China Travel Warning and Latest Inbound Figures Hit IPW Like A Cold Shower
Unlike the proper British who limit national campaigns to just 60 days, this week starts the intense portion of the 2020 presidential campaign in the United States. When 20 different candidates step onto the stage this week over two nights in Miami for the first Democratic Party debate, it can be said that every day will be filled with news of who said what, who is up, and who is down–for the next 17 months until November 3, 2020.
It is fair to assume that President Donald Trump is guaranteed the Republican nomination, so there will be a constant barrage of criticism coming his way from the two dozen Democratic candidates who will also be trying to gain advantage over each other.
This is not to say that legitimate issues, such as border security and the immigrating children in custody on the border, potential military confrontation with Iran, the growing federal deficit, and trade with countries such as China and Mexico, will take a back seat to the campaigning. On the contrary, all of these issues and more will be heavily politicized and probably will lead to further polarization of the American electorate.
Why is all this critical to the inbound travel industry?
First of all, presidential politics has a habit of pushing less visible issues to the back burner while members of Congress and the Executive Branch are focused on a major election. This means that our issues may languish while the hot topics get all the attention, particularly when there is already gridlock on Capitol Hill. The one possibility for the industry and inbound operators is to focus on those issues which have the least controversy and the most bipartisan support. For example, the funding of Brand USA has a good chance of being added back into the budget, even though not much is moving through Congress right now.
Second, the travel industry is much more active on Capitol Hill, however, speaking collectively seems to be less and less the case. In the past, a large number of industry associations worked together in a focused way on top priority issues, culminating in the creation of Destination Capitol Hill, operated by U. S. Travel with very large delegations from almost every state. This year, individual fly ins were held by at least seven different travel associations. Were the issues the same? No. Were any issues supported by all of these groups? Possibly the funding of Brand USA and to a lesser extent visa issues, but generally no. One can argue that more visits to Congress raises the visibility of the industry, but it is also true that the diffusion of key issues by splintering the industry in this way makes it easier for Congress to keep less broadly embraced items on the back burner.
In this highly charged time of the extended presidential (and congressional) campaign, inbound travel advocates have a two-fold challenge to get something done. First and obviously, focus on the most important issues. IITA is doing so by working hard on national park access and fees, the continuation of Brand USA, and visa-related issues. It is important to have bipartisan “champions” in both the House and Senate who will focus on these issues and see to it that they get attention in this overheated political atmosphere.
One last thought. The political conventions will be held next summer. The industry has a year to position tourism as a key trade issue and try to get the growth of tourism as a plank in both party platforms. Let’s be advocating now to be part of seeing that goal accomplished.
China Travel Warning and Latest Inbound Figures Hit IPW Like A Cold Shower
While approximately 6,000 delegates, including US destination and supplier representatives, inbound operators and their key international buyer and media partners, met last week at IPW in Anaheim, California, the industry was confronted with two different challenges, which hit US participants like an icy shower.
The first one was an announcement by the China Ministry of Culture and Tourism that it was issuing a warning on travel to the United States based on “frequent” shootings, robbery, and theft, according to the Xinhua News Agency. There were no statistics cited to validate these conditions.
This warning was read as part of the continuing hardball negotiations on trade between the United States and China, even though the reasons used played against some existing fears held by Chinese travelers.
In response to this warning, Roger Dow, President of US Travel, went even further by calling the warning from China an effort to make travel “weaponized” within the context of the trade negotiations.
Dow said, “While it’s too early to know the impact this might have on inbound travel from one of our top source markets, announcements such as this can have a chilling effect.” He further stated that the move “would appear to be connected to the U.S.-China trade dispute.”
The warning came on the heels of a U.S. Commerce Department report that travel from China to America had slipped from 3.2 million to 3 million from 2017 to 2018, the first such decline in many years. This was particularly disconcerting as Chinese travelers spend an average of $6700 per trip, 50% more than the international travelers overall, as was reported in Travel Weekly.
As an example of this economic impact Visit California cited that the 1.6 million Chinese visitors, the state’s third largest market, spent $3.4 billion, compared to the 7.9 million Mexicans, its largest market, who spent $3.5 billion in the last annual tabulation.
Chris Thompson, CEO of Brand USA, offered a more optimistic note that every Asian market was down slightly, but Fred Dixon, CEO of New York and Company, countered with data from Visa, showing Chinese visitors spent almost 12% less in the first quarter of 2019 in New York City.
Subsequently in a related development, the Trump Administration announced that it would be taking a hard look at international student visas on the basis of security issues. There will be further visa restrictions, a requirement to provide access to social media used by student visa applicants, and a much more rigorous visa process in general, potentially reducing the number of international students enrolled at American colleges. There are 1.1 million international students studying in the U. S. annually, a third of which are Chinese. The economic value of these students is $45 billion a year with the 360,000 Chinese students accounting for $15 billion of it.
Additionally, these students are often on vacation and generate visits from their families during the course of the time they are here, which adds to the economic impact from inbound visitors.
This move in the international student market is also seen as tied to the trade negotiations by various journalists and academicians.
With trade and now inbound tourism capturing a big part of the national dialogue within the political framework of the 2020 election, it is definitely time for the industry and especially inbound operators to be heard on this subject.
Members of Congress, the Commerce and State Departments, and the White House, all need to hear from organizations like IITA and its individual members, both operators and suppliers, how these increased restrictions are impacting travel, the most positive element within the international trade equation.
It is probable that all of these visa restrictions are impacting travel from a variety of markets, not just China. Inbound operators can monitor if they are experiencing any changes in their business and share that information with IITA, who in turn can make that known to the industry at large. If numbers of inbound visitors begin seeing a further decline, documentation will be critical.
Will Trump Accept Compromise on Government Funding?
Febraury 14, 2019
By Steve Richer, DC correspondent
As of Monday night, Republican and Democratic negotiators had “in principle” a compromise funding bill to keep the government open through the end of the fiscal year, September 30.
Key appropriators Republican Senator Richard Shelby of Alabama and Democratic Representative Nita Lowey of New York, who each chair the key funding committee in their chamber, had settled on border protection measures of $1.4 billion and some new focus for ICE (US Immigration and Customs Enforcement) to deal with identified criminals, as key parts of the compromise bill.
Shelby was optimistic that it could pass both houses quickly and get presidential approval, as he claimed to have been in touch with the White House as the compromise was developed.
The $1.4 billion was less than a third of President Trump’s request and would only treat 55 miles of border along the Rio Grande.
Why should inbound operators care?
Once again, we could see confusion at national parks with damages in the absence of staff, undermanned TSA inspections at airports, longer waits for visas, and a host of other issues.
It is therefore urgent to continue to collect information on modified or lost business from international visitors that can be linked to any shutdown.
Capitol Hill visits with the National Parks Conservation Association and Destination Capitol Hill, sponsored by US Travel are back to back the first two weeks in April with IITA playing a role both advocacy events.
Please provide IITA with anecdotal information on reduced or lost business attributable to the shutdown if you have it.
Unfortunately, this matter is not resolved and may miss the Friday deadline, February 15.
Continuing Government Shutdown Damages National Parks
January 3, 2019
By Steve Richer, DC correspondent
While President Trump holds out for a $5 billion appropriation to build part of the border wall with Mexico, the Federal Government shutdown is in its second week and beginning to have serious impacts on a series of functions critical to international inbound operators.
Unfortunately, our hopeful projection before Christmas that the President would sign a short-term continuing resolution (CR) to keep the government open until February 8, as passed by the Senate, was wrong. Members of the Freedom Caucus, a conservative group within the Republican House majority in the Congress which has ended, convinced President Trump to stick with the wall. He then persuaded the Republican House leadership to post a continuing resolution with the wall included and a last big vote by the departing majority passed it. The Senate considered this amended CR and failed to get the 60 votes needed to send it to the President for signature. As a result, the government went into partial shutdown before Christmas and has failed to resolve the deadlock since then.
Some federal agencies are functioning because a number of them had already received their FY19 appropriations. Key departments, including Commerce, Interior, State, and Homeland Security, had not been funded and were impacted by the shutdown.
As a result, TSA agents are working, but without pay. There is now a lawsuit claiming that requiring government employees to work without compensation is illegal. The case has not yet been heard. If the shutdown continues and the suit is successful, airports and points of entry can be further impacted.
