At the World Economic Forum in Davos, Switzerland, U.S. President Donald Trump emphasized America’s role on the global stage. “America first does not mean America alone,” he said. “When the United States grows, so does the world.”
The statement had meaning for tourism-related businesses in the U.S. While worldwide travel numbers are booming, inbound numbers to the U.S. are on a decline—a worrisome statistic for hoteliers. While an estimated 1.2 billion global trips were taken last year, up about 7 percent over 2016, of the top 15 countries in the world, only two have seen travel dips: Turkey and the U.S. The Trump administration's travel ban, notably, is blamed by some as having a deleterious impact on inbound travel to the U.S.
Upturns and Downturns
Marriott International CEO Arne Sorenson reiterated those numbers during his stop in Davos, but bemoaned the state of inbound U.S. travel, which is down between 4 percent and 5 percent. “We are losing share,” he said.
According to a recent study from the U.S. Travel Association, tourism outperformed overall U.S. export growth during the prior five years. The industry generated an $87-billion trade surplus in 2016, without which the U.S. trade deficit that year would have been 17-percent higher. “For our country to have any hope of closing the trade gap, international inbound travel must perform,” U.S. Travel Association president and CEO Roger Dow said in a statement earlier this month. “After almost a decade-and-a-half of relatively sustained post-9/11 recovery, since 2015 there’s been evidence that the country has gotten complacent with the policies needed to support this vital economic engine and job creator.”
A potential cause of the downturn could be the perceived “friendliness” of the U.S. toward international visitors, Sorenson warned. “Words around immigration, or words around some of these other issues, can be interpreted in the rest of the world as words of welcome or relatively less welcome,” he said.
Calling this a “golden age of travel,” Hilton CEO Chris Nassetta told Bloomberg that international tourism could hit 2 billion people by 2025. While the U.S. has profited from that growth, he said, he also noted the downturn in inbound numbers. While some of the decline could be credited to the growing strength of the dollar compared to other currencies, he said, the travel bans haven’t helped. “It’s sort of a convergence of events, he said. “A bunch of us in the industry are trying to help get coordinated with the administration to make sure that the people who want to come to America, who want to do no harm—which is the vast majority of the people who want to come to America—we let them understand that we want them, that they’re welcome.”
International travelers to the U.S. spent 3.3-percent less through November of 2017 than at the same point the previous year, according to the November International Trade report, released Friday by the Commerce Department’s Bureau of Economic Analysis. The drop translates to losses of $4.6 billion spent in the U.S. economy and 40,000 jobs.
“Flourishing international travel is vital to President Trump’s economic goal of sustained 3- percent GDP growth, and the Visit U.S. coalition is being founded for the express purpose of helping him achieve it,” said Dow. “Our guiding principle is that we can have strong national security and still welcome legitimate international visitors. We can do both—and, in fact, without effective security there can be no travel, as we witnessed after September 11, 2001.”
During the first half of last year, Nassetta estimated, travelers who didn’t come to the U.S. cost the country’s economy $2.7 billion. “Double that for the full year; it’s probably a $5-billion issue,” he said. “And if you translate that into jobs, it’s tens of thousands of jobs.”
And at some level, Nassetta said, he believes the administration cares about improving those numbers, but they may be too focused on safety and security to see the bigger picture. “What I would say to the administration, and what I have said—and they’ve listened—is that you can do both,” he said. “In today’s world, with the use of technology—digital identities, biometrics—there’s an ability to have much better security by sharing information between countries and… make it easier for people to come to America and to focus the energies on those people who are looking to cause trouble.”
Not everyone is buying it. The right-leaning Washington Examiner rebuked Sorenson’s comments, saying that they ring “completely hollow” and noting Marriott’s recent difficult week in China, after it referred to Tibet, Macao, Hong Kong and Taiwan as independent countries in an emailed survey. “Marriott always makes sure to leave the light on for Chinese communists,” the author wrote. “Offending the regime in any way, as the episode demonstrates, would hurt their bottom line. Trashing Trump, on the other hand, is hardly risky.”
After today's speech, Dow praised the sentiment in a statement: “We've been urging the president to proclaim America open for business, and we're very encouraged that he did so on the world stage in Davos. Robust international inbound travel is part and parcel of capturing the vast economic benefit of engaging with the rest of the word. Travel, after all, is the front door to economic development: the president’s goals for foreign investment will necessarily begin with someone taking a trip here. We urge the president to issue bold travel and tourism goals to help restore American competitiveness in the global travel market, which will be a critical boost toward his goal of sustained 3-percent economic growth.”