Dive Brief:
- A recent Bank of America Institute report found that U.S. tourism is off to a slower start this year as compared to 2023 and 2024, both of which experienced strong post-pandemic travel demand. The bank’s card data also shows softer lodging, tourism and airline spending.
- Poor weather conditions, a late Easter holiday and a lack of consumer confidence might be contributing to the sluggishness, according to the report, titled “Yellow light for travel: US domestic tourism taps the brakes.”
- The bank’s analysts remain cautiously optimistic about the industry’s outlook, saying in the report that the softer travel spending may not signal a “red light” but rather a shift to yellow, with households being somewhat more hesitant to plan big trips in the near term.
Dive Insight:
Consumers have become less confident in recent months, and Bank of America’s credit and debit card spending data provides insight into the trend, with weekly card spending on lodging through the week ending March 22 showing a somewhat slower start this year as compared to the same period in 2023 and 2024.
Total credit and debit card spending per household on lodging services is currently 2.5% below 2024 levels — meaning that the post-pandemic travel rebound has likely played out, according to the report.
The data also shows that airfare spending was around 6% below 2024 levels at the start of this year. This can be “worrying” if consumers are curbing air travel plans that could translate into softer spending in other areas of travel and tourism, like lodging, per the report.
Delta, Southwest and American Airlines lowered their projections for the first quarter of the year, citing weakening travel demand amid an uncertain economy, Reuters reported in March.
Bank of America notes, though, that lodging is typically lower during the winter months, with this year experiencing several cold weather disruptions that may have impacted spending.
It’s also possible that higher-income households are choosing to travel abroad rather than make domestic trips. Bank of America said that total credit and debit card spending done in person overseas was up 2.6% year over year in January and February 2025 compared to those months in 2024.
Also, Easter is later this year as compared to last year and 2023, which means that spring break plans may also be pushed back, along with travel spending. The institute’s analysts point out that there appear to be some hints of a belated pick-up, according to the latest weekly lodging and tourism spending in March.
