Trump and Brexit both have the potential to damage their respective country's tourism industries. Open, inclusive countries are always more attractive to outsiders than closed ones.
One week before the UK Prime Minister triggered her country’s departure from the European Union, and less than two weeks before our inaugural Skift Forum Europe, we launched a series of four stories devoted to Resetting Transatlantic Travel.
One of our 2017 Megatrends called this year one of reckoning for European tourism. With the pending departure of the UK from the EU, the growth of low-cost carriers like Norwegian Air, multiple violent acts in major European cities, and the rise of neo-isolationism in the United States and some European countries, it’s indeed a year of large-scale shifts for the most popular region in the world for tourism.
Our fourth story explores the potential impact on tourism of the neo-isolationism employed by the Trump presidency and the Brexit campaign.
At the end of April, Theresa May, the UK’s Prime Minister, made a trip to Bridgend, a former coal-mining town in south Wales, as part of her re-election campaign.
Britain is a deeply divided country, still pretty evenly split on the merits of leaving the European Union, following last summer’s narrow referendum vote in favor of Brexit. The next election wasn’t supposed to come until 2020 but a loophole in the relatively new Fixed-term Parliaments Act meant that if members of parliament (MPs) voted in favour, it could be brought forward.
May is now touring the country in a bid to secure a bigger parliamentary majority for her Conservative Party, thus making it easier to try and deliver the type of Brexit she wants. This looks increasingly likely. The opposition Labour Party is in disarray. It has moved leftward under leader Jeremy Corbyn, who is popular with members but deeply unpopular with the rest of the country.
That’s probably why May found herself in Bridgend. The area currently has a Labour MP and is a target for the Conservatives.
May, though, is not the slickest politician and is instead relying on her supposed competence and the lack of an effective opposition to propel her to victory in June.
The Bridgend speech was going relatively smoothly until she tried to deliver a line about terrorism, and said the following: “We also want to strike deals across the world for trading, for exporting British goods and services. We want to lead the world in preventing tourism…”
Everyone occasionally misspeaks so it would be unfair to be too harsh on May for failing to deliver a line, but as is often the case her unfortunate phrasing delivered a bigger truth.
May is determined to push through Brexit, and not just any Brexit, a Brexit that pretty much severely curtails all ties with our closest neighbours. The UK will be alone (and it might not even be the UK anymore if Scotland decides it wants independence.)
We’ve already looked at how beneficial EU membership has been for tourism and why people are so concerned about leaving. But it’s not only that.
Brexit brought out a certain amount of unpleasantness in the UK. Immigration was one of the key issues of the campaign and even if for some it was about control — as part of the EU, the UK allows free movement of people from other member countries — it created the opportunity for some people to blame the UK’s woes on foreigners.
Neither Brexit, nor the election of President Trump in the United States, nor the other nationalistic movements that have sprung up in recent years are explicitly anti-tourism but what they have in common is an inward looking type of neo-isolationism.
Travel at its most basic level is the just the movement of people. Even though preventing tourism is not the aim, it could turn out to be an unintended consequence.
In their own way, the Brexit vote and Trump’s success in last year’s U.S. presidential election were both shocks.
While there are differences between the two, they share certain characteristics.
Supporters of both movements blame the liberal international order for a multitude of sins. Trump and the leader of the UK’s leave faction were only too happy to fuel this feeling of disenfranchisement.
In many cases those supporters had every right to be angry. In the last 30 years, inequality has soared and capital cities like London dominate their countries at the expense of the regions. Manufacturing, mining and other industries have been decimated with few replacement jobs.
Rather than blaming the elites — though this has happened — rage has been directed at others: other people, other cultures, other races and other religions. It was no surprise to see control of immigration as keys factors in both Trump’s election and Brexit.
In the UK and U.S., immigration and tourism are seen as completely separate. Of course tourism isn’t permanent but both are about people going somewhere else to experience something different.
Calling some Mexicans rapists offended plenty of people. Not the smartest move when that country was the second biggest tourism market for the U.S. in 2015 with 18.37 million arrivals.
Similarly, it isn’t a great look to denigrate mainland Europe during and after the Brexit campaign when eight of your top 10 markets are located there and collectively spent $14.3 billion (£11.1 billion) during visits in 2015.
It might look foolish but does an antagonistic approach to foreigners deter tourists?
