NEW YORK (Reuters) -Kimberly Hilliard, co-founder of a five-year-old travel agency in Maryland, says at this time of year she usually fields up to 10 inquiries a week from clients eager to book vacations, but for much of the past month her phones have gone quiet. 

The unusual lull in Hilliard's business followed a plunge in U.S. share prices in early April, when the major stock indexes recorded their biggest percentage declines since 2020 on fears about the impact of President Donald Trump's trade tariffs.

Even her existing clients, many of whom she has worked with for months to chart their vacations for the year, have stopped calling, at least for now, to finalize their plans. 

That is likely because their financial outlooks have suddenly become murky, said Hilliard, co-founder of Front Porch Travel Co, based in Annapolis, even though stocks have made a shaky, tentative recovery from their April lows. 

"What's going on with the market and the economy right now is probably having an impact on them making up their mind on whether or not they're going to pull the trigger and take this trip or not," she said.

Economists have widely predicted that the tariffs Trump imposed on the country's trading partners, and escalating trade tensions with China, would weigh heavily on the U.S. economy and could spur inflation in the months ahead, unless his administration changes tack. 

With the value of 401(k) retirement accounts shrinking, many budget-conscious Americans appear to be hesitant about discretionary spending, particularly on travel, industry experts say. Many people are looking to spend less on vacation or even stay at home altogether.

U.S. consumer sentiment deteriorated to a near three-year low in April. Even before that, U.S. spending on both lodging and tourism-related activity in March was down about 2.5% year-over-year, according to Bank of America ( BAC ) data based on total credit and debit card spending per household.

Airlines have little clarity on how consumers will behave in the face of a potentially worsening economy. Carriers including Delta Air Lines ( DAL ) and Frontier Group ( ULCC ), the parent of Frontier Airlines, have withdrawn their full-year forecasts as a result.    

Tiara Moore, 36, said she watched in bewilderment as her combined investments fell $20,000 while she was on a recent vacation in Belize. 

"I travel just because I do have more security," said the marine ecologist and founder of the non-profit Black in Marine Science, referring to the value of her investment portfolio. 

"So when I see losses like that, that makes me feel like, oh, I need to put more cash in my emergency fund versus spending it on travel."

Moore said she was cancelling all non-essential travel this year and only plans to travel for her wedding in Las Vegas next month. 

'CANCEL FOR ANY REASON'

Travel agents say those clients who are still looking to book holidays are choosing to skip international vacations and stay closer to home. Others want a way out of their travel plans if things get worse.    

"They are asking more questions about cancellation policies and wanting refundable rates," said Jennifer DiDonna, owner of Amazing Journeys & More, a travel agency based in Morganville, New Jersey. "I have also been selling more travel insurance policies lately," she added.

InsureMyTrip, which sells travel insurance, said purchases of policies including the "Cancel for Any Reason" benefit increased 30% in March compared with the same time last year. From December 2024 to March 2025, insurance sales increased 23%, according to the company. 

The United States remains the largest source of international visitors to Italy and France, but in March flight searches to those countries from the U.S. for the next six months decreased about 12%, said Mirko Lalli, CEO of the Data Appeal Company, a tourism data provider. Searches to the United Kingdom declined 23%. 

Herman Sims, 66, from Dallas, Texas, said he and his wife had planned to spend the July 4th weekend visiting friends in New Jersey, but changed plans after seeing that the two-day trip would cost roughly $2,000.

Sims, a night operations manager for a trucking company, said his 401(k) retirement account shrank when the stock market took a nose dive in response to Trump's initial April tariff announcement.

Although the account has started to recover, the couple will spend the holiday closer to home in Tennessee amid the economic uncertainty.   

Sims said his main worry was the health of the economy, mostly for the sake of his children and grandchildren. 

"I'm hoping that we won't slip into a recession that's going to affect them in the future," he said.