US Accommodation and Food Services Sector NAICS 72

Jun 13, 2025 - No Tax on Tips

• The American Hotel and Lodging Association (AHLA), hotel workers, and their unions support the no tax on tips provision in President Trump’s “big beautiful bill,” which passed the House and is up for consideration by the Senate. “There are a lot of job categories within the hotel industry that benefit from tips — 800,000 individuals, when you add it all up,” says AHLA President and CEO Rosanna Maietta. The hotel industry wants to ensure that the elimination applies to all the job categories in the industry that benefit from tips, and not just those traditional ones that are in restaurants. The proposal to eliminate federal income taxes on tips has bipartisan support and because Trump campaigned on it he’s expected to sign it. The proposed No Tax on Tips Act of 2025 would enable an eligible taxpayer to deduct up to $25,000 in qualified tips.
• The US Accommodation and Food Services Sector topped the list of the 10 services sectors reporting growth in March, as measured by the Institute for Supply Management’s Purchasing Manager’s Index (PMI). The March Services PMI registered 50.8%, 2.7% lower than February’s 53.5% but still in expansion territory. Sales and gross output for the sector continued to trend upward in late 2024 and early 2025 with both at or near record levels. Job growth is also strong, with employment in leisure and hospitality continuing to trend upward in May with the addition of 48,000 jobs, largely in food services and drinking places (up 30,000), according to the latest jobs report from the Bureau of Labor Statistics. Over the prior 12 months, leisure and hospitality has added an average of 20,000 jobs per month.

• The dramatic drop in consumer confidence is expected to cause diners to pull back on spending, presenting restaurants with ongoing challenges amid a deteriorating economic landscape, Nation’s Restaurant News reports. In April, consumer confidence fell off a cliff according to the University of Michigan, whose consumer confidence index fell 11% for the month and is down 30% over the past five months as US consumers have grown increasingly pessimistic about the prospects for unemployment and worried about more inflation. Restaurants rely on discretionary spending. When consumers feel stressed they skip dining out and eat at home instead. In May, restaurant industry bellwether McDonald's reported a 3.6% year-over-year decline in first quarter same-store sales. The Michigan survey shows that Trump’s tariff pronouncements, along with the severe reaction of the stock and bond markets, are taking their toll on US consumers.
• International travel to the US is trending downward, according to preliminary data from the Department of Commerce, US Customs and Border Protection, and other organizations that track inbound US travel. Total international visits to the US fell approximately 14% in March compared to the same period last year. Moreover, traffic from the highest-value inbound travel markets declined significantly. March saw a 26% year-over-year decline in overnight land trips by Canadians and air travel to the US from Canada fell 14% YoY. Travel from Western Europe declined for the first time since 2021, with a 17% drop in March visits to America. Travel from Asia fell for the second consecutive month in March and remains 25% below 2019 levels, while visits from South America fell 10% following a flat February. Florida was the top destination for international visitors in March, per the US Travel Association.