✈️ 2025 US Travel Market Upheaval

President Trump’s plan to revitalize and reindustrialize the US, and deploy high tariff barriers is inadvertently impacting the US travel market. It’s making global travel market and US travel forecasts and even accurate views of the actual market unfolding a challenge.

Below you’ll find global travel statistics in relation to US travel statistics. The ITA forecasts 25% growth over the next 5 years to the US, so there is reason for optimism.

Of course, the political tensions rising from the new global trade relationship, along with the cost of travel are two big factors that could sink the US tourism market significantly. Border checks and illegal immigrant expulsions are making America look unwelcoming to some foreigners. And the internal strife in this country also shapes intentions to travel here. Because of this the US market has declined this year so far.

This is a time of great change in the US, and as Trump says, it is a year of transition and for many, travel will become a luxury expense. The question then is about who can afford to travel and where they will choose to go. Amidst all of this upheaval in dreams, politics, and affordability, is opportunity for travel businesses to connect with uncertain travelers.

Business Opportunities for Smart Entrepreneurs

Up to 2024, travelers might have been inaccessible due to being undecided in their brand choices, but with the travel value proposition altered, they will be searching once again on Google and ChatGPT among other tools for new destinations, experiences, and itineraries.  Making your travel agency, destination, resort, hotel, or tour products widely visible on social media and Google search makes a lot of sense. It’s all about timing, visibility and precise consumer targeting with your digital travel marketing strategy.

While 2025 travel will see a slowdown, the stage is being set for roaring years ahead as the US economy strengthens and more Americans will be working and enabled to take vacations. Planning for growth of your business or even launching a niche AI travel business might be wise given the promising outlook for digital travel sales in the years ahead.

A Travel Market Built on Credit Spending

And this market has gone from a $50 billion surplus to a $50 billion deficit over the ten years. With so much money exiting the US added to a severe trade-in-goods deficit, American travel spending had to moderate at some point. Some Americans are facing financial struggles, with maxed-out credit card limits.

So while the media attributes this current drop in foreign tourists to President Trump and his mission, it might be that delayed economic changes are cloaking why tourism in the US has struggled. Most travelers know that the US has sunk in attractiveness, safety and satisfaction.

Big Losses in Canadian Travel Spending

Canadians represent the biggest customer base for the US travel industry. And that is seeing a big shakeup with the tariffs and Trump’s comments about making Canada the 51st state, which is not going over well north of the border.

Politics and the high US dollar are keeping many Canadians away, while some of them who own properties in the Sunshine States are selling them and leaving.  “6 in 10 Canadian adults say they are unlikely to travel to the U.S. this year—and more than a third have already canceled trip plans” — from a Forbes report.

They won’t be making those vacation trips to the US, and instead are traveling to Mexico, Europe and the Caribbean for a change. Forbes reports that 20.4 million Canadian visitors spend 20.5 billion dollars at American hotels, restaurants, shops and other businesses each year. It’s a significant loss.

Americans and Asians have been visiting Europe in record numbers, giving countries like Portugal, Spain and Italy tremendous boosts in tourism revenue. But as dim as the outlook appears right now, Americans will be spending more within the US for flights, hotels, tours and restaurants. The domestic American travel scene is where it’s at, although trips to Europe will still be a sizable market for US travel agencies.

Travel Reports: The 2025 Outlook from Statista

The global travel market is relevant to forecasts, given the US market exists within it, and American travel choices are a big part of this market.  Statista’s 2025 global travel market report:

• by 2025, global travel revenue is estimated to reach US$955.94bn and is projected to grow annually at a rate of 3.91%, resulting in a market volume of US$1.11 trillion by 2029.
• the largest market within Travel & Tourism is the Hotels market, which is projected to reach a market volume of US$443.07 billion in 2025, and reach 1.81 billion users by 2029.
• the average revenue per user (ARPU) is projected to reach US$450.44.
• online sales are expected to account for 75% of total revenue in the Travel & Tourism market by 2029.
• the United States is expected to generate the most revenue in this market, reaching US$224 billion in 2025.

Those stats are impressive showing the strength of the travel market going forward.  With Americans becoming more wealthy in the years ahead, due to Trump’s agenda, these forecasts are likely light.  More American money will be spent in the USA, given the global trade tensions. Another factor is the strength of the US dollar which will likely remain high as more direct investment and equities investment pours into the US.  A high dollar makes foreign trips less expensive for Americans which might support plenty of booked trips and vacations to global regions.

Travel Market Reports for 2025

IGES, a popular resort, souvenir, and specialty gift trade show organization held in the US, just released its view of the 2025 travel market. They believe 2025’s market will differ from the 2024 travel market forecast, driven by AI personalization and the pursuit of meaningful experiences. The trend then involves technology changes and a cultural shift to find personally meaningful experiences.

In its last report, the International Travel Association also believed the US travel market will see significant growth over the next 5 years, after a disappointing 2023.  The negative growth in that year corresponds with the big rise in interest rates.

Of course, there are a lot of influences on the travel market. The key one is the overall economy and its projected outlook. Those projections are beginning to take the Trump economic initiatives into account. Economists and investors are slowly beginning to recognize how big this shift from socialism into capitalism will be. And it’s a sizable economic shift from big government to business. Private sector jobs were crushed in the last 4 years, and with the new DOGE department, Trump’s team will shrink government and government-driven travel.

Small business has struggled to survive let alone thrive. If the economy continues to grow and interest rates are driven down, a small business revolution arise, and that will drive a much better travel picture.

