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The United States is continuing to sink on the radar of places foreigners want to visit, even as the world’s tourism pie continues to grow. It’s a problem that has the potential to deeply affect the future health of the lodging business stateside as the Federal Government continues to put up blockades for those that want to spend their vacations here.
And while it’s understandable the Government is trying to protect Americans with certain in-place policies, the overall effect of a restrictive visitor visa policy is turning off potential vacationers to the idea of an American getaway.
At a luncheon last week sponsored by the Big Apple chapter of the Hospitality, Sales and Marketing Association International, a representative of the Travel Industry Association discussed the challenges faced by American lodging companies.
According to Rick Webster, the group’s VP of Public Affairs there is no existing travel Brand USA. Instead it’s left to other jurisdictions such as New York City to publicize visiting the States. In fact, there entire budget is $4 million, which is earmarked solely for the development of a website.
To put that into perspective, countries such as Australia, Mexico and Greece are investing significantly more promoting their countries overseas, investing $113.3 million, $149.2 million and $151.4 million annually respectively. Even China is investing $60 million while Canada is spending $58.5 million.
“America is losing in global competition,” warned Webster. “We have virtually no presence as a nation in the global marketplace.”
An onerous visa process is also discouraging foreigners from coming here. Webster said, noting this issue has reached ‘crisis’ proportions. The way it works now is that countries that are not part of the visa waiver program – there are currently 27 – those wanting to visit must take part in an in-person interview to get approval. Not only do people have to sometimes travel long distances to take the interview, they may have to wait months to get the appointment. In India, the wait can be as long as six months, for example, and the refusal rate can be as high as 70 percent. Oh yeah, they also have to shell out $100 for the interview, even if rejected.
The result is less people are interested in visiting the United States. According to the TIA, travel from overseas has declined 17 percent since 2001. “People are traveling overseas but are simply not coming here in the same numbers. “We are in a very bad situation,” said Webster.
The TIA notes the United States’ share of tourists coming from the United Kingdom is down 22 percent, 11 percent from Japan, France is down 38 percent, Brazil is down 21 percent and South Korea is down 21 percent.
The group estimates that the United States lost 58.6 arrivals between 2000 and 2005, which equates to a loss of $93.9 billion in tourism spending, $15.6 billion in taxes, 194,000 jobs and $25.9 billion in payroll. Since 2000, the United States’ global share is collapsing; an estimated 35 percent drop since 1992. In 2000 the States had a 7.5 percent share of the global business but declined to 6.1 percent in 2006.
“A lot of lawmakers don’t get that we need a [marketing] message so people think of the United States as a top of mind destination. Lets get people interested in coming here and show them they are welcome and wanted,” said Webster.
He said the problem is Washington legislators are not informed on the tourism issue. While elected officials are involved in a variety of complex issues, he urged HSMAI members to become more politically involved. “We are a white hat industry; you have nothing to be afraid of. We have no natural enemies, but what we have is apathy of the industry at times,” said Webster.
Also discussed at the event was the state of the New York City hotel market. According to Sean Hennessey, an analyst with Lodging Investment Advisers, New York is still a bargain in some ways such as total trip cost. “Clearly the case is where room rates are compared to a lot of other U.S. markets we can’t claim it’s a bargain, but we are a lot less than other cities around the world,” said Hennesey.
He noted there are no signs of weakness for the remainder of the year and for 2008. However, he estimates that some “material signs of concern” will develop in 2009. He urged attendees to manage customer relationships in anticipation of leaner times.
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