Is the US Travel Market Crashing?

We’ve been waiting for US national travel data for 2025 to begin rolling in and it’s arriving. What the initial data is telling us is that the US and Canadian travel markets are taking a downturn, and it’s surprising how steep the decline is.

While the harm is immediate, the negative sentiment that’s been established in other countries could last many years, and reshape travel flows across the globe. As travelers experience new destinations, they may not return to the US with the same frequency or desire. It’s a big blow to the travel industry, but we should keep in mind how bad the Covid plunge was, and that it recovered soon enough in 2022.

For travelers, this slowdown will generate more affordable prices on flights and hotels, yet inflation will present challenges for restaurant meals, hotel rooms and travel fuel costs. The tariffs will likely push inflation back up above 3% and may increase through the summer. For travel companies, these changes require alternations in travel packages, staff reorganization, and marketing strategy.

It’s a fact that fewer foreign travelers from Canada, China, Mexico and Europe can afford to vacation here. With a reduction in international business corporate travel is also suffering a steep decline.  The new focus for US travel companies is US domestic.  Before the Trump tariff imposition, The US Travel Association predicted domestic leisure travel will rise by 3.9% and reach more than $1 trillion in 2025, equaling 2019 levels (inflation-adjusted). Air traffic volumes are expected to continue growing into 2026 and beyond.

Of course, if the US economy resumes its strong growth in 2026, US domestic travel could grow considerably.  They’re projecting a 4.0% growth in U.S. business travel spending for 2025, reaching $316 billion, but is not expected to recover to normal until 2028.

Canadian Cancellations Creating a Big Drop in US Travel Industry

The biggest drop in bookings and revenues is due to lost Canadian travelers.  According to a poll, 36% of Canadians who had planned trips to the United States have canceled them. Canadians are instead booking trips to Europe (up 36%) primarily to Ireland and Scotland. Additionally, The number of Canadians entering the U.S. by passenger vehicle fell 21% to 2,223,408 trips in February 2025. That’s a loss of about 500,000 trips.

According to the US Travel Association, Canada is the primary source of international visitors to the United States, which rose to 20.4 million visits in 2024, generating $20.5 billion in spending and supporting 140,000 American jobs. They predict that a a 10% reduction in travel by Canadians could mean 2.0 million fewer visits resulting in $2.1 billion in lost spending.

OAG senior analyst John Grant said this week that “Future flight bookings between Canada and the U.S. have collapsed.  Using forward booking data from a major GDS supplier, we’ve compared the total bookings held at this point last year with those recorded this week for the upcoming summer season. The decline is striking — bookings are down by over 70% in every month through to the end of September.“

Worsening the scenario is the reduction in snowbirds visiting Florida, and the number of Canadians who owned properties in Florida, Arizona, and Texas. The high ownership costs in these states along with the exchange rate for the CAD/USD is causing many to sell their properties. That will affect long-term visit frequency and overall spending in those states.  Communities along with major north/south corridor highways such as the I95 and I75 will see much lower hotel bookings and restaurant revenues.

European to US Travel Dropping Too

European visitors are declining as well. Polls there show European’s attitude toward visiting the US has worsened. Visitor numbers to the U.S. from Western Europe fell 1% year-on-year in February, according to preliminary data from the U.S. National Travel and Tourism Office, after rising 14% in the same period last year.

Tourism Economics says travel to the US is now projected to decline by 5.5% in 2025 vs earlier forecast of a 9% growth. Europeans spent $155 billion on travel to the United States in 2023, according to EU figures.  They add that the decline might reach a US$18 billion drop in tourist spending in the United States for the full year.

It brings us back to the opportunity for travel agencies, destination marketing organizations, hotels, and tour operators for 2025. It’s Americans looking for a great vacation.

With the big drop in international travelers, you’ll want to reorganize your travel business and rally around a new business model. It’s a pivot to digital travel marketing with an SEO/Content Strategy that makes your travel brand and travel packages relevant to today’s travelers. Please review my affordable, comprehensive travel marketing services and know that you’re using your budget optimally and building lasting results.

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