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Three weeks ago, Hawaii Lt Gov David Ige said in an interview that he would rather welcome tourists from Japan, Korea, and Australia first in the reopening than mainland Americans tourists. And no one blinked an eye, precisely because it seems the most logical, common sense thing to do — and that in itself says a lot about the state of American tourism in 2020.
Tourism to and from America would normally be a key indicator on how consumer sentiment and the larger economic recovery goes from here, but these are not normal times of recovery as a pandemic still rages on.
As America continues to be the global hub of coronavirus infections and deaths, it is about to become a pariah state of tourism, both inbound and outbound. In fact, The New York Times just reported earlier on Tuesday that the European Union is looking to make official its already widely-known unofficial stance that Americans (and other high-infection nations) won’t be welcome this summer.
America has already become the laughing stock of the world for its pandemic response, for how lax even the so-called restrictions have been inside the country have been, and how the wearing the mask — or not — has become a political symbol. Most countries, with their own internal challenges on political willingness, will not take the risk of opening up to American tourists this year, and potentially well into next year.
The result is a stunning reversal: Americans were traveling out of the country in bigger and bigger numbers in recent years – taking 93 million international trips in 2018, up 6.3 percent, and an estimated 100 million in 2019, up 7.6 percent, according to data from the U.S. Department of Commerce and Skift estimates.
Much of it was spurred by oversupply and hence low global fares across the board in air, hotels, short-term rentals, tours and other types of travel supply. And, of course, the U.S. economy was doing well, with record low unemployment, high consumer sentiment and a favorable exchange rate on the dollar in popular destinations around the world, including in Mexico, Canada, the UK, and European countries that use the euro.
But that boom has come to a grinding halt, and indications are that most countries around the world won’t be welcoming Americans with open arms anytime soon, except perhaps Caribbean Islands that are heavily dependent on tourists for their economies, majority of which are U.S. travelers. The European countries will be devoid of American tourists this summer.
Also, the international airfares remain high, as airlines have reduced most international capacity to almost zero and social distancing measures over long haul of these flights. This, at a time where so much of purchasing power destruction has happened to the American wallet all across the economic spectrum.
For inbound tourism, things are a lot more complex: while the world had been going through a decade long boom in tourism arrivals — hence the word “overtourism” was coined by us at Skift in 2016 — America’s tourism growth rate had been on a decline for the last four years. Much of it was attributed to “Trump Slump”, a drop in America’s prestige, the effects of an expensive dollar, the ramifications of President Trump’s various trade war spats, and the unwelcome mat that our political leadership laid out for, well, just about anyone coming here.
Over the last few years, many countries had issued travel advisories to U.S., particularly in response to mass shootings, and while those warnings were a curiosity then, the sustained damage to America’s image has already happened, particularly in 2020.
Then there’s the reality of today: American borders are shut for most part, even to our genial neighbor Canada, and those border closings continue to get extended. The geopolitical tussle between U.S. and China continues, even on the seemingly-straightforward issue restarting of flights between the two countries. As we have seen in the past, China could issue a diktat to its citizens to not visit U.S. for incoming months and years, as it did in 2017 for visit to South Korea following political tensions.
Europe, usually a huge reliable supplier of tourists to U.S., is opening only to itself, while rising-star source markets like India and Brazil are still long way off from flattening their infection curves, which means few tourists from there, voluntarily or involuntarily.
Then the mass protests going on across all major American cities against police brutality and for racial justice means more possible disruptions to movement of people within the U.S., playing more havoc with international traveler sentiment to come to our shores.
Even if international tourists do restart the journey to America, there are chances they will keep their visits restricted to less dense places, or confine themselves to one region versus going all over America, as many first time visitors do.
All said and done, America’s local travel industry will have to fend for itself for a while to come. Data from Skift Research’s Monthly Traveler Tracker has shown that there is pent-up demand for people wanting to travel within their local regions as the states reopen, but that may only fill up a certain amount of the lost demand.
Travel is so dependent on consumer confidence and sentiment, including how the countries feel about themselves and about other countries. A survey by the airline organization IATA that just came out says people are less willing to fly now than they were at the height of the coronavirus lockdown.
The solutions to America’s predicament are a mix of structural and political changes: elevating travel and tourism’s place in the policy agenda of elected leaders would be a big boost to the sector for inbound and outbound travelers. America is the only major global country without a dedicated tourism minister, and Brand USA, the country’s apex marketing body, is only a few years old. It has no countrywide body to promote tourism internally, beyond the state and local level efforts.
Of course, just a change of leadership in the White House could have such a giant shot of optimism for America and the world, a global coordinated response could overturn this thing in ways we can’t imagine now. And that would be big for the American travel industry and the start of changes that could come.
Then a lot depends on how countries that welcome international tourists roll out their own coronavirus testing mechanisms: if everyone can be tested at the incoming airports and then be monitored and traced from there — something few countries are really equipped to do well at scale — then American dollars could become attractive again to these regions.
Even as America reopens, its failed pandemic response means that tourists will be crossing its borders in and out of it much less for a while to come.