International Arrivals Decline and Hotel Market Dynamics in Three Major U.S. Cities

Despite remaining among the United States’ most visited destinations, New York, Miami, and Los Angeles have experienced notable drops in international visitor arrivals based on data from their primary airports. Each city is navigating an evolving tourism landscape shaped by global economic factors, shifting travel preferences, and the lingering effects of the pandemic. Meanwhile, hotel performance in these three markets reflects a mixture of resilience, recovery, and new challenges as supply expands and consumer behaviors change.

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New York City

Declining International Arrivals, Steady Domestic Demand

• John F. Kennedy International Airport (JFK) saw roughly a 12% decrease in international traffic compared to pre-pandemic 2019 levels. Analysts attribute this dip to lingering global travel hesitancy, airline route adjustments, and higher transatlantic flight costs.

• The city’s signature attractions—Broadway, world-renowned museums, and iconic landmarks—remain in high demand for domestic travelers. However, the reduced influx of overseas visitors has weighed on certain segments reliant on international spending.

Hotel Performance and Outlook

• New York’s hotel market has shown “solid operating fundamentals with strong RevPAR growth,” supported by a balanced combination of group meetings, corporate transient travel, and leisure demand.

• Occupancy in 2024 reached around 84.3%, an increase of 3.3% year-over-year. Strong corporate transient demand, particularly in Midtown, propelled room-nights as offices reopened and more business travel resumed.

• Average Daily Rate (ADR) of approximately $319 in 2024 placed New York among the top performers nationally and grew nearly 6%, outpacing inflation.

• A significant pipeline of roughly 8,000 new rooms is projected over the next couple of years. Despite this supply influx, operators anticipate demand to keep pace, sustaining relatively healthy occupancy levels.

• In 2025, ADR growth is forecasted to fall below inflation, so controlling costs will be critical. The return of international travel—especially from Europe and Asia—could further support RevPAR if currency exchange rates remain favorable and global travel sentiment improves.

• Pending Data: The most recent metrics for March and April occupancy are still being finalized, but MMCG sees indications that occupancy could begin a mild decline as the market adjusts to new supply and more price-sensitive travelers.

Miami

Drop in International Visits, Recovery Underway

• Miami International Airport (MIA) suffered roughly a 10% shortfall in international arrivals from peak pre-2020 levels. European travel, once a robust segment, has been slower to recover, while ongoing economic uncertainties in parts of Latin America also played a role.

• Miami’s dependence on Latin American business travel and cruise-related tourism was tested as conference and event attendance initially lagged. The city, however, continues to lure U.S.-based leisure visitors with its warm climate, beaches, and nightlife.

Hotel Market Performance

• After 16 consecutive months of negative 12-month RevPAR change, Miami’s hotel sector began bouncing back in the second half of 2024, ending the year with a 12-month RevPAR of $164, thanks to a 2.6% occupancy increaseand a 0.3% ADR boost.

• Momentum carried into 2025, with another 3.3% gain in 12-month RevPAR. The outlook for the remainder of 2025 remains favorable, with modest ADR gains expected to offset the impact of new room supply coming online.

• Supply Growth: Roughly 17 hotels with 3,400 rooms—about 5.1% of the existing inventory—are under construction this year, along with another 1,800 rooms slated for 2026.

• Drivers of Demand include a year-round tropical climate, major conferences at the Miami Beach Convention Center, massive cultural events (Art Basel, Ultra Music Festival), and the city’s role as a gateway for pre- and post-cruise travelers via PortMiami.

• Going forward, the market’s performance hinges on how quickly Miami can recapture its international visitor base, particularly as outbound travel and cruises also compete for consumer spending.

• Pending Data: Similar to New York, Miami’s occupancy figures for March and April are not yet available, but MMCG notes that heightened competition and shifting travel patterns could temper the pace of recovery in the near term.

Los Angeles

International Arrivals, Leisure Shift

• Los Angeles International Airport (LAX) reported international arrivals still lagging by about 14% versus pre-2020 figures. Key factors include production slowdowns in the entertainment industry and a sluggish rebound from certain Asian and European markets.

• Leisure travel to Los Angeles—fueled by Hollywood, beaches, and theme parks—remains significant, but domestic demand has softened as cost-sensitive consumers explore alternative accommodations or opt for shorter or fewer trips.

Hotel Performance and Challenges

• Los Angeles has historically maintained some of the highest occupancy and ADR levels in the nation, yet the 12-month RevPAR through February dipped by -0.1%—a result of -1.5% in ADR offset by a 1.4% occupancy uptick.

• Occupancy reached 84.3% in 2024, driven largely by corporate transient demand when office workers started returning in greater numbers.

• RevPAR Declines: In 2024, every hotel class in Los Angeles experienced a 2% to 3% drop in RevPAR, reflecting broad-based weakening in domestic leisure demand and only partial recovery of international travel.

• New Supply remains moderate, with about 1,900 rooms (1.7% inventory expansion) under construction through 2027, significantly lower than the 4,400 rooms added in the past three years.

• The “Mansion Tax” implemented in April 2023 has also cooled high-value transactions; only four hotels above $20 million traded in the City of Los Angeles since the tax took effect.

• Over the long term, Los Angeles is expected to benefit from mega events that spur worldwide attention and travel—such as eight FIFA World Cup 2026 games, the 2026 NBA All-Star Game, the 2027 Super Bowl, and the 2028 Olympics—all of which should help rebuild both domestic and international demand.

• Pending Data: As with New York and Miami, the Los Angeles market’s March and April occupancy figures are forthcoming. MMCG sees signs that overall occupancy may decrease slightly if domestic leisure demand continues to soften and international arrivals remain sluggish.

Outlook and Key Takeaways

1. Stubborn International Declines: While domestic travel has compensated in some cases, all three markets have yet to fully recover their pre-pandemic levels of foreign visitors. Ongoing exchange rate fluctuations, global economic conditions, and evolving airline capacity remain pivotal factors.

2. Hotel Performance Resilience:

   • New York has sustained strong operating fundamentals with solid RevPAR and ADR growth, but cost control will be crucial as supply expands.

   • Miami successfully pivoted toward recovery in 2024–2025, with improving occupancy and ADR gains despite newly added hotel rooms.

   • Los Angeles still posts high absolute performance metrics, but a moderate RevPAR decline underscores heightened price-sensitivity among leisure travelers and a slower international rebound.

3. Supply and Demand Balance: The growing number of hotel projects in each market underscores investor confidence in these globally recognized destinations. Nonetheless, operators in all three cities must manage revenue strategies wisely to absorb new supply without undermining ADR.

4. Pending Occupancy Data: March and April figures are not yet available across these markets, but MMCG foresees a possible occupancy downturn as various headwinds—such as emerging competition, cost-conscious travel behaviors, and uneven inbound international recovery—exert pressure on hoteliers.

5. Catalysts for Future Growth: Major events, revitalized corporate travel, and a renewed influx of overseas guests hold the key to stronger hotel occupancies. Targeted marketing to international segments—especially in Europe and Asia—may help reignite inbound demand.

   
   

Over the next few years, the direction of the global economy, the pace of incoming foreign visitors, and each market’s capacity to host high-profile events will largely determine how swiftly these iconic cities reclaim their pre-pandemic tourism heights.

April 14, 2025 by Michal Mohelsky, J.D., principal of MMCG Invest, LLC, hotel and leisure feasibility study consultant