What Will Be the Impact of Tariffs on Travel?

Should be brace for impact or expect smooth sailing? (Sorry, two puns, I had to.)

Welcome back, dear friends.

If you live in the US, chances are you’ve heard the word “tariffs” non-stop. Though stocks fell over the last week, the market surged 2,900 points, the highest it’s soared in one day in many years. For my part, I think there will continue to be a lot economic turbulence over the next few years, and I’ve been curious what that means for the travel sector.

While many may scramble to buy higher-ticket items like smartphones before tariffs spike prices up, the travel industry is in a slightly different boat. Don’t get me wrong—I still think Americans will have to pay more across the board (and in some ways, I think we’ve all been used to underpaying and exploitative wages for far too long so this doesn’t surprise me. But this isn’t to say I welcome paying more if your wages have been stagnant for years or when inflation is unnecessarily high, to be clear.)

As of today’s writing, Trump implemented a 10% baseline tariff for 90 days (with the exception of China), which means that many of us will be paying more for basic necessities—like groceries or home appliances. That limits discretionary spending, aka what travel is typically identified as.

Already, Morningstar has cut their fair value estimates for online travel companies (think Expedia, Tripadvisor) by a few percentage points. This matters less for the average traveler than it does for the average investor, but it could very well be a sign of what’s to come. And Delta on Wednesday morning said that travel demand has “largely stalled” due to economic uncertainty from tariffs and pulled their 2025 financial forecast.

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And as we’ve talked a lot about on The Money with Katie Show recently, we also have to consider the second- and third-order effects from these decisions: It’s easy to say, if tariffs are for imports, why would travel be affected?

Consider: Global hotel chains now have to budget for additional construction or equipment costs or repairs—they will pass those costs on to consumers, by way of higher room prices. Airlines which rely on fuel and parts from overseas will have to pay more, too. Higher imports on cars means rental car companies that are already stretched thin will…well, you get the idea. I’m also already seeing some businesses preemptively increase their prices because of tariffs (though, whether or not they were already planning to do that and just used tariffs as the answer a la greedflation remains to be seen).

And there’s also, well, society’s sentiment around the United States right now. Canada and Mexico are less than thrilled with us right now, leading to a decrease in planned visits. Tariff and trade wars with countries like China and Cambodia mean they’re less eager to visit here (see also: China’s new travel advisory)—not to mention the Trump administration’s approach to immigrants and foreign visitors. And the backlash for US visitors elsewhere is…mounting. This will impact the #BigTravel guys, but it’ll also hurt the small businesses and restaurants that depend on tourism dollars, to be sure.

But I’m never one to be pessimistic for too long. So here’s where I’m landing (no pun intended) for now:

• The World Travel and Tourism Council projects travelers will spend more than ever this year on international trips, despite what seems to be a “blip” right now. And given how far in advance people plan vacations, I could see this playing out—I have planned three trips in the last two weeks, regardless of the tariff situation.

• The post-pandemic years have proved people have a deep desire to travel, even if it’s domestically. I could see many folks making other discretionary cuts to make a trip happen, whether it’s abroad or to their local lake.

• Americans love consumerism, for better or for worse. And publications are already sharing ways “travelers can escape tariffs”: Duty-free shopping for goods like alcohol. For my part, I’m less worried about avoiding tariffs while shopping on a trip, and more mindful of spending less at home.

The chances are, with this current administration’s back-and-forth policies, what I’m writing now will be a moot point within 72 hours—but the whiplash of it all still will impact us as travelers and consumers beyond however long they last.

So, what are you all thinking right now? Are you staying the course, doing business as usual? Are you adapting your plans or lowering your discretionary spending? If you feel comfortable sharing, I’d love to know.

• 💳 The card-that-cannot-be-named is back with its biggest signup bonus in years: 100,000 miles. Don’t sleep on these points if you’ve been wanting a travel card. I’m technically not allowed to share a referral link here, but if you’re interested (I’d receive 10,000 points in exchange), comment and I’ll share it individually. :)

• 🏆 If you love a treasure hunt, you’ll love watching Gold & Greed, a new Netflix series all about Forrest Fenn’s real-life treasure hunt in the 2010s.

• ⭐️ Dream job alert. If I had this experience, I’d be knocking down doors to apply for this role.

• 💡 Follow ups from last week: I finished A Year of Magical Thinking and it has stayed with me long after the fact. I’m also loving my new Margaux shoes (unfortunately for me since they cost quite the pretty penny).

• ✍️ An oldie but goodie reflection on the “messy divides in travel writing”: “Where do we draw the line between writing about ‘travel’ and writing about ‘place’?” (Here’s the link to the direct story—interesting to see how things have changed since the publication date…and where they’ve stayed the same.)

See you next week—after one of the biggest personal days of my life. 👀
—Henah

weekend mood // credit