National parks, however, are generally open with the exception of ones which are primarily comprised of historic buildings, like presidential libraries or historic homes. The other elements of the National Park System, such as the scenic parks and monuments, are accessible to the public. Due to the shutdown, there is no one to collect entrance fees, visitor centers and regular restrooms are locked, garbage is not being collected, snow-covered roads and trails are not being cleared, and port-a-potties are filling up to a point beyond potential salvation. Commentators are using graphic language to report that President Trump is allowing these national treasures to morph into something very undesirable.
At some parks, local support groups, even governments, have tried to empty the garbage, clean the trails and roads, maintain the sanitary facilities, and supply toilet paper, but these efforts are mostly voluntary, inconsistent, and not universally offered. This is creating a situation which is both unsafe and unsanitary in the short-term and with potentially long-term implications.
It is important for our international inbound operators to track if this has impacted any business or changed either the willingness of visitors to come or their reports back to other potential visitors from those who do have unwelcome experiences during this time.
Additionally, some federal agencies have started to run out of funds that were already on hand allowing them to offer services. Unfortunately, the Smithsonian, all of its fabulous museums, and the National Gallery will be closed by Thursday, January 3, when the National Gallery of Art shuts its doors. The 17 other Smithsonian Museums closed on January 2. The National Archives closed on December 22. Only the Capitol Visitors Center, the Library of Congress, and the U.S. Botanical Gardens will remain open as they are funded through the existing appropriations for the legislative branch of the Federal Government.
Operators should report to IITA whether these closures are impacting visitation to Washington.
The new Democratic House majority takes over today, January 3. It has been announced that they will send a bill funding all of the remaining departments, except Homeland Security, until September and continue funding that department without the wall but enhanced border security until February 8. Although the Senate previously passed this exact legislation, President Trump has already announced that it is unacceptable to him. Senate Majority Leader Mitch McConnell is on record to refuse to vote on anything the President will not sign, so a continuing stalemate may be in the offing for at least the rest of the week.
It is true that President Trump cancelled his Christmas vacation to Mar-a-Lago in Florida, waiting at the White House for new proposals. During this time, the Democrats were not in charge, so no one in Congress made any new offers and the President did not reach out to anyone other than the House Freedom Caucus during that time. Of course, that is the one group which wants the stalemate to continue, advising President Trump that his base will desert him if he compromises.
Welcome to 2019 and the new dynamics in Washington!
IITA members are encouraged to follow this situation, the possibility of a resolution, and keep good records on if and how the shutdown of the Federal Government affected business. There is an excellent probability that there will be hearings on it either during a continuation of the shutdown or in its aftermath.
Federal Shutdown Scenarios
December 20, 2018
By Steve Richer, DC correspondent
As of Thursday afternoon, the word in Washington is that there are various scenarios possible in terms of a somewhat anticipated federal shutdown which could happen at midnight on Saturday morning, if Congress and the President do not act by Friday, December 21. This is the date when the current CR (Continuing Resolution) to fund the government at prior levels expires.
The shutdown will only impact non-essential services and employees in departments which have not had their annual appropriations authorized previously, which includes key agencies impacting inbound tourism including Homeland Security, State, Interior, and Commerce. The Treasury, Justice, Housing and Urban Development, and Agriculture Departments would also be impacted.
Circumstances regarding a potential shutdown have been changing hour by hour.
Unlike the prior major shutdown starting in October 2013, national parks will neither close nor be barricaded. Parks which are single houses or other buildings will close. Staffing will be dramatically reduced, visitor centers and bathrooms will be locked, and garbage will probably not be collected. Inbound operators should report to IITA on any impacts this has on business, in case the shutdown does occur. Testimony on loss of tours or future bookings may be needed at any hearings on the impact of the shutdown.
At the present time, the battle between President Trump, who is demanding $5 billion for his border wall, and Congress, especially the Democrats who had initially offered $1.6 billion against border security costs, has been at a stalemate, but seems to be breaking.
Democrats are also arguing that the previously appropriated $1.7 billion for security on the Mexican border has yet to be spent to any meaningful degree, thereby weakening any motivation to add more funding with the already strong opposition from Democratic voters generally.
It is not even clear at this stage whether the Trump Administration could get a vote for the entire $5 billion from the still Republican controlled House of Representatives, which switches to a Democratic majority in January. This limited enthusiasm by Republicans for the wall contributes to the stalemate.
There are, however, three major scenarios on what could happen this week.
#1. President Trump and the Democrats in Congress continue to dig in their heels, while the Republican House takes no action in time to prevent the shutdown. If this happens through the weekend, it is likely that there will be a shutdown until the new Congress convenes and the Democratic House, which is where all appropriations must originate, passes something which would then be negotiated with the new Senate and President Trump. This scenario was the most likely until Wednesday, when Senate Majority Leader Mitch McConnell announced the probability of passing a CR until February. The Senate passed this on Wednesday night by voice vote and is staying in session today to wait on House action. Lame duck legislators in the House (who are currently working out of cubicles if they lost or are retiring) would probably support postponing any decision so they can leave Washington for the rest of the year. President Trump might want to kick the can down the road before he leaves for his two-week vacation at Mar-a-Lago and can disengage from trying to resolve the matter temporarily, even without funding for the wall. In short, this scenario has gone from most likely with a shutdown to least likely–depending on President Trump signing the CR.
#2. Congress passes a short term CR and the President signs it. Some Republicans are pleading with the White House to give them more time to resolve this. A short term CR to a date while Republicans are still in control of both houses of Congress will optimize resolving the matter on their terms, if they can find a compromise before the new year which will attract enough Democratic votes in the Senate. Such a compromise would probably exclude the full $5 billion for the US-Mexico border wall, so President Trump will have to yield on his demands. This might be the least likely possibility, as it would simply delay the matter until after Christmas and the Senate has already acted on a CR until February 8.
#3. Congress passes a longer term CR, giving the responsibility to the new Congress. In this scenario, there is even less possibility for any sizable appropriation for the border wall, thereby putting even more pressure on President Trump to compromise. The Senate passed CR has no appropriation for the wall. If the Senate passed CR is posted for a vote today by Speaker Paul Ryan, it will almost guarantee action by the House with the Democrats joining in passing this CR and then adjusting the appropriations bills more to their liking, negotiating with the Republican Senate, and then hopefully getting a signature from the President. As of Thursday morning, December 20, this became the most likely scenario with a CR compromise through February 8.
As of today, both Congressional Democrats and Republicans seem committed to avoiding a shutdown, particularly over the Christmas holidays which will take needed earnings out of the pockets of federal employees and reduce federal services to the public. Nevertheless, one of the scenarios is likely to be determined no later than Friday, because of White House intransigence, although it now seems to be softening.
Only President Trump had been saying he is happy to have a shutdown to get his wall and has clearly stated it will be his responsibility if it happens. This has complicated everything by putting even more pressure on Congressional Republicans to avoid the blame for a shutdown, while Democrats now have an almost free ride.
This is political theater at its best as drama and worst as policy. We are probably now in Act II. Let’s see what happens before the curtain falls on Friday.
Inbound operators should stay informed and, as cited earlier, keep track of any impacts to business should the shutdown take place.
Merry Christmas and Happy New Year!
Administrative Changes in 2019?
December 6, 2018
By Steve Richer, DC correspondent
While the recent Congressional elections with the Democratic takeover of the House of Representatives has captured most media attention in the last few weeks, new interest is focused on whether there will be accompanying changes affecting tourism matters at the Cabinet level, as well.
In our last issue, prospective committee leadership rotations due to both the Democratic House takeover and specific retirements or defeats was addressed.
Now, it is time to review the tenure of two Cabinet secretaries with high tourism impact who might see the end of their service at the choice of President Trump.
The one under more pressure is Interior Secretary Ryan Zinke, who is being audited for travel expenses and other improprieties. The Office of Inspector General at Interior has already referred this matter to the Department of Justice for possible further action.
Under Zinke, mineral extraction has increased on public lands, several National Monuments have been reduced in size, including Bears Ears in Utah which includes holy tribal grounds, and key tourism related advisory boards have met very infrequently.
The other Cabinet official on shaky ground is Commerce Secretary Wilbur Ross, whose advice has been often ignored, despite his public support of eventual decisions by President Trump on global trade and tariffs. Reasons for the possible change at Commerce have not been clearly stated, but Small Business Administration Director Linda McMahon seems to be a top choice.