The UK in limbo
It’s very difficult to work out if the rhetoric behind Trump and Brexit have had an impact on tourism in their respective markets.
This is especially hard in the case of Brexit because the “yes” vote resulted in a massive depreciation in the value of the pound. The UK is regarded as an expensive place to visit and it is likely that the drop persuaded some people it was too big an opportunity to miss.
In the three months to the end of February 2017, the number of people visiting the UK on holiday increased by 15 percent. Spending by all overseas visitors was up by 5 percent to $5.7 billion (£4.4 billion). At the moment the UK tourism industry is benefiting from voting to leave the EU, while at the same time benefiting from still being part of the EU.
“I think we were concerned in the run up to Brexit, that there would be a perception beyond Brexit that we were a less-welcoming destination,” said Deirdre Wells, chief executive of trade association UKinbound.
Worries about the reaction were born out by various reports of a rise in hate crimes in the aftermath of the referendum with critics linking to this to some of the xenophobic statements made by leave campaigners.
The problem for those selling it as a destination is that the UK is already seen as not as welcoming as its rivals. Research from GfK’s country brand index shows that the UK ranks fifth for tourism but 12th for welcome.
Fortunately, according to Wells, the impact has so far been limited.
“[With] most of our European neighbors there wasn’t a significant change in their attitudes to the UK as a destination. There was a little bit in the younger group, but mainly overall, there was no change, which was very, very good news,” she said..
“In the immediate aftermath of Brexit, particularly when there had been some quite negative comments on social media about foreigners… We’ve had a couple of members report cancellations from markets such as Germany or Poland. But that seems to have been quite an isolated issue.”
“So the good news is that we haven’t seen any significant impact. I think the concern I would have going forward is, of course, that we’re still in this slightly strange bubble at the moment, where the pound has fallen, but all of the sort of fiscal and regulatory, framework for tourism is the same, because we haven’t left yet.”
There are myriad ways the UK could leave the EU – if it indeed ever does. The problem for the tourism industry is that Prime Minister May seems intent of pursuing what has become known as “Hard Brexit” i.e. the severing of pretty-much all ties with the remaining 27 members.
“I think one of the things we have to be careful about is ensuring our dealings with Europe through the negotiations, do not have consequences for how we are perceived,” said Wells.
“So, not only in terms of practical measures that may mean that the logistics of ports and airports are more difficult than they were [before], but actually that the rhetoric is measured and still very much plays on the fact that, of course we need to be careful about our national security but fundamentally, we are an open and welcoming destination. I think we will have to overplay that message in order to compensate perceptions that we are, perhaps turning our back on Europe.”
‘People won’t go to places they’re not welcome’
If the debate about the Brexit impact has been has been mixed, discussion about Trump has not.
The U.S. is the second biggest tourism market by arrivals and the biggest by expenditure. Destination marketing organization Brand USA was effectively created under President Barack Obama with the aim of growing visitor numbers to 100 million by 2021. At the end of 2014 the number stood at 77.5 million.
Ever since his successor took office there has been talk of a “Trump Slump.” Unlike Brexit, Trump’s election, though a shock to most observers, didn’t cause the U.S. dollar to decline; in fact the opposite happened.
For UK citizens, the U.S. is now a much more expensive place to visit. Alongside that Trump’s belligerent rhetoric towards other nationalities, his misogyny and general offensiveness damages the whole country.
Of course this doesn’t mean that people won’t come but for those that find him distasteful, it will become part of the overall decision-making process. With Trump there is also the worry — unrealistic or not — that his election has created a more divided country, which might add to a feeling of potential unrest.
As well as these soft tourism prohibitors there have been more concrete measures taken by Trump and his team in his first 100 days in office.
The most serious of these was an order banning non-U.S. citizens from seven Muslim-majority countries from entering the U.S. This was shut down by judges but a second is still embroiled in legal proceedings. Not only will this affect tourists traveling directly from these countries, it also sends out a message that the U.S. isn’t welcoming to all.
A subsequent ban on travelers taking laptops, iPads and e-readers in aircraft cabins from 10 airports in the Middle East and North Africa only added to the sense that the administration was targeting potential visitors from these countries.
“What has happened specifically with Trump is a lot of people have deferred from going to the U.S. and a lot of the measures that are being taken, are prohibitive in terms of visas and regulations,” said Dimitrios Buhalis, head of tourism and hospitality at Bournemouth University in the UK.
