With 2025 Halfway Over, Travel is Healing — At a Cost to Travel Giants
GDP might be down, consumers might be nervous, and spending might be dragging, but after a lonnngggg Q2, things in the US could be turning a corner. And we aren’t just talking about stocks, which notched all-time highs this past week.
In fact, despite ‘recession jitters’, discretionary spending by consumers has remained hardy in the face of economic trial and tribulation, per data from Morning Consult — and that could be seen in the travel sector.
Well, that was quick: US travel companies expected strong growth this year, but in highlighting the slew of Q1 earnings from airlines, hotel chains, cruise lines, and other travel businesses, we found those expectations in upheaval. Uncertainty and pessimism from industry leaders have been palpable, with brands embracing discounts to win over increasingly budget-conscious customers (both domestic and international). Whether it has a positive impact on performance remains to be seen, but it’s encouraging more people to travel.
- Airfare prices are down 7% per Kayak, hotel rates are down 2% year-over-year per Hotels.com — and for road trippers, gas prices are down 6% YoY.
- Per TSA data tabulated through June 26, there are about 16K more people transiting US airports on any given day in 2025 than in 2024, marking a considerable turnaround.
What Trends Will Affect Travel Going Forward?
Besides discounts, travel brands remain worried about declining interest in US travel from overseas visitors. We had seen a slump from neighboring countries as early as the Super Bowl, but international travel has remained strong — the worry is that it could change.
- Since March, countries like Canada, Ireland, and Denmark have issued travel advisories, weighing recent policy changes and concerns about immigration crackdowns.
- Worsening things, news reports claim a Norwegian tourist was deported for having a political meme on his phone (disputed), while a Canadian citizen died Friday at an ICE Detention Center.
It’s all about brand: With the US’ reputation waning among global citizens, the worry is that the slowdown in traffic from neighboring Mexico and Canada will begin to affect more than border towns and Vegas. And if the trend continues or worsens, it could threaten to overshadow the draw of the US in the 2026 World Cup and 2028 LA Olympics.