Under Ross, the important Travel and Tourism Advisory Board also met infrequently but has now a new set of appointees, although none is an inbound operator, even though inbound tourism is the focus of the work of Commerce and its appointed board, as well as Brand USA.
There are travel products that serve inbound visitors represented on the TTAB, including state and local DMOs, but no operators. IITA leaders have previously served with distinction on this board.
Once again, inbound operators need to follow any changes, outline our issues to new leaders, and use existing relationships to build support within the Trump administration.
House Leadership Change Means Lots of Possibilities fot Tourism Priorities; Bi-partisan Efforts Required with an Increased Senate Majority
November 21, 2018
By Steve Richer, DC correspondent
The sweeping change in control of the United States House of Representatives with the Democrats picking up at least a net of 35 seats and a minor change in the control of the United States Senate with the Republicans increasing their margin by two seats, creating a likely six seat majority, means that the next session of Congress can either be more contentious or see more negotiations resulting in bipartisan legislation.
For the international inbound travel industry, the question will be focused on who will hold various committee gavels, how much of a priority various tourism issues will receive, and whether bi-partisan cooperation can emerge from the new balance of power.
One must assume that there will be matters in the new Congress that will put tourism issues as a lower priority initially. For example, it should be expected that a Democratic House will start off with a number of hearings to dig into various controversies surrounding the Trump Administration, while the Republican Senate will both look to minimize or prevent such inquiries while attempting to confirm a lot more federal judges.
For the purpose of this piece, however, it is best to take a quick look at the members of Congress who are most likely to chair key committees and what impact that will have on top tourism priorities, including national parks, transportation infrastructure, Brand USA, and visa policies.
Here is an overview.
On national parks, Senators Lisa Murkowski of Alaska and Maria Cantwell of Washington are likely to keep their positions as chair and ranking member of the full Energy and Natural Resources Committee. Both have been good friends to the national parks and should be willing to move better funding if the House is more generous. It is not clear if Senators Steve Daines of Montana and Angus King of Maine will retain their spots as chair and ranking member of the National Parks Subcommittee, but it is less critical since Murkowski and Cantwell are both hands-on on this matter.
The House is where a bigger change will occur. Representatives Raul Grijalva of Arizona and Rob Bishop of Utah will exchange roles, which should be good for the travel industry. While Grijalva and Bishop, who has already announced that he will retire after this term, have found ways to work closely together, it is probable that the reconstituted committee will be more generous to our national parks and public lands. IITA and any operators doing business in Arizona should reach out to Grijalva now to let him know we are looking forward to his leaders hip of the committee. Representatives Tom McClintock of California and have held the top spots on the Federal Lands Subcommittee and are likely to reverse roles, if they both choose to stay on that assignment. Almost all of the full committee will be returning. Most might continue, as the defeated members were on the Republican side and those numbers will be reduced.
On the Senate side, Senators John Thune of South Dakota and Bill Nelson of Florida have been chair and ranking member of the Commerce, Science, and Transportation Committee this past year, but Nelson will not be returning. Maria Cantwell is next in line for ranking member of Commerce but might choose to stay with that role on Energy and Natural Resources, in which case the role will pass to Senate Tourism Caucus Co-Chair Amy Klobuchar of Minnesota, which will be very helpful on any tourism issues, especially the continuation of Brand USA.
On the House side, ranking member Representative Frank Pallone of New Jersey, who comes from a district including the Jersey Shore, will become chair of the Energy and Commerce Committee. Representative Greg Walden of Oregon is likely to become the ranking member. About a half dozen Republicans are leaving the full committee, so there will be some education efforts required with a few new committee members. Pallone should be a good ally and keep tourism interests, including the funding of Brand USA and the in-flight survey of international visitors in place.
In the Senate, the same committee handling commerce issues just described will lead on transportation issues, too. There will be a related role played by the appropriators, especially in the House.
As the proposed transportation infrastructure initiative has as much as a trillion-dollar price tag, the current annual deficit could be a deterrent on this issue.
Nevertheless, the change in the House Transportation and Infrastructure Committee leadership could see this issue on the front burner. Representative Peter DeFazio of Oregon should be the new chair and is a strong advocate. Former Chairman Bill Shuster of Pennsylvania is not returning and a number of senior Republicans, such as Don Young of Alaska, are in line to succeed him, but will have to pick which full committee to serve as ranking member. At least a half dozen Republicans will not be returning, so once again some educational efforts will be required. The full committee will drive this legislation and should be initiated in the House in 2019.
It is good to note that Representative Nita Lowey of New York will succeed the retired Representative Rodney Frelinghuysen of New Jersey, as House Appropriations Committee chair. Having another chair from an urban district should be helpful on any big transportation funding. Representative Hal Rogers of Kentucky is slated to become ranking member.
More likely than not, both the committees on foreign relations and homeland security will weigh in on visa access issues.
On the Senate side Senator Bob Corker of Tennessee, the current chair of the Foreign Relations Committee, has retired and should be succeeded by Senator Jim Risch of Idaho. Senator Bob Menendez of New Jersey is likely to continue as ranking member. Republicans will probably add three new members to replace Corker, Jeff Flake of Arizona, and an extra seat to reflect the bigger margin of membership in the full Senate. On Homeland Security, Senator Ron Johnson of Wisconsin will probably continue as chair, while Senator Tom Carper of Delaware will move up to ranking member, replacing Senator Clair McCaskill of Missouri, who was defeated for reelection.
In the House, Representative Eliot Engel of California becomes chair of Foreign Affairs and Representative Christopher Smith of New Jersey moves up to ranking member, replacing Representative Ed Royce of California, who retired. At Homeland Security, Representative Bennie Thompson of Mississippi comes back as chairman and swaps with Representative Mike McCaul of Texas.
This combination of leaders should be slightly more favorable to visa access issues, particularly because of Engel, but this matter will still face a lot of hurdles due to the attitude and policies of the Trump Administration, which will see support from the Senate Committee chairs.
Inbound operators should be prepared to describe the impact of visa access issues on business in the next Congress.
After Thanksgiving recess, we can evaluate if tourism issues will get any attention in the Lame Duck Session in December.
Hopefully, this guide to the anticipated key players in 2019 will give inbound operators an idea of which existing relationships to enhance or which new ones to start.
Happy Thanksgiving to all!
Funding Brand USA Will Be a Lame Duck Session Priority
November 8, 2018
By Steve Richer, DC correspondent
As America goes to the polls, the travel industry will be challenged to make sure that Brand USA does not fall victim to an “inadvertent” oversight in its funding, due to provisions concerning Congressional budget caps.
Due to the increased federal deficit which seems to have followed the 2018 tax cut legislation, money generated from the ESTA (Electronic System for Travel Authorization) fees collected from visa waiver country visitors has been diverted from use by Brand USA to cover the deficit.
This $100 million in annual receipts for Brand USA is the basis from which the organization generates its matching funds, allowing the marketing of the United States to have a minimum annual effort of $200 million to promote travel to the United States globally.
In several of the most recent years, the Brand USA budget was even higher, because the matching funds exceeded the one for one requirement to obtain the maximum funding of $100 million. Anything collected beyond that amount in ESTA fees already goes to deficit reduction.
Brand USA, which is the agency resulting from the Travel Promotion Act of 2009, has a sterling track record. Since FY13, the marketing efforts of Brand USA have generated 5.4 million extra international visitors, who spent $17.7 billion on travel and US air carrier services, and total sales of $38.4 billion. In FY17, the numbers were 1.16 million additional visitors, $4.1 billion in travel expenditures, and $8.5 billion in sales.
The work of Brand USA is very critical at this time, too, as visitation to the United States is experiencing flat or reduced numbers in key markets at a time when international tourism seems to be growing globally. One recent statistic, exemplifying some of what is happening, is that travel to the United States during Golden Week in China, just last month, was down 42%.
This particular drop off in visitation might have a special link to the trade and tariff tension between China and America, but it is not divorced from current patterns. Travel to Canada, for example, is enjoying robust growth, while the United States is flat or down in most markets. This illustrates that North America is not the issue. Furthermore, according to the United Nations World Tourism Organization, the United States was one of only two of the top ten national tourism destinations to show negative growth in 2016 and it led in negative growth at -2.4%.
This all means that the work and funding is extremely critical right now. With its presence and efforts in markets generating close to 80% of all international arrivals, inbound operators are very reliant on this work.
