Monthly Travel Indicators Summary - January 2025

Executive Summary Domestic

Forecast (updated February 2025)

• Visitor spending in California is projected to grow by 6% in 2025, with domestic spending increasing nearly 4%. This forecast does not account for the wildfire events in Los Angeles or recent policy decisions by the Trump administration.
• According to the February forecast from Tourism Economics, prepared for Visit California, the state is expected to generate $166.1 billion in travel spending in 2025, a 6% increase over 2024.
• Domestic leisure spending is forecast to reach $135 billion, reflecting a $5 billion increase and 3.8% growth compared to 2024.

Macroeconomic

• The U.S. economy sent mixed signals in January, as the Consumer Price Index (CPI) rose again, reaching 3%, while consumer confidence declined following a post-election upswing. However, job growth remained solid, and the unemployment rate fell to 4.0%.
• Inflation increased by 3% in January, marking the fourth consecutive month of rising prices. The national average retail price for a gallon of gas was $3.20, up from $3.14 the previous month, while the average price in California stood at $4.31.
• A preliminary estimate showed that 143,000 jobs were added to the economy in January, with the unemployment rate holding at 4.0%.
• The University of Michigan’s U.S. Consumer Sentiment Index measured 71.1 for the month, down from 74 in December.

Consumer Sentiment

• As with the broader macroeconomic outlook, travel-specific consumer sentiment indicators were mixed for the month. Travel costs were increasingly cited as a deterrent, and consumers remained cautious about their financial outlook and travel budgets. As noted previously, Californians were more cautious in their economic outlook post-election compared to the overall U.S. travel consumer.
• Consumer tracking from Future Partners found that travel costs remained a top barrier over the past six months, with 38% of U.S. travelers saying travel is currently too expensive. California residents were slightly less likely to cite travel costs (37%) but were more likely to identify gas prices and airfare as barriers compared to the U.S. overall.
• Fewer than one-third (29%) of American travelers felt optimistic about their current financial situation compared to a year ago, while California residents were slightly more optimistic at 35%. However, travelers expressed greater confidence in their future economic situation, with 51% of U.S. travelers and 49% of California residents expecting improvement.
• Despite a decline in positivity in January, excitement for future travel remained high, with 86% of U.S. travelers and 85% of California residents  saying they were excited about leisure travel in the next 12 months.
• Additionally, 40% of American travelers and 53% of California travelers said they were considering international leisure travel within the next 12 months.

Lodging

• The wildfires in Los Angeles in January did not directly impact the region’s hotel and tourism infrastructure, and key performance indicators (KPIs) for the month showed positive year-over-year growth despite the disruption. However, these high-level metrics do not fully capture the complex effects of the tragic events that disrupted the travel industry. While initial closures and visitor declines affected some areas, evacuee and recovery-related demand helped offset losses in certain cases. Some parts of the Los Angeles region experienced noticeable declines in occupancy, yet overall, the state posted a 5% increase in demand and an 8% rise in revenue.
• Hotel room demand in California grew by 5% year over year in January, while room revenue increased by 8%.
• The state’s monthly occupancy rate reached 60% (+5% YOY), with an average daily rate (ADR) of $187 (+2% YOY) and revenue per available room (RevPAR) of $112 (+7% YOY). The week ending January 18 saw particularly strong performance, with RevPAR surging 47%.
• Group room demand increased by 3% compared to January 2024, while room revenue rose by 5%.
• For January, the occupancy rate for short-term vacation rentals in California stood at 47% (+5% YOY), with ADR rising 7%, leading to a 12% year-over-year increase in RevPAR.

Airlift

• National air passenger traffic, as measured by TSA checkpoints, increased by 2% year over year, while nonstop domestic seat capacity to California grew by nearly 2%.
• In total, 66 million passengers were screened at TSA checkpoints nationwide for the month, reflecting a 2% year-over-year increase. At California airports, screenings remained flat at 8 million travelers.
• Nonstop domestic seat capacity to California destinations totaled 8.8 million for the month, up 2% year over year.

Executive Summary International

Forecast (updated February 2025)

• While international tourism presents the greatest growth opportunity for California’s tourism industry, there are significant downside risks to the forecast. As of February, international spending in California was projected to grow by 18% in 2025. However, a strong U.S. dollar and geopolitical challenges may hinder this level of growth. The forecast does not account for recent wildfire events in Los Angeles and policy decisions by the Trump administration.
• According to Tourism Economics’ February forecast prepared for Visit California, international visitor spending in the state is expected to increase by 18% in 2025, reaching a record $31.3 billion.
• California’s largest spending markets are projected to be its North American neighbors, Mexico and Canada, with visitor spending of $5.4 billion and $4.3 billion, respectively.
• Among overseas markets, China is forecast to be the most significant, with visitor spending projected to reach $3.2 billion in 2025. India is expected to be the second-largest overseas market, with visitor spending anticipated to grow by 16% to $1.7 billion

Consumer Sentiment

• Consumer sentiment around travel from Visit California’s 13 priority markets remained consistent with prior months, with price continuing to be the top barrier.
• On average, across California’s priority markets, 42% of international consumers reported plans for international leisure travel (to any destination) within the next 12 months—consistent with January 2024 and up from 38% in the same month two years ago.
• Travel costs remained the primary barrier, cited by 44% of respondents, in line with January 2024. Overall, responses across the priority markets were comparable to the previous year.
• In the Asia-Pacific, India, and Middle East markets, safety and health concerns remained secondary barriers to travel.

Airlift/Arrivals

• Airlift growth from California’s 13 priority markets has slowed in recent months and remained essentially flat for the month, while arrivals at California’s ports of entry grew modestly by 3%. China was a notable bright spot, with both airlift capacity and arrivals posting strong growth.
• In total, there were 1.5 million nonstop seats to California from Visit California’s 13 priority markets for the month, down less than 1% from January 2024. Among overseas markets, the U.K. and Japan had the highest number of nonstop seats to California. China (+37%) and South Korea (+18%) continued to lead in airlift growth.
• Non-resident arrivals from priority markets through California’s ports of entry maintained a growth trajectory, increasing by 3% for the month. Arrivals from China surged 36% year over year, likely driven by pre-Lunar New Year travel.