- Domestic leisure travel remains robust, with projected growth despite economic uncertainties, while international inbound travel is expected to continue to decline in 2025.
- Major upcoming events, including the FIFA World Cup and America’s 250th Anniversary, are anticipated to boost international travel growth from 2026 onward.
The U.S. Travel Association’s Fall 2025 forecast reveals a mixed outlook for the hotel and travel industry. Domestic leisure travel shows resilience despite economic concerns, while international inbound travel is expected to decline. According to the report, total U.S. travel spending is projected to grow by 1.1% in 2025, reaching $1.35 trillion, with expectations of reaching $1.49 trillion by 2029.
Domestic leisure travel remains a strong pillar, forecasted to grow 1.9% to $895 billion in 2025. This growth is attributed to the continued prioritization of travel by American consumers, despite concerns about inflation and the overall economic climate. Notably, prices for travel-related items and services have shown smaller increases compared to the broader economy, providing some stability for domestic travelers.
Conversely, international inbound travel is projected to experience a downturn, with visits expected to decrease by 6.3% from 72.4 million in 2024 to 67.9 million in 2025. This decline is largely driven by a significant reduction in visits from Canada, while visits from other countries are expected to remain flat. Total inbound travel spending is forecasted to fall by 3.2% to $173 billion for the year.
However, the forecast anticipates a rebound in international travel starting in 2026, driven by major events such as the FIFA World Cup and America’s 250th Anniversary. These events, along with future spectacles like the 2028 Summer Olympics in Los Angeles, are expected to attract record levels of international visitors, with projections indicating 70.4 million visits in 2026 and 81.9 million by 2029.
Business travel is also expected to continue its recovery, albeit at a slower pace. Domestic business travel spending is forecast to grow by 1.4% in 2025, with group travel outpacing transient travel. The sector is projected to surpass leisure travel growth rates by 2027 as business investments solidify and economic conditions improve.
Despite these positive indicators, several risks could impact the travel industry’s growth. Consumer uncertainty remains significant, and any deterioration in broader economic conditions could lead to a decrease in travel. Additionally, potential increases in visa fees, extended wait times for visa applications, and negative sentiment towards the U.S. in key markets could further decrease international inbound visits.
Overall, while the U.S. travel industry faces challenges in the short term, the outlook for the latter half of the decade appears more optimistic, buoyed by a series of high-profile international events.
