The sweeping new tariffs announced by President Donald Trump have raised the risk of recession and the response from financial markets was swift, with a sharp decline Thursday in shares of travel companies, as measured by the Skift Travel 200.

Because the U.S. recession and global slowdown risks are higher than at the start of the year, Skift Research is lowering its outlook for global travel. We now forecast 2% to 5% travel industry growth in 2025, down from our forecast at the start of the year for 6% to 9% growth.

The S&P 500 plunged 4.8% Thursday on fears that higher than anticipated tariffs could spark a global recession. Travel stocks fared even worse, according to the Skift Travel 200, our proprietary index that measures the performance of the largest publicly traded travel companies in the world.

The ST 200 fell by 5.0%, but it was buoyed by global stocks in our index that fared better than their U.S. peers. Since the S&P 500 only contains U.S.-listed companies, the better comparison would be to just North American listed ST 200 travel companies. Those stocks fell by 8.1% Thursday, three points worse than the S&P 500.

That negative performance compounds a weak start to 2025, with the ST 200 down 12.8% this year, versus a decline for the S&P 500 of 8%.

Tariff Day, April 3, Travel Stock Performance

Travel Stocks vs. the Broad U.S. Market Year to Date

Behind the Sell-off: Recession Risks and Cutting Travel Growth Estimates 

This works out to travel stocks being roughly 1.5x as sensitive to an economic malaise relative to the broader market (and economy). Many economists believe that higher tariffs will slow economic growth worldwide. And so investors are concerned that consumers will curtail their travel plans in favor of saving cash for necessities like food, gas, and rent. 

Skift Research believes that travel has become more recession resistant over the past decade. Travel is the single most aspirational purchase one can make. It is key to family connection, business ties, and the modern experience economy.

But make no mistake: Travel is still not recession proof. An economic decline will hurt travel and the stocks are plunging as a result. That’s why Skift Research is revising down its outlook for global travel: We still don’t expect a recession but the risks of one have risen.

Revised Skift Research Global Travel Outlook

A Sector Perspective on the Sell-Off

The Skift Travel 200 stock index divides the universe of travel stocks into five sectors: accommodation, travel tech, airlines, cruise and tours, and ground transportation. Tariff “liberation day” saw cruise and tours get hit the hardest, down 10.4%. Ground transportation eked out a neutral end to the day, supported by international stocks in Latin America and Asia Pacific.

Tariff Day ST 200 Travel Sector Stock Performance

It’s been a tough start to the year for most travel sectors. When we look at year to date travel sector performance we see similar trends.

Year-to-date, ground transportation performed the best, up 6%. This was followed by Travel Tech, though that sector was still down 8.9% this year. Tech is an asset light business with high margins. And online travel agencies, which make up a large part of this sector, could outperform in a downturn. A more cost conscious traveler is not good for anyone, but it is relatively better for OTAs, which offer travelers discounts and choice.

That is in comparison to suppliers like hotels and airlines which have to eat those discounts and still cover higher fixed costs.  

Meanwhile, the hardest hit sector of 2025 has been cruise and tours, down 21%. That has to be disappointing for a sector that was up nearly 15% in early February on booming cruise demand. Perhaps this reflects the double-edged sword of a purely leisure business. The good times are good, but in leaner times, cruise and tours don’t have business or VFR travel travel to rely upon.

Travel Stocks by Sector Year to Date

Looking Outside the U.S.

We also divide the ST 200 by region, representing the global nature of the travel industry. Here we see the biggest divides, which shows the uncertainty that Trump 2.0 is creating in the U.S.

Since the start of the year, South American travel stocks are up 15% and Middle East and African travel stocks are up 13%. European and Asian travel stocks are mostly neutral on the year. In the meantime, North American travel stocks have fallen 19%.

Travel Stocks by Region Year to Date

Individual Stock Winners and Losers

The individual winners and losers on Thursday also tell us something about what investors are expecting. Skift Research isolated major U.S. travel stocks on the ST200, focusing on U.S.-based mid- and large-cap companies.

In the face of the tariff announcement, the top five best performing major U.S. travel stocks were primarily in the hotel sector.

All U.S. travel stocks were down, but Choice Hotels was down “only” 4.1%. Midscale hotel peer Wyndham made the top five today as well.

Perennial investor favorite Booking Holdings was also in the top five (down just over 5%). Between discount friendly OTAs, more economy focused hotel chains, and a car rental company, if one squints they can almost make out an investor thesis for more budget-friendly road trips in the year to come.

On the flip side of the coin, the worst performing travel stocks were primarily in the cruise sector, with an airline and timeshare company thrown in for good measure. Norwegian Cruise Lines holds the ignominious title of worst performing major travel stock in the U.S. today.