Trump’s Travel Ban Threatens to Deter Foreign Tourists From U.S.

EghtesadOnline: President Donald Trump’s immigration stance has begun to discourage foreign visits to major U.S. cities, threatening to cost billions of dollars and thousands of jobs.

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07 March 2017

New York, the nation’s most visited city by people overseas, predicts such trips will drop more than 2 percent this year to 12.4 million, the first decline after eight consecutive annual increases. Los Angeles and Miami may also experience decreases, Bloomberg reported.

Trump’s Jan. 27 ban on travelers from seven mostly Muslim nations, though halted in court, is taking its toll. The order, which caused chaos at airports, has sparked protests globally. High-profile customs ordeals, including the detention of Australian children’s author Mem Fox at Los Angeles International Airport and the interrogation of boxer Muhammad Ali’s son in Fort Lauderdale, Florida, are beginning to worry travel industry and city representatives.

“It’s the president’s ‘America First’ rhetoric, the trade protectionism, the Mexican wall,” said Adam Sacks, president of Tourism Economics in Wayne, Pennsylvania, which analyzes data to predict and measure travel activity for clients in government and private industry.

Lost Revenue

Trump on Monday issued revised travel restrictions that exempts Iraq from the ban and gives more specifics about who is covered. The new order will likely trigger a fresh round of legal objections.

International visitors spent about $250 billion in the U.S. last year, Sacks said. The U.S. will have about 4.3 million fewer foreign visitors this year thanks to Trump, which translates into $7.4 billion of lost revenue, according to his firm.

Sacks’s analysis included data from ForwardKeys.com, which reported that bookings to the U.S. from Western Europe decreased 14 percent from Jan. 28 to Feb. 4, compared with last year. From the Middle East, bookings were down 38 percent. In a statement, ForwardKeys Chief Executive Officer Olivier Jager said his company sent its information by email to the White House press office on March 3, prior to Trump issuing the revised ban.

In New York, which attracts almost 30 percent of the nation’s foreign tourists, officials still expect an overall record of 61.7 million visitors, 1 million more than in 2016, due to rising domestic tourism. Though international travelers amount to 20 percent of all city visitors, they account for about half the total that tourists spend. Officials say 300,000 fewer international travelers will cost the city economy about $900 million.

“The last time we dealt with something like this was after the Iraq war and the financial crisis and worldwide recession,” said Christopher Heywood, global communications director for NYC & Company, New York’s marketing agency. The office plans a $3 million advertising campaign in western Europe and Mexico this year, he said.

‘Direct Result’

Los Angeles could lose about 800,000 international visitors and $736 million in spending over the next three years “as a direct result” of Trump’s orders, most due to reduced travel by Mexican nationals, said Ernest Wooden, president of the Los Angeles Tourism & Convention Board, which based its estimate on research provided by Sacks’s Tourism Economics.

For Miami, which is second to New York in overseas visitors to U.S. cities, flight searchesfrom the U.K. “have fallen off a cliff,” down 52 percent from last year, according to a Feb. 27 report by Kayak.co.uk, an online booking agent.

Hopper.com, a mobile application that expedites bargain airfare searches, analyzed flight searches from foreign countries to the U.S. for the three weeks prior to Trump’s Jan. 20 inauguration through Feb. 22. Demand was weakest on the Friday Trump signed his executive order, down 17 percent when compared with former President Barack Obama’s final two weeks in office.

“We’ve seen larger declines in flight-search demand corresponding to dates when the executive order has dominated the news cycle,” said Patrick Surry, the company’s chief data scientist.

The U.S. travel industry already faced challenges, with the impact of a strong U.S. dollar and weakness in several western European economies, said Sacks of Tourism Economics. The dollar is at a 15-year high versus major currencies including the euro, and against the British pound, it has risen to levels last seen in the 1980s.

Trump, a billionaire whose family’s investments include at least 11 hotels, should understand the risks to the U.S. economy if foreign tourists spend their billions of dollars elsewhere, said Jonathan Grella, director of public affairs at the U.S. Travel Association.

“This president is a hotelier as well as a marketing and development specialist, so we would hope we can find some common ground,” Grella said. “Reputational fallout is a very real thing in the travel industry.”

Commerce Department spokesman Tim Truman said he couldn’t comment on the travel industry’s worries until May, when the federal government receives data on January’s international arrivals.

Hotel Bookings

U.S. lodging companies such as Marriott International Inc. and Hilton Worldwide Holdings Inc. said they’ve seen minimal impact from the travel restrictions. While Marriott, the world’s biggest hotel operator, lost a small amount of group bookings, it doesn’t expect a significant decline in stays by individual business travelers, Chief Executive Arne Sorenson said last month on the company’s earnings call. Hilton CEO Christopher Nassetta said continued pressure on international business probably will be driven by further strengthening of the dollar.

San Francisco Travel Association President Joseph D’Alessandro forecast a 1.8 percent increase in overseas visitors this year, mainly due to strong demand from Chinese travelers, who faced barriers to entering the U.S. until visa restrictions were eased during Obama’s administration.

“We’re Asia’s gateway to North America and that benefits us, so we’re not anticipating a decline,” D’Alessandro said. “We remain concerned about the European markets, where we are hearing tour operators’ concerns about the impacts of Trump’s immigration policies. No one wants to vacation in a place you hear is unfriendly and stressful.”

To combat that image, the city intends to launch a marketing campaign in Europe promoting the 50th anniversary of the “Summer of Love,” when hippies descended upon San Francisco’s Haight-Ashbury district. “We were a center of alternative culture, and we want to assure the world of our tolerance of gays, lesbians, new ideas and diversity,” D’Alessandro said.

Hopper.com said searches of flights to the U.S. fell in 103 of 122 countries it analyzed after Trump’s inauguration.