If you’ve been dependent on government-driven corporate bookings, you can now make the shift over to leisure and small business audiences.

IGES believes domestic travel will surge beyond pre-pandemic levels and that outdoor adventure and nature trips in particular will see growth, driven by younger audiences. The good old American roadtrip might return, and by 2030, domestic travel is projected to reach 70% of travel spending in the United States.

Americans feel safer in their own country and they want to explore the great USA.

Multiple Shifts Driving the New Travel Market

There may be a continuing preference for sustainable and responsible travel, as they cite Skift’s report that 83% of travelers believe sustainable travel is very important. Even with US deregulation and its money-saving benefits, most travel destinations will make an effort to be eco-friendly as part of an ideal customer experience.

With local travel getting a boost in the next two to five years, local economies will enjoy growing tax bases, making travel an important source of revenue for cities and states who are losing their lucrative Federal fund transfers.

IGES cites growth in medical tourism and wellness travel. Wellness tourism hit $720 Billion in 2019. With the Trump admin’s new focus on health (RFK), wellness travel will get a cultural and economic boost. And outbound medical tourism likely will continue to grow to $182 billion as US-based clinics become too expensive. Aging populations will need more critical services and US health insurance may not keep up to American’s actual medical coverage needs.

Mental and emotional health are priorities for Americans too. With a resurgent small business and private sector economy, they’ll have the funds to travel as they most wish. While some choose travel tips as their mental and emotional rejuvenation, others will be seeking destinations that emphasize health and wellness. You’ll hear more about treatments such as body vibration therapy, cryotherapy, red light therapy, and stem cell treatment. And just relaxing in a hot tub or relaxing in a quite out of the way resort will be compelling.

Other trends include local cultural immersion, food/culinary experiences, and historical experiences.

Last chance tourism is about the effect of over-tourism and human incursion,and how many travelers might be in a hurry to experience locations which are becoming too visited or spoiled. It’s a serious problem where anti-tourism activism is taking place.  Locations that are seeing damage include the Great Barrier Reef in Australia. Places such as Venice and Amalfi Italy, Bali Indonesia, Amsterdam, Greece, Spain, Florida, California, and Thailand.

Services such as Airbnb and VRBO vacation rentals had seen booming demand but may face some headwinds as some neighborhoods seek to expel short-term rentals.

Just to cross reference here to other travel market predictions, Expedia sees a big shift to cheaper more relaxing destinations next year. They cite the rising cost of travel, and the desire for off-the-beaten-path trips, authentic experiences and a real connection to communities and local cultures. Places such as Mongolia have seen a huge increase in visitors. Expedia also  speaks of travelers giving up on fear of missing out (FOMO) for the joy of missing out (JOMO).

Solo Travel Continues Growth

Solo travel is on the rise as young people unchained from 9 to 5 jobs to gig work yearn for travel and cheaper cost of living. Other travel research showed an increase in solo female trips.  And with the surge in the US economy and a severely undersupplied US housing market, the pressure to find cheaper cost of living will increase. Gen Z’s and Millennials will be on the move looking for travel solutions. Workations or Bleisure trips are becoming more popular as Americans and Europeans try to improve their lifestyles and satisfaction with trips to places where they can work online.

With Americans living longer, multi-generational trips could see growth too. That might include cruises, road trips, resort vacations, rental home bookings, and could increase demand for guided tours. In fact, this particular travel trend might be the most lucrative of all given its personal importance and how it is more affordable with a larger group of travelers.

Technology Driven Tourism

Already, AI is influencing the travel market, and Gen Z’s and Millennials seem to prefer how artificial intelligence tools aid planning, responsiveness, education, and customer service. Everything from virtual reality pre-travel research to smart airports to AI-aided trip planning is making them feel more confident of their travels, whether in the US or abroad.

As Statista’s data on trip researching and booking via AI apps shows, travel consumers are becoming more comfortable in using them. Bookings for hotels is strong now and we can expect itinerary-to-bookings purchases to grow as well with improved AI travel planners emerging.  Mindtrip.ai is one such tool leading the way to help travelers design their dream trip.

Many travelers prefer contactless travel planning and booking and AI technology systems are improving on delivering that service. According to a Booking.com survey, 83% of respondents are using technology to find less crowded areas, and 40% use smartphone apps for real-time assistance.

Mobile-based Booking Platforms are seen as delivering good value to travelers. The success of Travel Perk, Booking.com, and Expedia show travelers like a big selection and the ease of booking and managing trips via their smartphone.

Impulse travel too may be on the rise as Americans will have more cash to do as they please. And some travel companies are enabling last-minute travel including instant cancellation privileges.

Lastly, education and skill-seeking tourism will grow as workers travel to get the training they need for today’s economy and this would include attending conventions and conferences and receiving comprehensive training unavailable in their location.

2025’s Opportunity Awaits

The forecasts and predictions by travel market leaders might not take fully into account the economic boost from the incoming Trump-led government. The effect of lower taxes, deregulation, increased incomes, cultural trends, and lower interest rates mean these organizations will revise their 2025 and 5 year travel market forecasts.

This is a time of great economic change and the next 5 years present an unusually good opportunity for business growth and profitability. By reshaping your travel package offers and branding, rebuilding your content marketing strategy, and integrating AI enhancements, you might capitalize on all of these major trends for 2025 and beyond.

If you’ve downsized and reorganized as many companies have in the last two years, now’s the time to pick your new marketing team and keep it cost-efficient too.

Contact me about how I can contribute to your 2025 transition and revenue uplift. I’m looking forward to helping.