How tourists are weathering geopolitical uncertainty, currency moves and extreme heat

CNBC

12 hours ago

Geopolitics, currency moves and extreme weather are increasingly playing into tourists' considerations for their next vacation and affecting classic holiday destinations.
Staple European spots France, Spain and Croatia, for example, have been facing record-breaking heat in recent weeks, which triggered wildfires in some locations. Conflict in the Middle East has meanwhile meant that tourists in nearby Cyprus were able to see missiles and smoke in the sky from the beach.
Sluggish economic growth and inflationary fears, largely linked to U.S. President Donald Trump's tariff policies, appear to be making consumers more cautious with their spending.
A weaker U.S. dollar has also diminished the currency's purchasing power abroad, with a June report from the European Travel Commission showing that high travel costs, alongside the current global perception of the U.S., have been weighing on voyage plans.
"For American travellers, a weaker dollar has fuelled demand for countries where their purchasing power goes further, from parts of Latin America to Southeast Asia. Many are opting for package deals that lock in rates upfront, effectively turning travel planning into a smart financial strategy," Nicholas Smith, holidays digital director at Thomas Cook and the eSky Group online travel agency, told CNBC by email.
Travelers also appear to be thinking twice before picking the U.S. as a destination amid political tensions and an increase in reports of tourists being detained or interrogated as they enter or leave the country.
Linda Jonczyk, a spokesperson for Europe's largest tour operator TUI, said that there has been "some decline" in bookings for travel to the U.S. Earlier this month, TUI CEO Sebastian Ebel reportedly attributed the pullback to factors including reports of tourists facing border control issues.
Elsewhere, Europe remains a key destination, despite challenges. Smith said the British pound to euro conversion rate has remained relatively stable, and the familiarity many tourists have with mainland Europe works in the region's favor.
"Greece and Turkey also remain firm favourites, even with seasonal wildfire headlines, thanks to their compelling mix of history, hospitality, and value for money," he said. But, Smith also noted that "Turkey has found itself in a slightly tricky predicament. Inflation has pushed up prices, however as most people book all inclusive, it is somewhat mitigated."
Still, there has been a growing trend of consumers swapping heat for cooler destinations as part of so-called "coolcations," Smith said. This includes travelers now turning to countries such as Iceland, Norway and Poland.
TUI's Jonczyk meanwhile noted that the company's business is becoming less seasonally focused as it responds to "more of our customers preferring to travel outside the peak summer season as weather patterns especially around the Mediterranean change."
According to Thomas Cook's Smith, "holidaymakers in 2025 are factoring in more elements than ever when choosing where to go - from currency movements and visa rules to climate patterns and unique cultural draws."
"Travellers are becoming more intentional," he added, noting that tourists are seeking out spots that suit them and their priorities, rather than simply avoiding certain locations.
Europe's wildfires are an especially big concern among travelers right now, travel experts said, after heatwaves triggered outbreaks in tourist hotspots including Spain, Portugal and Greece.
Flames are still spreading in some locations. Over the weekend, Spanish infrastructure such as roads and train services was impacted, as Madrid deployed military emergency troops to try and constrain the fires, Reuters reported.
Fires are also continuing to rage in neighboring Portugal, which last week requested assistance from the European Union and was forced to evacuate residents in some regions.
In emailed comments, Portugal's tourism office meanwhile told CNBC that the country "remains a safe, welcoming, and fully operational destination for travelers," and that visitors were being hosted "as planned." Local tourism infrastructure was prepared for challenges like wildfires, they added.
Rhys Jones, a travel insurance specialist at GoCompare, told CNBC that the price comparison website has increasingly been receiving inquiries about what how to handle traveling in an area were wildfires raged at one point, or if there's a risk of blazes.
"The first thing we recommend doing is checking whether the Foreign Office has deemed your destination safe to travel to," Jones told CNBC by email.
"If the Foreign Office says it isn't safe, then it's important you take this advice seriously. If you decide to travel regardless of the warnings and need to claim for something that happens during the trip, your travel insurer could refuse your claim," Jones said.
On the flipside, insurers might not pay out if you choose to stay at home despite the Foreign Office saying it is safe to travel and there are no reported issues with flights or accommodation, he added.
Jo Rhodes, a travel specialist at U.K. consumer group Which?, echoed this advice.
"Holidaymakers should wait until closer to the departure date to see if the holiday can go ahead or what flexible booking options are offered from the tour operator or airline. Travel companies will be prioritising anyone due to depart in the next couple of days," Rhodes told CNBC by email.