After Trump’s unexpected victory, travel experts and economists were asked to read the tea leaves.
With Donald Trump set to become the 45th president of the United States, the spirit of openness that has permeated everything from our increasingly global economy to how we travel may be poised to change.
Trump has not addressed tourism specifically, but on the campaign trail he signaled a retrenchment from globalism. He talked about the possibility of reversing course with Cuba, barring Muslims from entering the U.S. (although the Trump Hotels website is decidedly international, available in several languages, including Arabic), and building a wall along the border with Mexico. In his victory speech Nov. 9, he said he planned to rebuild the nation’s infrastructure — including airports — and make it “second to none.”
After Trump’s unexpected victory, travel experts and economists were asked to read the tea leaves. Below, they offer some early thoughts about how Trump’s presidency might affect tourism, including foreign travel to the U.S., Americans traveling abroad, access to Cuba, the cost of airfare, and, of course, Trump Hotels.
More money is spent in the U.S. by international travelers than anywhere else in the world, said Adam Sacks, president of Tourism Economics, an Oxford Economics company based in Wayne, Pennsylvania.
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Yet experts say that how attractive the U.S. continues to be to foreign tourists will depend on how affordable it is to visit; what, if any, policies the Trump administration puts into place (new immigration procedures that make the customs and border process harder, the scrutiny of particular groups of people); and the perception of how welcoming and safe (or not) the U.S. is.
“If certain groups are targeted, if hate speech is tolerated against certain ethnicities, inbound travel will dry up,” said Henry Harteveldt, the founder of Atmosphere Research Group, a travel industry research company. “It will be bad for us.”
“There are people in Mexico, Latin America, the Middle East who view Trump with suspicion and concern,” continued Harteveldt, who is also a former marketing director for Trump Shuttle, an airline that Trump used to own, “and I think he is going to have to show that he can be magnanimous and can have a broader vision, which will be very important for international trade and inbound tourism.”
On Election Day, Royal Jordanian encapsulated such concerns when the airline tweeted an advertisement for its fares that said: “Just in case he wins … Travel to the U.S. while you’re still allowed to!”
Indeed, Gus Faucher, deputy chief economist with the PNC Financial Services Group in Pittsburgh, said that foreign tourists might be reluctant to visit the U.S. after the election not only because of Trump’s “nationalist” campaign but also because of the relative strength of the dollar. “The strength of the dollar plays an important role,” he said. (And the dollar could certainly lose strength, say some in the financial world, depending on Trump’s policies.)
Gary Leff, the founder of the View From the Wing travel blog and a co-founder of the frequent flier site InsideFlyer.com, agreed that, for now, the world likely sees the U.S. as less open to tourism and immigration. (The day after the election, Rafat Ali, the founder of Skift, a travel news and research company, tweeted that the industry was “gobsmacked” and that attendees at the World Travel Market London conference were coming up and “offering condolences.”) That perception is not good for airlines and hotels, Leff said, although in the short term it could mean that travelers benefit from lower airfares.
It remains to be seen whether those sentiments last, and if there will be actual policy changes that help or hurt travel to the U.S.
Few think that Trump will carry out mass deportations and erect a wall between the U.S. and Mexico, if only because of the impracticalities of such endeavors. “I don’t believe he will build a wall,” said Harteveldt of Atmosphere Research Group. But he said that he is concerned that Trump might break with NATO and that he might make it more difficult for people to get visas.
Sacks of Tourism Economics said policy proposals that would undermine long-standing alliances, along with Trump’s rhetoric, could certainly hurt tourism to the U.S. But by how much?
He and his team examined data from 2000 to 2006, comparing arrivals to the U.S. with the Pew Research Center’s favorability index, which rates America’s image. The take-away was that while there was a correlation between the perception of a place and the growth in visits to that place, it wasn’t a strong one. Even if Trump the president is not more conciliatory than Trump the campaigner, Sacks said, the U.S. is still likely to be an aspirational travel destination because of its arts, culture and diversity. “That’s not going to change in a wholesale way,” he said.
Americans and the cost of traveling abroad
Whether Americans travel internationally depends largely on the health of the U.S. economy. A weaker dollar could hurt outbound tourism.
“Travel is a discretionary product,” said Harteveldt. “If the economy isn’t good, travel is always one of the first areas where consumers start to cut back.”
