On day one, travel executives will see policies from White House that will give them renewed hope that the world will be more open and soon safer from a deadly pandemic. Four contentious years will be in the past and a steadiness returned from which to rebuild a devastated industry.
U.S. travel executives will watch with hope along with the rest of the world at noon Wednesday as Joe Biden and Kamala Harris assume the office of president and vice president of the United States. The official swearing in will mark the end of four long years of Donald Trump that left the travel industry frustrated and even baffled by stifling policies.
Things get better immediately, as President Biden will overturn Trump’s ban from Muslim-majority countries through executive order just hours after the inauguration. But that’s just one reason travel executives are hopeful. The new 117th Congress sharing the same party-majority party as the president means policies impacting travel should not face the same familiar partisan bottlenecks.
Biden’s $1.9 trillion injection plan for the U.S. economy to battle the impact of the pandemic will provide assistance to businesses and consumers, providing a lift to gross domestic product that is certain to benefit the travel sector.
And Biden’s laser focus on curbing the pandemic (he will not follow through with Trump’s proposal to lift bans on travel from Europe, UK and Brazil) will ultimately set a renewed example for the world and set the stage for a return to travel.
It seems like 100 years ago now, but Barack Obama was the first sitting U.S. president to sit down with the travel industry around a table and discuss the challenges facing tourism. It was under his tenure that Brand USA was born, the leading marketing organization for U.S. travel. As Obama’s eight years came to a close, Skift recounted his unprecedented successes for the travel industry.
At the dawn of 2021, travel executives see Biden as a return to those days, and real leadership. Much is still unknown, but here’s how things could change across the U.S. travel industry from a policy perspective.
The announcement that Biden’s first days in office will reverse Trump’s controversial travel restrictions has sent waves of optimism and hope across the sector. The Muslim ban will be the first to go, but the Biden-Harris administration also plans to order a mandate of mask-wearing on federal property and for interstate travel, and the country will see its first semblance of a proposed vaccine distribution plan.
“We’re really encouraged by what the Biden team put out (recently) as it relates to federal leadership on a vaccine distribution,” said Tori Barnes, executive vice president of public affairs and policy at the U.S. Travel Association.
The organization, which rallied Congress last year for another round of coronavirus relief, hopes to see more specificity in how the federal government will use the additional $20 billion towards the vaccination effort, part of Biden’s $1.9 trillion coronavirus recovery plan, though Barnes noted there is strong recognition that the most impacted industries are those in the hospitality, travel and tourism as well as the restaurant sectors.
“In conversations that we’ve had with the Biden transition team, they’ve recognized the need for additional, not only relief, but significant stimulus to help get businesses going again and so we’re very much encouraged by that as well,” Barnes said.
In addition to the promise of jabs underway but also more jobs in tourism being restored, the Biden administration’s cabinet nominees make up a group of experienced voices with a better understanding of the tourism sector, and there’s potential for bipartisan support on new and improved tourism policies.
“In particular, Alejandro Mayorkas from DHS who has a strong history of the key issues to travel and tourism, previously serving at [Department of Homeland Security] under the Obama administration,” Barnes said. “Governor Raimondo of Rhode Island has a very strong understanding of the importance of business and in particular small business — 83 percent of travel businesses are actually small business — and has a record within her state of supporting travel and tourism as an economic driver, that’s very encouraging.”
Additional key appointees expected to help quicken U.S. travel’s recovery, according to Barnes, include Janet Yellen, “a steady, knowledgeable hand in Treasury” who is pushing for Covid relief for the industry, not to mention Deb Haaland and her support of outdoor tourism and national parks.
Brad Dean, CEO of Discover Puerto Rico, noted that Biden’s administration has a chance to demonstrate the importance of travel and tourism to the U.S. by improving infrastructure and technology.
“The Biden/Harris administration can, and should, instill a broad commitment amongst all key agencies to advance travel-related infrastructure, systems, resources and policies that will drive sustainable growth for future generations,” Dean said.
This push to commit to travel includes rebuilding America’s image abroad and driving international tourism to the U.S., which may come easier given Biden is no stranger to governments around the world.
But will international visitors return faster as a result?
“We are supportive of the idea of testing for international inbound travel, but really only in conjunction with lifting the travel bans — especially with the EU, the UK, Brazil and others — and additionally we’d also like to see that if you’re going to do the testing then quarantines are not required,” Barnes said, noting the $59 billion travel trade surplus from international visitors in 2019.
Dean agrees, noting that despite domestic travel leading the recovery, a “positive, welcoming message that encourages global travelers to return” is needed. “The Biden-Harris administration has an opportunity to not simply restore the funding structure [of Brand USA] but establish a new model suited to grow international arrivals to record levels,” Dean said.
Ultimately, the U.S. travel industry is hopeful that travel and tourism will be seen by the new administration and congress as key to the nation’s economy’s recovery.