As usual, the leadership of the International Inbound Travel Association is at the forefront of addressing this matter. In conjunction with US Travel and other industry associations, IITA has drafted a letter to Congress and a tailored email which its members can use to bring this issue to the attention of their own Senators and Representative.
Please use that e-mail and send it to those who represent you in both the Senate and House now. In fact, it would be appropriate to either wish them congratulations if they are winners on Election Day or add a personal note of thanks for their service, if they are simply continuing terms, have chosen to retire at the end of 2018, or even were defeated, but will be part of the Lame Duck Session.
IITA Takes Leadership Role in Critical China Market
October 24, 2018
By Steve Richer, DC correspondent
It’s not often that you unexpectedly encounter a friend at an event far from home and find that friend playing a leadership role in an important international event.
Nevertheless, that’s what happened just a week ago in Xingyi, Guizhou Province, China, when International Inbound Travel Association Chairman Gary Schluter and I found each other at the opening ceremony of the Mountain Tourism and Outdoor Sports international conference. Gary was there as the representative of United States inbound tour operators, while I was on hand as an industry guest participating in a fam tour of Guizhou Province.
Gary was one of the VIP dignitaries, met with the media, spoke on an international panel, and had other high visibility roles in this gathering of more than 2000 attendees from dozens of nations. In addition to the Chinese hosts, it was interesting to see that the chair of the Mountain Tourism Alliance was a former prime minister of France, illustrating the importance of tourism at a national level in many countries.
Gary was the only United States VIP dignitary at the conference in this province which is covered on its total land mass by 93% of limestone mountains adorned in a lush green from gorgeous trees and shrubs, making the entire region look like a plateau filled with scoops of luscious emerald colored treats. It’s unique.
IITA’s presence at this event is critical for two reasons beyond just networking in a vertical market in which our operators have product to offer.
First is being part of the bilateral exchange of visitors between the United States and China, which until recently was the fastest growing international inbound market to our shores. One of the low points of the week was local press reports that travel to the United States had dropped 40% during Golden Week 2018, which ended on October 7. This is a peak time for travel, as all of China is on vacation, and other Asian destinations had picked up significant numbers of the outbound market usually headed to America. The Chinese media reports assigned some of the drop to the tension related to changing trade policies.
The second point is that China will continue to be a critical player in global tourism and it will only be growing as a source of inbound visitors. It is important that the United States stick with the development of this market for the long term and having IITA play more of a role is advisable.
At the Asia Leaders Forum of the World Travel and Tourism Council, held in the last few days in the autonomous region of Macau, attendees just received a report of the following items in the remarks of WTTC President Gloria Guevara:
- Shanghai and Beijing are the top tourism receipts generating cities worldwide at over $30 billion each annually; Paris is third, followed by Orlando and New York in the $24 billion range each. The rest of the top ten are Tokyo, Bangkok, Mexico City, Las Vegas, and Shenzhen.
- In terms of tourism jobs created, it’s Jakarta, Beijing, Mexico City, Shanghai, Bangkok, Chongqing, Delhi, Mumbai, Ho Chi Minh City, and Shenzhen. No U. S. cities there.
The fastest growing tourism city in 2017 in terms of GDP share at 34.4% is Cairo. In the last ten years, four of the top cities growing in tourism are in China–Chongqing, Chengdu, Shanghai, and Guangzhou.
A footnote is that Shanghai went from #8 in receipts to #1 in just ten years.
Guevara, the former Mexican Secretary of Tourism, also predicted that in the next ten years all of the top tourism growth of the ten most significant cities will be in Asia, except Marrakech, Moroccco.
Why is this important to our inbound operators? Again, two points.
It is imperative to monitor U. S. market share and see what policies can be implemented to get back on a stronger growth pattern. This seems to be a bigger and bigger challenge.
Finally and obviously, it’s important to fish where the fish are. China is going to continue to be a huge player in tourism, as both a destination and a source of visitors. Smart organizations, like IITA, will continue to help facilitate traffic in both directions.
View from Here–China
October 11, 2018
By Steve Richer, DC correspondent
Sometimes it is good to get out of Washington and take a look at how key markets perceive current events with any corresponding impacts on tourism.
As much as it was not possible to totally escape the recent debate and final resolution on the Supreme Court nomination of now Justice Brett Kavanaugh, the amount of coverage of this event in English language media, such as China Daily and China Global Television News (CGTN), is far less than what is being experienced in the United States.
On the other hand, the amount of time devoted to discussion of the continuing trade and tariff conflicts between the United States and China is a constant top news item, which has not only been a staple of both headline and financial news, but a frequent element in every one of the tourism discussions one can have with leading travel industry advocates.
These dialogues will initially begin with the comments of travel industry leaders about the so called “trade war” and then move into more general comments about how this conflict is impacting about tourism specifically to the United States. Some elements of the exchange of information will include a perception that travel to America has dropped from China in the last year, due to the trade tension and an accompanying new difficulty in obtaining U. S. visas, too.
At this point, information seems to be more anecdotal in inbound tourism terms, but projections by leading economists are already assigning an economic downturn globally to this particular bilateral trade relationship. The International Monetary Fund, for example, has lowered its annual growth projections for both developed and emerging economies based on the conflict. Interviews of leading economists from China, the United States, and international trade and financial institutions, such as an interview with IMF Director Christine Lagarde, fill the airwaves and print media.
China has just completed a massive Golden Week tourism explosion of Chinese vacationers making both domestic and international excursions during this traditional holiday period. Numbers for what the share of this international holiday travel was enjoyed by the United States has not yet been reported, as Golden Week concluded on Sunday, October 7. We can look forward to information coming later this year or early 2019 from such sources at the U. S. Department of Commerce and Brand USA.
In the interim, reports from our own inbound operators who work in the China market can be instructive to give some additional input on any changes in the visitation trends from this increasingly important visitor source.
One thing is certain. The United States is far from the only national destination seeking visitors from China. We all know about the competition from every corner of the globe. In the past two months, personal business experiences underscored this omnipresent competition during a project to grow tourism to an underdeveloped destination within Japan. What was the top international market being targeted? China. As this piece is being written, CGTN offered a feature on yet another national destination targeting the China market. Who was it this time? Turkey. The news story offered an extensive overview of Turkish tourism products and an interview with a top Turkish tourism leader on why his country wants to grow its share of the market, which is currently only 500,000 Chinese visitors per year.
IITA members should pay attention to these issues and be prepared to communicate with members of Congress in both the forthcoming lame duck session and when the new Congress opens in January, by offering specific impacts on tourism from trade policies, if it is possible to show how any changes in visitation numbers from China–or any other key markets–can be validly tied to these policies.
Expectations should be that it might be challenging to do so, as long as the U. S. economy is in high gear. If any downturn begins, however, there will be more interest to hear such reports. It is advisable to be well prepared under either circumstance.
Ready for Big Congressional Change in the House?
September 26, 2018
By Steve Richer, DC correspondent
Even before any ballots are cast or counted, big changes were already guaranteed in the United States House of Representatives, where nine sitting committee chairs have either decided to not seek re-election or, in one case, left early to campaign for higher office.
The committees with guaranteed new chairs in 2019 include Intelligence, Financial Services, Judiciary, Appropriations, House Administration, Foreign Affairs, Transportation, Science, and Budget. These changes will occur even if there is no partisan control change in the House, though that is increasingly predicted to take place, putting Democrats in charge next year.
Changes in the Appropriations, Foreign Affairs, and Transportation committees are of particular interest to inbound operators. Stepping down in the same order are chairs Rodney Frelinghuysen of New Jersey, Ed Royce of California, and Bill Shuster of Pennsylvania.
In the last session, Frelinghuysen and Shuster were particularly active on issues of concern to our members, with Chairman Frelinghuysen moving a favorable budget for the Department of the Interior and Chairman Shuster working hard for better transportation infrastructure funding. Foreign Affairs may be the committee that gets involved in visa issues and it was important in the past on the visitation to Cuba issue. Royce would be replaced by Chris Smith of New Jersey, who has done an excellent job on African issues as a subcommittee chair and might be more open to the travel issue on visa waivers.
If the Republicans hold the majority, Frelinghuysen would probably be replaced by Hal Rogers of Kentucky, while Shuster would be succeeded by Don Young of Alaska. Both pending Republican chairs have different priorities, based on their home states alone. It would require brand new efforts to bring them up to speed on tourism priorities using the prism of home state interests to define these issues.
