International visitation to the United States is forecasted
to contract this year, continuing a decline that began in 2016 following six
straight years of growth.
The strength of the dollar is widely thought to be the main
obstacle to inbound travel. Since 2014, it has increased 18%, reaching its
highest level since 2002. That was compounded by the weak British pound, which
fell to a 31-year low after the Brexit vote in June 2016, and by currencies
falling to record lows last year in Canada and Mexico, the top two inbound
markets overall.
"The biggest single thing that affects the travel
landscape right now is the ongoing strength of the dollar in the markets we're
active in," Brand USA CEO Chris Thompson told Travel Weekly earlier this
year.
The downturn has prompted Brand USA to push back to 2023 its
initial goal of 100 million international visitors by 2021.
Before 2016, international inbound travel had grown every
year since the recession ended, reaching a record 77.4 million visitors in
2015. That number fell 2.4%, to 75.6 million, last year.
This year, the numbers could be worse.
The U.S. Travel Association downwardly revised its
previously reported inbound travel numbers last week, based primarily on
Department of Commerce data from the first quarter indicating that arrivals
between January and March were down by 4.2%, to 15.8 million visitors.
The Commerce numbers supported U.S. Travel's earlier
prediction that there would be a drop-off in inbound travel in 2017. The
organization was surprised when there was a slight inbound travel uptick last
April, but it now says that was due primarily to the travel-heavy Easter
holiday falling in April instead of March.
Commerce also reduced its international visitor spending
estimates by $1.4 billion for the first six months of the year: Instead of
increasing 2.6%, it estimates international visitor spending edged up just
0.7%.
"A lot of that is a dollar story," said David
Huether, senior vice president for research at U.S. Travel. "That's been
the driving factor. ... Some markets like Brazil haven't been stellar. ... This
issue has not just affected travel. It affected exports in general throughout
most of last year."
Nick Hentschel, vice president of business development at
American Tours International (ATI), said 2017 has been solid for his company,
but he allowed that currency issues had affected certain product lines.
"Much longer escorted tours, because of the big bulk
cost, are not performing as well this year as in the past," he said. "Particularly
from the U.K."
The value of the dollar has been falling this year, hitting
a 15-month low in July, a potential bright spot for inbound travel though not
for the U.S. economy overall.
This has already helped the Canadian source market, where
visits fell 6.8% in 2016, when the loonie reached its lowest relative values
since 2003. In the first quarter, Canadian visitors increased 5.1% as their currency
strengthened, reaching its strongest position since 2015.
Still, U.S. Travel CEO Roger Dow said the ominous forecast
should spur action on the part of the administration.
"Inbound travel to the U.S. already went through one 'lost
decade' after 9/11," Dow said. "It took a sustained national policy
effort to return to the pre-9/11 level of travel exports, which only happened
last year. If we don't want to give back all of that progress, the time to act
is now."
Dow called for the White House to "help right the ship"
by continuing the Brand USA marketing organization and by protecting policies
that enable international travel to the U.S., such as open-skies agreements and
the Visa Waiver Program.
Visa policies are particularly important to the Chinese
market, which grew to nearly 3 million visitors in 2016 despite the strong
dollar, a 15% increase over 2015.
However, Lin Wang, the National Tour Association's (NTA)
director of China market services, said there are growing concerns about visa
application issues.
"While other countries are making it easier for Chinese
travelers to apply for visas -- for example, Canada plans to establish more
visa processing centers in China -- it seems the United States government is
doing the opposite," Wang said, adding that several NTA members reported
higher visa denial rates this year, and visa appointment waiting times of more
than 20 days "discourage the Chinese traveler" from wanting to visit
the U.S.
Threatening rhetoric
Many tourism leaders also blame the political rhetoric out
of Washington for contributing to an already difficult situation.
New York, for example, has been trying to soften the
currency issue by featuring "countless free and affordable attractions,
museums, parks and more" in its global messaging, as well as a "Free
in NYC" guide on its website. But its tourism marketing organization, NYC
& Company, is more concerned about rhetoric than currency.
When it predicted that its international visitor numbers
would drop for the first time since 2008, NYC & Company took aim at the
Trump administration.
"We know currency exchange always has an effect on
travel decisions, [but] the modification of our original forecast to be a
decline of 300,000 was due to the political rhetoric about the travel ban in
particular and the lack of a welcome message to our international visitors on
behalf of the Trump administration," said NYC & Company spokesman
Chris Heywood.
He added: "The competition for the same tourism dollar
is fierce, and having this extra layer of rhetoric doesn't help us."
Mexico might be the market most affected by the political
climate, starting with Trump's disparaging remarks about Mexicans during the
campaign, his continued call to build a wall along the border and recent tweet
calling Mexico "one of the highest crime nations in the world."
Visitors bureaus from New York to California have sent
delegations to Mexico to roll out the welcome mat, but NYC & Company still
predicts that Mexico visitation will drop 6.7% this year, more than any other
international market.
Without attributing it to anything specifically, Intrepid
Travel said it has seen a 24% decrease in bookings to the U.S. in 2017 compared
with 2016, the biggest decrease coming from the Australia market, which is down
27% in 2017. The company also saw a big drop in Australia bookings to the U.S.
as far back as 2015.
Intrepid Group regional director Leigh Barnes said that the
National Park Service's 2016 centennial created buzz for the U.S. last year,
but that even with the solar eclipse giving a slight boost to August, "bookings
to the U.S. are down across the board."
"We are
optimistic that this trend can and will turn around," Barnes said. "While
the U.S. government has been the source of a lot negative media attention this
year, the travel industry must continue to stand for open borders, inclusivityand the celebration of diversity."