Traveler Sentiment Toward the USA: Regional Impacts of Tariffs and What Lies Ahead

For anyone who has spent decades in the hotel and travel business, you learn that what seems like a policy debate in Washington or a tariff on paper often becomes front-page in traveler conversations around the world. The cost, the image, the welcome all matter. 

Over the years, economic storms, competitive destinations, regulatory shifts have taught us one constant: traveler sentiment doesn’t respond to just price. It responds to confidence, to whether a place feels worth risking the long trip, the visa, the unknowns.

Tariffs are one of those underappreciated forces. Not always top of mind for hoteliers or destination marketers, but critical nonetheless. They raise operational costs, ripple into pricing, and often, though less visibly, shape impressions abroad. When travelers in Asia, Europe or Canada begin to question whether value is slipping, it shows up in forward bookings, in cancellations, in the stories travel editors tell. That’s where we are now.

This article uses recent passenger-arrival data, hotel performance metrics, and incoming surveys to trace how tariffs are shifting travel behavior from region to region; how those shifts are reflected in lodging performance; and what the trail looks like going into 2026, a year that promises both opportunity and risk.

What the Numbers Are Saying

In the first half of 2025, STR reported that international arrivals to the U.S. were down about 3.1% (per I-92 data) versus the same period last year. That downturn isn’t evenly distributed: some cities, particularly Las Vegas, are seeing sharper drops in inbound traffic. Regions like the Mountain and West South Central have also shown softening demand. Since overseas arrivals contribute an estimated 4–7% of all U.S. hotel room-night demand, even modest drops in inbound travel can ripple outward which could translate into a loss of around 3 million room nights sold.

On the forecasting front, CoStar and Tourism Economics recently lowered their projections for 2025–2026 U.S. hotel growth. Revenue per available room (RevPAR), occupancy, and demand projections were all adjusted downward in light of softening international travel and cost pressures. Surveys tell a complementary story. Respondents in several international markets report being less likely to visit the U.S. because of the political environment  including trade policy and its perceived implications. Another report shows declining travel intention in key source markets with only a few (for instance, India) bucking the trend.

Regional Ripples: How Different Source Markets Are Responding

Asia-Pacific & China

In Asia, especially China, leisure and student travel are behaving more cautiously. Surveys show that uncertainty over visa processes, travel costs, and perception of political climate are making people postpone or reroute trips. While exact figures diverge by source, data from STR (international arrival declines) is consistent with what we hear from travel agents and booking platforms in Asia. (E.g., less forward booking from China into U.S.) The Skift data confirms this flattening (or decline) in intent, though there isn’t yet a public source that quantifies precise drops by percentage for every market in Asia apart from China.

Canada & Mexico

Here the effects are more visible and immediate. A Reuters piece in March 2025 detailed how Canadians are increasingly hesitant to travel to the U.S., citing negative rhetoric and rising tariffs affecting goods. Canadian arrivals are part of the “4-7%” inbound hotel demand figure, declines from Canada (and weakening car/air crossings) are contributing meaningfully to the drop in international arrival numbers. 

Europe

European travelers are showing mixed signals. Intention surveys (Skift) capture concerns related to cost, political climate, and visa/entry complexity along with tariffs. While not every European market is down sharply, many are placing U.S. travel lower on priority lists. Data from STR shows international arrivals broadly down; since Europe is a large contributor to overseas inbound traffic, it is affecting RevPAR in gateway and destination markets.

Other Regions

Markets in the Middle East, Africa, and Latin America show more varied behavior. High-income travelers remain more resilient, often less sensitive to marginal cost changes. But for price-sensitive segments in Latin America or travelers from countries with weaker currencies, tariffs and the strong U.S. dollar are squeezing affordability. Sources like Skift and forward booking data indicate these segments are more likely to delay or substitute U.S. travel with closer or lower-cost alternatives.

How Tariffs Are Showing Up in Hotel & Travel Performance

The influence of tariffs on travel doesn’t reveal itself in a single headline number; instead, it shows up in the fine print of hotel forecasts, performance reports, and booking behavior. Costs of imported goods  from linens and uniforms to kitchen supplies and technology  are climbing. Food and beverage programs in particular are feeling the squeeze, as tariffs on imported wines, spirits, and specialty ingredients cut into margins. Hotels can only absorb so much before some of that cost makes its way to the guest.

