Funding Our Future - Tourism Taxation & Sustainable Tourism

Miles Partnership has partnered again with Civitas Advisors and Tourism Economics to update “Funding Futures,” a comprehensive look at tourism tax and funding options for destination organizations across the U.S. This 2025 “Funding Futures” report updates our previous 2020 and 2021 analyses, part of our broader “Funding for Tomorrow” global studies. It offers an updated analysis of U.S. tourism tax and other visitor revenues, along with the newest trends and best practices in funding models for destination organizations.

A core element of fostering sustainable tourism is ensuring sufficient investment in the industry, local communities and the natural resources that fuel its growth. The challenges we see in tourism today, such as crowding, congestion and housing shortages for tourism workers, highlight a significant opportunity to strategically reinvest in our industry's future growth and long-term viability. 

Oxford Economics estimates more than $3.3 trillion in global tourism tax revenue is generated for governments. Our preliminary research estimates that less than 5% is reinvested back into the tourism industry for marketing or management.

Tourism in the U.S. is just one example of this. 

• We estimate* that less than 5% of $165 billion in travel-related tax revenue is reinvested by U.S. local, state and federal governments back into tourism marketing or management.
• Less than 1% is being reinvested into sustainable tourism challenges such as housing for tourism and hospitality workers or sustainable aviation solutions.  

Of the $1.3 trillion total visitor spending in the U.S., at least 13% (or $165 billion) is collected in tourism taxes and levies by local, state or federal governments. This amount has been growing dramatically; for example, travel-related taxes collected by local (city and county) governments across the U.S. rose 46% to $44 billion in the five years between 2018 and 2023 as the pandemic propelled a dramatic rebound in demand for travel.

However, the share of this large and growing revenue stream that is reinvested back into tourism is extremely small and getting smaller. Based on analysis from Funding Futures, the share of tourism taxation and levies being reinvested by governments directly into tourism is below 5%, or just $1 for every $20 collected by the government.  The percentage of this funding going specifically to make tourism more sustainable is infinitely smaller—certainly less than 1%.

For a sustainable future, tourism needs a fair and adequate reinvestment back into the industry, communities and natural environment that support it. It also requires investment into affordable housing for workers, to invest far more in sustainable aviation and to expand infrastructure for visitors and locals. The need for reinvestment into tourism has never been greater.  Less than 5% is simply not enough to ensure our industry—and its growth—are sustainable. 

DMOs have an important role in advocating for the strategic reallocation of tourism tax revenues while also pursuing the development of dedicated funding streams to ensure the sustainable growth and management of their destinations. We estimate that if just 10% (or $1 in $10) from tourism tax and other revenues were reinvested, the trajectory of our industry would radically change. In the U.S., this would unlock at least $8 billion of additional funds for local, state and federal governments to invest with industry and communities in a sustainable future for tourism. Such actions would be supporting an industry that truly improves not just economies and government coffers but protects and enhances the special communities and the natural places that we all love. 

• Download the Funding Futures 2025 report here.
• Watch the Funding Futures 2025 webinar here.