U.S. Travel Retail in 2025: Outbound Surge, Inbound Decline, and Untapped Duty Free Potential

The landscape of U.S. travel in 2025 presents a striking paradox. While outbound travel from the U.S. is booming, inbound tourism to the country has sharply declined, creating significant challenges for the global Duty Free and Travel Retail industries. According to the latest research from m1nd-set, these contrasting trends not only highlight the evolving dynamics of international travel but also uncover substantial opportunities for retailers looking to engage the American market. In particular, the report points to the untapped Duty Free potential among American travelers, whose high spending potential is not fully reflected in their current engagement with Travel Retail.

Outbound Travel Surge: Americans Leading Global Departures

The U.S. has become the leading nationality for outbound international travel, accounting for 10% of all global departures. This surge is partly driven by favorable exchange rates, which make international travel more attractive, and a growing desire among Americans to explore global destinations amid increasing political and social polarization at home. Major airports such as New York JFK, Miami, Los Angeles, Atlanta, and Chicago have become key hubs for international departures. As for preferred international destinations, American travelers flock to iconic cities like London, Cancun, Paris, Mexico City, and Amsterdam, underscoring their widespread interest in diverse travel options across Europe, the Americas, and beyond.

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However, while Americans are increasingly taking to the skies for international travel, the flip side of the coin is the significant decline in inbound tourism to the United States. This has raised alarms within the travel and tourism sectors, particularly the Duty Free and Travel Retail industries, which heavily depend on foreign visitors for spending in airports and duty-free shops.

Inbound Tourism Decline: A Projected $12.5 Billion Loss

The U.S. has seen a sharp downturn in inbound tourism, with a 12% year-on-year drop in the number of visitors recorded in March 2025 alone. Projections indicate that the total decrease for the full year could amount to 9%, representing a substantial loss of between $8.5 billion and $12.5 billion in foreign visitor spending. Several factors are contributing to this decline, including geopolitical tensions, restrictive immigration policies, and growing negative sentiment abroad toward the U.S. These factors, coupled with rising travel advisories, have prompted many potential visitors to opt for alternative destinations in Europe and the Americas, rather than traveling to the U.S.

This drop in inbound tourism is a major blow to industries that rely on foreign spending, especially the Duty Free sector. U.S. airports typically see a considerable portion of their retail sales come from international visitors, who tend to spend more on luxury goods and travel-related items. The ongoing decline in inbound tourism is a worrying trend for the global Travel Retail market, especially as other regions continue to see growth in foreign visitation.

Duty Free Shopping: High Spending, Low Engagement

Despite being among the top global spenders, with an average transaction value of $150 per visit, American travelers remain less engaged with Duty Free shopping compared to the global average. Research by m1nd-set reveals that U.S. travelers exhibit higher conversion rates when shopping in Duty Free environments outside the United States (68%) than when shopping domestically (56%). This gap highlights a clear opportunity for U.S. retailers to improve the in-store experience, which could drive higher engagement and increase conversion rates.

One potential reason for this disconnect could be that American shoppers, despite their high spending power, are not fully aware of the benefits of Duty Free shopping or have not been adequately engaged through targeted marketing efforts. This offers an untapped opportunity for retailers to create a more compelling shopping environment that could encourage more Americans to visit Duty Free stores and make purchases.

Emotional Drivers and Impulse Buying: The Key to Engagement

Emotional factors play a critical role in driving shopping behavior, particularly in Duty Free stores. According to m1nd-set, 64% of Americans who visit Duty Free stores do so spontaneously, motivated by store aesthetics, curiosity, and the desire to browse. Many of these shoppers are influenced by the store’s design and atmosphere, as well as the opportunity to explore new products and experiences. This presents a major opportunity for retailers to enhance store layouts and product displays in a way that sparks curiosity and attracts shoppers to engage.

Pre-planning also plays a role in American travelers’ Duty Free shopping behavior. Nearly 75% of U.S. travelers report planning their Travel Retail shopping in advance, with 44% planning to shop at airports and 30% identifying specific items they intend to purchase. This indicates that U.S. travelers are open to planning their Duty Free shopping, but they need more enticing offers and a seamless shopping experience to convert their interest into actual purchases.

The Importance of Customer Service: Elevating the Shopping Experience

One key finding from the m1nd-set research is the decisive role that store staff play in influencing American shoppers’ purchasing decisions. American travelers are more likely to interact with sales staff than their global counterparts, and these interactions can significantly impact their shopping behavior. Proactive and knowledgeable sales teams are a key factor in driving conversion rates, while poor service or a lack of product knowledge can act as a major deterrent.

Training staff to be more engaging, knowledgeable, and responsive to customer needs could be a game-changer for U.S. retailers. A positive customer service experience could not only increase conversions but also build brand loyalty, encouraging repeat visits to Duty Free stores both domestically and abroad.

Strategies for Boosting Engagement and Conversion

To fully unlock the potential of American travelers in the Duty Free and Travel Retail markets, retailers must rethink their approach to engaging this high-value segment. First and foremost, enhancing the overall shopping experience is crucial. This means improving store aesthetics, leveraging digital technologies to streamline shopping, and offering clear value propositions. Retailers must also focus on empowering their front-line staff with the training and resources they need to meet the expectations of the modern traveler.

Additionally, by positioning Duty Free shopping as an integral part of the travel experience rather than an afterthought, retailers can shift the perception of U.S. travelers, making it a must-do activity rather than something that happens by chance. Fostering an emotional connection with customers, along with clear and competitive pricing, will be key to driving higher conversion rates and overall sales.

Conclusion: Unlocking the Full Potential of U.S. Travelers

Despite current challenges in U.S. retail travel, American shoppers remain one of the most valuable and untapped segments for global Duty Free and Travel Retail industries. By improving store experiences, leveraging emotional triggers, and investing in customer service, retailers have a unique opportunity to enhance engagement and increase sales. While the current trends may indicate a slower uptake, the potential for growth remains high, and with the right strategies, U.S. travelers can become a major driving force in the future of Duty Free and Travel Retail shopping worldwide.

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