Travel Industry Continues Recovery, Despite Cooling Economy

Travel spending exceeded 2019 spending levels for the fourth consecutive month in July, and modest growth is expected to continue as inflation drops and the labor market remains strong, according to U.S. Travel Association research.

Inflation and a cooling economy are still concerns for the travel industry, which is still in a state of recovery after two years of pandemic-related decline. Elevated prices are eating away at consumers’ spending power, although data indicates U.S. consumers are still spending on travel services.

But with the summer travel season wrapping up, the outlook for the last quarter of 2022 is murky. Business travel still lags 2019 levels for Monday through Wednesday with demand down 13% at luxury hotel properties and down 9% at upscale and upper-midscale hotels.

International travel to the U.S. picked up this summer but was still down about 35% in July from pre-pandemic levels. U.S. travel from European and Latin American markets were down just 22% in July while those from Asia were still down by 62%. According to U.S. Travel, inbound travel is expected to slow down in the fall and recovery to pre-pandemic levels could take until 2025.