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U.S. travel companies are working to stay ahead of the competition with innovations like artificial intelligence, the sharing economy, and blockchain. Some brands and destinations, however, are struggling with a challenge that could derail the whole sector — getting international travelers to visit the United States in the age of President Donald Trump.
International arrivals to the U.S. dropped 3.9 percent during the first six months of 2017, compared to the year-earlier period, according to data released this week by the U.S. National Travel and Tourism Office and U.S. Department of Commerce.
The decline includes a 5.7 percent reduction in overseas arrivals (excluding Canada and Mexico), and a huge decrease of 9.4 percent from Mexico.
The largest regional drops were from the Middle East, Africa, Latin America, and Eastern Europe, respectively.
This slump began in late 2016 — the first year that notched fewer international arrivals than the previous year since before the global recession of 2008 — and continued into the early months of 2017.
It coincides with the election of President Trump in November 2016, although it’s not clear how much of the decline this year can be attributed to the political uncertainty. Headlines about travel bans and building a border wall, however, as well as an actual tightening of visas for refugees, certainly played a role and didn’t portray the United States as an inviting place to vacation.
Overseas arrivals for June, the start of the busy summer travel season in the U.S., were down 7.6 percent. Arrivals from Australia, Brazil, and India took a significant hit.
U.S. Travel president and CEO Roger Dow said the decline in travel to the U.S. should concern anyone who cares about the U.S. economy.
“These numbers are an undeniable wake-up call, and correcting this troubling trend needs to become a national priority,” said Dow, in a statement. “The travel industry will turn over every stone looking for all available policy options to better promote the U.S. as an international destination, and we stand ready to partner with the federal government to grow travel, and American jobs and exports along with it.”
Taking the Hit
The UK is the largest overseas visitor market for the U.S., and arrivals fell 6.2 percent year-over-year from January through June.
Chinese arrivals, the country’s third-largest overseas market, declined 10.6 percent for June and 3.2 percent for January through June. The Chinese decline is particularly notable given that it’s the world’s largest outbound travel market and has shown momentum in the U.S. China is already the largest overseas market for Los Angeles, for example.
Chinese arrivals increased last year and were a beacon of hope for the U.S. while arrivals from other countries were dropping off. But it’s a different tune this year, and travel industry groups such as U.S. Travel continue to sound the alarm.
“It’s basically a continuation of a trend that’s been going on for about a year and a half,” said David Huether, senior vice president of economics and research at U.S. Travel. While the jury is still out on the reasons behind the China and India declines, Heuther said Canada was a real bright spot for U.S. tourism.
Despite a weaker exchange rate between the U.S. and Canadian dollars, Canada had 5 percent growth in arrivals for June, and January through June. Canada’s travel growth is contrary to that of other countries also facing weak or less favorable exchange rates against the U.S. dollar, such as Brazil and the UK. The decline in UK travel, for instance, drags down relatively flat results from Western European countries.
The business travel community has been tracking this slowdown as well. The Global Business Travel Association (GBTA) has done research on the sentiment of European business travelers, and the news isn’t good.
“When GBTA polled our members following President Trump’s second executive order on travel, 38 percent of European business travel professionals said their companies would be less willing to send business travelers to the U.S. in the future because of the executive order and 45 percent indicated their company will be less willing to plan future meetings and events in the U.S.,” said Michael W. McCormick, GBTA executive director and chief operating officer. “As a result, incoming travel volumes are beginning to lag compared to last year given the mounting political uncertainty we have been experiencing. Uncertainty is bad for travel and it is bad for the economy.”
Here’s a breakdown of the latest numbers: