LARC Unveils Impact of Economic Uncertainty on the U.S. Hotel Industry

• The U.S. economic outlook has significantly degraded over the past two months, primarily due to the current administration’s tariffs and lack of transparency.
• These economic changes have led to a decline in consumer sentiment and a drop in advance bookings between Canada and the U.S. by more than 70% for the summer leisure travel season.

The U.S. economic landscape has significantly degraded over the past two months, leading to heightened uncertainty. This instability is primarily driven by the current administration’s tariffs and a lack of clarity regarding their scale and duration. This situation makes it difficult to predict the future implications for the lodging industry.

A series of policy dynamics, including disparaging remarks about Canada and other nations from Washington, D.C., and President Trump’s inconsistent approach to tariff negotiation, have contributed to this uncertainty. The tariffs, which have been implemented at higher levels than expected, are anticipated to have a more negative short-term economic impact than initially predicted.

This economic shift has led to a series of consequences. Moody’s Analytics now projects 2025’s GDP growth to be 1.3%, a decline from the 2.3% predicted in February. U.S. Consumer Sentiment has dropped 23% year-to-date (YTD) through March, and the S&P 500 index has fallen 15% YTD and 12% since April 2.

Most concerning for the hotel industry is the fact that advance bookings between Canada and the U.S. have dropped by over 70% for the upcoming summer travel season.

With this backdrop, Lodging Analytics Research & Consulting (LARC) believes there is too much uncertainty to issue an updated forecast for the U.S. hotel industry.

Discover more at Lodging Analytics Research & Consulting.