On the other hand, a Democratic majority would generate significant new changes and a dramatic alteration in the look of House committee leadership.
Currently, the Republican committee leadership is comprised of 19 men and two women chairing the 21 standing committees, primarily from suburban or rural communities. There are no chairs who are minorities. Seven of these 21 chairs are from Texas.
If the Democrats get control, there will be five black committee chairs, two Hispanics, four women, and New York will have the most chairs at just three, whereas California, Massachusetts, Pennsylvania, and Minnesota would each have two chairs. Additionally, there would be a much more urban focus within this group.
Based on past support for such issues through the co-sponsorship of legislation as visa waiver, transportation infrastructure funding, and funding for national parks, it seems likely that some of the potential changes under Democratic chairs could be more tourism friendly.
Two key committees will probably have limited change: natural resources, where Chair Rob Bishop of Utah and Ranking Member Raul Grijalva of Arizona have jointly sponsored national parks legislation, and transportation, where Chair Bill Shuster of Pennsylvania and Ranking Member Peter DeFazio of Oregon have done the same. With a reversal of roles, although Shuster will likely be replaced by Don Young of Alaska, results will most likely have minor adjustments, even if the changes are somewhat more favorable to the travel industry.
Bigger changes in the House will come from those committees with broad investigatory powers, including Intelligence and Judiciary. That discussion is better suited to other analyses in columns on politics than one on tourism.
In any case, there will be a very changed U. S. House of Representatives. As a result, it will be critical for inbound operators and our friends to start to build relationships now with those members who will be either chairs, ranking members, or subcommittee leaders by reaching out now on issues. There will be additional opportunities to do so in the Lame Duck Session after the election, too.
Please anticipate a more thorough discussion of anticipated changes in both the House and the Senate after the Midterm Election, when projections transform into governing realities.
Oh…and make sure you are registered and vote! Some states are already accepting early and absentee ballots now.
Natural Disasters May Have Major Impact on Inbound Travel
September 13, 2018
By Steve Richer, DC correspondent
Our hearts go out to those affected by natural disasters in recent weeks, whether hurricanes in Texas, Florida and the southeast, and the Caribbean or fires in the Pacific Northwest. To offer support to our members in those areas, we created a Resource Page on our website with links to sites that can provide operators and the travel trade with the latest information in the affected areas.
One needs only to observe media in the United States to understand how natural disasters can dominate the news. Many countries, who might have growing economies, improving government services, and excellent tourism attractions and services, will usually see very limited media coverage–particularly in a big nation like the United States with so much national news–unless there are occurrences of natural disasters, huge accidents, or–worse–incidents of terrorism. In recent years, all of us can recall examples of major storms, airplane crashes, and suicide bombings which fit this description of major media coverage.
The past few weeks have put North America into the view of global media attention, thanks to Hurricanes Harvey and Irma, as well as a record breaking earthquake impacting three states in Mexico and fires in the Pacific Northwest. Key tourism destinations and lots of airports have been dramatically impacted by all this media coverage. It is certain that a lot of business has been altered or lost.
International media, including television, the internet, and newspapers worldwide, have told the international travel trade and its customers that Florida, Texas, the Atlanta airport, other adjacent states, numerous Caribbean destinations, and a big portion of Mexico are all unsafe or impossible to visit right now. This is also impacting the cruise industry. Do not expect the same level of coverage to be offered when, whether it is in the near term or months from now, things are back to normal.
At this writing, international audiences are still being told that all of Florida is not ready for its own residents, let alone visitors, to come to its cities, the Florida Keys are “closed,” thousands of flights have been cancelled in Atlanta, and other storms, such as Hurricane Jose, are churning off the coast of the United States and could possibly strike our nation.
What does all of this mean to inbound tour operators and how can remedies be offered to prevent unnecessary loss of business?
It is certainly valid to attempt to move existing business to other destinations or postpone scheduled departures to preserve business, which are the most likely steps being taken by IITA operators.
The bigger challenge is how to update literally billions of impressions tied to these natural disasters to preserve and grow future business.
Inbound operators play a big part in the strategies needed to reverse all of these impressions. Working with DMOs, including Brand USA, operators can offer tour services in order to host international media and key international outbound operators to show them when destinations are once again easily visitable and ready to receive tourists.
An excellent strategy is putting actual video images online of destinations included in tour packages on both DMO and inbound tour operator websites. Dated video images are among the best tools with which to counteract weeks of broadcasts and articles on the impending and then actual devastation. This needs to start as soon as there is some level of normal circumstances. Actual images are the most believable. In the past, Florida destinations erected live cameras on the beach, so prospective visitors could watch the conditions in real time.
Very importantly, truth matters most at this juncture. Do not ask visitors to return, unless they are perhaps volunteers to aid in a recovery, until it is appropriate to ask them to do so. If this principle is violated, it can damage the reputation of either a destination or private business which promises an unimpeded experience before it is possible.
In the very short term, inbound operators can play a big role through organizations like Tourism Cares, the Caribbean Tourism Organization, and other groups concerned with restoring tourism by offering assistance to programs already announced. More adventurous inbound operators can assist by developing “voluntourism” packages for people who want to be of assistance in impacted areas, but it is advised to only do so, if it is coordinated by working with agencies who can manage such volunteers, have work to be done, and have identified housing to accommodate such visitors. Most affected destinations will put such coordinators in place in very short order.
Once again, IITA wants to hear from you on how your business has been impacted by these recent natural disasters or if you have historic information on how your business was impacted in the past. Such information can add to the national discussion on how to bring back normal business flow once it is warranted.
Inbound Travel to the U.S. Lags Behind Global Travel Boom
August 30, 2018
By Steve Richer, DC correspondent
According to an August 7 article published in Forbes Magazine, inbound tourism to the United States is not keeping pace with the boom period seen globally. The Forbes article writer, Lea Lane, has herself traveled to 130 countries and all seven continents.
With global growth in tourism up 8 percent in 2017, it would be logical for the United States to share in this upswing, especially given the excellent work of Brand USA, the successive years of partnership in tourism with China and India, and the just-completed centennial of our national parks. Unfortunately, that is not the case. Travel to the United States was down 6 percent in 2017, only exceeded by Turkey, which has recently gone through some political turmoil. It was the second year of decline.
On a comparative basis, other countries often cited in global tourism discussions about key destinations including the United States saw the benefit of worldwide growth in travel. Spain led the way, up 32.7 percent, Australia up 22 percent, Canada up 21.2 percent (possibly grabbing some market share from the U.S.), United Kingdom up 17.9 percent, China up 9.3 percent, and Germany up 8 percent. France at 4 percent and Italy at 2.2 percent were below the global growth levels, but at least still in positive territory.
Forbes Magazine, owned by Steve Forbes, a former Republican presidential candidate, cited some of the elements contributing to the inbound travel slump, including immigration policy under the “America First” approach; the Muslim travel ban against seven countries; anti-Mexican, Hispanic, and African rhetoric; treatment of political refugees seeking asylum; withdrawal from the Paris Climate Accords; confrontations with the leaders of friendly nations; tighter visa processing; and stricter airport security, all of which may be discouraging visitation to America.
U. S. Travel reports that there would have been 7.4 million more visitors spending an additional $32.2 billion and creating 100,000 more jobs, if visitation had stayed at 2015 levels, instead of experiencing two years of decline.
The big question is, of course, what will this mean to inbound operators and what can be done to reverse the trend?
Leaders in the industry, including our own team at IITA, recommend continued strong support for Brand USA, its campaign to tell the global industry that all travelers are welcome in America, and efforts to streamline the visa process to encourage more visitors.
Individual discussions with international partners to emphasize that America welcomes their customers must be a priority, while obtaining feedback on perceptions of travel to America within their businesses.
A united travel industry can turn the numbers around if everyone is engaged.
Next month will see the last of the Congressional primaries, so the new cast of characters in Washington will soon be known. With just two possibilities in almost all races for the House and Senate, it is not too early to start getting the message out for a better tourism focus in the next Congress.
Will National Park Infrastructure Backlog Finally Be Addressed?
July 19, 2018
By Steve Richer, DC correspondent
Although the House of Representatives is out for its August recess until Sept. 8, the U. S. Senate has shown some leadership on addressing the backlog of infrastructure repairs, maintenance, and improvements at our national parks, one of the top issues for the International Inbound Travel Association.
