Trump’s possible impact on travel
WI TH Donald Trump set to become the 45th president of the United States, the spirit of openness that has permeated everything from our increasingly global economy to how we travel may be poised to change.
Trump has not addressed tourism specifically, but on the campaign trail he signalled a retrenchment from globalism. He talked about the possibility of reversing course with Cuba, barring Muslims from entering the US (although the Trump Hotels website is decidedly international, available in several languages, including Arabic), and building a wall along the border with Mexico. In his victory speech on November 9, he said he planned to rebuild the nation’s infrastructure – including airports – and make it “second to none”.
After Trump’s unexpected victory, travel experts and economists were asked to read the tea leaves. Below, they offer some early thoughts about how Trump’s presidency might affect tourism, including both foreign travel to the US and Americans travelling abroad.
Travel to the United States
More money is spent in the US by international travellers than anywhere else in the world, said Adam Sacks, president of Tourism Economics, an Oxford Economics company based in Wayne, Pennsylvania.
Yet experts say that how attractive the US continues to be to foreign tourists will depend on how affordable it is to visit; what, if any, policies the Trump administration puts into place (new immigration procedures that make the customs and border process harder, the scrutiny of particular groups of people); and the perception of how welcoming and safe (or not) the US is.
“If certain groups are targeted, if hate speech is tolerated against certain ethnicities, inbound travel will dry up,” said Henry Harteveldt, the founder of Atmosphere Research Group, a travel industry research company. “It will be bad for us.”
Indeed, Gus Faucher, deputy chief economist with the PNC Financial Services Group in Pittsburgh, said that foreign tourists might be reluctant to visit the US after the election not only because of Trump’s “nationalist” campaign but also because of the relative strength of the dollar. “The strength of the dollar plays an important role,” he said. (And the dollar could certainly lose strength, say some in the financial world, depending on Trump’s policies.)
Gary Leff, the founder of the View From the Wing travel blog and a co-founder of the frequent flier site InsideFlyer. com, agreed that, for now, the world likely sees the US as less open to tourism and immigration. (The day after the election, Rafat Ali, the founder of Skift, a travel news and research company, tweeted that the industry was “gobsmacked” and that attendees at the World Travel Market London conference were coming up and “offering condolences”.) That perception is not good for airlines and hotels, Leff said, although in the short term it could mean that travellers benefit from lower airfares.
It remains to be seen whether those sentiments last, and if there will be actual policy changes that help or hurt travel to the US.
Few think that Trump will carry out mass deportations and erect a wall between the US and Mexico, if only because of the impracticalities of such endeavours. “I don’t believe he will build a wall,” said Harteveldt of Atmosphere Research Group. But he said that he is concerned that Trump might break with NATO and that he might make it more difficult for people to get visas.
Sacks of Tourism Economics said policy proposals that would undermine long-standing alliances, along with Trump’s rhetoric, could certainly hurt tourism to the US. But by how much?
He and his team examined data from 2000 to 2006, comparing arrivals to the US with the Pew Research Center’s favourability index, which rates America’s image. The takeaway was that while there was a correlation between the perception of a place and the growth in visits to that place, it wasn’t a strong one. Even if Trump the president is not more conciliatory than Trump the campaigner, Sacks said, the US is still likely to be an aspirational travel destination because of its arts, culture and diversity. “That’s not going to change in a wholesale way,” he said.
Americans travelling abroad
Whether Americans travel internationally depends largely on the health of the US economy. A weaker dollar could hurt outbound tourism.
“Travel is a discretionary product,” said Harteveldt.
“If the economy isn’t good, travel is always one of the first areas where consumers start to cut back.”
On the other hand, Faucher of PNC Financial Services Group said that if high-earning Americans end up seeing tax cuts under Trump, they might decide to travel more.
The cost of airfare will be interesting to watch. US legacy airlines like American Airlines, United Airlines and Delta Air Lines don’t want more competition; they want American travellers to buy their (costly) tickets. To that end, they have been fighting to limit access to the US market by major Gulf carriers like Etihad, Emirates and Qatar Airways, which would breed competition, pushing the airlines to improve and to lower airfares.
While that would be a boon to travellers, Leff said that the legacy airlines are hoping to prevent it by capitalising on Trump’s “protectionism” to keep their competitors at bay. If that protectionist attitude prevails, options will continue to be limited and prices will continue to be high.