NASHVILLE, Tennessee — The intersection of geopolitics and travel is growing and the U.S. hotel industry is in the crosshairs.
As U.S. tariff policies and negative rhetoric toward other countries continue to dominate headlines, hoteliers are seeing the effects show up in the data. Hotel demand is down in part due to weakening consumer confidence. And international inbound travel has taken a sizable hit, perhaps delaying a full recovery to pre-pandemic numbers by another four years, according to Aran Ryan, director of industry studies at Tourism Economics.
During the "How Geopolitical Uncertainty is Affecting Travel" session at the 2025 Hotel Data Conference, Ryan said top-line international inbound demand to the U.S. has been affected compared to the past growth trends.
Corresponding with President Donald Trump's tariff policy, overseas visitor arrivals to the U.S. — not including travelers originating in Canada or Mexico — plummeted in March, down 11.6% year over year. They jumped up again in April, but as of the end of June, overseas arrivals to the U.S. were down 3.4% compared to the same period in 2024.
Add in the effects of the loss of Canadian travelers to the U.S. and the numbers get worse, Ryan said.
Prior to Trump taking office, Tourism Economics projected that U.S. inbound arrivals would recover to 2019 levels this year. That recovery is now significantly delayed, Ryan said.
"It's a sustained impact to U.S. inbound travel," he said, adding that it's not a scenario where the country experiences one bad year then makes up for negative numbers quickly.
"We've pushed this recovery timeline back to 2019 levels ... out to 2029, so we're anticipating a sustained setback as we go through the administration's policies," Ryan said.
Back to Canada. It's the country with the largest negative impact on tourism growth to the U.S. Since Trump's election victory in November 2024, he has continuously urged Canada to become the 51st U.S. state in order to duck impending tariffs.
The subsequent strain on a once-strong relationship between the two countries is playing out in the hotel data, Ryan said.
Tourism Economics projects a 20.2% drop in visitor arrivals to the U.S. from Canada this year. Canadian visitor arrivals to the U.S. were down 23.7% June year to date, down 28% in land travel and 13.3% in air travel.
"Think about where the Canadians live. The U.S. is closer to them than a lot of parts of Canada are, and they typically have come to the U.S.," Ryan said. "But also these drive trips are something that was pretty easy to plan and pretty easy to cancel."
While it's easy to point to tariffs and rhetoric as an overall contributing factor to falling international inbound demand, it's not the same story from every global region.
Visitor arrivals to the U.S. from Eastern Europe, Central America and South America were all up more than 1% year to date in June. And arrivals to the U.S. from Mexico are generally ahead of where they were the same time last year.
The price of the dollar is above the historical average, but it's cheaper than it's been over the past few months. This is encouraging more people to travel to the U.S. and serves as a near-term positive, Ryan said.
"Coming to the U.S. is not the bargain it was back in, say, 2010, but it is cheaper than a couple of months ago," he said. "The short-term depreciation does matter."
All in all, Tourism Economics projects total international travel to the U.S. this year including overseas and intracontinental to be down 8.2% over 2024 levels.
How this affects US hoteliers
The overall decline in international inbound visitors will have an effect on U.S. room demand growth. For 2025, CoStar Group and Tourism Economics is projecting international demand will be down 0.6%. It's currently expected to be up 0.3% in 2026.
The takeaway is that even if individual cities don't typically see a lot of international inbound demand, every bit counts these days and losing any is tough.
"It takes away that marginal demand at the point where you're trying to drive additional pricing, which can make it more difficult," he said.
Markets such as Miami, Dallas, Honolulu, New York City and Los Angeles have the highest international share of paid room nights among the major U.S. cities. But cities that receive the most Canadian travelers will be the ones most affected, Ryan said.
Seattle; Portland, Oregon; Detroit; Louisville, Kentucky; and Cleveland will see the largest declines in international overnight visitor arrivals, with most of that share of decline due to losing travelers from Canada.
There are a couple of huge events heading to the U.S. in the near-term future, with the 2026 FIFA World Cup in 11 U.S. markets next summer and the 2028 Summer Olympics in Los Angeles. While the events' overall impact on hotel demand for the year will be limited, it provides the U.S. with a shot to gain momentum.
"These are major opportunities to put the U.S. back on the world stage," Ryan said. "I think it really is a chance to show that stability and communicate out that despite anything you might see in the headlines, we're all still here, [it's a] safe, great place to come and visit."