US Immigration Crackdown Sparks Hotel Declines; Cancellations Surge
UPDATE: A significant crackdown on immigration in the United States is wreaking havoc on the hotel industry, with cancellations from South Korean travelers surging as the impact reverberates across major tourist destinations. This urgent situation is unfolding just as the peak travel season reaches its height, raising alarms for the hospitality sector.
According to reports from Tourism Economics, foreign tourists are projected to spend $8.3 billion in the US in 2025, a decline of over 4% from the previous year. Meanwhile, the World Travel & Tourism Council (WTTC) warns that US hotels could face staggering losses of up to $12.5 billion this year alone.
In major cities such as Las Vegas and New York, mid- to low-tier hotels are cutting room rates in a desperate attempt to attract guests amid declining reservations. In June, Las Vegas saw a 11.3% drop in visitors, totaling 3.09 million, while the average hotel occupancy rate plummeted to 78.7%, a decrease of 6.5 percentage points from last year.
Travel experts cite the recent detention of 317 South Korean workers at a Hyundai Motor–LG Energy construction site in Georgia as a catalyst for the spike in cancellations. This incident has triggered a wave of anxiety among potential travelers, especially in the business class, which predominantly serves corporate travelers.
In April, the room occupancy rate across US hotels stood at 63.9%, down 1.9 percentage points year-on-year, according to data from STR. The average revenue per available room (RevPAR) also fell slightly to $103.11, indicating a worrying trend as hotels brace for further declines.
Full-service airlines in South Korea are feeling the pinch as well, with indications that their third-quarter earnings will take a hit due to diminishing demand for US-bound flights. Major carriers are already reporting a notable uptick in cancellations, particularly for lucrative business class seats.
As of August 20, 2025, the US government is implementing stricter visa requirements, requiring applicants from certain countries to post a refundable security bond of up to $15,000 per person. This comes amid a tightening of the screening process, including mandatory in-person interviews for visa applicants starting August 2. Such measures are expected to further discourage international travel, compounding the challenges faced by the hotel industry.
Analysts are now closely monitoring the situation, with major hotel chains like Hilton and Marriott revising their earnings outlooks downward amid this travel drought. Hilton has adjusted its projected RevPAR growth to between zero and 2%, while Marriott has lowered its annual revenue growth forecast to 1.5–2.5%.
With international travel dynamics shifting rapidly, the implications of these developments are profound. The ongoing decline in arrivals from neighboring countries, particularly Canada and Mexico, is a critical factor driving this trend.
Travelers and industry stakeholders will be watching closely for any signs of recovery as the summer season progresses. The immediate future of the US hotel industry hangs in the balance, with significant ramifications for both the economy and the millions of workers reliant on tourism.
As these urgent developments unfold, travelers are urged to stay informed and consider their plans carefully. The impact of the US immigration policies on the travel landscape is a story that continues to evolve, and its effects will be felt for years to come.
