Expedia today reported a revenue outlook that missed the mark. The company attributes this drop to lower domestic and global travel demand. According to the latest federal government statistics, cross-border traffic from Canada has plunged more than 87%. This abrupt and large decline has raised alarm bells about the health of international travel to the U.S.
According to the U.S. government, by the end of March, just 7.1 million international travelers had come to the United States. This is a 3.3% drop from the first quarter of 2024. This figure does not include land crossings from Mexico or trips starting in Canada. International visitors have cratered. This decline comes at the same time as a five-month slump in U.S. confidence in the economy, which has now hit its lowest level since the start of the COVID-19 pandemic.
Expedia CEO Ariane Gorin recently underscored such dynamics. She noted that the picture is definitely worse on the demand side in the U.S., in April vs. March. She noted, too, that citizens from many countries, particularly our northern neighbors from Canada, are losing faith in traveling to the U.S. This trend is likely due in part to the impacts of tariffs and the detention of Mexican tourists at the border.
As travel patterns shift, major U.S. airlines have responded by pulling their full-year financial guidance and planning to reduce scheduled flights due to a decrease in leisure travel bookings. This win is a sign of a broader, industry-wide acknowledgment that the landscape of travel demand has changed.
Gorin pointed out a pretty surprising trend. Europeans are skipping the states. In droves, they are continuing to passionately opt for locations in Latin America. She remarked on the noticeable trend: “Europeans are traveling less to the U.S., but more to Latin America.”
At the same time, American consumer confidence is slumping, and international travel figures are falling. These trends should cause deep alarm for travel companies and the overall economy. Christopher Nassetta, a prominent figure in the hospitality industry, expressed optimism about future economic recovery: “My own belief is you will see some of — if not a lot of — that uncertainty wane over the next couple of quarters, and that will allow the underlying strength of the economy to shine through again.”
Even with these headwinds Expedia still managed to post a 3% increase in revenue for the quarter ($2.99 billion). The announcement caused the company to drastically lower its growth projections for the year. These days, they’re projecting growth of 0%-2%—a downgrade from their prior estimate of 2%-3%.
Ellie Mertz, another industry expert, commented on the changing travel behaviors observed among Canadians: “I think Canada is the most obvious example, where we see Canadians are traveling at a much lower rate to the U.S. but they’re traveling more domestically. They are traveling to Mexico, they are going to Brazil, they’re going to France, they’re going to Japan.”
