PIEDMONT, S.D. (AP) — John Carley joined about 100 other business operators in early May for a meeting of the Black Hills & Badlands Tourism Association to preview the 2025 tourism season.
The mood in the room, he said, was “a little muted” compared to recent years, when South Dakota set repeated records for visitors and tourism spending.
“I wouldn’t say they were jumping up and down like, ‘Yeah, we’re going to have a great year,’” said Carley, manager of the Elk Creek Resort and Petrified Forest in Piedmont.
For the first time since the COVID-19 pandemic, tourism officials across the state are feeling cautious, and perhaps even a bit worried, that tourist numbers and revenues will be lower this year.
From Sioux Falls to Rapid City, officials said stubborn inflation, the rising cost of living, cuts to federal jobs and national parks, fear of tariff impacts and a general malaise over the national economy could curtail visitor counts and spending.
“Anxiety is starting to grow among American travel consumers,” said James Hagen, secretary of the South Dakota Department of Tourism. “People are being very cost-conscious right now.”
Comments by President Donald Trump about annexing Canada is also blunting the state’s typical rush of visitors from north of the border, officials said.
A recent industry survey showed that while most Americans remain excited about potential travel this year, more than half are worried about a pending national recession, Hagen said. One quarter of those respondents said their worries will cause them to travel less this year, he said.
Hagen said when travel budgets were tight in the past, such as during the 2008 Great Recession and the COVID-19 pandemic, South Dakota still performed well because it is mostly a driving destination that is seen as affordable compared to its competition.
“There are some things that are out of our control, national and world politics for example, so we need to keep a close pulse of what’s going on,” Hagen said. “But we can adjust our message in a heartbeat nine ways to Sunday to reach the right consumers at the right time to get in front of those consumers to inspire them to pull the trigger.”
Any reduction in visitors and tourism dollars will cause ripples across the economy of South Dakota, which has seen falling sales tax revenues in recent years.
According to the state, tourism generated nearly $400 million in tax revenues, making up 17% of all state sales tax collections in 2024. An estimated 14.9 million visitors spent $5.1 billion in 2024, supporting nearly 59,000 jobs, state data show.
Tourism has been on a roll in South Dakota in recent years, with increases in visitors and spending in seven of the past eight years, dipping only during the pandemic in 2020.
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