The broader picture is one of a market losing a little steam. According to CoStar and STR’s latest forecast, RevPAR for U.S. hotels is projected to decline by about 0.1% for full-year 2025, with demand expected to remain flat or slightly negative. Occupancy, once a bright spot, is now projected to hover around 62.5%, a notch lower than earlier expectations. These numbers may not signal crisis, but they reflect a sector where growth has stalled just as international sentiment is softening.

Not all hotels are experiencing this equally. Reports show a clear split by tier: luxury and upper-upscale properties continue to outperform, buoyed by travelers who are less sensitive to price increases and still willing to pay for premium experiences. By contrast, midscale and economy hotels are under pressure, exposed to cancellations, shorter booking windows, and more price-sensitive guests. For operators in these segments, the margin for error is shrinking.

Group business, another vital indicator of health, is showing signs of weakness. STR’s weekly tracking highlights a year-over-year decline in group demand that has persisted for several weeks. In major markets such as Las Vegas and Houston, forward bookings are lagging well behind actualized occupancy, suggesting that planners are holding back on commitments or pushing decisions closer to event dates. The result is a widening gap between expected and realized business, leaving hoteliers with less visibility into future demand.

Some good news on the horizon. Executives from the major U.S. airlines said last month that American passengers booking premium airfares helped fill their international flights and that demand for domestic flights was picking up after a weaker than expected showing in the first half of 2025.

Looking Toward 2026

As 2026 approaches, the outlook for U.S. hotels and travel demand depends heavily on how tariff policy evolves. If current measures remain in place and no major trade agreements provide relief, the industry is likely to face a subdued first half of the year. 

Forecasts from analysts suggest that overall performance will stay soft through at least mid-2026, with only modest gains in occupancy and demand. Luxury and destination markets are positioned to fare better, supported by high-spend travelers who are less sensitive to rising costs. In contrast, midscale and economy properties—already struggling with cancellations and shorter booking windows—may continue to lag behind.

Pricing trends tell a similar story. According to forecasts, average daily rates are projected to rise by just 0.8% in 2025, driven more by rate creep than by genuine demand growth. That dynamic points to soft spots ahead for the mid-market, where competitive pressure will limit how much operators can raise prices without losing guests.

Group business will be another bellwether. STR’s weekly data already shows weaker forward bookings, with planners hesitant to commit large blocks far in advance. The question for 2026 is whether group demand will recover its usual visibility or remain defined by short lead times and last-minute decisions. If the latter persists, hotels in convention-driven markets such as Las Vegas and Houston will face continued uncertainty.

Beyond hotel metrics, several external signals will be just as critical to watch. International arrival data from the I-92 program will reveal whether inbound travel is stabilizing or slipping further. Exchange rates, particularly against the Canadian dollar, Mexican peso, and the euro, will shape affordability perceptions. Visa and travel policy friction, always a sensitive factor, could either ease or compound challenges. And in the background, tariffs will continue to add cost pressures to food and beverage, imported goods, and hotel operations—costs that ultimately feed into guest pricing and sentiment.

The road to 2026, then, is not without opportunities. A more stable policy environment, even without major tariff rollbacks, could help restore traveler confidence and bring longer booking windows back into play. But if current friction persists, particularly in key source markets, the USA risks delaying recovery and diverting growth to other destinations.

What Leaders Can Take From This

The data is clear: tariffs are already affecting travel sentiment. It’s not just a whisper in trade or economic reports—it shows in how many people are booking (or not), in how hotels are planning, and in what travelers are saying in survey after survey.

For those of us in hotels, destination marketing, airlines, or tourism boards, the imperative is to attend as much to perception as to pricing. Stabilize policies where possible; make the travel experience clear, predictable, affordable; segment offerings mindful of the growing divide between those who are sensitive to cost and those less so.

Because 2026 offers both a stage and a test. If trade tensions cool, if messaging about openness grows stronger, and if major events like the FIFA World Cup are leveraged well, the U.S. could see a sharp uptick in inbound travel.

But if current friction persists, particularly in key source markets, there is a potential risk in delaying a recovery and allowing other destinations to continue their growth.