Research Update: Q1 Tourism Highlights and Key Trends for the Months Ahead

Monday, May 05, 2025 Research

Solid Start for Puerto Rico MICE

The Discover Puerto Rico Sales Team achieved a remarkable milestone by contracting 58,000 group room nights in the first quarter of this year, marking a 70% increase compared to last year. Despite this impressive success, the industry is facing political and economic challenges. Leads generated have decreased by 11%, and the number of groups confirmed has dropped by 12%, with production results mirroring those of 2023.

At the National level, the Professional Convention Management Association (PCMA) has highlighted several challenges and changes in the meeting planning industry during the current Federal Government policies. Here are some key points:

Government Meetings: affected by new austerity measures and layoffs, leading to cancellations and reduced attendance
Medical and Scientific Conferences: Funding cuts to institutions like the National Institutes of Health (NIH) have delayed and canceled grant review sessions, scientific workshops, and educational symposia
Diversity, Equity, and Inclusion (DEI) Programs: The elimination of federal DEI programs has led to the cancellation of conferences focused on social impact and workplace equity
Increased Costs: Aggressive tariff policies have increased costs for essential event infrastructure, such as exhibition booths and stages.

Overall, the industry faces increased uncertainty and higher operational costs, prompting planners to adapt quickly to these new realities. Discover Puerto Rico is closely monitoring the industry to uncover opportunities and foster key local partnerships to provide guidance and support during this time.

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Summer bookings trending up

Discover Puerto Rico monitors the industry’s reservation booking pace for several reasons, including forecasting demand to adjust marketing strategies and manage resource allocations. According to TravelClick, the hotel reservation booking pace as of April 20th is tracking April occupancy ahead +1.4% from last year, while May and June are -1.7% and -6% below the same time last year.

Overall occupancy for Q2 is -1.3% below last year's pace, mainly due to less transient business than the previous year, possibly due to changes in corporate travel polices and impacts on government travel approvals. Leisure reservations are +6.8% ahead of last year. Rental listing nights on the books are pacing well ahead of last year, with +14% more nights booked for May, +16% more for June, and +30% for July. Thanks to a solid group base, Q3 continues to pace ahead of last year on both the hotel and rental segments.

At the U.S. level, a survey by MMGY found a 4% drop in travel intentions among Americans over the next 12 months compared to the mid-February survey.

80% of US consumers say their travel behavior will change in the next six to 12 months because of the recent financial news. One-third (33%) of this group said they will travel closer to home, 24% will change to a less expensive mode of transportation, and 22% anticipate adjusting their length of stay. However, according to the same MMGY survey, 29% of travelers report plans to change from an international destination to a domestic trip—a potential silver lining for the US travel industry.

Air routes capacity changes

Domestic and International (non-Caribbean) air capacity into SJU between May and August this year reached 2.6 million seats, a slight decrease of -1.5%. A third of the air capacity originates in Orlando and New York; seat capacity has been reduced from Miami, Fort Lauderdale, and Boston, while Detroit, Chicago, Philadelphia, and International destinations from Europe and South America show increased capacity. The route with the highest year-over-year seat growth is from Medellín, Colombia, with an increase of 234%.

Current load factor forecasts predict many routes will fly at over 90% capacity, including Atlanta, Dallas, Fort Lauderdale, Houston, Newark, Orlando, Tampa, DC, and Philadelphia. New routes for this summer include Providence, White Plains, San Antonio, Lakeland, and San José, Costa Rica.

147,000 seats are scheduled to service the Aguadilla airport with service from Orlando, New York, Newark, Ft. Lauderdale, and Miami, a slight decrease of -2.7% compared to last year. The Ponce airport will receive 50,000 seats combined from Orlando and New York, a -16.5% decrease from the previous year.

According to Tourism Economics’ April Newsletter, Airline bookings to the US from Canada are pacing 24% behind a year ago from April through September, with the rest of the world down an average of -5% each month (Source: OAG, as of March 2025).

Global Landscape Presents New Challenges and Emerging Opportunities

Furthermore, Tourism Economics reports that many Americans feel less welcome in other countries due to U.S. Government policy decisions. Negative sentiment towards the US abroad, driven by evolving tariff policies, polarizing rhetoric, heightened border security, and visible immigration enforcement, has significantly dropped U.S. inbound travel. Updated travel advisories from Germany and the UK also contributed to further decreases in visitation.

Airline bookings and surveys of American travelers indicate continued economic uncertainty. Many opt for domestic trips instead of international travel, potentially benefiting the US travel industry in the short term.

Locally, according to Forward Keys’ Traveler Statistics, Canadian visitors accounted for 0.5% of the total visitors arriving at SJU Airport, overall international visitors accounted for 5-7% of total visitors, which may limit any significant impacts from decreases in the International arrivals, specially travel demand shifts to more U.S. domestic trips as seen during the early post-pandemic era. However, the US economy is expected to experience slower growth in 2025, with an average annualized GDP growth rate of 0.5%. This slowdown is reflected in declining consumer and business sentiment, rather than hard economic data, indicating a vulnerable economy that has not yet tipped into a recession.

Consumption growth is forecasted to average 1.5% in 2025, down from 2.8% the previous year, due to higher inflation, wealth losses, rising unemployment, and uncertainty. Overall travel demand in the US has been difficult to assess due to various disruptions. Still, international arrivals are expected to decline by 9.4% in 2025, with a full recovery towards 2019 levels delayed until 2029.

Discover Puerto Rico closely monitors Industry Metrics, consumer sentiment, and traveler insights to align marketing strategies with market changes.

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Inbound international travel to u.s. impacted