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STR Unravels the Dramatic Effects of Slowing Global Inbound Travel on U.S. Hotel Industry’s Demand – Image Credit STR
Recent projections by STR indicate a potential decline in international inbound arrivals to the United States. This decline could impact the U.S. hotel industry, with an estimated 4-7% of total hotel demand coming from international inbound arrivals. The likeliest scenario could have minimal impact, but a steeper decline could have significant repercussions. Other factors, such as the geopolitical environment and natural disasters, influence hotel performance.
Analyzing the Impact
Tourism Economics says international inbound arrivals account for 4-7% of total U.S. hotel demand. If international inbound falls 5% for the year, the industry could lose 3 million room nights sold. However, a steeper decline would have a more substantial impact, with a 1% reduction in international inbound reducing hotel demand by 654,000 rooms annually.
Recent Performance
The first quarter of 2025 saw several major demand influencers impacting the industry. These included the presidential inauguration, Super Bowl shift, and the College Football Playoff Championship shift. Natural disasters like the Los Angeles wildfires and the Fall 2024 hurricanes also played a role. March ended Q1 with a modest 0.8% increase in RevPAR.
Future Bookings
Forward bookings among major U.S. markets appear mostly steady for the coming months. However, individual market performance varies. For instance, D.C. is down around 3 percentage points on average through June, while San Diego is up around 6 percentage points.
Other Indicators
Other factors to watch include ADR growth, long-term Group bookings, TSA screenings, unemployment claims, and consumer spending. ADR growth has primarily driven RevPAR forecasts this year, and any slowdown might indicate market share discounting.
Looking Ahead
Industry experts advise against overreaction and emphasize the importance of trusting data and complete analysis. A revised STR and Tourism Economics forecast will be released in early June at the NYU IHIF.