Expedia Group recently reported disappointing revenue for the first quarter, attributing it to a decline in travel demand within the United States. This downturn was reinforced by Bank of America’s findings that spending on flights and accommodations fell in the same period. These developments signal a potential slowdown in the U.S. travel and tourism sector, the first since the “revenge travel” trend began post-COVID-19. Several major travel companies, including Airbnb and Hilton, echoed similar sentiments in their earnings reports. Additionally, several U.S. airlines have announced plans to reduce scheduled flights, linking this decision to a drop in leisure travel bookings.
Various factors contribute to this slowdown, primarily economic uncertainty and consumer anxiety, influenced by President Donald Trump’s tariffs. The U.S. Travel Association noted that Americans’ confidence in the economy dropped for five consecutive months, a trend that could hinder holiday spending. Bank of America highlighted that while its credit card holders remained willing to indulge in smaller discretionary purchases, such as dining out, they were less inclined to make larger expenditures on travel. This declining consumer confidence could further impede spending on flights and accommodations.
Internationally, the ongoing tariffs and concerns over U.S. border policies have dissuaded potential travelers from other countries. The government reported a decline in overseas visitors to the U.S., with 7.1 million arrivals recorded by the end of March—a decrease of 3.3% compared to the same period in 2024. The data also revealed notable declines in border crossings from Canada, exacerbated by political tensions and unfavorable commentary from U.S. officials regarding Canada.
Expedia’s Chief Financial Officer, Scott Schenkel, indicated a significant decrease in bookings for U.S. travel, with a 7% decline overall and nearly 30% from Canada alone during the January-March timeframe. Conversely, CEO Ariane Gorin noted a shift in travel patterns, with fewer Europeans visiting the U.S. and an increased interest in Latin American destinations.
Airbnb’s recent earnings call revealed that foreign travel to the U.S. represents only a small fraction of its overall business. Despite these ongoing challenges, the Canadian market particularly highlighted a trend where Canadians are choosing to travel domestically or to countries like Mexico and Brazil, rather than the U.S. This decline in interest was further supported by Hilton’s observations, which showed reduced international bookings for U.S. hotels.
Despite the current downturn, Hilton’s President and CEO, Christopher Nassetta, expressed optimism for the latter half of the year. He speculated that as economic uncertainties recede, the underlying strength of the economy would re-emerge, potentially revitalizing travel demand. However, for the time being, the U.S. tourism industry must navigate through these challenges while adapting to shifting consumer behaviors and external factors influencing travel decisions.