On July 11, the Senate Committee on Energy and Natural Resource Subcommittee on National Parks held a hearing on S. 3172, the Restore Our Parks Act. This bill is a compromise between two earlier bills, each of which had a partisan majority of either Republican or Democrat sponsors. Those bills are National Park Service Legacy Act and the National Parks Restoration Act.
Thanks to the leadership of Senators Mark Warner (D-Va.), and Rob Portman (R-Ohio), Republican of Ohio, this new bill, which is on the right track for passage, now has 19 co-sponsors, including 11 Republicans and 8 Democrats. In addition to the chief sponsor Portman and co-sponsor Warner, sponsors include Republicans Lamar Alexander of Tennessee, Steve Daines of Montana, Shelley Moore Capito of West Virginia, Roy Blunt of Missouri, Cory Gardner of Colorado, Susan Collins of Maine, Thom Tillis of North Carolina, Dan Sullivan of Alaska, Mike Rounds of South Dakota, Dean Heller of Nevada, and Lindsey Graham of South Carolina. Democratic Caucus members co-sponsoring Angus King of Maine, Martin Heinrich of New Mexico, Joe Manchin of West Virginia, Sherrod Brown of Ohio, Amy Klobuchar of Minnesota, Michael Bennet of Colorado, and Ron Wyden of Oregon.
The bill will pull unobligated royalties generated from onshore and offshore energy resources, including oil, gas, coal, and renewables into a fund which will provide $6.5 billion in the next five years. These funds can address the most important portions of the $11.6 billion in infrastructure maintenance at our national parks, including roads, bridges, parking lots, facilities, and historic structures.
As a result of the Senate’s leadership on this matter, the much more polarized House of Representatives got the ball rolling on July 25, when House Natural Resource Committee Chairman Rob Bishop (R-Utah), and Ranking Member Rau Grijalva, (D-Az.), filed H.R.6510, a companion bill to S.3172 with 55 co-sponsors—28 Republicans and 27 Democrats.
Unlike the Senate bill, the filed House bill provides funding to be used with all federal agencies operating public lands, while the Senate version only funds national parks.
At this point, it will be important to obtain more House co-sponsors and make sure there are timely hearings on this bill which was referred to the committees on Natural Resources, Education, and Transportation, especially since there are less than 100 days until the Congressional midterm elections. Electioneering schedules have a habit of postponing Congressional action as Election Day approaches.
It will be appropriate to develop both short term and “lame duck” Congressional session strategies.
With IITA leaders meeting later this week, it will be an excellent focus for some of the advocacy strategy that emerges from this gathering in Florida. It is certain that IITA policy on national parks and public lands, will be targeted on both this infrastructure backlog and group tour fees.
If you are coming to the IITA Leadership Retreat meeting, please bring any relevant experiences which reflect issues from the infrastructure backlog. If you have such information but are not one of the attendees, please email it to IITA staff or any of the IITA leadership for inclusion in discussions.
IITA can be very proud of its championing of this issue and the related fee increases on group tours, originally targeted as a major source for infrastructure backlog funding. Meetings four months ago on Capitol Hill with the IITA delegation with both key members of Congress and the appropriate committee staff is contributed to getting a more rapid consensus on these two new bills, which will both address the backlog and make it possible to diminish the proposed fees.
The job is not finished by a long shot. However, IITA goes into its retreat with a lot of Capitol Hill forward motion on its top issues.
Will Anything Get Done in Washington for the Remainder of 2018?
July 19, 2018
By Steve Richer, DC correspondent
One of the top priorities of the International Inbound Travel Association has been the funding for the backlog of infrastructure repairs to our national parks, now at more than $11 billion due to the year after year of under funding from Congressional appropriations.
Luckily, both the House and Senate are considering bills to address this specific issue, with a Senate hearing and House floor consideration of legislation scheduled. There are currently three bills addressing the issue: S 751 (and its companion bill, HR 2584) also known as The National Park Service Legacy Act; S 2509 (and HR 5210), The National Park Restoration Act; and S 3172, The Restore Our Parks Act.
The first bill is predominantly a Democratic measure and the second is a Republican one. But the third represents a significant bipartisan compromise and has the best chance of passage in the long run. Our friends at the National Parks Conservation Association support the first and third bills, because they address funding needs most explicitly without raising fees for most of the revenue. Significant resources are derived from unallocated receipts from oil, gas, coal, and renewable or alternative energy resource development.
International inbound operators are encouraged to follow the progress on these bills and provide feedback to their legislators, especially if the National Park Service Legacy Act or The Restore Our Parks Act keep moving.
While this sounds like good news for this important issue on the IITA agenda, the big question is whether anything is really going to move in the current atmosphere of Capitol Hill.
Right now, there is a conundrum of competing priorities within both the Trump Administration and Congress, including the upcoming national elections with control of Congress at stake, the Supreme Court nomination of Federal Judge Brett Kavanaugh, global reactions to changing U.S. trade policies and tariffs, and the effects from the just-completed travel of President Trump to Brussels for the NATO Summit, a state visit to the United Kingdom, and a meeting with Russian President Vladimir Putin in Helsinki.
These recent meetings have resulted in a wake of controversy with the potential to further complicate the ability of Congress to act on anything while its members are trying to position themselves in the midst of so many competing pressures.
As we know, when controversy strikes, Congress often determines that the safest harbor is the one of doing nothing at all. There could be lots of momentum for the idea of simply kicking the can down the road until after the November elections to avoid alienating any more voters by taking hard positions on anything.
Compared to the pressures on Congress, however, the list of Administration challenges gives additional impetus to the idea that the rest of 2018 will be enmeshed in distractions and inactivity. Cabinet level and White House personnel turnover continues, while those staying in place have controversies to handle, including ones that affect tourism.
For example, the entire National Park Service Advisory Board has resigned and is yet to be replaced, primarily due to lack of access to Interior Secretary Ryan Zinke, according to former member and former Alaska Governor Tony Knowles. A similar situation exists in the Commerce Department, where the Travel and Tourism Advisory Board has not met in person in 2018, with only a conference call in May, which was poorly attended because it was held at the same time as IPW. Since then, all of the TTAB appointees have been notified that their service is complete, but a new board has not yet been appointed. That means that these two critical tourism boards have no voice at all.
The premise is simply that the approach of national elections, compounded by other matters laced with controversy, are likely to stall, if not stop, national resolution of issues until after November elections.
If that is the case, now is the time to step up the focus of international inbound operators on our priority issues, keep working them, and be fully prepared for what happens in the “lame duck” session of Congress in late November and December. That is when a lot of postponed items could be handled.
IITA leadership and advocacy team members will be meeting in Sarasota, Florida, early next month, which will make further involvement on these issues easier.
If you are attending, be prepared to report on any changes in your business results in 2018. If you are not going to be there, please share this information with IITA leadership and staff.
Thank you for your interest and assistance.
IITA Demonstrates Effective Advocacy Leadership on National Parks Issues
July 5, 2018
By Steve Richer, DC correspondent
Over the last several months, the International Inbound Travel Association has generated excellent teamwork within the industry, touched the right bases at the Department of Interior and National Park Service, and kept key members of Congress informed on issues impacting the operation of group tours and FIT visits to our national parks.
Beginning at Destination Capitol Hill in March, the IITA delegation led by Chairman Gary Schluter and Executive Director Lisa Simon deviated from the regular schedule to hold meetings with the National Park Service fees manager and Congressional committee staff handling both access and fee issues. This laid the foundation for further work which followed.
At IPW in Denver in May, the IITA team participated in a subsequent meeting with Department of Interior and National Park Service staff, including Ben Cassidy from DOI and Donny Ledbetter of NPS, to follow up on the challenges presented by a dramatic increase in group tour fees and a new cumbersome reservation system for group tours and FITs at the national parks. This meeting was held under the auspices of the Western States Tourism Policy Council. Schluter attended yet another follow-up meeting of the Policy Council in Rapid City, South Dakota, in late June at which point an issues paper developed by IITA on all of the matters impacting tour operators was presented.
The draft document, which can be viewed here (please attach) covered the matters of the Commercial Use Authorization (CUA) fees and reservations system modification, offering an analysis, projected impacts, suggested recommendations for successful changes, and best practices for future performance standards in the proposals.
In addition to offering the issues paper, IITA was able to enlist the support of the American Bus Association, International Motorcoach Group, National Tour Association, Student and Youth Travel Association, and United States Tour Operation Association, thereby unifying the industry on these issues to try and solve a dilemma impacting all of their collective membership.
