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The hotel industry, unlike other sectors in the travel industry, has remained relatively quiet on the ramifications of U.S. President Trump’s newest executive order, which temporarily bans immigrants and refugees from seven majority-Muslim countries.
The only statement issued so far came from the American Hotel & Lodging Association’s president and CEO, Katherine Lugar, who said, “The American Hotel & Lodging Association has long recognized the critical importance of finding the right balance between unwavering hospitality and strong national security. While we recognize the importance of reviewing the processes surrounding visa issuance as a means to enhance national security, any action must also be balanced. It is our hope that the administration’s review will be completed quickly, so that we can work together to develop policies that both promote hospitality and travel to the United States for those who wish to come – both as employees and as guests – while also ensuring the safety of our citizens here at home. We look forward to working with the Administration, Congress, and the broader U.S. travel community to meet that goal.”
The newly elected President’s directives on immigration policy and the free movement of people across borders should be of concern to the travel and hospitality industries — if they aren’t already. Hospitality, like the rest of the travel industry, is one that relies heavily on the ability of people to travel freely, and it employs 1.94 million people in the U.S alone according to the U.S. Bureau of Labor Statistics. In 2015, the U.S. welcomed a record nearly 76 million international tourists to its shores, according to the U.S. Commerce Department.
Michael J. Bellisario, a senior research analyst with Baird who covers real estate and the hotel industry, issued an investor’s note on Jan. 30 pointing out that “Hotel stocks are significantly underperforming today (the brands less so than the REITs [real estate investment trusts]) after fallout over the weekend from President Trump’s executive order …”
Looking at the longer-term effects of the order, Bellisario told Skift it’s still to be determined and while hotel stocks seemed to perform better post-election, it’s still early to see if border control will have a negative impact on hotel companies. “So many of these hotel companies, especially REITs, own hotels in urban markets that rely on international inbound travelers to fill their rooms,” he said.
He also brought up a good point about the chilling effect Trump’s new policies could have, even on travel from countries not impacted by the travel ban. “You know there could also be a ripple effect from travelers from other countries who may choose to travel elsewhere other than the U.S. How are others looking at the U.S. Are they saying, ‘I don’t want to travel there because of what’s going on there?'”
Concerns about Trump’s statements to tighten U.S. borders also prompted Marriott International CEO Arne Sorenson to write an open letter to the then-President-Elect, asking him to consider rolling out a global trusted traveler program, something he also spoke about on stage at the Americas Lodging Investment Summit (ALIS) last week.
Last week, on January 27, the Trump administration also said it was suspending the U.S. Visa Interview Waiver Program, which allows travelers from a number of countries to renew travel authorizations without having to undergo an in-person interview at their local U.S. consulate.
When news of this program suspension broke, some assumed the Trump administration had also suspended the U.S. Visa Waiver program, which allows citizens from 38 different countries to enter the U.S. without having to secure a visa at a consulate prior to traveling to the U.S. for up to 90 days.
Officially, the U.S. Visa Waiver Program is still in place. But given Trump’s recent moves and previous comments to further isolate the U.S. and tighten its borders, Skift decided to ask hotel industry executives what they believe, hypothetically, could happen if the U.S. Visa Waiver Program were diminished and/or suspended.
We spoke to them while they attended the ALIS conference from January 23-25. Their comments were given prior to news of Trump’s travel ban being issued on January 27. Here’s what they had to say:
“I’d say the visa waiver program has driven a lot of international travelers to United States, and we are in the best situation ever with a U.S. Visa Waiver Program and how we speed up both the visas,” said David Kong, president and CEO of Best Western. “Any compromise to that would be disastrous. We’ve got to recognize inbound travel is our best export. It creates jobs, it balances the trade deficit, and it allows us to show America to a lot of international folks who might otherwise have the wrong impression of us. So I think it’s good in so many different ways. We have to protect that.”
Amanda Hite, president and CEO of STR said, “I’m a big supporter of Visa Waiver Program. It is a security program. From that standpoint, I think if the industry does a good job educating the Trump administration and policymakers, [we as an industry should be in a good place.] The U.S. Travel Association has led the way on the Visa Waiver Program. They are incredible advocates for the travel industry.”
She continued, “President Trump knows the hotel business, right? That’s what we all say. He’s one of us. He knows the hotel industry. He knows how important travel is to the United States, and he’s also a big security guy. The Visa Waiver program is a security program. Yes, it enables people to travel here more easily, but it’s because that they’ve been vetted. It’s another layer of security. I think the industry is doing a good job educating. Obviously, it’s a new administration, so we’ve got to start over in terms of educating the process. I hope that he doesn’t take the tack of doing away with the program. That would be very harmful to us.”
Not surprisingly, when asked about the hypothetical impact of tighter immigration and visa restrictions on his business, Trump Hotels CEO Eric Danziger had this response: “So you’re asking for speculating on changing a policy, which is not currently being changed? I don’t really have an opinion on that, because, I mean … Again, if you refer to my general belief, there will always be people traveling in some tier of business. Your job is to go maximize that. I can’t even answer to that directly.”
Elie Maalouf, CEO of The Americas for InterContinental Hotels Group shared his personal perspective on the issue.
“I didn’t come to this country until 1981,” he said. “I didn’t need a visa because I was coincidentally born here in 1964, but I do feel like I didn’t come over on the Mayflower either. I came over as soon as I could. We think that the proper maintenance and expansion of those programs is a healthy thing for not just this industry but for the United States. What certain actions will be in the short term, we don’t have a view or really any better perspective.
He also added, however, “As an industry, and frankly also as a company, we’re signatory to many encouragements, let’s say, to maintain and expand those in a thoughtful way. Thoughtful, of course, is take into consideration security and take into consideration other aspects of proper maintenance of a program like that, but we believe it’s [the U.S. Visa Waiver Program] been an effective program not just for travel but also for the United States, for the economy, and for bringing talented people into this country, also people desirous of growing their careers in this country.”
Echoing Maalouf’s sentiments, Choice Hotels COO Pat Pacious said, “Certainly, we’re supportive of more, greater access, if you will, for international travel and anything that either creates a perception or reality that’s getting in the way of that is not something that’s good for the hotel industry or the travel business in general. It is something that I think we will continue to work through the lobbying organizations that we’re part of to make sure that those types of views are continued to be held. Because it is good for business to have open travel and allow people to sort of move around the globe as they need to.”
And finally Robert Warman, CEO of Hong Kong-based Langham Hospitality Group said, “I think the growth of our business is going to be the growth of travel from around the world, and so yes, I think it can hurt North American hospitality industry [if the U.S. Visa Waiver Program is diminished]. It’s less people, less exposure to that, but I guess we don’t really focus on it. We can’t control it. All we can do is continue to obviously provide the best possible service. Those that are coming to the United States, we want to make sure they choose us to stay there, but certainly any reduction in the allotment of visas from anywhere in the world is going to certainly impact the travel industry.”