by Lacey Pfalz
Last updated: 9:55 AM ET, Tue April 22, 2025
Federal funding changes, the worsening trade war and the Trump Administration’s intensifying border challenges have led to an impact on U.S. hotel performance the past few months, according to a new analysis.
The report, called “Navigation Market Turbulence: The Impact of Federal Policy Changes on U.S. Hotel Performance and Demand Outlook,” takes a look at data compiled from over 35,000 hotels across 334 markets in the country from January 2024 to early April 2025, as well as 30-day future bookings from April 4.
The nation is seeing more mixed results this year than last year: 53 percent of U.S. markets saw year-to-date declines in hotel performance, up to 22 percent lower than last year.
The rest of the markets either remained flat or improved.
Total room night volume decreased 1 percent from last year, with future bookings -4 percent from 2024.
This year was predicted to be a banner year for U.S. tourism by the National Travel and Tourism Office, expected to nearly reach pre-pandemic totals, with a 6.5 percent increase in total visitation from last year.
That prediction seems to have changed.
Government travel is even worse: total U.S. government per-diem transient bookings are down 9 percent, with future bookings 20 percent below last year’s levels. Seventy-six percent of U.S. markets are reporting declines in government travel, with Washington, D.C. reporting a 20 percent drop in bookings and a 44 percent decline in future bookings.
"Federal policy is reshaping travel patterns in ways that directly impact business planning and hotel profitability,” said Cindy Estis Green, Co-Founder & CEO of Kalibri Labs. “We have always seen muted travel growth during times of economic uncertainty and the duration and extent of the disruption is not yet known.”
“However, to navigate this evolving landscape, commercial teams need a granular, real-time view of demand. Precision—not broad targeting—will define the winners in today's hospitality market. Consumers and businesses will always return to traveling, but the short-term decisions made to manage this turbulent period are critical as they can affect long-term hotel results for years to come."
Hawaiian tourism officials have reported rising concerns about Canadians, the largest international source market for the United States, cancelling their pre-planned trips due to the escalating trade war and Trump’s comments about making the sovereign nation the 51st state.
New International Trade Administration data found that international arrivals to the U.S. declined 11 percent in March alone, with Canadian visitation down 12.5 percent year-over-year.
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