Zipping around the U.S. over the course of two travel industry conferences in the last week made one thing clear: We’re firmly in a K-shaped economy.
With U.S. RevPAR projected negative in 2025 and luxury bookings up more than 25%, investors face a split-screen travel market.
At STR’s Hotel Data Conference in Nashville, the opening salvo was a hard dose of reality. The firm’s latest forecast points to a bumpy ride for U.S. hotels: Supply growth remains muted (+0.8% in 2025), but demand is expected to contract slightly (-0.1%). The revised forecast landed with the kind of collective gasp I haven’t heard since Madonna actually started on time for her Boston concert earlier this year — but less on the Material Girl and let’s instead focus on hotel data.
Days later in Las Vegas, the mood couldn’t have been more different. Virtuoso Travel Week, often dubbed the “Fashion Week of Travel,” was buzzing inside the Bellagio and Aria, the twin host resorts. If there’s economic trembling to be had, it wasn’t in those halls. Virtuoso’s network of 20,000 advisors across 58 countries celebrated record engagement, with luxury travel demand showing little sign of slowing. Year-to-date sales data shows global hotel sales up nearly 26% from a year ago, while cruise sales climbed more than 9%.
The question is how long can travel companies keep touting strength at the top of the market if the mainstream business lines, where the bulk of transactions occur, continue to drag?
For frontline travel advisors, this split-screen view of the industry presents both challenges and opportunities. STR’s forecast makes clear that the middle of the market — where many Americans book their vacations — is softening. Occupancy is expected to decline slightly in 2025, and RevPAR is projected to slip into negative territory. Hotels in the midscale and upper-midscale tiers are being hit hardest, leaving brands with fewer levers to pull beyond discounting.
That’s where travel professionals come in. Even as some consumers pull back, others — particularly those with means — are doubling down on trips and experiences. The appetite for premium products is holding, as Virtuoso’s data shows, but it’s also clear that clients are more discerning and expect advisors to deliver true value.
Performance declines are expected to hit economy (-2.2%), independent (-1.5%), and upper midscale (-1.4%) hotels the hardest while luxury hotels (+3.9%) and upper-upscale hotels (0.9%) should still post gains for the year.
“The next six months are really going to be rocky and probably not feel so great, because we saw the bulk of our growth in the first half of the year, unless you’re a luxury hotel,” said Amanda Hite, president of STR.
If there is a silver lining, it’s that STR forecasts growth to pick back up as next year progresses.
Advisors at Virtuoso Travel Week reported strong interest in longer itineraries, immersive experiences, and curated perks that elevate the journey. Baby boomers remain a dominant force in driving bookings, while women — especially those traveling independently — are increasingly shaping demand. These trends align with what frontline advisors outside of Virtuoso are experiencing: clients want experiences that justify the spend.
Cruising, in particular, continues to shine. With luxury lines rolling out new ships and elevated onboard offerings, the segment has proven resilient. Advisors who can navigate the crowded marketplace and highlight what’s new are well-positioned to capture share.
Virtuoso’s Counterpoint
Against this backdrop, Virtuoso Travel Week underscored the durability of the luxury customer.
Advisors reported sustained demand for extended stays, multi-generational travel, and high-touch, experience-driven itineraries. With demand up so far compared to 2024, the affluent traveler is spending aggressively despite broader macroeconomic headwinds.
“The business of human connection is turning out to be the most defensible business model there is,” said Virtuoso CEO Matthew Upchurch.
The Advisor Advantage
In a market this uneven, your expertise is the differentiator. Economic headlines may paint a picture of slowdown, but the reality is more nuanced. Some clients are cutting back, yes, but others are expanding budgets for the very experiences only a travel professional can unlock.
Whether you’re matching families to the right product, leveraging partnerships for added value, or simply being the calm in the storm of conflicting economic narratives, your role has never been more essential.
The industry may be at a crossroads, but one truth remains: advisors are the bridge between client aspirations and real-world travel realities. In a K-shaped economy, that role is only magnified.
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