Overview
Bernstein has warned that the prospect of fresh U.S. tariffs on a group of European countries is likely to exert downward pressure on travel-sector equities, despite the brokerage's view that the immediate, direct impact on travel services should be limited.
Market reaction so far
The note from Bernstein points to recent market moves after reports that U.S. President Donald Trump intends to impose a 10% tariff on eight European countries in connection with opposition to U.S. efforts to acquire Greenland. The brokerage highlighted a roughly 2% decline in shares of InterContinental Hotels Group listed in the U.K., noting that the move occurred even though Monday was a U.S. market holiday and no tariffs have been announced specifically on flight tickets or hotel stays.
Direct versus indirect effects
Bernstein draws a distinction between first-order and second-order consequences. On the direct front, the proposed measures are targeted at goods rather than services, so the brokerage sees no immediate, direct shock to travel services. Firms under Bernstein's coverage have, the note said, mostly regained ground after the earlier wave of tariffs announced in April 2025.
However, Bernstein cautioned that the bigger concern may be second-order effects. These include economic impacts that can depress demand, political escalation that alters travel flows, and changes in consumer behavior. Any of these developments, the brokerage said, have the potential to weigh on the travel sector over time.
Economic channel
On the macroeconomic side, Bernstein referenced early estimates indicating that the GDP hit for the affected European countries would be modest - in the region of 0% to 0.2%. Germany is expected to face the largest headwind among the group because of its relatively greater exposure to U.S. goods exports.
Inflationary effects are less certain, according to Bernstein, but the firm did not rule out incremental inflationary pressure. The brokerage characterized this as a small headwind to both European and U.S. demand. Because travel demand is closely tied to overall economic activity, and because higher inflation can squeeze discretionary spending, even modest GDP or inflation impacts could translate into weaker travel consumption.
Implications for the U.S. hotel market
Bernstein also noted potential knock-on effects for U.S. hotels. If tariffs push up construction costs, that could further constrain an already limited hotel development pipeline. The brokerage suggested this would provide a small tailwind to revenue per available room (RevPAR) by tightening supply, while simultaneously acting as a headwind to net unit growth for asset-light hotel operators that rely on continued development to expand their portfolios.
Travel patterns and political risk
Beyond economic channels, Bernstein highlighted that geopolitical escalation could shift travel patterns. The brokerage pointed out that inbound travel to the U.S. has already encountered headwinds since April of last year, with overall inbound travel down about 6% and as much as 30% from Canada.
Bernstein said further political tensions could weigh on inbound travel from Europe to the U.S., although so far U.S. outbound travel has remained largely unaffected. The brokerage also flagged the potential for more extreme outcomes, such as travel bans or calls to boycott major sporting events, as risks that could materially change travel flows.
Events and platform exposure
Looking to the 2026 FIFA World Cup, which the U.S. is set to host, Bernstein described the tournament as expected to be a material tailwind for travel demand. The firm quantified that benefit as contributing roughly 30 basis points to RevPAR growth for Marriott and about 50 basis points of night growth for Airbnb.
However, the note added that German politicians have not ruled out a boycott of U.S.-hosted matches should tensions escalate further. Bernstein also warned that political escalation could prompt increased regulatory scrutiny of U.S. technology companies operating in Europe, which could create headwinds for platforms such as Airbnb and Booking Holdings that are already facing ongoing regulatory cases in the region.
Conclusion
Bernstein's assessment emphasizes that while the immediate, direct consequences of the proposed tariffs on travel services appear limited, the spectrum of second-order effects - ranging from modest GDP impacts and possible inflationary pressure to construction-cost-driven supply constraints and politically driven shifts in travel patterns - create a complex risk set for travel stocks. These dynamics could influence everything from demand and RevPAR to regulatory exposure for digital travel platforms.