Schluter reported that Cassidy, who also attended the Rapid City meeting and several state travel directors who are members of WSTPC were impressed that IITA had assembled the paper so quickly and unified the industry on the issues. Cassidy also recommended that the best practices section be sent directly to Interior Secretary Ryan Zinke as a separate document.
While this is still a work in progress, it is an illustration of a focused effort of an informed and strategic approach to address policies adversely impacting inbound group travel in an effective and meaningful way.
Any experienced observer of Capitol Hill advocacy efforts would give IITA an A for its work on this matters to date. More follow up will take place at the IITA retreat in Sarasota, Florida on August 3-4.
Will New Trade Policies Impact Inbound Tourism?
June 21, 2018
By Steve Richer, DC correspondent
In the past two weeks, new protectionist trade policies have prompted an international response from several targeted countries whose reactions were further compounded by related steps and comments by President Trump at the recent G-7 meeting in Canada.
This is being written during a trip to two travel industry events in China, via an air route through two major Canadian cities. There has been no shortage of news coverage to absorb on both the G-7 meeting and the newly announced trade policies with their accompanying increase in tariff protection (at least in theory) for U.S. goods.
The first news encountered was a front-page editorial in Canada’s National Post on June 12, “Time to Get Tough Against Trump Tactics–Conditions in Canada ripe for a Boycott America Backlash,” describing a unanimous vote of the Canadian Parliament condemning the recent characterization by President Trump of Prime Minister Justin Trudeau as someone with limited integrity. In the context of that vote, there were editorial suggestions to avoid purchasing any products or services from the U.S..
The editorial stated that there actually was a trade surplus for the United States with Canada, our biggest trading partner, thereby questioning the basis for the tariffs. The editorial piece urging this boycott in the National Post did not cite tourism specifically as one way to express displeasure, but it is hard to imagine at least some Canadians not coming to that decision. Canada is our top overall inbound market.
Here in China, the June 18 edition of China Daily, the global Chinese newspaper printed in English in both China and the United States with a worldwide daily circulation of 900,000, featured a new reciprocal tariff on $50 billion of U.S. goods levied by President Xi Jinping in a front-page story, “Tariffs to backfire, experts warn US.” The article was subtitled “Actions ‘make it more difficult’ to sell ‘Made in America’ products.” Again, tourism was not specifically cited, but it anecdotally came up in numerous conversations with the Chinese travel industry at the first industry event of the week held in Beijing.
The same issue of China Daily ran another front-page editorial titled, “New levies on $50B in goods to show Washington policy’s price,” suggesting that U.S. companies will be hurt, not helped, by the tariffs with a resulting loss of jobs and economic downturn. Whether that prediction turns out to be true, remains to be seen, but the entire discussion of protectionist trade policies is not helpful to tourism prospects. A further complication are reports that U.S. visas are now suddenly more difficult to obtain for Chinese travelers, another challenge for inbound operators who are working in this market. China and the United Kingdom are vying for the top overseas market to the U.S. in the most recent travel indices.
Combine these reports with other reactions to the new trade policies from the European Union, Mexico, India, and other smaller markets and there is a need to focus on support for the work of Brand USA, its message of welcome to all visitors to the United States, and any policy changes that further affect world opinion on the desirability of travel to America.
Luckily, a broad coalition from the Koch brothers and US Chamber of Commerce to free trade advocates in both political parties in Congress are speaking out against these policies and impolitic personal comments.
Inbound operators should take several steps back from the politics, but watch the reactions carefully so that business of keeping the flow of international visitors is steady and growing. To do otherwise, is to ignore the front-page reporting and editorials reflecting world opinion at a time when inbound travel could be at risk.
NOTE: These concerns are being heard throughout the industry. IITA invites our members to share what they are hearing or what their concerns are, as well as what they’re doing to alleviate these negative perceptions of the U.S. Contact IITA at Headquarters@iinboundtravel.org.
IPW Sends Strong “Welcome to the United States” Message
June 7, 2018
By Steve Richer, DC correspondent
The major theme of the recently concluded IPW held in Denver, May 19-23, was that everyone is welcome to visit America.
In the biggest functions, face to face appointment meetings, and the overall remarks to the delegates by leaders such as US Travel President Roger Dow and Brand USA President Chris Thompson, this message was constantly the main talking point to convince the buyers to go back to their respective countries and motivate their customers to visit America.
In the face of one of the only declining tourism market shares of increasing global travel numbers, the United States is taking concrete steps to put out this message in its advertising, media relations, and industry relations around the globe. Brand USA with its 30 offices worldwide is taking the lead on this with the private sector and key destination marketing organizations from the state and local level falling in step with them.
The new IMAX film, “America’s Musical Journey,” sponsored by Brand USA, for example, reinforces this welcome by showing the diversity of America, its music genres, and both its performers and audiences. Music transcends political boundaries and cultures and therefore is an easy way to translate this welcome into action by creating a comfortable feeling for prospective visitors.
International inbound operators reported being very busy at IPW with the normal volume of international buyers within the over 6000 attendees. Feedback includes that international visitors do not perceive a lack of enthusiasm from the American public to have them as guests anywhere within the United States, so the welcome message has credibility on the level of interacting with the American public.
In this sense, the person to person sales efforts by inbound operators who are communicating with the international buyer community need to be constantly reinforcing the welcome message, as it is difficult to know when the next decree on modifications of international trade agreements or some other political decision will cause a new dust up in the global markets. As this is being written, as an example, the United Nations Human Rights Council is condemning the detention to children being removed from their parents at the U. S. border when entry is either illegal or seeking asylum.
It would be fair to say that prospective visitors do follow news from the United States probably more than Americans pay attention to international news and that this awareness can generate hesitancy to visit without all of the welcome messaging being in place. It also has to counter some of the other perceptions about coming to America resulting from political rhetoric and government actions, such as the child detention cited above, which can impact visitation attitudes.
The interaction between buyers and sellers at IPW seemed very normal, enthusiastic, and productive with international inbound operators having had strong appointments which were a cause for optimism. It is nevertheless a time of changing attitudes, so diligence in keeping this message in the forefront will serve operators, the industry, and the national economy very well.
U.S. Market Share Drop Creates Focus for IPW
May 10, 2018
By Steve Richer, DC correspondent
In a report just released by the United Nations World Tourism Organization, United States market share of world tourism is projected to fall below 6 percent for the first time in 20 years. During the last two decades, visitors to the United States peaked at 7.75 percent in 1999 when world arrivals were only 626 million.
With the growth of world tourism projected to be 1.282 billion for 2017, U. S. market share has fallen to a projected 5.92 percent, a drop of 1.83 percent of world tourism, which translates into 23.6 percent of the previous high or 23.46 million fewer visitors than would have been the case had market share been the same.
With a projected 75 million arrivals in the report for 2017, the market share loss would have put the total at over 98 million, close to the 100 million arrival goal set by President Obama.
According to the UNWTO, total arrivals peaked at 77.5 million in 2015 and dropped by 2.5 million by 2017, making the United States one of only two top twenty destinations to see a decrease in those two years. The other one is Turkey.
As was previously discussed, lots of reasons have been cited for this decline, including the strong U.S. dollar, changes in visa policy, political comments, and policies seen as unpopular in other parts of the world. In 2017, the U. S. withdrawal from the Paris Climate Accords was one such policy matter. This week’s decision by President Trump regarding the Iran nuclear treaty, which is supported by the United Kingdom, France, Germany, European Union, Russia, and China, may also impact number of potential visitors to the U.S.. However, if there is such response, it might take two years to validate it.
All of this leads to the critical role face to face discussions will play with the major tour operators from around the world who generate the bulk of tourism to the United States, when close to 3000 such buyers arrive in Denver May 19-23 for IPW.
International inbound operators in particular must piggyback on the “everyone is welcome to the United States” message being promoted worldwide by Brand USA. In conjunction with that simple message, inbound operators should also focus on key elements such as the warmth and openness of the American people is still the same, enhanced security measures also protect our visitors, and more and more key destinations and attractions are becoming better prepared for international visitors.
On the latter point, it was the case twenty years ago that international visitors focused on five states–California, Florida, Hawai’i, Nevada, and New York–which captured a majority of those tourists. Today it takes approximately twenty states to reach a majority of the visits, meaning that more destinations are prepared, visible in international markets, and growing the impact from international tourism.
