(Yahoo!Finance) - The summer of 2022 was defined by the notion of "revenge travel" as consumers tried to make up for time lost during the height of the pandemic.
As the summer of 2025 fast approaches, the story is shaping up to make those post-pandemic summers in which everyone went to Italy feel like a meme from another era.
American Airlines (AAL) and Southwest Airlines (LUV) both pulled their outlooks for 2025 this week, citing uncertainty that weighed on demand. Delta Air Lines (DAL) did the same earlier this month.
On Wednesday, the Federal Reserve's latest Beige Book report was chock-full of anecdotes from regional business leaders discussing the obvious caution from consumers that is already starting to weigh on the leisure and hospitality industry.
And it's clear this summer is shaping up to be a challenging one for businesses with any kind of seasonal tilt.
In the Boston Fed's district, "Cape Cod restaurant owners experienced a first-quarter slowdown, and hotel bookings on the Cape for summer were running somewhat below recent years."
"[Travel] from Canada declined noticeably, and contacts feared that summer travel from Europe and China could suffer as well because of negative reactions to US tariff policies," the report added.
"More broadly, tourism contacts expressed concerns that declining consumer confidence could hurt leisure spending."
In New York, "a New York City hotel owner reported a falloff in international reservations." Upstate, contacts also noted a slowdown in visitors from Canada.
In the Atlanta Fed's district, which includes the whole state of Florida, hotel stays were down and shorter in duration. Business travel was lower. Entertainment ticket sales fell.
"Large attractions that normally draw international visitors saw a drop in travelers from abroad, particularly Canada, and airports and airlines reported a notable decline in foreign passengers to the U.S.," the Atlanta Fed added.
In the San Francisco Fed's district, "Consumer demand for air travel, hotels, and entertainment events slowed — an atypical trend for the early spring growth period. In addition, several contacts reported weak booking volumes for the summer."
And the impacts that tariffs and some of Trump's other policies are having on the economic outlook were not just limited to travel.
Businesses that rely on immigrant labor noted a shortage of workers. Car dealers across districts saw a surge in demand as consumers tried to front-run price increases. Real estate markets nationwide remain under pressure.
"Numerous contacts voiced concern that heightened uncertainty stemming from on-again, off-again tariffs was making it increasingly challenging to plan," the Dallas Fed wrote in its report. "Stricter immigration policy, federal government layoffs, and a cutback in spending were also cited as headwinds for growth."
That's just about everything.
The daily run of headlines and market action are liable to lift the economic mood, of course. Just look at the last three days in the stock market.
But the risk being run in the US economy is that as the notion of a more uncertain outlook grows more entrenched and impacts people's jobs, income, and their willingness to spend against the security offered by both, a reversal or softening in Trump's tariff stance may not be followed by a commensurate response from businesses and consumers.
Just as it takes more than a 20% rally in the price of a stock to make back a 20% decline, so too might the US economy face a longer period of repair than the damage that's been inflicted in just a few short months.
By Myles Udland · Head of News
