Tourism officials worry about tariff effects
The tourism industry has boomed in the strong economy, but senior travel officials are concerned that global trade tensions could reverse the trend.
“When it comes to tariffs, we worry about it,” said Roger Dow, president and CEO of the U.S. Travel Association, a Washington, D.C.-based trade group, during a visit to Phoenix this week. “Travel can inadvertently get looped in.”
The domestic travel industry — hotels, restaurants, stores, national and state parks, casinos and many other enterprises — collectively generates more revenue from foreign visitors than from any other services sector, and it runs a trade surplus, he said.
At $2.4 trillion in revenue, including that spent by domestic travelers, the sector is nearly five times the size of the American steel industry, where a trade war has broken out, with the White House slapping tariffs on products made in China, Canada, Mexico, Europe and elsewhere.
The U.S. hasn’t implemented any travel-specific tariffs, but industry representatives worry that global tensions could discourage international visitors or undermine the value of their currencies, which would affect affordability.
“It’s a fragile thing — this thing we call travel,” Dow said. “A dip in travel could have more impact than the steel and aluminum tariffs combined.”
Global tensions haven’t taken a big bite yet. In fact, the industry currently is on a roll, with trips made by foreign and domestic travelers up a combined 4 percent in June compared with June 2017, the association said. That marks 102 straight months of expansion for the sector, coinciding with the economy’s emergence from recession.
However, domestic travel has been the main catalyst lately, helped by improving consumer confidence and rising corporate profitability, which encourages business trips.
Foreign inbound visits have slowed, with the U.S. share of the long-haul global travel market eroding from a recent peak 13.6 percent market share in 2015 to 11.9 percent last year, according to the association. Visits by international travelers are down about 6 percent over the past two years.