“But also other things like the fact that you cannot take your computer on a flight from six or seven different countries. So what’s happening is that a lot of people are looking into how to it is affected now. It’s really difficult to measure that because they’re trends that are happening at the same time.
“So although we know there is an impact. We know that people defer traveling because of the insecurity and because of the directory that is not welcoming. It’s quite difficult to actually prove that.”
Research from ForwardKeys following the first travel ban showed that not only did bookings drop off a cliff from the seven targeted countries, there was also a 6.5 percent total decline. Although there was a recovery after the ban was blocked, the second attempt by Trump provided a similar effect.
As chief executive Olivier Jager said, it’s not just that the ban might be divisive, it’s that some “passengers do not know where they stand.”
There are other metrics worth looking at to try and get a handle onthe impact of Trump’s policies.
Barcelona-based travel analytics company Mabrian has sifted through millions of conversations across the Web to try and gauge travelers’ perception about visiting the U.S. It then analyzes these conversations to come up with a Perceived Security Index for a country. Broadly speaking the fewer conversations about security the higher the index.
The above chart shows the daily fluctuations during Trump’s first few months.
“My reading in general is: Since Trump took office, the U.S. brand is much more sensitive to security issues. It is more sensitive because it fluctuates more basically, but that doesn’t mean that the overall degree of security perceived has decreased with Trump. In fact, with Trump, the U.S. brand has had is highest and lowest PSI measures,” said Hugo Sanchez, chief operating officer at Mabrian.
Under Trump, security perception is pretty volatile and over time we’ll be able to see how much of an impact this has on tourism. But if you combine the uncertainty along with the concrete proposals on things such as visas, the future looks fairly bleak.
For Taleb Rifai, Secretary-General of the United Nations World Tourism Organization, it’s not even the details that are important, it’s the general thrust of the debate.
“People don’t want to go to places where they think they’re not welcome. To make them six or seven countries is beside the point, it’s basically what kind of message am I telling the world: that you’re not welcome to come here. And this is going to be very heavily impacting the United States travel industry,” he said.
The U.S., it shouldn’t be forgotten, has been here before.
Rifai pointed to the decline in tourism in the aftermath of 9/11 as a harbinger – a situation that was only reversed under President Obama.
In 2000, the U.S. welcomed just under 26 million tourists (not including those from Mexico and Canada), and it took until 2010 for this total to be beaten.
Others agreed. “The United States is in danger of taking the same path it took after the 9/11 terror attacks, which led to a decade of economic stagnation in the travel and tourism sector,” said David Scowsill, president and chief executive, World Travel & Tourism Council.
Learning from past mistakes
While the populist uprisings that fueled Trump and Brexit are new, the disconnect between travel and politics is not. Travel has always involved a certain degree of moral flexibility from both the tourist and the company selling the hotel or airline ticket.
Most travel companies in the UK either stayed out of the debate or backed the remain side in the UK’s EU referendum mainly, you would think, because a liberal open society is good for business. Since the Brexit vote, they have spent their time lobbying behind the scenes for as little as possible to change.
In the U.S. several chief executives have deemed it necessary to criticize Trump. Expedia’s Dara Khosrowshahi and Marriott International’s Arne Sorenson have both called out the President’s policies, saying that they could hurt travel.
At the moment the situation on both sides of the Atlantic doesn’t look good. Still, there is the hope from some that tourism can cut across the neo-isolationism we are now seeing and actually improve things.
“For a lot of people I think there’s a separation between the political backdrop and their own experience of travel. It almost seems like a contradiction on some occasions but [there’s] this idea that the traveler is a sort of a diplomat or an ambassador for a country and on a deeper level, people travel and they form relationships, friendships, travel companions. And, at that level it almost doesn’t matter,” said Derek Jones Chief Executive UK, at pan-European tour operator Der Touristik Group.
“People still travel to Turkey, they still travel to the Middle East, they go to Egypt. My view, which I’ve always held is, people are people everywhere in the world, and the vast majority are just trying to make a decent life for themselves. So, people always have more in common than not.”
Let’s hope so.
This is the fourth and final in a series of stories called Resetting Transatlantic Travel.
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Photo Credit: Trump's first travel ban was the target of protests across the U.S. Craig Ruttle / Associated Press
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