Will tariffs disrupt your summer vacation plans? Probably not, finance expert says

As families plan summer getaways—booking flights, reserving hotels and mapping out road trips—many are also keeping a close eye on rising prices. Could new import taxes, including those recently enacted by the Trump administration, make vacations more expensive?

Edward Van Wesep, professor and chair of the finance division at the Leeds School of Business, studies financial decision-making and how economic policy impacts consumers. He sat down with CU Boulder Today to explain why tariffs are unlikely to disrupt most Americans’ summer travel—and where consumers might actually feel the pinch.

Edward Van Wesep

Will tariffs increase the cost of summer travel for most Americans?

Not significantly. Most summer travel spending goes toward services—like hotels, flights and activities—and services are generally not subject to tariffs. If you're traveling internationally, tariffs are even less relevant. For example, if you go to Mexico and stay in a hotel or dine out, tariffs don’t apply to what you’re consuming there. Domestically, tariffs might slightly affect businesses that import goods, but any price increases are likely to be small and not passed on directly to consumers in a noticeable way.

Could tariffs impact prices for airfare or hotels?

Only in very limited ways. Hotels might import certain goods, but these aren't major parts of their day-to-day operating costs. What matters more for pricing is demand. If demand stays high, prices will too. If fewer people travel, prices may drop. Airlines face similar dynamics; imported parts might raise maintenance costs, but that doesn't automatically translate into higher ticket prices. 

What about gas prices?

Gas prices tend to be higher in the summer, but I wouldn't expect anything drastic. The average price nationwide is $3.17 per gallon, which is the same as in 2007, 18 years ago. Oil prices lead gas prices by a few weeks and they have been trending down so, if anything, I would expect the price of gas to fall. Tariffs don't have much to do with gas prices because we are not an energy importer.

Are there types of travel-related purchases where tariffs will be felt more directly?

Low-cost imported goods are the most vulnerable. Think toys, clothes or travel gear bought from places like Walmart or online retailers such as Temu. These products are often imported with very thin profit margins, meaning companies have little room to absorb the cost increases and will pass them directly to consumers. So if you're stocking up for a family trip, you might notice higher prices on those items.

Could inflation or consumer pullback affect summer travel more than tariffs?

Possibly, but not yet. Consumer sentiment has been negative, but actual spending remains strong. Personal consumption forecasts for this quarter are reasonably strong, and people are still traveling. However, if inflation in areas like food or fuel starts to squeeze household budgets, we could see a dip in demand. If that happens, prices for travel-related services—like hotels—might fall to attract more customers.

What about less visible vacation costs like theme park tickets or attraction fees?

In most cases, those won’t change much either. Theme parks base ticket prices on demand. Even if tariffs increase the cost of imported parts or supplies used in the park, the effect on ticket pricing is minimal. The cost of letting in one more visitor is low, so prices are more about strategy than expenses. Unless there’s a major drop in attendance, prices are unlikely to shift significantly.

Is it smarter to book summer travel now or wait?

Planning ahead is wise, especially in an uncertain environment. Prices always fluctuate with demand, but current economic unpredictability adds another layer. For travelers, that means it’s a good idea to book early, secure refundable options when possible and have backup plans in place—like alternatives for accommodations or transportation in case of cancellations.