Commercial Pulse Report | 1-14-2025
Experian has just released the Commercial Pulse Report for January 14th, 2025 which includes a compelling look at the leisure and hospitality sector.
The Leisure & Hospitality sector has long been one of the hardest-hit industries following the COVID-19 pandemic. But in 2024, it demonstrated impressive resilience and recovery, with data from the latest report highlights several noteworthy trends that mark a turning point for this vital sector of the economy.
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Travel Reaches New Heights
Air travel soared to record-breaking levels in 2024, with the TSA screening over 903 million passengers—a 6.5% increase from pre-pandemic levels. This rise reflects not just pent-up travel demand but also growing consumer confidence in the safety and accessibility of travel.
Hotel occupancy rates, while recovering, still lag slightly behind pre-pandemic levels. Reduced corporate travel and the rise in remote work have contributed to this trend. However, leisure travel remains strong, and small businesses in the travel ecosystem are seeing the benefits.
Stabilizing Credit Activity and Improved Risk Scores
On the commercial credit side, there’s good news. Businesses in the Leisure & Hospitality subsectors have experienced a gradual increase in new account inquiries, and credit risk scores have steadily improved since late 2023. These metrics indicate a promising stabilization of credit activity.
Interestingly, the average number of commercial credit accounts per business continues to decrease. This could reflect cautious financial planning as businesses strive to balance growth with sustainable debt.
Consumer Trends Drive Growth
The affordability of travel is another major driver of the sector’s recovery. Inflation in the travel sector has trended lower than the broader economy, making vacations and leisure activities more accessible for many consumers. Despite financial pressures, such as a significant portion of Americans living paycheck-to-paycheck, this trend has supported a surge in travel demand.
Challenges Remain
While the outlook is positive, challenges persist. For example, delinquency rates within the sector fluctuate month to month, although no long-term trend of increased risk has been observed. The Hotel, RV, and Campground subsector, which bore the brunt of the pandemic’s impact, now boasts the lowest charge-off rate among Leisure & Hospitality categories—a testament to its steady recovery.
There’s a lot more on the leisure and hospitality study in this week’s report, so download your copy today!
As temperatures rise across the U.S., so does the nation’s appetite for travel—and the Leisure & Hospitality sector is feeling the heat. In this week's Commercial Pulse Report, we examine how soaring consumer demand intersects with evolving credit conditions for businesses in travel, lodging, and transportation. Travel Rebounds, But the Story Is Mixed By every measure, Americans are traveling in droves. AAA projected over 72 million domestic travelers over the July 4th holiday—setting a record. Meanwhile, Memorial Day travel surged across all transportation types, especially road trips, which saw a 3.0% year-over-year increase. However, despite six new TSA checkpoint records in June, major airlines have cut forward-looking forecasts, signaling a notable shift: travelers are increasingly opting for alternatives like road and rail over the skies. This change in travel behavior has direct implications for how different business subsectors access and manage credit. Infrastructure Drives Commercial Credit Trends The Leisure & Hospitality industry is broad and fragmented—from mega-airlines and hotel chains to small sightseeing operators and independent RV campgrounds. This diversity is reflected in commercial credit data. Businesses with heavy infrastructure needs—like airlines and hotels—tend to carry higher loan and credit line balances. Airlines, in particular, average the highest number of commercial trades, a reflection of their large-scale operations and capital intensity. Hotels also hold sizeable credit, but with a twist. While revenues have rebounded beyond pre-pandemic levels, occupancy rates remain flat due to an increase in room supply from new construction. The hotel pipeline stood at 6,211 projects with over 722,000 rooms as of Q3 2024, signaling sustained investment even amid margin pressures. Rental Cars: High Volume, Higher Risk The rental car sector stands out—but not in a good way. Despite being a key enabler of domestic travel, these businesses exhibit the highest commercial credit risk across the industry. According to Experian’s Commercial Risk Classification, 32% of rental car companies are considered Medium-High to High Risk, compared to less than 10% in categories like air transport and sightseeing. The elevated risk may be due to a combination of factors: fleet acquisition costs, multi-location exposure, and operational disruptions during the pandemic. While credit trades in this segment remain high, inquiries have declined over recent years, possibly reflecting tightening lending standards or constrained demand for new credit. Encouraging Risk Trends—With Exceptions Across the broader Leisure & Hospitality industry, there’s been a decline in commercial credit risk since 2020. The share of businesses classified as Medium-High or High Risk dropped from 11.7% to 8.5% as of April 2025. Most firms now fall into the Medium Risk category—a sign of normalization in the sector. Delinquency rates remain low (under 1%), and the average Intelliscore Plus v2 score has remained stable across most subsectors. Still, credit conditions vary sharply by business type, underlining the importance of nuanced risk assessment in portfolio management. Smarter Credit Allocation Starts with Subsector-Level Insight The summer travel surge is a powerful reminder of the sector’s resilience—but not all players are experiencing the boom equally. For credit professionals and commercial lenders, the latest data from Experian suggests a growing divide: infrastructure-heavy firms are leaning into credit, while high-risk subsectors like rental cars may warrant closer scrutiny. Whether your clients are in air transport or roadside accommodations, understanding these credit trends will be key to navigating the second half of 2025. ✔ Visit our Commercial Insights Hub for in-depth reports and expert analysis. ✔ Subscribe to our YouTube channel for regular updates on small business trends. ✔ Connect with your Experian account team to explore how data-driven insights can help your business grow. Download the Commercial Pulse Report Visit Commercial Insights Hub Related Posts
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