On the other hand, Faucher of PNC Financial Services Group said that if high-earning Americans end up seeing tax cuts under Trump, they might decide to travel more.
The cost of airfare will be interesting to watch. U.S. legacy airlines like American Airlines, United Airlines and Delta Air Lines don’t want more competition; they want American travelers to buy their (costly) tickets. To that end, they have been fighting to limit access to the U.S. market by major Gulf carriers like Etihad, Emirates and Qatar Airways, which would breed competition, pushing the airlines to improve and to lower airfares.
While that would be a boon to travelers, Leff said that the legacy airlines are hoping to prevent it by capitalizing on Trump’s “protectionism” to keep their competitors at bay. If that protectionist attitude prevails, options will continue to be limited and prices will continue to be high.
Still, the decision to travel will ultimately be about more than money. It will also hinge on how Americans think they will be treated when they go abroad, something people typically gauge based on what they’re seeing in State Department reports and news stories, and on their fellow travelers’ Facebook and Twitter feeds. They will ask themselves whether they feel it’s safe to travel or whether they think, by virtue of their president, they will be targets of anti-American sentiments. “We are all ambassadors of our country,” said Harteveldt. “You don’t want to be attacked or harassed or looked down upon as an American.”
Traveling to Cuba
Cuba is only just opening up to the U.S., yet it is already on many travelers’ bucket lists.
Airlines and cruise ships have begun taking Americans there, and more hotels are in the works. But during the presidential campaign, Trump said that unless there is greater political freedom on the island, he might reverse the historic agreement President Barack Obama made with President Raul Castro of Cuba. Are Americans still likely to be able to go?
“There’s some risk to Cuba policy changing,” said Leff, because Trump could issue his own directive. Additionally, Leff said that the uncertainty surrounding Cuba could delay investment there in terms of new hotels and other travel-related infrastructure, slowing tourism.
Harteveldt, however, thinks that Trump won’t necessarily back off international trade with Cuba and other places because four years from now, “he probably would like to see Trump-branded hotels open in more cities and more countries.”
During Trump’s campaign, his eponymous hotel brand appeared to be in trouble. And when the family announced that a new hotel brand was in the works but that it would not use the Trump name, some companies speculated it was because the Trump brand was indeed tarnished. In May, Hipmunk, the travel comparison site, said that “while overall Hipmunk hotel bookings have been on the rise year-over-year, that has not been the case with bookings of Trump Hotels.” The share of Trump bookings on Hipmunk as a percent of total bookings was down 59 percent year over year.
But now that Trump will be the next president, things could be looking up.
“Winning could mitigate whatever damage had been done to the brand,” said Leff, suggesting that there may be a halo effect from the presidency — especially the idea of staying at a Trump hotel in the shadow of the White House. Suddenly, he said, the new Trump International Hotel, Washington, D.C., is “the President’s hotel.”
Brand Keys, a customer loyalty research consultancy based in New York, seemed to underscore that notion in a report the day after the election, saying that Trump, “a brand that was once deemed toxic by many consumers is now seen as not only a safe option but an emotionally desirable option.”
“We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals,” Trump said during his victory speech. “We’re going to rebuild our infrastructure, which will become, by the way, second to none. And we will put millions of our people to work as we rebuild it.”
That could generate jobs and help the economy. Exactly how that huge increase in spending — Trump has pledged to spend nearly $1 trillion on infrastructure — will be paid for is unclear, said Leff. Assuming Trump’s administration finds a way to make it happen (more recently he has suggested creating a federal infrastructure fund supported by government bonds), infrastructure projects still take years. So while there may be new roads and airports, this is a change that’s unlikely to happen in the near term.
Change is one thing the industry can be sure of when Trump takes office.
“He could be one of the most travel-friendly presidents in modern history,” said Harteveldt, noting that Trump has long been part of the travel industry and was deeply involved in the marketing of the Trump Shuttle in its early days — experience that could he put to use thinking of ways to make the U.S. a more welcoming and appealing destination. Or, Harteveldt continued, Trump could be one of the most travel-unfriendly presidents. “He has the potential to be at either end of the continuum.”
The only unlikely outcome, Harteveldt added, is that Trump will be in the middle.