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by Max C.
Rising geopolitical tensions and the trade war initiated by President Trump are creating chaos in the global economy, especially in the airline and travel industry. Consumers and companies face uncertainty, and many predict summer travel will be affected.
Corporations are adjusting their 2025 outlooks as the global trade war intensifies.
“In the face of an uncertain economic landscape, you are very likely to see people and businesses cut back on their travel, and that will lead airlines and hotels to have to cut prices to attract more business,” said Todd Kelly, managing director of Merrill Private Wealth, in a conversation with the Lakeside Leo. Kelly added that “airfares fell 5.3 percent in March from last year.” Delta, American, and Southwest Airlines have all slashed their entire economic forecast for 2025.
Meanwhile, economic numbers don’t show significant progress. However, airline executives are trying to calm anxious investors during these uncertain times. Kelly stated the signs are pointing to a “mild” recession. “At the start of the year, corporate travel had been up 10 percent year-on-year, but has since flattened," he said. "Almost every national airline has pulled their earnings guidance for 2025, basically saying that the environment is too uncertain to provide a forecast.” The demand for air travel and hotels is slowing. Prices might fall enough that some consumers might continue with their travel plans.
For consumers, as the summer travel season heats up, the weaker U.S. dollar means more Americans will stay home or avoid costly trips to overseas destinations. While the U.S. dollar is still worth 100 pennies or four quarters, it is worth less if you exchange it for foreign currency like the euro or the yen. These days, you’ll get less for a dollar than what you received a year ago, or even just three months ago. This is one of the reasons American residents are staying local this summer. The cost of gas also affects travel for Americans wanting to take road trips and purchase airline tickets. When fuel gets more expensive, so do plane tickets.
By Max C.
By Max C.
The Upside: Best Local and International Travel Options
One thing that could help Seattle travelers is that there are more departing flights being added to the summer schedule at Seattle-Tacoma International Airport. One reason is the merger between Alaska Airlines and Hawaiian Airlines. Starting May 12, you can fly from Seattle to Tokyo on Alaska Airlines. By moving Hawaiian widebody aircraft to Seattle, residents will see more flights, such as Seattle-Seoul in September. Alaska Airlines told The Lakeside Leo that they will announce another long-haul route from Seattle this fall. Aviation insiders view London as a possible route. More flights (or increased capacity) could lead to better prices. In economics, if demand stays the same and flight capacity (or supply) goes up, prices should come down.
Kelly has seen several big market downturns. “The recessions of 2002, 2008, and 2020 come to mind. During each of those recessions, people and corporations cut back dramatically on their travel. It's one of the first spending items to go.”
Will this time be different? “No," Kelly said. "If there is one valuable lesson that I have learned over the course of my career, it's that almost every industry is cyclical—meaning that every industry goes through good times and bad times.”
If the economic uncertainty is too much for your family, we created a list of free and accessible Seattle destinations and short road trips to consider.
We hope you find some fun over the summer in the midst of this economic uncertainty.
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