In less than six weeks, the United States will have a new president, Donald J. Trump. Given that he’ll come into office with a background in hospitality and travel through his involvement with hotels, casinos, golf courses, and various other travel sectors, it could be a boon to the travel industry. Nevertheless, a combination of campaign statements, key appointments, and policy announcements from either President-elect Trump himself, the leaders of the Presidential transition team, or prospective members of the executive branch must be evaluated to get a sense of where things might be going.
At this early stage, the three elements to watch in a broader sense could be transportation and infrastructure improvement, support for national parks, public lands and tourism businesses, and policies which encourage visitation from throughout the world. Let’s take a look at each one of them.
Regarding transportation infrastructure, Mr. Trump campaigned on investing a trillion dollars to address the massive transportation backlog for highways, bridges, tunnels, and transit. For example, there is a six billion dollar transportation infrastructure backlog in the national parks alone.
Trump has now redefined his investment strategy as one based on tax credits for those who invest in infrastructure, creating new tax breaks and potentially allowing some of this infrastructure investment to be revenue generating such as toll roads. The plan targets $1 trillion in investments, accompanied by $140 billion in tax credits, even though the American Society of Civil Engineers pegs the total backlog needed to be addressed by 2020 to be $3.6 trillion. The challenge with this approach is that densely populated areas with higher potential for revenue will attract the most investment.
The appointment of former Labor Secretary Elaine Chao, who is also the wife of Senate Majority Leader Mitch McConnell of Kentucky, as Secretary of Transportation suggests that these issues will have a practical focus, which is encouraging. Additionally, the appointment of the new National Advisory Committee on Travel and Tourism Infrastructure, which will be meeting for the first time in December, is expected to have some input on industry priorities. Committee members include state and local destination marketers, local officials, airport and transportation executives, tourism association leaders, and even former US Senator Mark Begich of Alaska, who co-chaired the Senate Travel and Tourism Caucus. (No tour operators have been appointed to this group.) You should watch for the initial reports from this committee and anticipate some prioritization for upgrading aging airports and putting more intermodal transportation from airports to downtown areas, both beneficial to the inbound market. The members of the NACTTI can be found here.
The health and support of tourism product under the Trump Administration is going to be a hot topic. While the contribution of tourism to the national economy is likely to be well understood, interests in mineral and fossil fuel extraction might have an audience which could be a threat to national parks. On the other hand, tourism is big business and should be in line for some of the tax breaks and incentives enjoyed by other industries. The voice of the travel industry – and specifically inbound operators – should be loud about the impact of international visitation on the national economy.
President Trump has already named billionaire investor Wilbur Ross as his nominee for Secretary of Commerce. The industries with which Ross has been involved are ones like steel and high technology with no specific mention of tourism, unlike current Secretary of Commerce Penny Pritzker, who is an owner of Hyatt Hotels. One can hope that Ross will focus on other elements in the department and allow the good work of the National Office of Travel and Tourism and its partner, Brand USA, to operate without much change, since both are doing excellent work. The priority should be to simply remind the new administration of this fact.
Finally, how the United States is perceived as a place to visit will be a function of the visa process, visa access, and continuing comments by President Trump and members of his administration. At this point, the nominees for Secretary of State and Secretary of Homeland Security have not been finalized. Only the nomination of Senator Jeff Sessions of Alabama to be Attorney General has been finalized within the group dealing with the mix of issues relating to visitation and immigration, which are often inseparable in the minds of foreign nationals.
In this case, international inbound operators should stand firm on no reduction in visa waiver countries, maintenance of access while maintaining appropriate security, and toning down any language which discourages groups of people from coming to the United States. Providing information, if it exists, on any reduction in visitation from specific markets might be the way to modify that perception.
This is an ongoing story at only its preliminary stages. Stay tuned for additional updates and comments or join in the conversation by sending your questions and comments to the team at email@example.com.