Sunday, May 28, 2017

Far Fewer People Are Coming To The U.S. As Tourists-- A Side Effect Of Trumpism That Will Cost Billions Of Dollars


My favorite hotel in Taormina was once a nunnery

I once spent the better part of a month driving around Sicily; I loved it. And, even though it's really touristic, Taormina was one of my favorite places-- stunningly beautiful well-kept little town south of Messina, the perfect place to head after the half hour ferry ride from Reggio Calabria on the mainland. Now that Trump has sullied it though... Nah, Taormina has too much to offer to be permanently damaged by the memories of the Trumpanzee presence. Just check in to the Belmond Villa Sant'Andrea or the San Domenico Palace Hotel and Trumpy-the-Clown will be the absolute last thing that ever pops into your mind.

In fact, if Señor Trumpanzee is going to hurt tourism anywhere, it's right here in the U.S.A. He already has-- drastically. Jeff Glueck, writing for Foursquare Direct, warned that international tourism to the U.S. is down by double digits.
Our findings reveal that America’s ‘market share’ in international tourism started to decline in October 2016, when the U.S. tourism share fell by 6% year-over-year, and continued to decrease through March 2017, when it dropped all the way to -16%. Currently, there is no sign of recovery in the data.

The share of international tourism to leisure locations in America has been steadily declining since October 2016, after small YoY growth in August and September. Over the full October 2016 to March 2017 timeframe, there was an average decrease of 11% YoY...
The U.S. is losing tourist activity to foreign destinations. Share of visits for leisure categories in other countries is up year-over-year by about 6%, by definition at the expense of the U.S. since we are talking about market share.
California, and in particular L.A. and San Diego, was most impacted by the decrease in international travelers. Both cities saw strong YoY gains in fall 2016, but international tourism has dropped sharply in Q1 2017.
Business trip activity is up in the U.S. by about 3% (as a share of international traveler global activity), but that trend line is not as high as elsewhere in the world, where YoY trends are closer to 10%. Relative to business travel gains globally, business travel to the U.S. is suffering.
When it comes to an impact on the economy, did tourism to the U.S. slow from different countries at the same rate, or did specific regions stay away in greater numbers?

From our data, residents of the Middle East and Central/South America are avoiding the U.S. more than residents of Asia, Europe and elsewhere. It goes without saying that some of the current administration’s most controversial policies have been focused on countries within the Middle East and Latin America, and that we’re seeing a greater impact in travel from these nations.

...[T]he downturn in tourism came months before the new President came into office, and before changes to visa procedures, restrictions on travel from certain Muslim countries, the ban on certain electronics during flights from select countries and more. This timing may align with the heated rhetoric of the height of the Presidential election last fall, as the big dip began in October. International travelers may have determined that the America within their sights was less appealing or welcoming. Trend lines become even more steep in January when Trump took office, and have continued up through the end of Q1 2017.

What’s the impact of these trends? It’s early and hard to say, but the impact could be material. Tourism in the U.S. is a big business, and not just for hotels and airlines.

According to our data, international travelers generally make up 10.7% of all visits to leisure categories. In the past six months, the above-discussed 11% YoY drop in U.S. market share for tourism activity thus adds up-- impacting domestic businesses. This means that the drop in international tourism to the U.S. is resulting in an opportunity cost of about 1.2% in total visits to U.S. shops, restaurants, attractions and the like. And it’s a fair bet that international shoppers spend more than the average domestic shopper.

So though the impact may sound small, it could mean an additional 1–2% YoY sales hit to U.S. retailers already operating on thin margins and besieged by competition from Amazon, e-commerce as a whole, and a generally competitive and “over-stored” economy. It represents significant damage to a hurting sector.

For hotels in Q4 and Q1, international visitors made up about 15% of hotel visits, so that sector will also feel an impact.

Others have begun to forecast what a tourism slowdown could mean. One analysis by the firm Tourism Economics reported that Trump’s travel ban could cost the U.S. economy more than $18 billion and about 107,000 jobs.

As a Location Intelligence company, we leave the policy conclusions to others. But we do believe better data makes for a more well-rounded debate, and that is where our role centers. Proponents of President Trump’s new policies might argue that the President intended to reduce visitors from certain countries, and that the economic cost is outweighed by claimed security needs. Critics of the administration may question the effectiveness of these new tactics. Either way, we believe that the direct economic impact from these policies should be in the conversation, just as they are for discussions about the coal sector, pipeline construction, or manufacturing sectors.



At 9:43 AM, Anonymous Tom Wakely said...

My wife and I generally greeted 4-5 families a year coming from Mexico to stay with us but since the first of the year, no one. Last night she got a call from her cousin Dora, who lives in Guadalajara. Dora called to say she wasn't coming up to San Antonio this summer. Trump had soured her on visiting the US.

At 1:28 PM, Anonymous Anonymous said...

But making America great again could take a whole summer. That hotel looks fantastic, but where did all those nuns go?

At 6:30 AM, Anonymous Anonymous said...

Making America great again includes keeping the nonwhite nonchristians out.

Losing out on a few billion from tourism? killing a couple million elders and tax cuts will compensate for that nicely.


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