Travel companies feel the impact of slump in demand for US holidays

Euronews

12-05-2025

Expedia Group said Friday that reduced travel demand in the United States led to its weaker-than-expected revenue in the first quarter, and Bank of America said credit card transactions showed spending on flights and lodging kept falling last month.
The two reports add to growing indications that the US travel and tourism industry may see its first slowdown since the end of the COVID-19 pandemic fuelled a period of 'revenge travel' that turned into sustained interest in getting away.
Expedia, which owns accommodation reservation platforms Hotels.com and VRBO as well as an eponymous online travel agency, was the latest American company to report slowing business with both international visitors and domestic travellers.
Airbnb and Hilton noted the same trends last week in their quarterly earnings reports. Most major US airlines have said they plan to reduce scheduled flights, citing a decline in economy passengers booking leisure trips.
The US Travel Association has said that economic uncertainty and anxiety over President Donald Trump's tariffs may explain the pullback. In April, Americans' confidence in the economy slumped for a fifth straight month to the lowest level since the onset of the pandemic.
Bank of America said Friday that its credit card holders were willing to spend on 'nice to have' services like eating at restaurants in March and April, but 'bigger ticket discretionary outlays on airfare and lodging continued to decline, possibly due to declining consumer confidence and worries about the economic outlook.'
Abroad, anger about the tariffs as well as concern about tourist detentions at the border have made citizens of some other countries less interested in travelling to the US, tourism industry experts say.
The US government said last month that 7.1 million visitors entered the US from overseas this year as of the end of March, 3.3 per cent fewer than during the first three months of 2024.
The numbers did not include land crossings from Mexico or travel from Canada, where citizens have expressed indignation over Trump's remarks about making their country the 51st state.
Both US and Canadian government data have shown steep declines in border crossings from Canada.
Expedia Chief Financial Officer Scott Schenkel said that while the net value of the travel company's bookings into the US fell 7 per cent in the January-March period, bookings to the US from Canada were down nearly 30 per cent.
In a conference call with investors on Friday, Expedia CEO Ariane Gorin said demand for US travel was lower in April than in March.
'We're still continuing to see pressure on travel into the US, but we've also seen some rebalancing,' Gorin said. 'Europeans are travelling less to the US, but more to Latin America.'
Airbnb said last week that foreign travel to the US makes up only 2 to 3 per cent of its business. But within that category, it's seeing declining interest in the US as a destination.
'I think Canada is the most obvious example, where we see Canadians are travelling at a much lower rate to the US but they're travelling more domestically, they are traveling to Mexico, they are going to Brazil, they're going to France, they're going to Japan,' Airbnb Chief Financial Officer Ellie Mertz said in a conference call with investors.
Hilton President and CEO Christopher Nassetta said the company saw international travel to its US hotels fall throughout the first quarter, particularly from Canada and Mexico.
But Nassetta said he remained optimistic for the second half of this year.
'My own belief is you will see some of — if not a lot of — that uncertainty wane over the next couple of quarters, and that will allow the underlying strength of the economy to shine through again,' he said.
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