International inbound operators are encouraged to share these message points, but also to listen to the feedback from their international business partners. Making it possible for the International Inbound Travel Association to have fresh information on what is stimulating inbound visitation and what is curtailing it will be very critical to any advocacy efforts in the coming weeks and months.
If there is any opportunity to reverse the trends in gross arrivals and the accompanying loss in market share, effective sales and marketing, as well as informed advocacy will be critical. Everyone knows that there will be a lot of new faces in Congress in 2019, whether there are changes in control in the House, Senate, both, or not. With all the retirements and members running for other offices, it will give the travel industry a chance to improve the numbers for the United States.
Come prepared with a national message, your best listening skills, and your sales pitch at IPW 2018 for its 50th anniversary and a reversal in market share trends!
See you in Denver!
View from Mexico
April 26, 2018
By Steve Richer, DC correspondent
On April 15th to 18th, more than 10,000 exhibitors and buyers converged on the beach resort town of Mazatlan in the State of Sinoloa, Mexico, for the annual national gathering of the travel industry attending the 2018 edition of Tianguis Turistico, the trade show for both inbound and domestic travel.
For an American participant, this might be IPW on steroids. In addition to the strong presence of tour operators, attractions, local destination marketers, and other services in huge state pavilions, there were also separate areas in the expanded convention center for national hotel chains, airlines, outbound tour operators, cruise lines, and other national industry services.
Additional characteristics of this event are the elements not usually associated with U.S. shows-at least not to the same degree. These included full meals served at lunch time by most state pavilions, alcoholic drinks, costumed characters wandering the trade show floor, dancers, musicians, cultural objects, and even souvenirs, either for free or for sale.
The importance of this show to U.S. inbound operators relates to the current circumstances between the U.S. and Mexico, and how it impacts U.S. inbound tourism numbers. From 2015 to 2017, Mexican arrivals were down about 7 percent, despite the relative health of the Mexican economy. Various causes have been attributed to this trend, including a strong U.S. dollar and political rhetoric focused on Mexico.
The vibrancy of Tianguis is a good reflection of the health of the Mexican travel industry and the strength of the Mexican marketplace. Outbound operators, such as giant Best Day, are still generating massive numbers of travelers to the United States and the vast majority of Mexicans still want to travel to the U.S.
While there are certainly a lot of comments by Mexican travel industry leaders about the tension in the bilateral relationship between the two governments, it is also apparent that there is very little concern about relations with individuals in the U.S. directly. As a result, it is likely that additional efforts to attract Mexican travelers will pay off handsomely.
Happily, Brand USA is fully aware of this anomaly and is making significant efforts in Mexico through its in-country marketing efforts and welcoming messages to the Mexican travel industry.
Special efforts have been directed through media visits and other on-site promotions. Chris Thompson, president and CEO of Brand USA, will be making an additional presentation and extend a renewed invitation to North American travel industry leaders, including Mexicans, at a key tourism meeting in the Cancun area in early May.
The message that Mexicans are welcome to visit the United States, however, needs to be reinforced as much as possible.
Fortunately, inbound operators will have an excellent chance to do so in May when Mexican delegates are part of the 6,000 attendees at IPW in Denver. Mexico is still number two in overall arrivals to the United States and needs to be engaged by face-to-face industry efforts to regain a positive trend.
It is therefore recommended that inbound operators seek out Mexican tour operators at IPW to support the welcoming message, whether doing so at formal appointment sessions or encounters at social events. Candid conversations will underscore the sincere welcome and give Mexican tour operators renewed energy in selling the United States as a top destination easily accessible to their customers.
U.S. Inbound Tourism Drops in 2017, One of Only Two Countries to See Declines
March 29, 2018
By Steve Richer, DC correspondent
In 2017, the United States saw a decline in global tourism market share from 13.6 percent in 2015 to 11.9 percent after a period of growth following the passage of the Travel Promotion Act and the establishment of Brand USA.
Initially, travel industry leaders looked at the downturn as stemming from a combination of factors, including the strong dollar, limited air access, and growing challenges involving travel access to the U.S. Some mention of visa restrictions on seven primarily Muslim nations established by an executive order issued by President Trump was described in 2017 to have had limited impact on the numbers.
All of that changed last week when Roger Dow, president of U. S. Travel, appeared on Bloomberg Radio’s “Politics, Policy, Power, and Law” and stated that the newly announced tariffs against China could have additional impact on the international inbound tourism decline, restrict the economic engine of the $2.1 trillion travel industry, and reduce its contribution to the international trade equation.
U.S. Travel had already established the “Visit U.S. Coalition,” an ad hoc focused group of 10 major trade associations, to make additional efforts to reverse the decline in inbound visitors. The overall value of travel and the importance of Brand USA were key elements of industry discussions with Congress during Destination Capitol Hill, at which IITA was well represented.
Interestingly, only two countries within the top 20 national destinations saw a decline in international arrivals since 2015. Turkey was down 6.7 percent and the U. S. was off 6 percent. Meanwhile, Canada was up 21.2 percent over the same period, giving many observers a comparative analysis from which to conclude that political comments was encouraging travelers to opt for other choices seen to be more welcoming.
Brand USA is concentrating on putting out enhanced welcoming messages and will be making the case that everyone is welcome in America. This will be its focus at IPW, when 6,000 attendees gather next month in Denver, including most of the key sellers of American travel across the globe.
This will be a big challenge, as the U.S. lost market share in nine of the top 10 source countries for international arrivals from 2015 to 2017. South Korea was the only source of inbound travel where the U.S. did not lose market shar—and that share remained flat.
Countries where the U.S. lost market share of international travelers included: Brazil down 25 percent; France down21 percent; Australia, India, and the United Kingdom, all with declines of 14 percent; Italy with 11 percent less market share; Germany down 10 percent; Japan with market share loss of 5 percent; and China with a decline of 2 percent.
China is the dominant market for immediate accelerated growth, but opportunities for growing market share of international visitors may be challenged by political sparring and recent tariff announcements by President Trump. What happens in the China market should be watched closely for the remainder of 2018.
International inbound tour operators are encouraged to track any changes in market demand and share any insight with fellow IITA members in Denver. We look forward to a dynamic dialogue at that time!
IITA Makes Headway at Destination Capitol Hill
March 29, 2018
By Steve Richer, DC correspondent
A delegation of IITA leaders had extra impact in Washington last week when they attended Destination Capitol Hill, the annual travel industry legislative fly-in event.
In addition to sharing concerns on international access to America, open skies, the national park infrastructure backlog, funding for airports and transportation, and the continuation of funding for Brand USA and its marketing efforts, the IITA delegation discussed high park fees at peak season in various top national parks, the challenge of getting confirmed group reservations in a timely manner, the use of a lottery system for bus tours by some parks, and support for the continuation of public/ private partnerships started under the National Parks Centennial Act.
The delegation was led by IITA Board Chair Gary Schluter of Colorado, Executive Director Lisa Simon, Petra Hackworth of Travel Oregon and Board Member Gerrit De Vos of New York, who chairs the IITA Advocacy Committee. Washington Representative Steve Richer accompanied them to various meetings which were held in addition to the Congressional ones scheduled by state.
US Travel organized one day of appointments with members of the Senate and House of Representatives or their staffs on March 22. All IITA delegates participated in those appointments, adding their specific messages, but the other meetings were even more impactful for IITA’s priority focus on national parks.
Even with the federal government closed due to snow on March 21, the group had a key meeting with Michelle Lane, Majority Staff, Senate Committee on Energy and Natural Resources, which had a heavy focus on the vagaries on how CUAs (Commercial Use Authorizations) are employed.
A variety of other issues, from changing fees to parking to finding a permanent legislative funding solution to the infrastructure backlog. were reviewed as well, making for a very successful meeting!
On March 22, the group met with Christine Williamson, National Parks Fee Manager, to give input and gain perspective on changing national park fees. This was also a highly productive meeting.
That afternoon was a meeting with Terry Camp, Majority Staff, House Natural Resources Committee, where the second discussion on key legislation affecting national parks was held with the people who actually “prepare the sausage.”
IITA went the extra mile by seeking out committee staff to get to the people most focused on our story, to hear what is being implemented and how it impacts inbound tourism.
Who knows–after these briefings, IITA could find our organization represented on a witness list the next time these issues are the subject of a Congressional hearing!