“We always say that travel and tourism is a non partisan issue and travel is important for all 50 states and territories and so it shouldn’t be a red or blue issue,” Barnes said. “And we have great champions on both sides of the aisle and I’m hopeful that they can come together to get some meaningful policy accomplished.”
— Lebawit Lily Girma, Global Tourism Reporter
The hotel industry has 1.9 trillion reasons to be optimistic about the incoming Biden-Harris administration, but it also isn’t losing sight of an ongoing public health catastrophe that isn’t going away anytime soon.
Biden’s proposed $1.9 trillion relief measure would deliver an additional $400 per week in federal unemployment benefits, a major win for an industry facing severe unemployment like hospitality. While the U.S. hotel industry unemployment rate dipped to 18.9 percent last month, it is still out of step with the 6.7 percent national average.
Biden’s plan also comes after a $900 billion measure passed late last month reopened and added funds to the Paycheck Protection Program of federally backed small business loans, the top relief request from the hotel industry.
“The hotel industry is excited to work with the new Administration to strengthen and implement crucial policies to help drive demand, bring back jobs, reignite a continued investment in the communities we serve, and ultimately bring back travel,” American Hotel & Lodging Association CEO Chip Rogers said in a statement.
But hotel leaders recognize the road to recovery is a long one.
“While I am confident that the hospitality industry will make a full recovery, Covid-19 remains a serious challenge. Above all, we need care, collaboration and stability from the new administration in order to rebuild our deeply impacted industry,” Hyatt CEO Mark Hoplamazian said in a statement to Skift. “Since the beginning of the pandemic, we have believed that accessibility of vaccines as well as rapid, high-quality and low-cost testing would be vital to travel’s rebound and we are optimistic that the new administration will prioritize increasing access to both. We look forward to collaborating with the new administration on these efforts, which we hope will bring us all closer to reconnecting and experiencing the joy of travel again.”
Biden’s proposal calls for investing $20 billion in a national vaccination program as well as $50 billion for testing.
The hotel industry could play a role in helping Biden achieve his target of 100 million people being vaccinated in his first 100 days. Hoteliers can partner with local, state, and federal governments to offer up their hotels as vaccination distribution points, Rogers said.
But the hotel industry hopes the relief doesn’t stop with Biden’s $1.9 trillion plan. Ultimately, an actual stimulus plan will be necessary in reviving the decimated group business, convention, and international travel sectors.
“It’s clear that getting colleagues back to work is not only incredibly important for our industry, but also for overall economic recovery,” Hoplamazian said. “We urge congress and the new administration to come together on a longer-term stimulus package to sustain the hotel industry and help the country recover economically once the public health threat subsides.”
Once that threat does subside, there are other issues the hotel industry hopes to achieve with the Biden administration — largely around labor. Marriott CEO Arne Sorenson, in an open letter posted to LinkedIn shortly after Biden’s victory, listed immigration as one of several measures he hoped would change under a Biden administration.
“There has been little effort to build a public consensus about immigration for far too many years. We need to get to work on building that consensus, moving as quickly as we can to allow those who are already here to be the productive members of our society they want to be, while creating transparent rules and predictability about what levels of future immigration should be permitted,” Sorenson said. “Immigrants built this country and done right, will be part of the success story of our future.”
— Cameron Sperance, Hospitality Reporter
Airlines are set to get their top priority from Biden later Tuesday. The new president plans to sign an executive order mandating masks on all U.S. flights among his first acts after being sworn in on Wednesday. The industry has called for a federal mask mandate since the early days of the crisis.
While it is unclear how the mask mandate will work, having the backing of the federal government is expected to alleviate much of the harassment crews face enforcing airline rules. And, as the Association of Flight Attendants-CWA (AFA) president Sara Nelson has put it, “clear, calm, commanding leadership from the highest levels” of government will go a long way towards normalizing the practice.
Airlines are also looking towards the new administration for support of the travel recovery. To that end, trade group Airlines for America (A4A) encourages the new administration to adopt a standardized testing regime to restart international travel and replace the remaining country-specific entry restrictions. The organization supports the implementation of a required molecular antigen test three-days before travel, it said in a letter to incoming Transportation Secretary Pete Buttigieg on Monday.
Carriers, however, are optimistic for the year. Delta Air Lines CEO Ed Bastian anticipates an “inflection point” sometime this spring — potentially within 90 days — that will mark what he and his team think will begin a sustained, and not choppy, recovery. Bastian is even optimistic that the Atlanta-based carrier could be profitable by summer.
Other airlines and Wall Street analysts also anticipate a return in traveler confidence — at least domestically — by summer. This should support a sustained recovery in both schedules and passenger numbers during the second half of 2021. However, the outlook is not without caveats: neither international flying nor corporate travel is expected to return in significant numbers by year-end.
