A confluence of events could have a real impact on tourism and the hospitality industry in the United States. There is the proposed travel ban of six countries by the Trump Administration, consideration of extreme vetting of foreigners entering the U.S. by the government, and a strong dollar that may dampen the spirits of visitors coming to our shores for sightseeing, some fun in the sun and great shopping.
The World Travel and Tourism Council (WTTC) recently stated that travel and tourism’s contribution to the U.S. economy will grow at a slower pace this year than in 2016 due to the perception that the country is less welcoming to foreigners and a strong U.S. dollar. The travel and tourism sector in the U.S. accounts for $1.5 trillion, the biggest in the world.
The revised travel ban signed in March by the President would ban citizens from Syria, Sudan, Somalia, Libya and Yemen from entering the United States for 90 days and all refugees for 120 days. Two federal judges have temporarily blocked the ban, with the ruling under appeal. While these countries represent a small percentage of visitors to the U.S., there is increasing concern that the image of the U.S. as a welcoming place is being tainted.
A survey by the Global Business Travel Association (GBTA) indicated business travel, an important source of income for hotels and airlines, could suffer due to the travel ban. About 37% of U.S. business travel professionals said they expect a reduction in their company’s travel because of Trump’s revised executive order, while 17% of European travel professionals said their company has already canceled business travel to the United States.
There may be even more concern by the tourist industry in light of the news that the government is looking into boosting the vetting process for all foreigners. According to the Wall Street Journal, foreigners who want to visit the U.S. – even for a quick trip – “could be forced to disclose contacts on their mobile phones, social-media passwords and financial records, and to answer probing questions about their ideology.” The Administration is also looking into subjecting more visa applicants to intense security reviews and having embassies spend more time interviewing each applicant. The changes could apply to people from all over the world, including those coming from allies like France and Germany.
Another challenge for U.S. tourism is the strengthening of the dollar. The U.S. dollar has gained more than 5% against the euro over the past six months, making it more expensive for travelers to visit the United States. New York City was expecting foreign tourist numbers to remain unchanged at 12.7 million but has cut its forecast for 2017 by 300,000, according to Business Insider. “It’s too soon to tell exactly what’s going to happen,” Britt Hijkoop, a senior manager at NYC & Company, told Reuters, but said New York hoped to be proactive with its advertising. The city has spent $3 million on a marketing campaign with the slogan “Welcoming the World”.
We’ll be keeping our eye on this as developments unfold.