Reuters
Siddarth S
02 May 2025
Weakening travel demand, signaled by grim earnings forecasts of travel-related companies, may erase billions of dollars from the U.S. economy this year as the Trump administration's trade policy takes a toll on consumer sentiment, analysts have warned.
Goldman Sachs and J.P.Morgan projected lower foreign travel spending to trim 0.1% from U.S. GDP this year, adding that the hit could be as much as 0.2% to 0.3%.
As of the first quarter of 2025, U.S. GDP stands at $23.53 trillion, according to LSEG data, and the impact could amount to anywhere between $23 billion and $71 billion, based on Reuters calculations.
Last month, Delta Air Lines (DAL.N), opens new tab, a major international carrier, warned travel demand has "largely stalled," scrapping its forecasts for the year.
Southwest Airlines (LUV.N), opens new tab, American Airlines (AAL.O), opens new tab, Alaska Air (ALK.N), opens new tab and Frontier (ULCC.O), opens new tab pulled their guidance, while United Airlines (UAL.O), opens new tab gave two different forecasts as the trade war creates the biggest uncertainty for the industry since the COVID-19 pandemic.
Read on: US economy risks losing billions as travel demand weakens, analysts warn | Reuters
