Donald Trump’s Presidency and Predictions on Global Tourism
As Donald Trump prepares to become America’s 45th president, the question is posed: what impact will a Trump presidency have on tourism? That’s both in terms of Americans traveling overseas and foreign tourists coming here. In the short term, airlines and hotels are reporting a dramatic drop in load factors and occupancy. Some of this can be attributed to the uncertainty of any election year. But this year, the number of travelers from Mexico, Latin America, and the Middle East has dropped significantly.
On election day, Royal Jordanian Airlines actually ran an ad about discounted airfares that said, “Just in case he wins, travel to the U.S. while you’re still allowed to.” Donald Trump’s stunning victory over Hillary Clinton in the U.S. presidential election has sent shockwaves around the world. Global markets are predicting a colossal impact to global tourism.
Stock markets around the world took hits — the U.S. stock futures on the Dow Jones Industrial Average fell 5.1%, while stocks in London plunged over 4.3% before recovering some of the losses. The Mexican peso was one of the world’s hardest-hit currencies, tumbling 12% to a record low of 20.5708 to the dollar early Wednesday. And at 11:48 p.m. ET, the loonie was worth US$0.74119, according to XE.com. It lost more than a cent in early trading the day after the vote, falling to $0.768 for its biggest drop in 18 months.
So what does all this mean for travel and tourism? According to many experts, a Trump win is both a good and bad thing, depending on where you are in the world. The Telegraph in the UK says that a weaker dollar over the longer term could lead to cheaper holidays not only in America but around the world. Since oil is priced in U.S. dollars, this could mean a price drop in airfares and other transportation, while cruises – many of which are costed in dollars – can also see a dip in prices.
On the flip side, a Euromonitor paper said Trump’s America-centric platform, his threat to ban Muslims or residents of terrorism-afflicted countries and to build a wall between the U.S. and Mexico will have devastating consequences on the travel and tourism industry. It said that Mexico tourism, which is the second largest source market for inbound travellers to the U.S. behind only Canada, would be particularly hit, and that companies like Airbnb and Expedia, both of which rely heavily on the Mexican market, would be among those negatively affected. A Travelzoo poll taken before Trump’s victory found that 20% of Brits said they would not travel to the U.S. following a Trump win, and that although inbound tourism to the States would suffer, Canadian tourism would enjoy a boost.
Mr. Trump has not addressed tourism specifically, but on the campaign trail he has signaled a retrenchment from globalism. He has talked about the possibility of reversing course with Cuba, barring Muslims from entering the United States (though the Trump Hotels website is decidedly international, available in several languages, including Arabic), and building a wall along the border with Mexico. In his victory speech on Nov. 9, he said he planned to rebuild the nation’s infrastructure — including airports — and make it “second to none.”
Less than 24 hours after Mr. Trump’s unexpected victory, travel experts and economists were asked to try and read the tea leaves. Below, they offer some early thoughts about how Mr. Trump’s presidency might affect tourism, including foreign travel to the United States, Americans traveling abroad, access to Cuba, the cost of airfare, and, of course, Trump Hotels.
During Mr. Trump’s campaign, his eponymous hotel brand appeared to be in trouble. And when the family announced that a new hotel brand was in the works but that it would not use the Trump name, some companies speculated it was because the Trump brand was indeed tarnished. In May, Hipmunk, the travel comparison site, said that “while overall Hipmunk hotel bookings have been on the rise year-over-year, that has not been the case with bookings of Trump Hotels.” The share of Trump bookings on Hipmunk as a percent of total bookings was down 59 percent year over year.
But now that Mr. Trump will be the next president of the United States, things could be looking up.
“Winning could mitigate whatever damage had been done to the brand,” said Mr. Leff, suggesting that there may be a halo effect from the presidency — especially the idea of staying at a Trump hotel in the shadow of the White House. Suddenly, he said, the new Trump International Hotel, Washington D.C. is “the President’s hotel.”
Brand Keys, a customer loyalty research consultancy based in New York, seemed to underscore that notion in a report the day after the election, saying that Trump, “a brand that was once deemed toxic by many consumers is now seen as not only a safe option, but an emotionally desirable option.”
“We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals,” Mr. Trump said during his victory speech. “We’re going to rebuild our infrastructure, which will become, by the way, second to none. And we will put millions of our people to work as we rebuild it.”
That could generate jobs and help the economy. Exactly how that huge increase in spending — Mr. Trump has pledged to spend nearly $1 trillion on infrastructure — will be paid for is unclear, said Mr. Leff. Assuming Mr. Trump’s administration finds a way to make it happen (more recently he has suggested creating a federal infrastructure fund supported by government bonds), infrastructure projects still take years. So while there may be new roads and airports, this is a change that’s unlikely to happen in the near term. Change is one thing the industry can be sure of when Mr. Trump takes office.
It is said that “He could be one of the most travel-friendly presidents in modern history,” noting that Mr. Trump has long been part of the travel industry and was deeply involved in the marketing of the Trump Shuttle in its early days — experience that could he put to use thinking of ways to make the United States a more welcoming and appealing destination. Or Mr. Trump could be one of the most travel-unfriendly presidents. He has the potential to be at either end of the continuum.