Nasdaq travel stocks fell sharply this week as rising geopolitical tensions between China and Japan rattled global tourism markets and triggered a broader pullback across travel-related shares. The selloff began after Japanese Prime Minister Sanae Takaichi warned that a military attack by Beijing on Taiwan would constitute a "survival-threatening situation" for Japan-comments that prompted China to issue a travel ban and denounce Tokyo for "seriously damaging bilateral ties and challenging post-war international order."
The reaction rippled quickly through Asian financial markets. Japan's Nikkei 225 slid 3.22% on Monday, marking its steepest single-day decline in weeks. Tourism and leisure stocks bore the brunt: Secom fell more than 11%, and Oriental Land, operator of Tokyo Disney Resort, suffered a drop of more than 11% as investors assessed the fallout from China's ban. According to Japan's National Tourism Organisation, Mainland Chinese travelers accounted for 23% of all foreign arrivals in 2025, making the sector acutely vulnerable to political shocks.
U.S.-listed travel companies were hit soon after the Nikkei selloff. On the Nasdaq, Expedia Group fell 7.75%, Booking Holdings dropped 4.83% and Tripadvisor declined 3.88%. The losses reflected both direct exposure to Asian markets and investor concerns that volatility in the region may feed into a broader downturn in global discretionary travel spending.
The declines also come at a moment of intensifying competition in digital travel booking. Google has confirmed plans to expand its AI-powered search tools to include hotel, flight and reservation services, while noting that actual bookings will be processed through partners such as Expedia and Booking.com. The shift reinforces fears that the travel sector is confronting a rare combination of geopolitical and technological headwinds simultaneously.
Expedia, despite Tuesday's losses, has benefited from strong financial momentum. The company hit a 52-week high of $279.61 just two days prior to the market pullback. In the third quarter of 2025, the $32.4 billion company reported revenue of $4.4 billion and adjusted net income of $962 million, rising 9% and 19% year-over-year. Shares remain up nearly 32% year-to-date, underscoring how abruptly sentiment shifted following the China-Japan dispute.
Booking Holdings has described similarly resilient consumer demand. President and CEO Glenn Fogel highlighted strength across its global network, reporting that revenue and net income for the quarter ended September 30 rose 13% and 14% to $9 billion and $2.7 billion. Fogel also said that GenAI has added "excitement" to customer and partner experience, suggesting that long-term structural drivers remain intact even if near-term volatility grows.
Tripadvisor has been pivoting toward what it describes as higher-growth marketplaces. CEO Matt Goldberg said the segment now accounts for "almost 60% of revenue and 30% of profit." Net income reached $80 million in Q3 2025, up 10% from a year earlier, and free cash flow improved to $26 million from negative $64 million in the same period last year.
