The trend: US consumers are dialing back their travel plans this year due to economic uncertainty and safety concerns. That’s forcing companies to lower prices to lure budget-conscious travelers and beef up their luxury offerings to strengthen ties with wealthier consumers.

By the numbers: More than half of Americans (52%) report that current economic conditions—including tariffs and rising prices—have affected their travel plans for the year, per a survey conducted by The Harris Poll for The Points Guy.

• 1 in 5 Americans has or will travel less than previously planned.
• A similar proportion (19%) has or will shorten the length of their trips.
• A smaller but sizable number (14%) is postponing or canceling trips, while the same percentage is changing travel destinations.

Signs of strain: While there is very often a gap between what consumers say and what they do, it’s clear that households are rethinking their travel plans.

• Would-be travelers—both leisure and business—are waiting until the very last minute to secure hotel rooms, Marriott CEO Tony Capuano said, as uncertainty clouds their decision-making.
• Alaska Airlines and Air France-KLM are among the airlines that have had to lower prices to fill seats on their planes, which is aiding demand but at the expense of profit margins. Average summer fares are 7% lower YoY, per Kayak data shared with Reuters.
• The unpredictability of the overall environment led the International Air Transport Association (IATA) to lower its 2025 profit forecast for the global airline industry by $600 million to $36 billion, although it expects the total number of flyers to exceed last year’s figures.

One bright spot: The biggest pullback in travel demand is coming, unsurprisingly, from lower-income consumers, who are trying to reduce their spending any way they can. While wealthier households are not unconcerned about economic volatility, they remain willing and able to splurge on everything from international trips to premium seats to luxury hotels—prompting companies like Marriott, United, and even Southwest Airlines to ramp up their higher-end offerings.

• Nearly half (49%) of consumers with travel plans this summer have incomes over $100,000, per a Deloitte survey, up 14 percentage points from 2023. Meanwhile, the share of travelers with incomes below $50,000 will be just 18%, down from 31% in 2023.
• High-end travel demand is a “bright spot” for Alaska Airlines, CEO Ben Minicucci told Reuters—which no doubt factored into its decision to start long-haul service between Seattle and Rome, its first European destination.
• Shows like “The White Lotus” are also fueling demand for luxury travel, sending Marriott, Hilton, and other hotel companies into a frenzy to add more high-end properties.

Our take: Uncertainty has put an end to the travel industry’s extraordinary run of post-pandemic growth. While demand is still relatively high, many consumers are taking a more pragmatic approach—shorter trips, cheaper destinations—that allows them to scratch their travel itch on a much lower budget.

But as for the rest of the economy, what’s true one week can change on a dime. While confidence trended up in May thanks to the reduction in China tariffs, rising tensions between the US and China and the lack of trade deals could cause consumers to quickly rethink their getaway plans.