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America hits the brakes on travel

  • Automatic
  • 25 June 2025
  • 2 minute read
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This article was written by Hospitality Today. Click here to read the original article

Lagging bookings, shrinking budgets, and last-minute plans reveal growing consumer caution — and potential trouble ahead for the U.S. economy

Jun 25, 2025

American travelers are pulling back. New data shows fewer passengers moving through US airports, weaker hotel demand, and a drop in consumer travel spending across all income levels. While luxury travel remains relatively stable, budget and mid-range accommodations are feeling the pinch — a sign that inflation fears and political uncertainty may be tempering consumer confidence. Economists warn this shift could be an early indicator of a broader economic cooling.

Key takeaways

  • Air travel decline: TSA data reveals fewer US airport passengers over the past 90 days compared to 2023 — the first decline since COVID-19’s peak.
  • Last-minute bookings rising: Booking Holdings and Hyatt both report shorter stays and more last-minute reservations, complicating yield management and pricing strategies.
  • Price drops across the board: Airline tickets and hotel stays dropped in price between April and May (seasonally adjusted), per the Bureau of Labor Statistics.
  • Lower-income households scaling back: Bank of America data shows the sharpest decline in travel spending among lower-income Americans. Wealthier travelers continue to prioritize high-end travel experiences.
  • International tourism declining: Canadian travel to the US dropped nearly 25% in May year-over-year; arrivals from France and Germany also fell.
  • Vacation “trade-down” trend: Travelers aren’t cancelling vacations but opting for closer, shorter, and cheaper alternatives like road trips and campgrounds.
  • Industry sentiment: Executives from Hyatt and Booking Holdings note caution and unease among guests, pointing to broader economic and political uncertainty.
  • Macroeconomic warning: Travel is often an early signal in economic cycles. The downturn suggests consumer resilience may be weakening after years of strong post-pandemic demand.

Get the full story at the Financial Times (subscription required)

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