The United States is experiencing a notable decline in international tourism, with Canadian and European travelers increasingly opting for destinations closer to home or across the Atlantic. According to data from HotelPlanner, international hotel bookings to the US dropped by a staggering 61% in April 2025 compared to the same period last year. Canadian bookings alone fell by 52%, while those from the UK declined by 33%.

This shift marks a significant change in travel behavior, particularly considering that Canadian tourists have long been the largest group of inbound visitors to the United States. But dissatisfaction with US policies, economic headwinds, and a global shift in travel sentiment are reshaping patterns.

Despite the fall in international arrivals, the domestic travel market in the US is booming. Americans are increasingly vacationing within their own borders, driving hotel occupancy and room rates upward. The average hotel room rate during the week of May 12–18 reached $223, up 19% from the same period in 2024. This surge in domestic demand is helping stabilize the hospitality industry even as foreign interest wanes.

Canadian and European Drop-Off Signals Sentiment Shift

The downturn isn’t limited to just numbers—it reflects a growing unease among international travelers. In Europe, travel to the US is faltering, especially from countries like the UK and Germany. While HotelPlanner recorded a modest 14% rise in total European bookings, the share of Europeans using the platform to book US accommodations fell by four percentage points, suggesting a relative loss in interest.

Several key factors are contributing to this pullback. The US political climate, tighter immigration policies, and rising travel costs are deterring foreign visitors. Additionally, the strong US dollar, ongoing trade disputes, and recent travel advisories from European governments are further dampening enthusiasm.

Both Germany and the UK have warned travelers of heightened immigration scrutiny and unpredictable border enforcement in the US. These advisories, coupled with anecdotal reports of detentions and long wait times, have added to what industry experts call a “sentiment headwind.”

$12.5 Billion Revenue Loss Projected

The economic impact is significant. The World Travel & Tourism Council projects a $12.5 billion drop in international travel revenue for the US in 2025. Foreign visitor spending is expected to fall below $169 billion for the year, dealing a blow to cities and states that rely heavily on global tourism.

Germany, once a steady and profitable source of transatlantic tourism, is now showing steeper declines than the UK. Analysts say this reflects not just financial concerns, but also growing unease about the visitor experience in the US.

Domestic Travel Keeps Industry Afloat

Ironically, while foreign arrivals decline, domestic travel is thriving. Many Americans, wary of international uncertainty themselves, are embracing “staycations” and exploring national parks, coastal towns, and major cities within the country. This domestic surge has buoyed hotel demand and prices, preventing deeper losses for the industry.

With the summer travel season approaching, the outlook remains mixed. International arrivals are expected to fall 8.7% this year, including a projected 10% drop in European visitors. Still, the resilience of the American traveler offers a silver lining for the US hospitality sector.

In a shifting global landscape, the US travel industry may need to rethink its international strategy and focus on rebuilding trust with its once-loyal global clientele.