Domestic U.S. air passenger traffic in August declined yet again year over year, but some other indicators pointed to a sturdy business transient demand landscape as the U.S. travel market began to stabilize following the conclusion of the FIFA World Cup.
Overall U.S hotel rates again rose, as did occupancy, but at lower rates than in recent months. Still, it appeared transient business travel carried the weight of the increase in demand.
After two straight months when U.S. revenue per available room increased more than 8 percent year over year, the strongest year-over-year performance in more than three years, that metric cooled to a 2 percent increase in August, according to CoStar.
Demand, as measured in paid room nights sold, in August increased year over year by more than 3 percent for three consecutive weeks for the first time since 2023, according to CoStar. However, Sunday-through-Thursday demand—traditionally representing business travel—accounted for about 80 percent of that demand growth. While group business was solid, "transient demand was the larger contributor to weekday gains, suggesting transient business travel continues to improve across many markets," according to CoStar.
Trips sold in August by travel agencies with at least 70 percent self-reported corporate and government business and settled by Airlines Reporting Corp. increased by more than 8 percent year over year, according to ARC, the seventh month that figure has increased year over year.
Total passenger trips sold were up 5 percent year over year in August, per ARC. Domestic trips and international trips each were up 5 percent too.
"The strong summer trends from June and July carried into August, with travel to both U.S. domestic and international destinations remaining steady from the prior month and above 2025 levels," ARC chief commercial officer Steve Solomon said in a statement.
Ticket prices remained elevated in August. The average price in August for a U.S. domestic roundtrip ticket was $624, compared with the $532 reported in August 2025. This leads to a 19 percent increase in total U.S.-based agency air ticket sales settled by ARC in August, compared with the 5 percent increase in trips.
The average price of a U.S. domestic economy-class and premium-class ticket in August was up 17 percent and 11 percent year over year, respectively, to $569 and $1,454, per ARC.
Demand indicators for flights actually flown weakened in August. U.S. domestic air demand, as measured in revenue passenger kilometers, declined almost 3 percent year over year, according to the International Air Transport Association, marking the fifth consecutive monthly decline. Capacity, measured in available seat kilometers, fell 1.1 percent, with demand’s steeper drop pushing load factor down 1.5 percentage points to 83 percent.
The weakness extended beyond the U.S., as worldwide domestic demand fell 0.5 percent year over year, reversing July's modest growth. China and Brazil posted demand increases of 5.8 percent and 4.3 percent, respectively, but demand declined 7.5 percent in India and 2 percent in Japan.
August international demand on North American carriers dropped 1.9 percent year over year, and capacity dropped 1.1 percent.
"With some important exceptions, such as domestic China, global connectivity was generally weaker in August," IATA SVP of sustainability and chief economist Marie Owens Thomsen said in a statement. "The coming months will reveal whether travelers, whose purchasing power has been reduced by higher energy prices, are adjusting their travel budgets and might be discouraged from traveling due to the prevailing geopolitical instability."