For a president who advocates economic growth and ‘America First’ policies, Donald Trump sure seems to be going out of his way to dent the US tourism sector.

Analysts say tourists from the Middle East may consider other destinations

 

Analysts said the latest electronics ban on direct flights from 10 Middle Eastern airports to the US is likely to dampen Middle Eastern tourists’ sentiment towards travelling to America. The impact will likely be seen on leisure tourism arrivals to the US as visitors may start to look to other leisure destinations.

Earlier this week, the US announced it will introduce a ban on electronic devices larger than a cell phone for direct flights from airports in Dubai, Abu Dhabi, Doha, Cairo, Istanbul, Kuwait City, Jeddah, Riyadh, Amman and Casablanca.

The UK followed suit in introducing a similar ban on devices, though the UK ban did not include airports in the UAE, Qatar, Kuwait and Morocco. (It did, however, add Tunisia and Lebanon.)

“While we expect the ban to have less impact on essential business travels from the region to the US, other business travellers such as meeting/conference and incentive tourists are likely to defer or avoid their trips or divert their travel to other destinations,” said Rashid Aboobacker, associate director at TRI Consulting, a hospitality consultancy.

Leisure tourism

He added that “the ban is, however, likely to have a stronger impact on the leisure tourism arrivals to the US from the countries listed under the ban, which adds to the woes caused by the visa restrictions already in place and the increased profiling and ‘random’ security checks reported by many Muslim tourists.”

The electronics ban follows two earlier bans the Trump administration had introduced to bar citizens of seven Muslim-majority countries from entering the US. While both the US and the UK administrations cite national security as reason behind the bans, analysts believe the bans will turn many tourists away from the two countries.

“Based on US official data, the country received 1.3 million tourists (non-residents) from the Middle East in 2015, 3.5 per cent of the total inbound arrivals. The current ban is more likely to impact the US than the source markets as the tourists are likely to consider other destinations to spend their holidays,” Aboobacker said.

UK’s ban is much the same. Walk into any of London’s busiest landmarks or retailers, and many of the shoppers are Saudi Arabian, for instance. In 2016, Saudi Arabian visitors alone spent around $568 million (Dh20.8 billion) in the UK, according to data from research firm Euromonitor, while Egyptian visitors spent around $92 million.

Peter Morris, chief economist at Ascend Worldwide, pointed out that travellers tend to shift their choices whenever there are changes in price, time or convenience.

With the electronics ban, many tourists will try to avoid the inconvenience of checking in their devices by either not visiting the US or UK altogether, or flying indirectly via transits in Europe or Canada.

“Alternative tourism destinations are definitely a solution in the light of such deterrents. This phenomenon has been seen in Europe when North Africa became perceived as dangerous. For some passengers, the combination of visa issues and travel inconvenience to the US may well cause them to consider alternative options,” Morris said.

He added: “While business travellers will probably be more inclined to look at different routes or airlines as they often have to travel to particular destinations, the leisure tourist is much more likely to consider it not worth the bother and look elsewhere. Since this judgement will vary across markets, it is not easy to estimate just how big this might be, but it will be negative.”

Confusion for travellers

With the ban having just been announced a few days ago, travel agents said many visitors who have already booked flights to the US are not necessarily changing their plans yet but there’s been a lot of confusion.

Biju Nair, head of LuLu International Travel and Tourism in Abu Dhabi, said he has received plenty of questions from customers planning to visit the US, on what the ban means and how to comply with it, as well as whether the UK’s ban covers the UAE’s airports.

“If more and more restrictions are introduced on travel to US, be it the form of visas or the device ban, then there are chances to rethink about travelling there, or else use European carriers to travel there. It won’t be a good sign in the long run,” he said.

Long-term impact

In fact, New York City is likely to attract fewer tourists. According to figures from the city’s tourism promotional body, NYC & Company, New York is expecting a potential drop of 300,000 visitors since the executive order signed by Trump on the visa ban.

NYC & Co earlier this month said that the US President’s rhetoric is likely to discourage potential visitors who may be unsure what type of welcome they will receive.

Similarly, Euromonitor International revised down its forecast for arrivals to the US after Trump won the presidential race to 3.4 per cent from 3.6 per cent.

“Growth has been downgraded 0.5 per cent for 2017 for total arrivals. Looking at the US’ key source markets of Canada and Mexico, there has been a downgrading of forecast growth, from Mexico in particular, due to uncertainty surrounding immigration policies,” said Caroline Bremner, head of travel at Euromonitor.

She said that growth in expected arrivals to US from Canada in 2017 was downgraded to 1.8 per cent from 2.3 per cent if Trump hadn’t been president. For Mexico, the growth rate was revised to 2.2 per cent from 3.1 per cent.

But it’s not just inbound tourism to the US or the UK that will be impacted by the Trump administration’s rash decisions and the Brexit. Bremner said that a disorderly Brexit would have an “acute” impact on outbound travel from the UK, with a potential eight million outbound trips cancelled or postponed over 2016-2018 period.