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
A South Korean worker is shackled by US federal agents before being transported to a detention center during an immigration raid at the Hyundai Motor–LG Energy battery plant construction site in Georgia
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.
Full-service carriers in South Korea brace for a decline in third-quarter earnings
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.
Workers at the Georgia construction site of a joint Hyundai Motor-LG Energy battery plant detained by ICE on Sept. 6, 2025 (Screenshot captured from ICE’s video)
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.
Write to Jae-Kwang Ahn at ahnjk@hankyung.com
Yeonhee Kim edited this article.