Bernstein warns that geopolitical uncertainty, specifically the prospect of new U.S. tariffs on European countries, is likely to weigh on travel stocks despite limited direct impact on services. The brokerage cited a 2% drop in UK-listed InterContinental Hotels Group shares as an early sign of market sensitivity, even though no tariffs target flights or hotels directly.

The analysis suggests second-order effects pose the real risk. Bernstein estimates modest GDP impacts of 0%-0.2% for affected European nations, with Germany most exposed due to its goods exports. This economic pressure could dampen discretionary spending, while potential construction cost inflation from tariffs might further constrain the already limited U.S. hotel development pipeline.

Political escalation remains a key concern. Bernstein noted inbound U.S. travel has already fallen about 6% since April 2025, with Canadian arrivals down 30%. Further tensions could hurt European travel to the U.S. and trigger scrutiny of tech firms like Airbnb, which face ongoing regulatory cases in Europe. The 2026 FIFA World Cup, expected to boost hotel RevPAR, could be impacted if tensions lead to boycott threats.