Various outlets have been claiming that the U.S. tourism industry is experiencing a so-called “Trump Slump.” There is no doubt that President Trump’s rhetoric and his administration’s policies have had a negative impact on inbound tourism to the United States, with the “travel ban” being the most significant overall. But many observers have pointed out that it’s not all about Trump. This especially true for China.
2017’s tourism slump in the United States wasn’t all about Trump
Fundamentally, putting the blame for this drop in tourism all on Trump is short-sighted and counterproductive. Overall tourism dropped by 2.4 percent last year before Trump was elected. In fact, the drop in tourism from some regions last year was substantially larger last year compared to this year. For example, Western European arrivals fell by 6.7 percent in 2016 compared to 1.9 percent this year.
With China, the “Trump slump” is not as significant as with other source markets. There has even been speculation that Trump’s election actually stimulated increased interest in the United States as a destination in China.
By overstating the influence of the “Trump slump,” stakeholders risk focusing their attention on a factor they have little control over, i.e., the behavior of an extremely unpredictable and unstable executive branch and its head.
Despite a large drop across the board, Asian tourism to the United States remained steady
A key piece of information from the latest numbers from the U.S. National Travel and Tourism Office (NTTO) is that tourism from Asia fell by a much lower rate compared to other source markets. Total year-to-date overseas arrivals to the United States are down 4 percent according to the latest data from the NTTO. Asian arrivals were down only 0.8 percent in 2017, with arrivals from Western Europe, Eastern, Europe, and the Middle East down 1.8, 13.8, and 29.8 percent respectively.
While ostensibly, this isn’t good news for the U.S. tourism industry, it does illustrate that fundamentally Asian source markets, with China being the largest in terms of spending, are by far more stable and robust source markets for U.S. tourism stakeholders. Despite the downturn, this should be a source of optimism for the future of Chinese travel to the United States. Chinese travelers are still very clearly interested in the United States.
Of course, this doesn’t mean fthat stakeholders shouldn’t be concerned about the ongoing drop in tourism to the United States or the drop in Chinese tourism. The U.S. Travel Association is particularly concerned about the ongoing downturn. Moreover, the United States seems to be the only major destination in the world with a fall in Chinese arrivals.
The United States seemingly stands alone in 2017 among major destinations to experience a drop in Chinese arrivals
With demand for the United States as a destination remains relatively strong among Chinese travelers, how can the United States recover growth in Chinese tourism in 2018? Ultimately, the United States needs to be a more welcoming destination for Chinese tourists.
This has little with the political or social climate that has turned off tourists from Canada or Germany for which the “Trump slump” is a genuine phenomenon. Visa requirements are key. Other major destinations like Japan and Canada are making efforts to reduce visa requirements. Many other destinations are waving visa requirements for Chinese nationals altogether. These moves reduce the relative competitive advantage of U.S. tourism.
The slower improvement of flight availability between the United States and China is holding back growth
Flight availability is another factor that is putting the United States at a disadvantage. Britain has made substantial strides in promoting direct flights with China, which has been one factor that has resulted in considerable growth in Chinese tourism. Britain even signed an open skies agreement with China to facilitate this further. Australia is another destination that is experiencing rapid growth in Chinese tourism; an open skies agreement between Australia and China was reached last year.
The soonest the United States and China will finalize a similar agreement is likely 2019, this may help encourage long-term, steady growth of Chinese tourism to the United States. Regardless, more flights from more carriers to more destinations going forward will invariably help boost tourism to the United States.
Re-branding at a micro level may also help individual destinations. With Chinese tourists becoming ever more independent and hungry for holistic, unique travel experiences, the U.S. brand power is not in and of itself enough to set itself apart.
Finally, 2017 saw Chinese tourism growing in far-flung, less-conventional destinations like Morocco, Turkey, Egypt, and Finland. Efforts to brand individual American destinations as uniquely local experiences, separate from the larger national tourism brand that garner social capital among their peers back home may also help.