Choose Trump impact on the tourism industry

trump

Choose Trump impact on the tourism industry

A number of economic sectors hang in the balance as voters in the US go to the polls to choose the next president on Tuesday, 8 November, and the US travel and tourism industry, which reportedly contributes USD1.4 trillion to the US economy, is one of them. Foreign policy has played an unusually important role in the discourse leading up to the election, and foreign policy has a significant impact on public perceptions of countries as tourism destinations. While companies in the sector would do their best to work with either administration, based on the candidates’ stated platforms, a Clinton victory represents a brighter future for the US travel and tourism industry based on the candidates’ stated platforms.

SCENARIO: TRUMP VICTORY

A victory by Republican candidate Donald Trump represents the worse of the two scenarios for the US travel and tourism industry. Trump has campaigned on an America-centric platform, including language and proposed policies that are inflammatory towards minorities and immigrants, as well as a foreign policy consisting of “peace through strength”, through abrasive rhetoric towards key trading partners, including China and Mexico. While Trump’s policy goals and the methods he suggests to achieve them have evolved as the campaign has gone on, several key campaign ideas have included banning Muslims or residents of terrorism-afflicted countries; deporting the estimated 11 million illegal immigrants currently residing in the US and building a wall to separate the US and Mexico; and renegotiating key trade agreements such as NAFTA and increasing tariffs on imported goods. These ideas are positioned as protecting the livelihoods of Americans and ensuring America is taken seriously by the international community, but, if enacted, all would have negative effects on the travel and tourism industry.

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The Council on Foreign Relations, a respected US foreign policy think tank, estimates that a travel ban on Muslims to the US could cost up to USD71 billion per year and up to 132,000 jobs, taking into account both direct spending on travel and tourism as well as spill-over into other sectors, as well as losses to tax revenues and institutions of education. Mass deportations and the construction of a border wall would likely significantly damage both formal government and economic relationships between the US and Mexico. Reputations matter greatly for maintaining and growing tourism flows, and these policies would likely hurt perceptions of the US as a destination for Mexican travellers and vice versa. Mexico is the top destination for outbound US travellers, who account for 80% of all inbound travellers to Mexico; Mexico is the second largest source market for inbound travellers to the US, behind only Canada. Companies like Airbnb, which reports that 3 of its top 10 cities in Latin America by number of listings are in Mexico, and Expedia, who has invested heavily in recent years to tropicalize its booking strategy to appeal not just to inbound US travelers to Mexico but also Mexican residents, would be among those negatively affected.

Chinese travellers, projected to provide the greatest growth globally of outbound travellers, would likely be similarly disillusioned with the US should the two countries enter a trade war. Shopping tourism, a major driver of inbound leisure travellers to the US, would likely be negatively affected by increased tariffs on foreign goods – a key driver of shopping tourism is apparel and accessories, little of which is manufactured in the US.

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These policies and their repercussions are in addition to Trump’s repeated verbal attacks and alleged physical assaults on women and Republican vice-president Mike Pence’s efforts to delegitimise homosexuality as governor of Indiana. Women and LGBTQ travellers are two fast-growing tourism segments, but inbound travellers from these segments would likely be at least somewhat deterred from visiting the US based on the rhetoric and policy initiatives regarding gender and sexuality that Trump and Pence have espoused.

From Euro Monitor

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