The weird economy has finally come for travel — just in time to screw up your summer plans

• Travel demand is showing signs of slowing down as Americans grapple with economic anxiety.
• High prices, economic uncertainty, and household debt are putting financial pressure on consumers.
• Travelers are seeking value, which could lead to lower prices and deals from airlines and hotels.

Just when you thought you'd be making your summer travel plans — Japan or Paris anyone? — economic anxiety appears to be rearing its ugly head.

Following years of a post-pandemic boom, travel demand is finally showing signs of slowing down. Though spending on leisure travel remains high, consumer confidence has plummeted, tariff whiplash has left prices and the stock market in limbo, and fears over a recession are mounting — and that's on top of planes crashing and spats with our allies.

Vanessa Roberts, a 35-year-old from Los Angeles, said she and her husband traveled frequently in 2024, including a trip to England and an eight-state road trip. But in 2025, they're embracing smaller trips and focusing on traveling locally or regionally instead of shelling out for pricier destinations.

"I have a long list of short trips we have planned for the year, and they're all very affordable," Roberts, who shares travel content on TikTok, told Business Insider.

Travel companies are bracing themselves for the impact. Airlines such as Delta, American, and Southwest have cut their projections for Q1. Analysts at Truist Securities said in a note Friday that bookings in the cruise industry have slowed over the past month. Some industry experts who spoke to BI said companies could be compelled to offer more deals in order to allure hesitant, budget-conscious travelers.

There is good news for the industry, though. Even if consumers are worried about paying their bills, many of them will still make travel work — though often with some sacrifices along the way.

"For American travelers, travel has shifted from a want to more of a need," Amir Eylon, president and CEO of Longwoods International, a market research consultancy that specializes in the travel tourism industry, told BI.

Americans splurged post-pandemic. It could be catching up with them.

Eylon said that while travel demand is strong, it has shown recent signs of slowing. A monthly survey conducted by his firm found that 88% of American travelers planned to take a trip in the next six months, compared to 93% during the same month last year.

That softening demand can largely be chalked up to one thing: the economy. Though plane crashes — like recent incidents in Washington, DC, and Toronto — do cause concern among travelers, Eylon said it would likely take an extended pattern of safety incidents to actually deter people from flying.

Ali Furman, consumer markets industry leader at PwC, and Jonathan Kletzel, transportation and logistics leader at PwC, also told BI in an email that American consumers are cutting back on travel spending right now, citing economic uncertainty and financial pressures being felt across income levels.

Americans saved a lot in the pandemic and then spent a lot during the post-pandemic travel boom, but it could finally be catching up with them. Household debt has grown steadily, with many struggling to pay off their credit cards and car loans. Furman and Kletzel said Americans could be pulling back on spending, including travel, to avoid overextending themselves financially.

It's that combination of debt and other economic headwinds that have softened demand and left travelers looking for better deals, Eylon said, adding, "travelers are seeking value much more strongly than they were a couple years ago."

Travelers are looking for good deals, and there could be more on the horizon

Tamara Charm, a McKinsey partner who focuses on consumer insights, told BI there's still a "splurge mentality for experiences right now." Even when consumers say they'd like to cut back on traveling, that doesn't always happen.

Instead, many travelers still take trips but cut back in other ways. That could mean traveling domestically instead of internationally — staycations, or traveling locally or regionally, were popular in the wake of the Great Recession — as well as opting for budget hotels, buying fewer souvenirs, or eating fast food over fancy dinners every night on vacation, Eylon said.

Furman and Kletzel of PwC have heard from their clients that travelers are now waiting to book their trips, including flights, hotels, and rental cars, until closer to their gates of travel due to that economic uncertainty. They said travelers are being more strategic in their spending and in timing their vacations to maximize value.

"This moderation is different from the post-pandemic surge when consumers were willing to pay almost any price for a trip," they said. "Now, financial pressures are causing them to think twice before booking."

Mandy McKaskle, a luxury travel advisor at Embark Beyond, told BI she's also noticed that some of her clients who would already be planning their trips for the summer and even the holidays seem to be holding off.

These changes are mostly being seen among budget travelers, but if the stock market continues to see volatility, higher-income consumers could also cut back on discretionary spending, including travel, Furman and Kletzel said. That means demand for luxury travel could be hit too.

There may yet be a bright side for travelers in all this: Airlines and hotels experiencing a slowdown in bookings could slash prices or offer attractive deals at various price points to keep people coming, Furman and Kletzel said.

"We expect that softening in demand means potential deals on the horizon for customers looking to book travel in late summer and into the holiday season," they said.

Do you have a story to share about your travel plans this year? Contact this reporter at kvlamis@businessinsider.com.