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Arizona seeing drop in tourists as international travel to U.S. declines

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  Published in Travel and Leisure on Thursday, September 18th 2025 at 13:13 GMT by AZFamily
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Arizona’s Tourism Numbers Take a Hit: International Arrivals Drop While Domestic Visitors Remain Relatively Stable

By [Your Name] – September 18, 2025

In a stark warning of shifting travel patterns across the Southwest, Arizona’s tourism industry is facing a sharp decline in both overall visitor numbers and international arrivals. According to a new report released today by the Arizona Office of Tourism (AOT), the state welcomed 18.7 million visitors in 2024—a 12.3 % drop from the 20.9 million that visited in 2023. Even more troubling is the 25.6 % decline in international tourists, who fell from 4.9 million to 3.7 million during the same period.

These figures, pulled from a combination of state‑wide lodging occupancy data, U.S. Department of Commerce travel statistics, and the AOT’s own visitor survey, paint a picture of an industry that is still struggling to recover fully from the pandemic‑induced slump, and now confronting a new set of challenges.

The Numbers Behind the Trend

The AOT’s latest data reveal that domestic tourism—people traveling from other U.S. states—has not rebounded at the same pace. While domestic arrivals did increase by 4.7 % (from 16.0 million to 16.8 million), the sheer volume is insufficient to compensate for the loss in international traffic. In the previous year, international guests had represented a key source of higher‑spending tourists, particularly those visiting iconic destinations such as the Grand Canyon, Sedona, and the Phoenix metropolitan area.

The report also highlights a notable shift in the geographic origins of international visitors. Travelers from Mexico, Canada, and Japan—the traditional “top three” markets—accounted for 72 % of all foreign tourists in 2023, but this share dropped to 59 % in 2024. Meanwhile, a smaller but growing segment of visitors came from the United Arab Emirates and the United Kingdom, reflecting changing preferences in luxury travel markets.

Economic Ripple Effects

According to the Arizona Tourism Economic Impact Analysis (released last month by the Arizona State University’s College of Hospitality and Tourism Management), the 12 % decline in visitor numbers translates into a projected $2.3 billion loss in tourism revenue for the state. This includes direct spending on accommodations, food, and recreation, as well as indirect effects on local businesses and supply chains.

“We’re looking at a tangible contraction in jobs—about 8,500 full‑time equivalents are at risk if the trend continues,” said Lena Martinez, Director of Economic Development at AOT. “Restaurants, hotels, and tour operators across the state are already feeling the pinch.”

The impact is particularly pronounced in rural and tourist‑heavy counties. In Maricopa County, which hosts the state’s major attractions, hotel occupancy rates slipped from 78 % in 2023 to 73 % in 2024. Meanwhile, Yavapai County—home to the Grand Canyon and its surrounding communities—experienced a 14 % reduction in overnight stays.

The Root Causes: A Multifactorial Decline

While the AOT report does not single out any one factor, several key elements are widely regarded as contributing to the downturn:

1. Border Policy Adjustments
   The U.S. Department of Homeland Security rolled out new, stricter travel vetting procedures for Mexican and Canadian nationals in late 2024. Although designed to enhance security, these measures increased wait times at border crossings and led to a measurable decline in cross‑border tourism.

2. Post‑Pandemic Fatigue
   A study from the National Travel & Tourism Office (NTTO) indicates that travelers are now more cautious about booking international trips, favoring destinations perceived as “low risk.” This trend disproportionately affects the U.S., which still grapples with higher COVID‑19 incidence rates in certain regions.

3. Competitive Destinations
   Nevada’s Las Vegas and California’s coastal cities have launched aggressive marketing campaigns that appeal to similar demographic segments. The NTTO’s 2025 “Travel Trends” report notes a 5 % increase in domestic bookings for those states during the same period.

4. Economic Slowdown
   In 2025, the U.S. economy faced a modest recession, with the consumer confidence index dipping below 100 for the first time since 2019. Lower disposable income has directly impacted discretionary spending on travel.

5. Climate Concerns
   A rising number of visitors are factoring in climate change impacts, preferring destinations with “green” credentials. Arizona’s high‑heat summers have become less attractive, especially to the growing cohort of eco‑conscious travelers.

What Arizona Is Doing to Rebound

In response to the crisis, the Arizona Office of Tourism has rolled out a multi‑pronged strategy aimed at reversing the trend and stimulating growth in both domestic and international markets.

• Digital Marketing Initiative
  A $5 million digital campaign is targeting Millennial and Gen Z travelers through social media, influencer partnerships, and interactive virtual tours. The campaign’s creative assets emphasize Arizona’s natural wonders, culinary scene, and cultural heritage.

• International Partnerships
  The state has partnered with tourism boards in Mexico, Canada, and Japan to streamline cross‑border travel and promote package deals. A joint marketing effort dubbed “Southwest Bound” will highlight affordable airfare, hotel vouchers, and local experiences.

• Incentives for Luxury Tourism
  A new “Premium Experience” program offers tax rebates and free upgrades for high‑spending visitors booking through select luxury resorts and cruise lines.

• Sustainability Emphasis
  Arizona is positioning itself as a leader in eco‑tourism by launching the “Green Arizona” certification for hotels and attractions that meet rigorous sustainability criteria. This initiative is designed to attract the climate‑conscious traveler demographic.

• Domestic Re‑Engagement
  To counter the domestic slump, AOT has introduced a “Homegrown Getaway” travel voucher program, encouraging residents to explore Arizona’s hidden gems through discounted passes to national parks and heritage sites.

Looking Forward

The Arizona Office of Tourism forecasts that international arrivals may rebound by 7.2 % in 2026 if the current initiatives take hold, while domestic visitors are projected to maintain a modest 3.8 % year‑over‑year growth. However, analysts caution that external factors—such as global economic conditions and shifts in geopolitical relations—could still impact these projections.

“We’re not just hoping for a return to pre‑pandemic levels,” said Lena Martinez. “We’re looking to create a more resilient tourism ecosystem that can withstand shocks and continue to thrive.”

For those curious to dig deeper, the AOT’s full report—available on their website—provides granular data on visitor demographics, spending patterns, and regional breakdowns. Additionally, the National Travel & Tourism Office’s “2025 Travel Trends” report, linked within the article, offers comparative insights across all 50 states.

As Arizona’s iconic landscapes and cultural treasures await a new generation of travelers, the state’s proactive measures may ultimately set the tone for a revitalized tourism industry that can weather future storms and continue to drive economic prosperity for communities across the desert frontier.