Rahim Madhavji is the president of Knightsbridge Foreign Exchange.
Travelers across the globe face a summer of economic and political complexity. With the larger travel industry just now settling back into a pre-pandemic swing, things may soon take a different shape as trade negotiations and tariffs place pressure on travelers.
Foreign exchange markets and businesses are likely to get caught up in the shuffle, especially if travelers reprioritize to a great degree. If needing to make an exchange, it’s best to keep a flexible budget and monitor exchange rates to identify the most favorable time for a transaction.
With this in mind, what might the global travel landscape look like this summer, and how can businesses best respond?
Location, Location, Location
Looking at emerging travel trends across the globe helps inform an early picture of what different regions can expect this year.
The U.S. Travel Association found a 12% decline in trips from overseas in March, which may continue as political tensions ripple into the year. Meanwhile, international tourist arrivals to Europe rose 4.9% in Q1 2025 compared to the same period last year, according to the European Travel Commission.
The Asia Pacific Region is looking ahead to a solid season, according to Sabre’s global travel data, if trends hold. Their study found a 34% increase in bookings made by travelers in the region year on year, placing the area in a prime position for an active summer season.
Other Early Indicators
Tariffs have seen many forgo vacations to the States, including travelers from Canada, which provides the U.S. with its largest pool of international visitors. Economies in border towns may dwindle or boom depending on how cross-border travelers respond long-term, with staycations or in-country trips becoming more popular options.
Though trade discussions are ongoing and may soften the impact on cross-border destinations over time, for now, however, it seems many locations, like Florida and Arizona, will need to contend with instability in the short term.
How Businesses Can Respond
Coming up with a responsive strategy to fluctuations in the travel industry is beneficial, especially for businesses anticipating losses. Consider the following as you pull together your plan:
Identify growth opportunities with current customers.
In the absence of diverse revenue sources, consider additional ways to nurture existing customer relationships. This could be something as simple as an exclusive sale, launching a loyalty program or early access to new products.
Shore up local support.
Similarly, leaning into local markets where possible can help supplement income from international visitors. Consider setting up hyper-targeted ads to expand local awareness or contacting local media with events, initiatives and stories.
Stay prepared.
Certain places may see a boom in business driven by those rethinking trips to the States or other areas. In those circumstances, it’s best to increase capacity to meet heightened demand and capture the most of the summer season.
Keep a cool head.
It’s the most important step, and the hardest to do. Downturn is an unfortunate part of business, but nothing lasts forever. Whether you’re a seasoned pro or just starting out, remembering to set some time aside to focus on other areas of your life is essential when times are tough.
It’s too soon to tell exactly how the summer travel season will go, but early indicators suggest some degree of trouble depending on where businesses are based. In these conditions, revisit your current business strategy early and often. Making relevant adjustments at the top of the summer will better help drive revenue. Leaning into local markets and trends is helpful if your area sees a dip in activity, while striking while the iron is hot will serve those with more foot traffic.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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