TOURISM DEVELOPMENT
Industry Updates
Entering 2026, several key dynamics are shaping the global travel landscape. While no single factor is driving the market, the convergence of these trends is creating a more cautious planning environment for both travelers and industry stakeholders:
- Domestic leisure base is holding steady
- Softening international visitation, particularly from key markets such as Canada
- Luxury travel continues to outperform
- Ongoing geopolitical uncertainty, influencing long-haul travel decisions
Domestic leisure travel remains the bedrock of the U.S. travel economy. While demand is holding steady, growth is moderating as consumers become more price-sensitive. Americans are taking more trips but are increasingly sensitive to high travel costs and inflationary pressures. According to NerdWallet and Travel Pulse, airfare costs are up 7.1% year-over-year as of March; cost of dining out is up 3.9%, car rentals up 2.7%; movies, concerts and theaters are up 2.2%. The only category of travel costs that have not increased is hotels, which are down 2.2%.
International inbound travel is the most significant area of weakness in the U.S. travel economy. After seven consecutive months of year-over-year declines through late 2025, arrivals entered 2026 and are still trending down, with January 2026 showing a 4.2% decline.
Canada, historically the largest single source of international visitors to the U.S., has experienced the most dramatic decline of any origin market. Canadian visits are currently down approximately 18–25% year-over-year. As of mid-March, February 2026 international visitor data is not available.
At the same time, a clear divide has emerged between high-income and middle/lower-income travelers. Luxury and premium segments continue to outperform. Virtuoso reports 24% more luxury bookings on the books for 2026–2027 compared to the prior year. Airlines like Delta expect premium seat revenue to overtake main cabin revenue in 2026.
Travel depends on long booking windows, and continued unpredictability is impacting forward planning and investment across the industry. While it’s too early to quantify the impact of the current geo-political crisis in the Middle East, some industry clients note the potential for long-haul demand from Europe to shift toward North America. If that pattern holds, it creates a potential window for the United States to capture incremental demand, but only if the experience of visiting is perceived as accessible, welcoming, and high-value.
Greater Palm Springs Performance
STR data through February indicates transient occupancy for Greater Palm Springs is pacing +4.3% year-over-year, along with a +0.8% increase in average daily rates (ADR). International arrival data for 2026 is still being collected, along with guidance on forward bookings. We expect to have additional information to share in the coming months.
We are also working with several travel companies on both current and future marketing campaigns. Those companies include ATI, Bonotel, Virgin Holidays, CANUSA, BA Holidays, Travel Associates, Internova, and Hayes Travel.
Program of Work
Tourism Development efforts continue to focus on strengthening relationships, expanding international reach, and supporting air service growth. Since our last board meeting, we have hosted 43 clients from 10 global markets on individual destination visits or FAMs, along with participating in Visit California destination trainings across Japan, India, China, and Taipei, as well as attendance at the following events:
- Travel & Adventure Consumer Travel Show (Seattle)
- International Inbound Travel Association Annual Summit
- Visit California Mexico Mission
- IGLTA Virtual Marketplace
- Aer Lingus Roadshow (Ireland)
- Lunar New Year Sales Calls (Los Angeles)
- California Luxury Forum
ABOVE, CLOCKWISE FROM TOP LEFT: Attendees of a German tour operator FAM enjoy a desert sunset at Reset Hotel in Joshua Tree; Tourism Development Manager Gerry Boyle presents to clients at the Aer Lingus Roadshow; Tourism Development Manager Joanne Ohanesian at the shared Visit Greater Palm Springs and California Desert Regions Travel and Adventure Show booth.
Looking Ahead
Q2 programming will continue to prioritize high-value markets and strategic industry engagement. Planned activities include attendance at the California Cup, ASTA’s Luxury Showcase in Washington, D.C., a Charlotte sales mission, Airport Roundtable, U.S. Travel’s IPW, ASTA’s Global Conference, a Germany sales mission, and the Jump Start air service development conference. The team will also continue international outreach through Visit California-led destination trainings in China and Japan.
