By Emmanuel Mounier, Secretary General, Global Travel Tech.
The world’s tourists are discovering that trade wars don’t stop at the border. In an era of rising tariffs and economic brinkmanship, the ripple effects are reaching far beyond factory floors and into airport departure lounges. From Beijing to Brussels, travelers and tourism businesses are grappling with an unexpected new reality: the policies forged in trade disputes are increasingly reshaping when and where people travel. Global tourism has been rebounding impressively after the pandemic. 1.1 billion international tourist trips were recorded in the first nine months of 2024, marking a 98% recovery to pre-COVID levels. In this remarkable recovery of the industry, travel platforms and other innovators played a pivotal role. Going forward, supporting these kinds of innovative solutions, ones that enable a dynamic sector where consumers can adapt their planned trips based on the latest information on currency, tariffs, or other developments, might be fundamental to the industry’s growth prospects.
Yet beneath this overall resurgence lies an uneven landscape. Geopolitical tensions and tariff-driven skirmishes act as de facto “travel barriers,” dampening certain flows even as others surge, forcing the industry to adapt in real time. The stakes are high: tourism is not just about holidays, but a multi-trillion-dollar industry increasingly caught in the crossfire of global trade conflicts.
Tariffs Erect New Barriers for Travelers
What begins as a tariff on goods can end up as a de facto deterrent to travel. Travelers worldwide are rethinking plans in response to rising costs and uncertainty. A recent survey found more than a third of American respondents are now leaning toward domestic trips over international ones, citing cost and unpredictability as key factors. In turn, bookings to the U.S. from key markets have slumped. Canadians, who are quite negative towards Trump’s ambitions of buying their country, have in response decreased their summer bookings to the US by 21% compared with last year, according to numbers from Airlines Reporting Corporation. These same statistics show that summer bookings in general to the US have declined by about 2%, a worrying sign for the American tourism industry. Airlines and hotels are scrambling: United Airlines has cut cross-border routes, and resorts in U.S. sunbelt states are rolling out campaigns like “Palm Springs loves Canada” to woo back wary visitors. The message is clear: tariff tensions are no longer an abstract concern for Wall Street – they’re tangibly dampening tourist flows.
When Trade Tensions Hit Tourism: Lessons from Asia and the U.S.
During the 2018–2019 U.S.–China trade war, Chinese tourist arrivals to the U.S. fell 5.7%, marking the first drop in 15 years and costing an estimated $2 billion in lost revenue. Travel warnings, nationalist sentiment, and strained diplomatic ties discouraged long-haul trips. Even in 2024, Chinese visits to the U.S. remained far below pre-pandemic levels, with just 1.6 million arrivals compared to 2.8 million in 2019. Weaker currency, inflation abroad, and persistent visa delays have pushed many travelers to opt for closer or more politically neutral destinations.
Similar trends played out in 2019 between Japan and South Korea. After Japan imposed trade restrictions on key tech materials, South Korean consumers responded with a sweeping boycott of Japanese goods and tourism. Visits from South Korea to Japan fell sharply, down 48% by August, and over 65% by October. Airlines cut routes, and hotels across popular regions like Kyushu saw dramatic drops in occupancy. What began as a trade skirmish quickly spiraled into a travel slump, showing how consumer sentiment and national pride can hit airlines and hotels as hard as tariffs hit exports.
Europe’s Stake in the Tourism Tug-of-War
For Europe, trade-driven turbulence in global tourism is both a challenge and an opportunity. As Chinese tourists hesitated to return to long-haul U.S. destinations in 2023, many instead turned to Europe. That year, Chinese arrivals reached roughly 6 million, helped by steady diplomatic ties, relaxed visa regimes in some countries, and expanded direct flights. Major cities like Paris and Prague saw a notable rebound, with platforms like Trip.com reporting a 900% surge in bookings in early 2024 (albeit from a low base). Europe’s relatively neutral stance in major trade disputes has made it an attractive alternative in a polarized travel landscape.
Still, the continent is not immune to economic headwinds. Sanctions on Russia have slashed Russian arrivals by over 90% since 2019, cutting off a key market for destinations from the Baltics to the Mediterranean. At the same time, a strong U.S. dollar, inflation, and rising airfares have made long-haul travel more expensive for European households, cooling outbound demand. Meanwhile, internal friction points—like post-Brexit travel rules—have added layers of complexity. As global tensions persist, Europe’s tourism sector will need to stay nimble, balancing openness with resilience.
Travel Tech Platforms as an Enabler in Uncertain Times
In 2022–2023, with the value of the dollar going, up, Americans instantly saw their travel apps flagging to them how far their strong dollars could go in eurozone cities. This shows how travel tech is helping individuals navigate the practical challenges that trade conflicts create.
Price comparison engines instantly adjust when tariffs or currency swings change the cost landscape, ensuring budget-conscious tourists can identify better-value destinations. Furthermore, travel advisory and risk alert services keep travelers informed of geopolitical advisories, like China’s recent warning about U.S. travel or any new visa restrictions, so that itineraries can be changed with minimal hassle. This kind of timely information can make the difference between a traveler canceling a trip versus simply adjusting the itinerary. And on the industry side, hotels and tourism boards are leveraging big data to pivot marketing efforts when a key source market dries up. If one platform’s analytics show fewer Chinese bookings, hotels can quickly retarget promotions toward, say, Southeast Asian or Middle Eastern tourists to fill the gap. In essence, technology is providing the tourism sector a much-needed flexibility “shock absorber” in the face of policy shocks.