Trade monitors consumer confidence as US tariffs spark uncertainty

The trade is “closely monitoring” world events and the impact of US trade tariffs on the global economy and holiday sales.

Travel agents and tour operators reported early signs of a general sales slowdown as the tariffs imposed by president Donald Trump came into force this week.

Trump rowed back on the levels of tariffs for most countries on Wednesday, but doubled down on America’s escalating trade war with China.

Some agents this week reported drops in US sales despite robust overall bookings.

Premier Travel managing director Paul Waters said: “We’ve seen US bookings slow slightly compared to previous years. We’re expecting [US sales] to drop with the new tariffs.”

But he stressed: “While we’re always mindful of the broader economic climate, we haven’t seen a significant dip in demand. It might be too early to see an impact.”

Independent Travel Experts managing director Gary Gillespie noted a “healthy pace” of late bookings with prices “largely” holding up, strong summer demand and volumes ahead of last year.

But he cited a “noticeable slowdown” in March, reflecting a “momentary pause in consumer confidence”, and highlighted caution among families.

He said: “There is a definite shift in customer sentiment when it comes to travel to the US. While the US remains in third place overall in terms of sales volume, behind Spain and cruise, it’s clear families are thinking twice.

“Our members are reporting feedback from clients around the high cost of living in destinations like Orlando, mandatory service charges of up to 20%, and concerns about political instability. These factors are creating a layer of hesitation for some travellers.”

High-street agents also described the high cost of food, drinks and excursions in the US as a potential sales barrier.

“It’s not putting people off but it’s making them think,” said Deben Travel director Lee Hunt.

Tivoli Travel director Jo Richards agreed: “We don’t pull any punches; we tell them it’s $25 for breakfast.”

The Travel Village Group chief executive Phil Nuttall said there was little doubt the cost-of-living crisis and higher US tariffs could cause headaches for the industry.

He reported strong late sales but a “softening of the market”, adding: “The financial uncertainty will certainly be influencing people’s choices when booking a holiday. It could be painful for a period of time.”

Travelpack managing director Vishal Patel said it was “still early” to fully assess the impact of the new trade tariffs but warned: “Initial market reactions often bring a sense of panic and inevitably affect overall costs.

“While we haven’t yet seen significant increases, we do anticipate upward trends in pricing soon. That said, we remain optimistic — the travel industry is known for its resilience and ability to rebound, even amidst global uncertainty.”

Despite some raising concerns, USAirtours chief executive Guy Novik said the tariffs could have a positive effect if the US dollar weakened, adding: “In the short term, the introduction of tariffs will have little effect on the majority of UK customers and if the dollar continues to weaken, the price of US holidays will look more attractive.”

Jackie Ennis, Brand USA vice-president for global trade development, agreed exchange rates were key. “There is a possibility the rate will work in favour of sterling and we know that even small fluctuations can have a positive impact,” she said, while noting flight prices to the East Coast were better than “for some time”.

Agents expressed the importance of keeping a watching brief on world events.

Jacqueline Dobson, president of Barrhead Travel Group, said: “The current economic situation hasn’t impacted leisure travel from what we’re seeing but it is something the industry needs to be closely monitoring over the next few months.”

There was already evidence of customers being “slightly more cautious and taking a little while longer on decision-making”, she admitted.

The Advantage Travel Partnership said some members had shifted marketing spend away from the US to destinations such as Canada.

“We are monitoring the situation closely but, in terms of current performance, we have no concerns as yet,” said chief commercial officer Kelly Cookes.

The consortium enjoyed a “really strong week” last week across all sectors, with mass market sales up 8% in terms of passenger numbers against the same week last year.

More than a third (34%) bookings last week were for departures within 12 weeks, up 5% on the week before, while cruise sales were particularly strong, up 31% year on year, although prices dropped on the prior week.

Cookes said the US continued to perform well in sales, with a number of suppliers naming it their top destination.

Inspire Europe chief executive Lisa Henning said luxury sales were holding up particularly well despite the current climate, with 21% sales growth year on year.

She added: “The backdrop of announcements coming from the USA and speculation of a global recession is concerning, but the lates market is holding up, and average booking values for us currently are up 22%, which is partly driven by price increases.”

Janine Marshall, founder of The JLT Group, which owns Janine Loves Travel, said customers seemed “pretty unfazed” by world events, with bookings to the US holding firm as the homeworking group’s third top-selling destination after Spain and Greece in recent months.

“No sign of a slowdown there yet,” she said, adding the same was true of the general market. “Sales have been consistent as usual, no big swings either way and late departures are as steady as ever.”