Seattle braces for big drop in tourism as sales tax revenue stays flat

(The Center Square) – Seattle is expected to see a 27% drop in international overnight visitors this year, with generated sales tax revenue remaining flat.

The Seattle Office of Economic and Revenue Forecast anticipates sales tax revenue to total $344.7 million in 2025, a 1.26% increase year-over-year from $340.4 million in 2024. The small bump in revenue comes as the city is set to address a $143 million budget deficit.

Sales tax revenue generated through the leisure and hospitality sector is highly dependent on tourism. The office notes sales tax revenue collection has been weak since the second half of 2023. In all of 2023, the city collected $339.9 million.

Recent data from Oxford Economics revealed that Seattle is expected to see a huge loss of tourism from Canada. According to the leading global economic advisory firm's July report, Seattle is predicted to see a 27% fall in overnight international visitors expected in 2025. That is the biggest drop among U.S. cities, with Portland, Ore., trailing at second with a predicted 18.4% decrease.

Despite the anticipated drop, the number of overnight international visitors is expected to grow again in 2026 with the city set to host four to six FIFA World Cup matches with an anticipated 400,000 to 750,000 visitors. A full recovery of international tourism in Seattle is anticipated for 2028.

During an Economic and Revenue Forecast Council meeting on Aug. 4, Seattle City Councilmember Dan Strauss noted that while international tourism is set to drop this year, tourism in general will continue to increase to record highs from 2026 onward.

Over the last 10 years, Seattle has become a tourist destination despite significant blows from the COVID-19 pandemic in 2020. There were roughly 9 million overnight visitors in 2016 and now 10 million projected in 2026.

“Whenever I’m hearing peoples’ impressions of downtown Seattle today, they’re astonished by the waterfront, they’re astonished by the convention center ... granted we still have more work to do around places in downtown Seattle, but the things are back on the right track,” Strauss said during the forecast meeting.

According to the destination marketing association Visit Seattle, the city had 40 million total visitors in 2024, a 5.3% increase from 2023. These visitors generated $839 million in state and local taxes.

Visit Seattle told The Center Square that it does not comment on forecasts. However, Public Affairs Manager Bobbie Nickel noted that forecasts change regularly in Seattle.

The Office of Economic and Revenue Forecast will revise projections again in October when the city council nears its 2026 budget process.