Tourism Industry Braces for “Trump Slump”
As Travel Weekly notes it isn’t just travel from the seven countries featured in the President’s initial executive order that is being affected. While it true that U.S. bookings from Iran, Iraq, Libya, Yemen, Somalia, Sudan and Syria were down 80% at the beginning of the month compared to the same time frame last year, fare monitoring app Hopper also reports that searches for flights from foreign locations to the States were down 17% in the weeks following the order. Similarly Cheapflights found searches falling 30% the weekend after the ban was signed. Those did rebound some after a federal judge issued a stay on the order but were still 14% lower than average for this time of year. Frommer’s also reports that, according to the Global Business Travel Association, business travel declined by $185 million in the week following the initial ban. Meanwhile a follow-up order related to travel from the seven countries mentioned is expected from the administration later this week.
Speaking to the potential impact the President’s immigration and travel policies could have on tourism, World Travel & Tourism Council president and CEO David Scowsill told the Boston Globe, “The US is in danger of taking the same path it took after September 11th, which led to a decade of economic stagnation in the travel and tourism sector. Strict visa policies and inward-looking sentiment led to a $600 billion loss in tourism revenues in the decade post 9/11.” Incidentally the U.S. Travel Association recently reported that 2016 marked the first time international travel numbers returned to their pre-9/11 levels.
Beyond tourism, several high-profile CEOs have spoken out about the President’s ban and proposed immigration policy. Among these leaders is Disney CEO Bob Iger who told CNBC, “I firmly believe we cannot shut our borders to immigrants… I think a fair and just immigration policy is good for our country and good for society.” Other corporate leaders more explicitly stated that such policy would be bad for business. As CNNMoney notes Amazon CEO Jeff Bezos recently spoke to the vast talent pool that open immigration gives businesses access to, saying, “We’re a nation of immigrants whose diverse backgrounds, ideas, and points of view have helped us build and invent as a nation for over 240 years…. It’s a distinctive competitive advantage for our country—one we should not weaken.” Bank of America CEO Brian Moynihan echoed that sentiment in a memo to employees saying, “As a global company, we depend upon the diverse sources of talent that our teammates represent. In view of this, we are closely monitoring the recent refugee and immigration-related executive order in the United States, and subsequent developments.”
At this point any potential impact that President Trump’s policies could have on the tourism industry over the next four years (or more) is pure speculation based on very recent and mostly reactionary data. That said, with foreign travel to the United States making up such a massive market — a report from last April found that international visitors to the U.S. spent $700 million a day during that month — any decline could easily lead to billions in lost revenue. Just as other Trump administration policies such as the threat of tariffs have perked up the ears of economists, the “Trump Slump” is something that businesses in the travel sector would be wise to keep a watchful eye on in the coming months.