More warning signs emerge for US travel industry as summer nears
FILE – Travelers check American Airlines flight information screens for their flight status at O’Hare International Airport in Chicago, Wednesday, Feb. 22, 2023. (AP photo/Nam Y. Huh, File)
AP — Expedia Group said Friday that reduced travel demand in the United States led to its weaker-than-expected revenue in the first quarter.
Meanwhile, 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. This fueled a period of “revenge travel” that turned into sustained interest in getting away.
Expedia owns the lodging reservation platforms Hotels.com and VRBO as well as an eponymous online travel agency. It was the latest American company to report slowing business with both international visitors and domestic travelers.
Airbnb and Hilton noted the same trends last week in their quarterly earnings reports. Most major US. airlines pulled their full-year financial guidance in April. They said they planned to reduce scheduled flights, citing an ebb in economy passengers booking leisure trips.
Fallout from Trump’s tariffs
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.”
READ: ‘Trump Slump’: Fewer foreigners visiting US
Abroad, anger about the tariffs as well as concern about tourist detentions at the US border have made citizens of some other countries less interested in traveling 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. This was 3.3 percent fewer than during the first three months of 2024.
The numbers did not include land crossings from Mexico or travel from Canada. Canadian 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 the net value of the travel technology company’s bookings into the US fell 7 percent in the January-March period. But bookings to the U.S. from Canada were down nearly 30 percent.
In a conference call with investors, Expedia CEO Ariane Gorin said US demand was even softer in April than March.
Europeans go to Latin America
“We’re still continuing to see pressure on travel into the US, but we’ve also seen some rebalancing,” Gorin said. “Europeans are traveling less to the US, but more to Latin America.”
Seattle-based Expedia said its revenue rose 3 percent to $2.99 billion for the quarter. That was lower than the $3 billion Wall Street was expecting, according to analysts polled by FactSet.
Expedia shares were down than 7 percent in mid-day trading Friday.
Airbnb said last week that foreign travel to the U.S. makes up only 2 percent to 3 percent 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 traveling at a much lower rate to the US. But they’re traveling 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.
