The Great American Tourism Shakedown

America has lost the plot. We built a tourism economy designed to extract maximum revenue from every interaction, and it’s backfiring spectacularly. We have priced ourselves out of our own welcome mat. What once felt like a promise to the world is now an obstacle course, a trip measured not in miles but in fees, surcharges, and the steady erosion of goodwill.

I’ve spent nearly 15 years observing this industry at Skift, watching as we’ve collectively convinced ourselves that premium travel’s resilience somehow masks the fundamental rot beneath. But the cracks are showing, and they’re widening faster than anyone wants to admit.

Walk through any American destination today and you’ll encounter a masterclass in extractive capitalism disguised as hospitality. In Las Vegas and Orlando, resort fees can exceed the advertised room rate, a practice so brazen it would be illegal in most other industries. In New York, the welcome feels like a toll booth at every turn, each interaction an opportunity to separate you from more of your money.

Your cab driver in Vegas presents you with a payment screen suggesting a 25% tip, sometimes 40%! Who would ever pay that? Order an ice cream and the counter worker’s tablet spins toward you, asking for 15% for the privilege of scooping it. These aren’t isolated incidents; they’re the new American travel experience.

Airport lounges, once refuges for the weary traveler, have become overcrowded holding pens where the only thing premium is the price of entry. TSA lines bark at passengers as though showing up to catch a flight is somehow suspicious behavior. Airlines have perfected the art of charging for everything short of the air you breathe, and given their track record, I wouldn’t put oxygen surcharges past them.

Cities have turned their sidewalks into obstacle courses, not from the crush of tourists but from the human cost of a society that has allowed too many to slip through the cracks. The homelessness crisis isn’t just a moral failing, it’s become a tourism deterrent in cities from San Francisco to Seattle, from Los Angeles to Portland.

This isn’t about lacking compassion for those struggling. It’s about recognizing that when basic urban infrastructure fails, when mental health systems collapse, when housing becomes unaffordable for entire swaths of the population, the tourist experience inevitably suffers alongside residents’ quality of life.

The obvious wounds are well-documented: the Muslim ban’s lasting diplomatic damage, visa processing delays that can stretch for months, the general fortress-like mentality that emerged post-9/11 and never quite receded. But these pale compared to the death by a thousand cuts that awaits visitors once they actually arrive.

The data tells a stark story. It’s often cheaper for Americans to fly to Europe — or anywhere internationally — than to take a domestic vacation. A family of four can spend a week in Portugal, meals and lodging included, for less than a long weekend in Disney World once you factor in resort fees, parking charges, expedited line passes, and the endless menu of upcharges that have become standard practice.

Is it any wonder we’re losing market share to destinations that still understand the basic principle that tourism is a long-term relationship, not a short-term extraction opportunity? Every hidden fee is another reason for travelers to book elsewhere.

Perhaps most damaging is the industry’s willful blindness to the affordability crisis reshaping American travel. We celebrate when premium segments hold up, as if the hollowing out of the middle market is somehow irrelevant to long-term sustainability.

But here’s the deeper issue that the industry refuses to confront: the tourism business model is just a downstream reflection of the same extractive approach applied to the people who live in these destinations full-time. The affordability crisis hitting tourists isn’t separate from the affordability crisis crushing locals. It’s the same crisis, applied to different customer segments.

When San Francisco hotel workers can’t afford to live in San Francisco, when Disney World employees need multiple jobs to survive in Orlando, when New York restaurant staff commute two hours each way because they’ve been priced out of the city they serve, we shouldn’t be surprised that the visitor experience suffers. The same economic forces making these cities unlivable for residents are making them unaffordable for tourists.

The middle class, the backbone of American tourism for decades, is being systematically priced out of travel altogether. Hotel rates that once represented splurges now feel like ransom demands. Restaurant prices have inflated beyond any reasonable relationship to wages. Even camping, that most democratic of American vacation traditions, has seen costs spiral as PE discovers the profit potential in what used to be simple, affordable outdoor experiences.

Meanwhile, industry conferences buzz with talk of “premiumization” and “revenue optimization,” as if the solution to pricing out your core customer base is to squeeze even more from the shrinking pool of those who can still afford to pay. But this misses the fundamental point: you cannot solve the tourist affordability crisis without addressing the local affordability crisis, because they’re the same crisis wearing different hats.

