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The U.S. federal government shut down on Oct. 1 after Congress could not agree to a budget deal. The shutdown would last throughout October and into November. The consequences in October for the business travel industry took shape quickly, perhaps most visibly in flight delays triggered by staffing shortages among air traffic controllers, who are employees of the U.S. Federal Aviation Administration and who were not paid during the shutdown.
But the shutdown had more direct effects in October. U.S. hotel occupancy in October dropped 2.4 percent year over year, according to hotel analytics firm STR, and RevPAR in Washington, D.C., declined 23.8 percent and 6.2 percent year over year on the third and fourth weeks of October, respectively.
Meanwhile, one month after the number of air tickets sold by U.S. corporate travel agencies and settled by Airlines Reporting Corp. increased year over year for the first time in 2025, that figure dropped 5.3 percent in October from prior-year levels. ARC chief commercial officer Steve Solomon said in a statement acknowledged that "uncertainty caused by the U.S. government shutdown may have had a short-term negative effect on corporate and government air travel in October," but noted overall air sales were positive
Still, both overall international and domestic air demand increased year over year, according to the International Air Transport Association. International demand on North American carriers, as measured in revenue passenger kilometers, increased 4.5 percent year over year, which IATA director general Willie Walsh in a statement said was "of particular note ... after several months of basically flat performance."
Domestic air demand in October increased year over year in every major market IATA publicly measures, including the United States, where it rebounded to a 1.3 percent rise after two straight months of decline. Capacity increased 3.6 percent overall, and increased in each listed market except Japan, but overall domestic load factor declined slightly.
The average U.S. domestic roundtrip ticket price in October increased to $576, according to ARC, up from $558 in September and the highest level since November 2024. It'salso higher than the $557 recorded in October 2024. The average price for a premium-class ticket was $1,404, an increase of 8 percent year over year.
