It’s been a week of wins and losses for the U.S. travel and hospitality industry.
The budget reconciliation package passed by Congress and then signed by President Donald Trump on July 4 included vital, sought-after investments in air traffic control and customs modernization, and tax protections for small businesses, areas the U.S. Travel Association has long lobbied for on behalf of the travel and hospitality industry.
Another big win came on July 8, when Secretary of Homeland Security Kristi Noem announced that, effective immediately, passengers at TSA checkpoints would no longer need to remove their shoes during security screenings (only passengers in the TSA PreCheck line were previously allowed to keep their shoes on). The move is expected to help lead to shorter lines and a more efficient screening process. For now, passengers will still need to remove belts and coats, laptops and liquids.
Some news was more discouraging. The budget package also contained spending reductions that impact travel and hospitality, including slashing funding for Brand USA, that nation’s destination marketing organization, and increases in visitor visa fees, which will make international travel to the U.S. more expensive for international travelers. The U.S. Travel Association will begin working with Congress to address these issues for fiscal year 2026 appropriations.
“This legislation is a giant step in the right direction when it comes to improving America’s travel infrastructure and security,” U.S. Travel Association President and CEO Geoff Freeman said of the legislative budget package sent to the White House. “Bold, necessary investments in air traffic control and customs and border protection will make a meaningful difference in the traveler’s experience.”
He added, however, that the “smart investments in the travel process make foolish new fees on foreign visitors and reductions to Brand USA, America’s promotion arm, that much harder to swallow. Making America the world’s most visited destination—and capitalizing on the upcoming World Cup and Summer Olympics—requires smarter policy and legislative changes that we are already pursuing.”
The U.S. is about to embark on a ‘decade of sports,’ from 2025-2035, with three of the world’s biggest sports events—the 2026 World Cup in 11 U.S. cities, the 2028 Summer Olympics in Los Angeles and the 2034 Winter Olympics in Salt Lake City,—coming to this country. In addition, the U.S. is host to golf’s Ryder Cup in New York this fall, the World Baseball Classic in 2026, men’s and women’s rugby World Cups in 2031 and 2033, and the 2031 Women’s World Cup soccer championship. The World Cup alone is predicted to generate $40 billion in economic impact and create 200,000 jobs.
The decision to allow passengers to keep their shoes on while going through security was welcome news for Freeman. In an interview for the State of the Industry issue of ALHI’s Beyond the Meeting Room magazine in May, Freeman said the American traveler is too tolerant when it comes to going through airport security.
“None of that needs to be done,” he said. “All of the technology exists, so that shouldn't have to happen, and yet, we as Americans at times are guilty of being sheep and just saying, ‘Well, this is the way it is.’ I'm excited about creating a more demanding traveler who says, ‘Give me the technology. Give me the experience that's going to change this.’
“If I could do nothing else during my time at U.S. Travel but help create an environment where the American traveler has higher aspirations for the system that they deal with every day, that would be a met success. Because if we give them a better system, if we give them something that provides confidence, that provides security, that provides efficiency, guess what? That's going to mean more hotel nights. That's going to mean more theme park tickets. That's going to mean more flights. That's going to mean this entire industry lifts up if we can simply give people the experience they deserve.”
Key Wins for Travel and Hospitality in the Budget Package
$12.5 Billion to Modernize Air Traffic Control: A down payment to modernize the National Airspace System (NAS), supporting updates to air traffic control technology, physical infrastructure and workforce development.
$6.1 Billion to Reduce Wait Times and Improve Customs Staffing: Increased customs staffing to spur international growth and reduce wait times including $4.1 billion to hire and train at least 5,000 new U.S. Customs and Border Protection (CBP) officers and $2 billion in CBP retention bonuses to address ongoing staffing shortages, which will help lower wait times at airports and improve the traveler experience.
$673 Million to Expand Biometric Screening at U.S. Ports of Entry: Technology investments to strengthen border security and unlock future Visa Waiver Program (VWP) expansion including the biometric entry-exit system at ports of entry.
$1.6 Billion for Security and Operational Support for Major Events: Homeland Security funding to prepare for upcoming global events including $625 million for security, planning and operations related to the 2026 FIFA World Cup and $1 billion for security and planning tied to the 2028 Los Angeles Olympic and Paralympic Games.
Tax Policy Wins for Nonprofits and Small Businesses: Protects and preserves the tax-exempt status of nonprofits, locks in tax breaks for small businesses and makes it easier for companies to invest and grow by extending key investment incentives.
Key Losses for Travel and Hospitality in the Budget Package
Brand USA's Funding slashed by 80%: Federal matching funds were cut from $100 million to just $20 million annually in FY26 and FY27. Freeman said this comes at the exact moment the U.S. should be ramping up global promotion around America’s 250th anniversary, the 2026 FIFA World Cup and the 2028 Los Angeles Olympics.
Visitor visa frees significantly increased: A new $250 Visa Integrity Fee and an increase in the ESTA fee—from $21 to $40—make international travel to the U.S. more expensive for international travelers. Freeman said these fees are not reinvested in the travel experience and do nothing but discourage visitation at a time when foreign travelers are already critiquing the welcome experience and high prices.
“Failing to fully fund Brand USA is a missed opportunity, especially as the administration seeks to maximize a historic slate of global events on American soil,” Freeman said. “Raising fees on lawful international visitors amounts to a self-imposed tariff on one of our nation’s largest exports: international travel spending. These fees are not reinvested in improving the travel experience and do nothing but discourage visitation at a time when foreign travelers are already concerned about the welcome experience and high prices.”
The U.S. Travel Association released a report earlier this year outlining critical reforms needed to modernize the U.S. travel system.
Shoes-Off Policy
Noem, the Homeland Security secretary, said ending the shoes-off policy will increase hospitality and streamline the TSA security checkpoint process, leading to lower wait times.
“Ending the ‘Shoes-Off’ policy is the latest effort DHS is implementing to modernize and enhance traveler experience across our nation’s airports,” she said. “We expect this change will drastically decrease passenger wait times at our TSA checkpoints, leading to a more pleasant and efficient passenger experience. As always, security remains our top priority. Thanks to our cutting-edge technological advancements and multi-layered security approach, we are confident we can implement this change while maintaining the highest security standards.”
She added that some travelers may still be asked to remove their shoes if they are required to undergo additional screening. The policy of removing shoes had been in place since 2006 in response to a 2001 attempt by an airline passenger to conceal a bomb in his shoe.
Freeman was supportive of the announcement.
“The days of removing your shoes at airport security checkpoints are finally behind us—and that’s a win for all travelers,” he said, commending Noelm for ending the “outdated policy.”
“Ensuring that security policies are re-evaluated and appropriately updated based on risk, effectiveness and the travel experience is the type of leadership Americans expect,” he said.
Earlier this year, the Commission on Seamless and Secure Travel recommended the biggest aviation security upgrade since TSA PreCheck that would enable all travelers to keep shoes, jackets and belts on, leave electronics and IDs in bags and carry larger liquids.