“While the advent of multiple vaccines is encouraging, we do not expect [passenger] volumes to return to pre-pandemic levels before 2024, at the earliest,” wrote A4A President Nicholas Calio in the letter to Buttigieg.
Aside from the immediate Covid-19 needs, airlines hope Biden will accelerate some of their long sought goals. One of these is investment in the NextGen modernization of the U.S. air traffic control system. The more than a decade-old plan replaces the current ground radar-based system with a satellite-based one that would shorten routings, reduce delays and ultimately cut aircraft emissions.
However, multiple presidential administrations have attempted to accelerate NextGen with minimal results. Some upgrades have been made but they are market specific and far from the broad system modernization envisioned. There is hope that an emphasis on the environmental bonafides of NextGen investments will win it points in a new administration that plans to focus on infrastructure and climate issues.
— Edward Russell, Airlines Reporter
Online Travel and Tech
Online travel executives expect the Biden administration to take a more open and less jingoistic stance toward travel, as evidenced by reports that the new president will reverse the Muslim travel ban, for example, but there are many important issues that remain open questions.
For example, how tough will the Biden administration be on Big Tech and broader antitrust issues?
Reuters reported that the Biden transition team charged with Department of Justice and Federal Trade Commission issues conducted a call in mid-November with moderates and progressives, and they discussed topics including being more aggressive in level antitrust suits to block anticompetitive mergers, and even rolling back mergers that they now deem to be harmful.
“Other topics discussed during the session included reversing merger guidelines, retrospective scrutiny of mergers, revamping antiquated competition laws and offering more funds for federal enforcement agencies such as the FTC, the sources said,” according to Reuters.
But it’s unknown where the Biden administration will land on these issues. Former President Obama’s Federal Trade Commission, for instance, declined to take a tough stance against Google’s anticompetitive business practices, but that may not be a template for the incoming administration.
Obliterating Section 230 of the Communications Decency Act, a foundation of free speech on the Internet, would be a fiasco for online travel. Section 230 enables online travel companies to post user reviews without fear of liability in most circumstances.
Tripadvisor is part of a coalition, Internet Works, that seeks to deter scattershot actions with unintended consequences to alter the Act.
“Given multiple legislative proposals that could undermine CDA 230 benefits, the goal of Internet Works is to ensure policymakers understand the potential unintended consequences of blunt changes to the law, including reducing competition, imperiling consumer choice, and limiting effective content moderation efforts,” the coalition stated.
Google, too, opposes abolishing Section 230, arguing several months ago that it would harm the U.S. economy and the country’s “global leadership on Internet freedom.”
Steve Kaufer, Tripadvisor co-founder and CEO, was bullish about the Biden’s administration’s chances of boosting the U.S. economy and its workers.
“The Biden administration’s commitment to the speedy and equitable distribution of the Covid-19 vaccine, we believe, will have an immensely positive impact on the travel and hospitality industries and the economy at-large,” Kaufer said. “We’re looking forward to supporting the incoming President and his team focused on getting us through this pandemic and the work required to grow tourism and support American workers displaced by this crisis.”
Chris Lehane, Airbnb’s head of policy and communications, said he expects the Biden administration to support the travel industry because Biden and Vice President-elect Kamala Harris believe in an open world.
He argued that the more pertinent issue should be how can the travel industry, with its fostering of people-to-people connections around the world, support the Biden administration rather than the reverse.
“And the most powerful way to renew this uniquely American superpower in this profound moment where there is a big question within our country and beyond our country, is advancing an open world or a closed world,” Lehane said. “And we know it is travel that is foundational.”
On the specifics, Lehane believes the Biden administration will reverse travel bans, back economic stimulus to spur a recovery, integrate sustainability objectives into travel and tourism, and enlist federal agencies to support health and safety initiatives.
Eben Peck, executive vice president, advocacy, for the American Society of Travel Advisors, welcomed the Biden administration’s proposed Covid-relief package.
“We welcome and wholeheartedly support the provisions of President-elect Biden’s Covid-19 relief proposal that will help spur the travel industry’s recovery and provide support to ASTA members, employees and independent contractors,” Peck said in a statement.
Peck specifically lauded the Biden team’s proposed “ambitious” vaccine program, extension of unemployment programs, and targeted relief for small businesses, including travel agencies.
“This is just the beginning of the process and we are working with allies in Congress to build on these proposals and provide additional support for our members, including targeted funding for travel businesses and new long-term loan programs for hard-hit businesses along the lines of last year’s RESTART Act,” Peck said.
— Dennis Schaal, Founding and Executive Editor
Photo credit: Joseph Biden and Kamala Harris take office officially on Wednesday as U.S. president and vice president, with much of the travel industry waiting in anticipation of new policies. Wikimedia