The political climate has had a negative impact on business travel

Negative impact on business travel

Over the past several months there has been much consternation about the effect of an uncertain political climate on the global travel industry, particularly as concerns the united states.  The exit of Britain from the European union, the ban on travel from several Muslim-majority countries to the United States, the prohibition on laptops and tablets on flights from some middle-eastern airports and the Qatar boycott were all expected to negatively impact the American travel industry.

Part of this theory seemed to stem from a combination of research and surveys. For instance, the GBTA found that 45% of its European members indicated their company would be less willing to plan meetings and events in the United States due to the various executive orders and general perceptions of the new administration overseas.  

But now that we are well into the new administration’s tenure and more data is available the much talked about slump has failed to materialize. The U.S. Travel Association report recently found that far from declining, travel to the U.S. was up 6.6% over the same period last year based on hotel, government and airline data. In fact the U.S. travel industry has experienced more than 13 consecutive months of growth, confounding the doomsayers to produce some strong results across the industry.

“There is widespread talk of daunting challenges to the U.S. travel market — perception of the country abroad is mentioned most, but the strong dollar and slowing global economy are factors as well — yet the resilience of our sector continues to astound,” said U.S. Travel Association President Roger Dow in a recent statement.  He continued to say that “we cannot identify a loss. It's contrary to everything we've heard, but travel is in slightly better shape than it was a year ago. Everyone wants me to tell the story of the sky is falling, but for the travel industry, the sky is not falling”.

Individual sectors have also had good news. Hotel occupancy in the first five months remained high, and there is no evidence of slowdown in either domestic or international meetings in the U.S over the same period.  Chris Thompson, CEO of Brand USA noted that tour companies specializing in bringing foreign visitors to the United States are “not only holding year over year, but in many cases they’re having a record year”. In fact, available data indicates that not only has international travel failed to decline, but total numbers and spending seem to have improved slightly.

Many analysts believe this performance is due to global trends not connected with the political climate that are more determinative of industry success. A strong U.S. dollar, continuing economic stimulus in the developed world, growth in total global trade, improvements in the manufacturing sector and the enduring strength of emerging markets like China, India and Brazil are all identified as stabilizing factors.

Political factors such as the long term implications of the travel ban and the final terms of the British exit from the European Union remain potentially challenging the U.S travel industry. For the moment, however, the industry remains as robust and dynamic as ever.