As the Financial Times (FT) reported Sunday (June 15), fewer people passed through U.S. airports in the last 90 days than in the same timeframe in 2024. Air travel has begun to dip for the first time since the height of the COVID pandemic, the report added, citing an analysis of Transportation Security Administration data by TS Lombard.
Meanwhile, prices for airline tickets and hotel rooms fell on a seasonally adjusted basis between April and May, according to the Bureau of Labor Statistics’ latest inflation figures. The hospitality industry, the report added, says it has become harder to fill rooms as U.S. tariffs have fueled concerns about unemployment and rising prices.
“The uncertainty in the environment is creating cautionary behaviors from guests,” Joan Bottarini, chief financial officer for the Hyatt hotel group, said during an investor conference last week in New York.
American consumers across all income brackets reduced spending on hotels and air travel in the year to May, compared with the same period in 2024, according to an analysis of credit and debit card spending by Bank of America (BofA).
The largest pullback on travel spending came from lower-income consumers, BofA found. Wealthier consumers only marginally curbed their spending, which means that luxury hotels were mostly insulated from the dip in travel.
“The higher end is still actually prioritizing travel and experiences, and it’s showing up in our numbers,” said Hyatt’s Bottarini.
Selling rooms was “definitely more difficult” for “lower end” hospitality providers, added Ewout Steenbergen, chief financial officer for Booking Holdings, which owns Booking.com, Kayak and Agoda. He said was seeing “shorter stays” and more last-minute reservations in the U.S.
Against this backdrop, the travel sector is employing artificial intelligence (AI) to reimagine internal operation and customer experiences, PYMNTS wrote last week.
“Before you come into the hotel, after you leave the hotel, you will be 90% AI-driven,” Accor CEO Sébastien Bazin said at the recent Viva Technology 2025 conference in Paris. “Booking, choosing what you want, what you need — all of that will be clearly AI.”
Also at the conference was Expedia CEO Ariane Gorin, who discussed the external stakes facing the industry when it comes to AI.
Travelers “may go to Google, and now these days, go to ChatGPT,” she said. “It’s a very different search experience when you’re looking for keywords versus prompts. For us, we think about how do we make sure that our brands are showing up in these new ways travelers are searching?”
