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.
These two reports contribute to mounting evidence suggesting that the U.S. travel and tourism sector might experience its first downturn since the post-pandemic "revenge travel" boom transitioned into continued strong demand for getaways.
Expedia, the owner of accommodation booking sites such as Hotels.com and VRBO along with its own online travel agency, was the most recent U.S. firm to announce a slowdown in business from both overseas tourists and local travelers.
Last week, both Airbnb and Hilton observed similar patterns in their quarterly earnings statements. Many of the leading U.S. airlines announced intentions to cut back on planned routes, attributing this decision to a drop in bookings for leisure travel among budget-conscious passengers.
The U.S. Travel Association has stated that economic unpredictability and worries about travel-related concerns are prevalent. President Donald Trump's tariffs Could you clarify the retreat? In April, American faith in the economy dropped for five consecutive months to hit its lowest point since the start of the pandemic.
Individuals are now more hesitant to splurge on vacations, particularly trips to the US.
On Friday, Bank of America reported that their credit card customers showed readiness to spend on "non-essential" items such as dining out during March and April. However, they noted a continuing decrease in spending on more expensive non-essentials like travel tickets and accommodation, which might be attributed to reduced consumer confidence and concerns over the economy’s future direction.
Overseas, there is frustration regarding the tariffs along with worries about detention of tourists at customs This has caused citizens from certain other nations to lose interest in visiting the US, according to experts in the tourism sector.
Last month, the US government reported that approximately 7.1 million international travelers entered the United States by the end of March this year, which represents a decrease of 3.3 percent compared to the initial quarter of 2024.
The figures did not account for land crossings from Mexico or travelers coming from Canada, whose citizens had shown anger over Trump’s comments suggesting their nation could become 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 continue to experience pressure on travel to the US, but we have also observed some adjustments," Gorin stated. People from Europe are visiting the U.S. less frequently nowadays. , but rather more towards Latin America."
Interest in the US as a travel destination is waning.
Last week, Airbnb stated that international trips to the U.S. account for just 2 to 3 percent of their transactions. However, they noted a decreasing trend in how many people want to visit the United States within this segment.
I believe Canada serves as the clearest instance; here, we observe that Canadians are significantly less inclined to visit the U.S., yet their domestic travel has increased," stated Airbnb CFO Ellie Mertz during an investor conference call. "They're also exploring destinations like Mexico, Brazil, France, and Japan.
The Hilton President and CEO, Christopher Nassetta, mentioned that during the initial three months of the year, the corporation experienced a decline in international visitors staying at their American properties, notably those coming from Canada and Mexico.
However, Nassetta expressed continued optimism regarding the latter part of this year.
"My personal view is that you'll observe a reduction in some—or possibly a significant amount of—uncertainty over the coming few quarters, which will enable the fundamental resilience of the economy to become more apparent once again," he stated.