The U.S. Travel Association recently predicted that the U.S. share of global long-haul travel could fall from 13.9% in 2015 to 10.9% in 2022 and called June the worst month for travel performance in almost a year. News editor Johanna Jainchill talked to CEO Roger Dow about the loss of market share and what might be causing it.
Q: How bad is the state of inbound travel?
A: [The June numbers] sound doom and gloomy; it's actually not that bad. ... We were down eight-tenths of a percent from a year before. What concerns us most is declining market share. While the U.S. last year grew by 2%, the rest of the world grew by 6% to 8%. The actual volume is good, not great: We are projecting a flattening. But this industry has had 115 months of straight growth, which is good and also concerning because nothing goes up forever. But the share numbers started going down in 2015, from 13.7% to 11.7% last year. That little [change] of share represents 120,000 jobs, almost $60 billion.
Q: Why are long-haul travelers choosing destinations other than the U.S.?
A: One, the U.S. dollar in 2015 started an unprecedented growth run. ... It became much more expensive to come here. The second thing is we started to see some weakness in global economies like in South America and some Europe economies. Third is the proliferation of growth of low-cost carriers in Europe. If you're in Europe, you can go to the beaches in Kenya much more cheaply than the beaches in Florida or California.
People jump to the conclusion that it must be Trump. I told the president months ago, "You're not the cause, but you can be the solution." People separate politics from place. You and I go to China; we don't feel good about their human rights. We go to Moscow and Red Square and don't feel good about their politics. But we still go. I said to the president, "We're not sending a welcoming message around the world. Your message should be, 'No bad guys, we want all the good guys.'" No industry cares more about security than travel and tourism. On 9/11, the industry shut down in one hour. Security is important, but we must have a welcoming message, and that's not apparent. Another thing is, we're seeing visa processing being slower. That can intimidate new travelers.
Q: I know the decline started in 2015, but with certain markets like China, it started last year. Is that not because of the trade war?
A: China, Japan and South Korea all went down together last year -- anywhere from 2% to 4%. It was an Asia issue. There's been a flip where last year they were doing more short-haul travel. Yes, the trade war is a factor. China has blocked ads for U.S. travel on TV; they've issued travel warnings. But [inbound numbers have] only gone from 3.2 million to 3 million. Travel is too important to both countries. [The Chinese government wants] travel reciprocity to China. It's one of their pillars of growth. They don't want to mess with travel too much, but it is a trump card they can use.