Here’s the uncomfortable truth: this isn’t a marketing problem that Brand USA can solve with a bigger budget or slicker campaigns. It’s not an operational issue that the U.S. Travel Association can lobby away. It’s cultural. It’s systemic. And it’s been building for years.

The decline isn’t sudden, which makes it more dangerous. Like climate change or infrastructure decay, it’s the kind of slow-motion crisis that’s easy to ignore until it reaches a tipping point. We’re seeing the early warnings now, in the summer crowds that aren’t materializing, in the international visitor numbers that lag pre-pandemic levels even as other destinations surge ahead.

We’ve created a travel experience that feels hostile to the very people we’re supposedly trying to attract. Every transaction has become an opportunity for additional extraction. Every service interaction carries the subtext of “how much more can we get?”

But this hostility isn’t unique to tourism, it’s the American business model, applied universally. The same economic logic that has made housing unaffordable, healthcare predatory, and education a debt trap has now been applied to hospitality. The tourism industry didn’t invent extraction capitalism; it just adopted it with particular efficiency.

This is why band-aid solutions won’t work. You can’t fix the visitor experience while ignoring the resident experience, because they’re products of the same broken system. The cities that have priced out their teachers, firefighters, and service workers are the same cities wondering why the tourist experience feels increasingly hollow and expensive.

The suddenly famous New York State Assemblyman Zohran Mamdani, now running for mayor of New York City on an affordability platform, has been making this argument for years, and the data keeps proving him right, even if you don’t agree with his prescriptions for it. His focus on the local affordability crisis as the root of so many other problems applies here to tourism: America is losing its competitive edge for domestic AND international tourists alike not because our attractions are inferior or our landscapes less beautiful, but because we’ve forgotten what hospitality actually means.

True hospitality isn’t about luxury amenities or premium experiences, though those have their place. It’s about making people feel welcome, valued, and fairly treated for the hard-earned money they invest. It’s about delivering on promises without hidden fees or surprise charges. It’s about creating experiences that leave visitors planning their return trip, not calculating whether they can afford one.

The solutions are easy, but they require admitting we have a problem that goes far deeper than tourism policy. It means acknowledging that the race to extract maximum revenue from every visitor interaction is ultimately self-defeating, and that it’s part of a broader economic model that has made American life unaffordable for millions of Americans.

You cannot build a sustainable tourism economy on the backs of workers who cannot afford to live in the places they serve. You cannot create authentic hospitality experiences in cities that have become playgrounds for the wealthy while pushing out the communities that gave them character in the first place.

Some global destinations are already figuring this out. Copenhagen has built a tourism economy around infrastructure that first serves residents: its extensive cycling network, which accounts for 45% of all trips to work and study, doubles as a major tourist attraction. The city’s recent CopenPay initiative rewards both residents and visitors for eco-friendly behaviors like cycling or taking public transport, recognizing that sustainable tourism flows from sustainable daily life.

Vienna provides another model: the city’s social housing program, which houses 60% of residents in high-quality, affordable units, helps keep overall rents low and maintains the authentic urban character that attracts visitors. Vienna spends $470 million annually on social housing, creating communities with amenities like libraries, gymnasiums, and green spaces that benefit both residents and the broader city experience. Compare that to San Diego, which has 1.4 million people but spent just $13 million on affordable housing last year.

But they remain exceptions in an industry — and a country — that seems determined to optimize itself out of competitiveness.

The destinations that will thrive in the coming decade are those that understand the fundamental connection between local affordability and tourist accessibility. They’re the places investing in housing for workers, supporting local businesses over chain extraction, and building tourism economies that strengthen rather than hollow out their communities.

We can continue down this path, convincing ourselves that premium resilience justifies pricing out the mainstream market. We can keep celebrating record revenues per visitor while ignoring declining visitor volumes. We can maintain the fiction that tourism problems can be solved in isolation from the broader American affordability crisis.

Or we can admit that America has priced itself out of its own welcome mat. AND start the hard work of building an economy that works for both the people who live here and the people who visit.

Tourism dies when affordability dies.

September 16-18, 2025 - NEW YORK CITY