US immigration restrictions are beginning to spill over into the hotel industry, with reservations in its major tourist cities declining even during the peak travel season — a trend industry observers warn would take several years to fully recover from.
The sector is also feeling the strain of Washington’s hardline tariff policies targeting key allies, compounded by a slowing domestic economy.
According to Tourism Economics, a travel data provider, foreign tourists are projected to spend $8.3 billion in the US in 2025, down more than 4% from the previous year.
The World Travel & Tourism Council (WTTC) offers an even more dire forecast. It projects that US hotels would face losses of up to $12.5 billion this year.
In major tourist cities like New York and Las Vegas, mid- to low-tier hotels are slashing room rates to stay afloat
In South Korea, major full-service carriers are reportedly seeing a noticeable uptick in cancellations of US-bound flight reservations, particularly in business class seats typically booked for corporate travel.
Travel industry sources cite the recent arrest and week-long detention of 317 Koreans by US immigration authorities at a construction site of a Hyundai Motor Co.-LG Energy Solution Ltd.’s joint venture in Georgia as a key reason behind the rise in US trip cancellations.
ROOM OCCUPANCY RATES
According to STR, a data provider for the hospitality industry, the room occupancy rate at US hotels reached 63.9% in April, down 1.9 percentage point from the year prior.
The average revenue per available room (RevPAR) fell to $103.11 in April, down 0.1%, compared to the same period last year.
For the second quarter, their average room occupancy rate declined by 1.4 percentage points, while RevPAR dropped by 0.5%.
LAS VEGAS
Las Vegas, a top destination for international travelers, saw a 11.3% drop to 3.09 million in the number of its visitors in June, compared to the same month last year.
The average hotel occupancy rate in the city stood at 78.7% during that month, down 6.5 percentage points, while RevPAR plunged 13.8%.
Analysts point to a sharp decline in international arrivals from neighboring countries such as Canada and Mexico as a key factor behind the slump.
Global hotel chains are revising down their earnings outlooks amid weakening travel demand.
Hilton recently lowered its projected RevPAR growth rate for the year to zero to 2%, while Marriott cut its annual revenue growth forecast to 1.5–2.5%.
Starting Aug. 20, the US government requires visa applicants from some countries, including Malawi and Zambia, to post a refundable security bond of up to $15,000 per person to curb visa overstays.
Washington has also tightened the screening process for visa applicants, making in-person interviews mandatory, starting Aug 2.
The move coincides with its continuous re-evaluation of roughly 55 million valid visa holders, provoking anti-American sentiment.
As of the end of August, the number of passengers traveling between South Korea and the US reached 3,794,729 travelers, marking a record high for the period, according to local media reports.
By Jae-Kwang Ahn
ahnjk@hankyung.com
Yeonhee Kim edited this article.
