Despite the uneven nature of recent U.S. tariffs, they still are set to disrupt travel with rising airfares, fewer flights and unexpected costs, impacting travelers across Canada, Mexico and beyond.
The latest wave of U.S. tariffs has sparked retaliation from some of America’s biggest trading partners, setting off a chain reaction that could have profound effects on various industries—including travel. While most consumers will first feel the pinch through rising costs of everyday goods, such as fertilizers, books and sugar, travelers may also find themselves facing new financial burdens in unexpected ways.
Will Tariffs Increase Travel Costs?
According to Steven Carvell, a finance professor at Cornell University’s S.C. Johnson College of Business, the most immediate impact will likely be seen in business travel, which often reacts quickly to economic downturns. When tariffs disrupt trade, companies cut back on discretionary spending—including travel for conferences, client meetings and corporate events.
Because business travel is booked closer to the travel date than the meeting itself, it’s also easier to cancel—i.e., no worry about nonrefundable tickets, hotel blocks and deposits. However, on the planning side, a conference with fewer attendees than anticipated can pose major problems.
For the meeting and incentive planner who relies on an accurate head count, it might be a good idea to lock in those air prices now, before any possible price increases (see below). Why the increases? One major consequence of tariffs is their effect on airline revenue streams.
Many international airlines rely on income from shipping goods in their cargo holds, often selling space that would otherwise go empty. If tariffs lead to reduced imports and exports, airlines could experience lost revenue, which they may attempt to recover by raising ticket prices.
What Travelers Can Do
For those planning international trips in 2025 and beyond, keeping an eye on economic developments and currency fluctuations is crucial. Here are a few tips to minimize the impact of tariffs on travel costs:
- Book flights early – If airlines begin adjusting fares due to lost cargo revenue, booking early could help secure a lower price before increases take effect.
- Consider alternative destinations – If tariffs lead to price hikes on certain routes, exploring alternative locations with favorable exchange rates can offer better value.
- Use travel rewards – Leveraging airline miles and hotel loyalty programs can help offset rising costs.
- Monitor exchange rates – A strong U.S. dollar could work to your advantage when traveling to countries where the currency is weaker.
True, one outcome of tariffs—strengthening the U.S. dollar—may seem positive at first, but the currency shift also means that fewer international visitors may visit the U.S. as their home currency weakens against the dollar.
Staying informed about economic policies, trade negotiations and airline pricing trends can help both business travelers and planners navigate these changes strategically.
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Multiple news sources contributed to this report.
