Wednesday, July 9, 2025
The new US Budget Bill signed by President Donald Trump on July 4, 2025, introduced several changes that have had both positive and negative impacts on the travel industry. While some provisions bring good news to travel advisors, others present challenges to key organizations, such as Brand USA and the Air Traffic Control (ATC) system. Here’s a detailed breakdown of the wins and losses for travel as a result of the new budget bill.
Win 1: Permanent Tax Deductions for Travel Advisors
A significant victory for travel advisors came in the form of a permanent tax deduction under Section 199A of the tax code. Previously, this deduction, which allows many small businesses, including travel advisors, to deduct 20% of their qualified business income, was set to expire at the end of the year. The new budget bill ensures its continuation, providing financial relief to those in the travel industry.
Additionally, the income limits for individuals and couples have been raised to $75,000 and $150,000, respectively. This change will benefit a large portion of travel advisors, enabling them to reduce their tax burden and better compete with other travel agencies. The American Society of Travel Advisors (ASTA) had been a strong advocate for this deduction, arguing that its loss would have negatively impacted advisors’ ability to hire staff and conduct business.
Zane Kerby, President of ASTA, expressed that without this deduction, the travel industry could face severe setbacks. “The increased tax burden would significantly affect their business, their ability to employ staff, and could ultimately harm the industry,” Kerby said.
Win 2: Expansion of 529 Savings Plans for Training and Certification
Another positive change in the new budget bill involves an update to the 529 savings plans, which are traditionally used to save for college tuition. Under the new provisions, 529 plans can now be used for postsecondary training and credentialing, including the ASTA’s Verified Travel Advisor certification.
This move is being hailed as a common-sense update that provides travel advisors with more flexibility in funding their professional development. Jessica Klement, Vice President of Advocacy at ASTA, emphasized how this change would strengthen the travel advisor profession by allowing professionals to choose training programs that best suit their career goals.
“The ability to use 529 plan funds for professional training is a logical progression,” said Klement. “This change will benefit those who are already in the industry and want to enhance their skills.”
Loss 1: Brand USA’s Funding Cut
While there were wins in the budget bill, the travel industry also experienced a setback. One of the most significant losses came for Brand USA, the U.S. government’s destination marketing organization. The organization had its federal matching funds slashed in the new bill, from $100 million to just $20 million.
Fred Dixon, President and CEO of Brand USA, expressed his disappointment but remained optimistic about the organization’s future. “While we are disappointed with the reduction, Brand USA remains committed to our mission and looks forward to opportunities for funding restoration in the future,” Dixon said.
Despite the funding cut, Brand USA remains focused on its goal of promoting international inbound travel to the U.S. and generating substantial economic benefits. Since its launch in 2010, the organization has generated an estimated $8.3 billion in tax receipts and returned $20 to the U.S. economy for every dollar spent. However, with the reduction in funding, Brand USA will need to reorganize its resources in order to continue its mission effectively.
Geoff Freeman, President and CEO of the U.S. Travel Association, also expressed concern about the funding reduction, calling it “a missed opportunity—especially as the administration seeks to maximize a historic slate of global events on American soil.” Freeman cited major upcoming events, such as America250 and the FIFA World Cup, which will take place in the U.S. and require robust promotional efforts.
Loss 2: ATC Funding Falls Short of Duffy’s Proposal
Air traffic control (ATC) modernization is an area of great importance to the travel industry, but unfortunately, the new budget bill does not allocate sufficient funds to meet the ATC modernization goals outlined by U.S. Transportation Secretary Sean Duffy.
Duffy’s proposal for a complete overhaul of the U.S. ATC system had requested approximately $20 billion for upgrades, with estimates from airlines and aerospace companies suggesting that $31 billion would be necessary to modernize the system. However, the bill allocates just $12.5 million, far below the amount needed.
Duffy’s plan aims to address the aging radar systems, air traffic control towers, and improve safety measures. Additionally, his proposal includes hiring 2,000 new controllers by offering 20% salary bonuses to attract and retain talent. Without sufficient funding, Duffy’s proposal will be significantly delayed, which could have long-term consequences for air travel efficiency and safety.
Despite the funding shortfall, industry leaders remain hopeful that further investments will be made in the future to improve the ATC system. Geoff Freeman described the allocation as “a giant step in the right direction,” emphasizing that bold, necessary investments in air traffic control will lead to a better traveler experience in the long run.
Duffy himself warned that without modernization efforts, the risks of system failures, disruptions, and security vulnerabilities will continue to grow. The lack of sufficient funding could delay the necessary upgrades, further complicating the air travel experience for passengers and causing long-term economic damage.
The Road Ahead for the Travel Industry
While the new U.S. Budget Bill has brought both victories and setbacks for the travel industry, there is still hope that the wins will help strengthen the sector in the long run. The permanent tax deduction and the expanded use of 529 savings plans for training and certification will undoubtedly provide travel advisors with the tools they need to succeed and grow.
However, the funding cuts to Brand USA and the insufficient funds for ATC modernization are serious challenges that the industry will have to navigate. These cuts could hinder the ability of the U.S. to attract international visitors and maintain a safe and efficient air traffic control system.
In the coming months, it will be crucial for industry leaders, such as Brand USA and the U.S. Travel Association, to continue advocating for increased funding and support. The travel industry remains a vital contributor to the U.S. economy, and it’s important that the government recognizes the need for continued investment in the sector’s growth and sustainability.
Travel advisors, in particular, should take heart in the wins in the new budget bill. The permanent tax deduction will provide much-needed relief for small businesses, while the expansion of 529 plans offers more opportunities for professional development. With these positive changes, the future for travel advisors looks bright.
While there are certainly challenges ahead, the travel industry remains resilient. By staying informed and actively participating in the ongoing discussions surrounding these issues, travel advisors and other industry stakeholders can help shape the future of U.S. travel policy.
As the U.S. travel sector moves forward, it will need to strike a balance between addressing the losses while seizing the opportunities presented by the wins in the new budget bill. This will require continued advocacy, investment, and collaboration among all stakeholders in the travel industry.
