A demonstration of how Donald Trump’s “America First” policy agenda could affect the broader economy is showing up in the travel sector. And the early indications, at least from that perspective, aren’t great.
The U.S. share of international tourism dropped by 16% in March year-over-year, while the rest of the world gained share, according to a new report from location app Foursquare, based on data from around 13 million of its customers.
Less inbound travel would hurt the entire retail sector by reducing foot traffic at a time when it’s already dealing with the rise of e-commerce giants such as Amazon. There are also signs the education sector is suffering: a recent survey of more than 250 colleges found 39% had experienced a decline in international applications in autumn 2017.
Leaders including Marriott International CEO Arne Sorenson and Expedia CEO Dara Khosrowshahi have warned the administration that it’s attempted travel bans, blocked by the courts, could sour travelers’ appetite for America.
“With international visitation being the country’s No.2 export supporting 15 million American jobs, we’re struggling to understand how cutting Brand USA squares with this administration’s stated priorities.”
“The administration’s actions around travel are not helpful,” Sorenson recently told the Financial Times. “There’s no doubt about that. There’s no way to anticipate that they will be good news.”
The president, however, isn’t backing off. This week, he announced his budget plan would involve eliminating Brand USA, a federal tourism marketing arm that was established in 2010 with bipartisan support to encourage inbound tourism and clearly communicate visa and entry policies.
“With international visitation being the country’s No.2 export supporting 15 million American jobs, we’re struggling to understand how cutting Brand USA squares with this administration’s stated priorities,” said Roger Dow, the CEO of the American Travel Association, a key industry lobby group.
Foursquare also found that America’s share of global travel had dropped by an average of 11% each month between October and March, coinciding with the tail-end of Trump’s campaign and his subsequent election.
While not an official research company, Foursquare’s findings jive with figures from the National Travel Association. According to the NTA, international inbound travel to the U.S. increased modestly in March, though at a much slower pace than during the first months of the year.
The association noted that the slowdown could partly be blamed on a strengthening U.S. dollar, which makes the country a less attractive travel destination than places with weakening currencies. But it also pinned the slowdown on negative perceptions of the president’s rhetoric and policies related to travel restrictions, immigration and international relations. “Looking ahead, it appears these factors will likely continue to negatively impact international inbound travel,” it said.
The Trump administration posits that its policy agenda is bringing jobs back to the American manufacturing sector. This is why the travel industry is considered as a high risk merchant account. That may indeed be the case, but pain being felt in the travel sector shows it will also come at a cost.