In early 2025, renewed uncertainty around U.S. border policies, international relations, and travel regulations is creating ripple effects in the short-term rental (STR) market. While domestic travelers remain the primary source of bookings in both the U.S. and Europe, early data shows a shift in key regions that depend on international demand—particularly from Canadians and Europeans visiting the U.S., and Americans heading to Europe.

For STR managers in these exposed markets, the signs are worth watching. This article provides timely insights and actionable strategies to adapt to a landscape where international travel flows are no longer a given.

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Current Situation: What Early 2025 Looks Like

After strong recovery in 2024, international travel to the U.S. has begun to slow significantly in early 2025, especially from key markets like Canada and Western Europe. Meanwhile, U.S. travelers, who traveled heavily overseas in recent years, are beginning to stay closer to home.

Here’s what the latest numbers show:

Region	March 2025 Visitor Trends	Key notes
🌍 Overseas	⬇️ Down 12% year-over-year	Major drop in March, reversing 2024’s gains (+12% growth).
🍁 Canada	⬇️ Down significantly (~23%) early 2025	Big drop, affecting both air and road travel to the U.S.
🇲🇽 Mexico	↔️ Stable, strong recovery continuing	Continued stability from 2024’s strong recovery.

Where International Travelers to the U.S. Came From (2024 Baseline)

In 2024, international visitors to the U.S. totaled 72.4 million. Here’s the breakdown:

• Overseas: 35 million (48%)
  
• Canada: 20 million (28%)
  
• Mexico: 17 million (23%)
  

These numbers set the stage for understanding shifts we’re seeing now in early 2025.

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What’s Driving the Slowdown?

🔻 Tariffs & Geopolitical Tensions

• Tariffs introduced in April 2025 have pushed U.S. import rates to nearly 30%, according to Tourism Economics. These increases impact the cost of everything from STR amenities to furniture.
  
• Yale’s Budget Lab emphasizes that these tariffs act as a regressive tax—reducing household spending power by an average of $3,800/year. For lower-income households, the hit is around $1,700.

What this means for STRs:

• You might see increased operating costs—on essentials like linens, electronics, and restocking supplies.
  
• Guests may travel less, book shorter stays, or prioritize budget-friendly accommodations—especially in the mid-market segment.

💸 Currency & Economic Factors

• A strong U.S. dollar makes travel to the U.S. more expensive for overseas visitors, particularly from Canada and Europe.
  
• Simultaneously, economic growth in the U.S. is slowing (from 2.4% to 1.7%), with rising core inflation, according to Oxford Economics.

What this means for STRs:

• International demand is softening not just from sentiment, but from real affordability concerns.
  
• Even domestic guests may feel pressure—watch for changes in length of stay, trip frequency, or cancellation behavior. is making travel to the U.S. more expensive for Canadians and Europeans.

🌐 Sentiment & Safety Concerns

• Some international travelers report discomfort around current U.S. immigration policies, border control stories, and global political positioning (e.g. on Ukraine).

What this means for STRs:

• Inbound travel decisions are shaped not only by price but by perception.
  
• This could especially affect bookings from first-time international guests or family travelers who prioritize comfort and predictability.

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What This Means for U.S. Vacation Rentals

• International travelers account for ~12% of U.S. STR nights (~30M/year).
  
  • Airbnb: 20M international nights (15% of its U.S. demand)
    
  • Booking.com: 6M (30% of its U.S. demand)
    
  • Vrbo: 3M (8%)
    

Varying Exposure by Market Type:

• Gateway cities (e.g. NYC, Orlando): Heavy international reliance (20%+ bookings).
  
• Drive-to markets (e.g. Florida Panhandle): Minimal exposure (1–2%).

International demand is softening, especially from high-value source markets like Western Europe and Canada. That means if your portfolio includes properties in major urban or resort destinations—especially those historically popular with international travelers—you’re likely to see fewer bookings and a potential dip in nightly rates.

However, this is not all bad news. The slowdown in outbound U.S. travel suggests more Americans are vacationing closer to home. That shift could benefit drive-to and regional markets, especially those within a few hours’ radius of major metro areas.

This dynamic creates an uneven playing field: operators in international-reliant destinations may need to reallocate marketing spend, diversify guest acquisition channels, and double down on loyalty and repeat domestic guests. 

Meanwhile, managers in domestic-centric markets have a chance to capture new demand—if they’re ready to meet it with strong pricing strategies, appealing packages, and updated messaging that speaks to domestic travelers looking for ease, value, and flexibility.

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U.S. Travelers Shifting Back to Domestic

• U.S. outbound growth slowed to just +0.7% in early 2025, down from +8% in late 2024.
• Americans may opt for domestic stays due to a weaker dollar and global tensions.

💡 Fewer Americans may vacation abroad in 2025. This looks like it could drive up demand for regional and drive-to destinations—particularly for long weekends and summer travel.

Caveat: According to the Yale Budget Lab, recent tariff policies are expected to reduce the average U.S. household’s spending power by as much as $3,800 per year, with lower-income households facing potential losses closer to $1,700.

What this means: Even if these policies shift, many Americans are already anticipating tighter budgets—and adjusting their spending accordingly. That could translate to shorter trips, more price-sensitive booking behavior, and a greater focus on budget-friendly accommodations across the board.

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Operational Adjustments to Consider

For U.S.-based Managers:

• Lock in inventory pricing (linens, appliances, welcome kits) ahead of further cost hikes.
• Reassess upgrade plans—imported furniture or fixtures could see volatile price shifts.
• Renegotiate vendor contracts to build flexibility into your margins.
• Lean into domestic demand—refresh your listings, marketing, and offers to attract value-conscious U.S. travelers seeking convenience, comfort, and flexibility.

For Vacation Rental Managers Outside the U.S.:

• Expect fewer American travelers in 2025, particularly to long-haul markets like Europe, due to tighter household budgets and reduced appetite for international travel.
• Adjust messaging and offers: Emphasize safety, ease of travel, and affordability—especially for U.S. travelers who may still be considering overseas vacations but need more convincing.
• Capitalize on shoulder seasons: If summer travel weakens, aim to attract Americans in spring and fall with targeted campaigns or flexible booking windows.
• Explore regional demand: With U.S. arrivals softening, build stronger ties with domestic and neighboring source markets to diversify guest flow.

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Final Takeaway

2025 isn’t playing out like 2024. The mix of tariffs, economic uncertainty, and global tensions is reshaping travel demand—fast. U.S. short-term rental managers need to plan for fewer international guests but may find stronger domestic momentum. Meanwhile, operators abroad will need to work harder to capture American bookings.