Why U.S. hoteliers should be worried about travel bans

Image: ©Stephanie Keith / Stringer

The travel bans are on hold for now, but the U.S.' travel and hospitality industries could be facing a rough future ahead. 

A new report from the Global Business Travel Association projects a loss of over $1.3 billion in overall travel-related expenditures in the United States this year, including hotels, food, rental cars and shopping expenses that inbound travelers would have spent. That includes $250 million lost in spending from inbound business travelers from Europe and the Middle East. 

Using first-quarter ticketing data from the Airlines Reporting Corp. (ARC), publicly available travel data and GBTA’s economic research and models, GBTA developed an ‘uncertainty forecast’ for 2017 showing the impact this mounting geopolitical uncertainty is having on the economy. 

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In an earlier survey of GBTA’s European members, 45 percent indicated their company will be less willing to plan future meetings and events in the United States due to executive orders on travel.

Courtesy GBTA

The loss of this inbound traffic could have a dramatic effect. Overall, the U.S. GDP is poised to take a nearly $300-million hit. More than 4,200 jobs could be lost along with $175 million in wages and $70 million in tax collections. 

Europe, meanwhile is forecast to lose over $250 million in air fare spending and the Middle East will lose over $80 million in air fare. This devastating economic impact could take years to recover from.

It is not unprecedented for the negative perception around government policy to result in real economic losses. Before the controversial HB2 ‘bathroom bill’ in North Carolina was repealed, an AP analysis projected the law would cost the state more than $3.76 billion in lost business over a dozen years. A survey from the tourism group Visit Indy revealed Indiana’s religious objections law may have cost the state as much as $60 million in hotel profits, tax revenue and other economic benefits.

"Business travel drives lasting business growth and is a leading indicator for jobs and the economy at large," the report claimed. "Continuing to enact policies that discourage business travel will cause a rippling effect across the travel industry and the overall economy. We urge the Trump Administration to consider the important lasting impact of business travel and enact policies going forward that preserve both our national security AND our economy for the future."

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