Travel industry leaders around the world are bracing themselves for the fallout of the Trump tariffs announced yesterday—and even more so in Asia, where most countries have been lumped into the “worst offenders” bucket and are facing what the BBC described as “truly remarkable” tariffs.
Other than Singapore, which faces the base rate of 10%, countries in the region have been hit with tariffs ranging from 17% (the Philippines) to 24% (Japan and Malaysia), 32% (Taiwan and Indonesia), 36% (Thailand), 46% (Vietnam), 49% (Cambodia) and 54% (China)—a move which the BBC said, “will break the business models of thousands of companies, factories and possibly entire nations.”
There is no doubt that this biggest change to global trade in 100 years will have ripple effects across industries, including global travel on several levels—and Asia’s travel industry will not be unscathed. It impacts every sector of travel, from leisure to corporate and conferences and exhibitions.
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"Travel and tourism rely on a safe environment, whether that be for business or pleasure," said Timothy O’Neil-Dunne, principal of T2Impact, a Seattle-based travel tech consultancy.
"Trump’s tariffs are a devastating blow to the world economy and that will have a double whammy effect on our sector, perhaps even a triple. Effect number one is pure economics: There is less money to spend on travel. Effect number two is that travel to and from USA will be impacted by fear. Effect number three is retaliation and restrictions in reality by border controls."
Mike McGearty, co-founder of care rental technology specialist Meili, said the proposed tariffs would be negative for the entire industry.
"As the tariffs stand today, they will increase costs for all operators (airlines, hotels, car rental, etc.) within the industry and therefore lead to increased prices. Increased pricing will dampen demand and the economic uncertainty created could reduce consumer confidence even further."
“I would have a cautious outlook until this plays out further and we have full visibility on how possible retaliation leads to a negotiated position, which hopefully is less impactful on the industry," McGearty said.
Short-term uncertainty
Chris Hemmeter, managing director of travel investment company Thayer Ventures, sees impact on four levels.
- Inbound U.S. – negative impact because of negative United States brand response and strong dollar; likely relatively short term
- Outbound U.S. – moderately neutral; recession risk causing downward pressure, but strong dollar drives cheaper options
- Impact on global – generally negative as everyone pulls in their horns and spends less
- Asia Pacific – possibly neutral; economic pressure pushing down travel but swing away from U.S., increasing regional options for China travelers especially
“All that said, global interdependence is too fundamental to be kept down for long," Hemmeter said.
"Travel has an inevitable flow to it, and any short-term setback will be rapidly offset by a surge forward. I used to say this in the early days of the pandemic, and I think we have all seen that the momentum is real. The short term is uncertain but the long term is not.”
Retaliation and longer-term risks
In Singapore, Nicholas Cocks, partner at Velocity Ventures, a travel-focused fund in Asia, said there is a big question around how countries in the region retaliate.
"As most Southeast Asian nations have a trade surplus with the U.S., counter tariffs are not effective. So what retaliatory measures will be taken?" he asked.
“Will governments in the region look to retaliate through other means for example visa restrictions or taxes on visitor arrival? It remains to be seen how countries in the region respond, but such measures are possible, which would obviously affect our industry dramatically.”
The biggest concern, he said, is global instability.
“The Trump administration is demonstrating that their modus operandi is very disruptive. We have seen markets fall on the announcement. And I suspect many boardrooms are withholding investment decisions because the environment is just too uncertain.
“These factors may well produce a recession, and as we all know travel and hospitality is often a discretionary expenditure and the first to be cut when recession bites. This is a longer-term risk for our industry and one which we are very worried about at Velocity Ventures,” Cocks said.
Fritz Demopoulos, CEO of Queen’s Road Capital, a family fund with interests in travel, said: “There might be a wealth effect issue, i.e., lower stock market influences people willingness to spend. My gut tells me 80% of travel is consumed by the top 20% of consumers, and those are the ones most affected by the wealth effect. The opposite occurred during periods of high inflation. The top 20% of consumers were less impacted and hence could continue travelling.”
Perceptions of the U.S.
One clear impact is on inbound to the U.S. because beyond the economics, it’s about perception.
In a recent podcast, Professor Scott Galloway said “Brand USA” has taken the deepest, furthest dive of any brands in the last two years, and this plunge will affect purchase decisions, including that of travel.
Ross Veitch, CEO and co-founder of Wego, an online travel agency focused on the Middle East and Southeast Asia, said: “U.S. cities are already very expensive for international visitors and increased tariffs will make this even worse. This combined with all the anti-foreigner rhetoric and news stories about rounding up and deporting foreigners is really damaging the appeal of the U.S. to visitors of all types. I’m very glad I’m not running Brand USA.”
“Inbound tourism to the U.S. has already been impacted by the tariffs imposed on Canada, so this will now continue further based on the countries impacted by yesterday’s announcement," McGearty said.
"So the immediate outlook for inbound tourism to the U.S. is negative, which may be softened in the short term by some domestic demand.”
Another impact is outbound from the U.S.—will Americans, hit by higher prices at home, stay home? Could a stronger dollar mitigate that? Or perhaps just the desire to escape their country’s most politically turbulent period in recent history?
Japan may feel the pinch. In 2024, the country experienced a significant increase in American tourism, with over 2.7 million U.S. visitors—a 33% rise compared to 2023, according to the Japan National Tourism Organization (JNTO). This surge contributed to Japan’s record-breaking total of nearly 36 million international tourists that year. Monthly data from the JNTO highlights that in January 2025 alone, 182,500 American travelers visited Japan.
“Outbound traffic from the U.S. will be impacted by retaliatory tariffs, which will likely increase costs, reduce demand and may drive more domestic tourism in the short term," McGearty said.
"This is likely to have the same effect in the European market, which will see fewer U.S. travelers but stronger European demand.”
*This story originally appeared on WebinTravel.