11-07-2025
From air traffic control to visitor fees, travel groups find pros and cons in budget law
Hotel, aviation and agency groups praised the massive budget and policy bill signed into law on July 4, citing long-sought investments in infrastructure and business-friendly tax policies.
But industry stakeholders also expressed concern with its steep cuts to Brand USA's federal funding and the sharp fee hike for international travelers, which could further deter inbound travel.
Aviation groups cheered the $12.5 billion provided to overhaul air traffic control (ATC) systems, even while cautioning that substantially more funding will be needed to complete the ambitious ATC transformation, especially within Transportation Department secretary Sean Duffy's four-year timeline.
The Modern Skies Coalition, a group of stakeholders that formed for the purpose of supporting an ATC overhaul, called the bill a "meaningful first step toward replacing outdated technology and aging facilities with the tools needed to keep our skies safe and efficient for decades to come." The group has estimated that completing the ATC overhaul will cost at least $31 billion.
Geoff Freeman
The bill also won praise from airports for the more than $6.1 billion included for Customs and Border Protection (CBP) personnel, which was lauded by U.S. Travel Association CEO Geoff Freeman.
"This legislation is a giant step in the right direction when it comes to improving America's travel infrastructure and security," Freeman said.
But Freeman was less complimentary when referring to the bill's provisions for visitor fees and travel funding.
The law introduces a $250 Visa Integrity Fee for nonimmigrant visas and nearly doubles the Electronic System Travel Authorization (ESTA) fee charged to Visa Waiver Program travelers, raising it from $21 to $40.
It also slashed Brand USA's federal matching funds. Previously, Brand USA received private-sector donations that were matched by up to $100 million in federal funding provided by a $17 portion of every ESTA fee. The law now only provides for $20 million in federal funding for Brand USA.
According to U.S. Travel, a portion of the fees once used for Brand USA will go to CBP to operate ESTA and "accomplish CBP's mission," and some will offset general government spending.
Freeman called the new fees "foolish."
"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," Freeman said.
Freeman said that by not reinvesting the fees in improving the travel experience, the hikes "do nothing but discourage visitation at a time when foreign travelers are already concerned about the welcome experience and high prices."
Fred Dixon
The higher fees come as inbound visitation continues to decline: in June, total overseas visitation was down 3.4%, according to the National Travel & Tourism Office, excluding Canada and land crossings from Mexico. International visitation for the year is down 1.2%.
Fred Dixon, CEO of Brand USA, said the reduction in its funding will require "a significant recalibration" of its resources and programming.
Still, he added, "we remain focused on growing legitimate international inbound travel and the vital boost it provides to the U.S. economy, especially with major global events on the immediate horizon like America250 and the FIFA World Cup."
Two ASTA victories
ASTA said the bill contained two victories it had been lobbying for: a tax break used by many advisors was made permanent, and education savings accounts were given greater flexibility.
The tax break, which had been set to expire at the end of 2025, allows small businesses to deduct 20% of their qualified business income.
ASTA said the law has been updated to raise income limits to $75,000 for individuals or $150,000 for couples filing jointly. It also guarantees a minimum deduction of $400 for those earning at least $1,000 in business income. The deduction is applicable to many advisors, ASTA said.
Jessica Klement
The approved uses of 529 savings plans also expanded from a U.S. college or university or an apprenticeship program to being applicable to postsecondary training and credentialing, like ASTA's Verified Travel Advisor certification. Vice president of advocacy Jessica Klement called it "a common-sense update."
Within the U.S. hotel industry, the American Hotel & Lodging Association (AHLA) also praised the small-business tax break, which it said was crucial for hotel owners who operate as small businesses under licensing agreements with national brands. The expiration of the deduction would have significantly increased taxes for these operators, the AHLA said.
The bill also permanently extends 100% bonus depreciation and expanded business interest deductibility, which the organization said would incentivize capital improvements and property modernization.
Christina Jelski and Jamie Biesiada contributed to this report.
