Will Donald Trump scare tourists away from America? Judging from the latest US spending data, he might already be doing so.
Since Mr Trump’s election in November, businesses that rely on tourism have become increasingly concerned that the president’s "America First" policies – including bans on travel from selected Muslim-majority countries and extra vetting of visa applicants – will make the country less attractive as a destination for all kinds of visitors. Some organisations and companies have even reported a decrease in bookings.
Now the decline is beginning to appear in economic statistics. The Bureau of Economic Analysis estimates that in the three months to the end of February, spending by foreigners on travel in the US amounted to US$44 billion, down by about 10.2 per cent from the three months to the end of October, before Mr Trump won the election. The decline, while small compared with what happened after the terrorist attacks of September 11, 2001, was the largest during a comparable period since the recession of 2008 and 2009.
To be sure, such short-term moves often reverse themselves, and Mr Trump isn’t the only factor that could affect tourism. The US dollar, for example, gained about 2 per cent against the currencies of the country’s trading partners between October and February, making travel to the US a bit more expensive. That said, the historical correlation between tourism and the dollar’s exchange rate is not very strong. And of course it stands to reason that if the US makes foreigners feel unwelcome, they won’t want to visit and spend money.
The effect on tourism illustrates the broader contradictions in Mr Trump’s version of "economic nationalism". Repelling foreigners might benefit US workers by reducing competition for jobs in the short term. Ultimately, it might also mean less work.
A case in point comes from Hawaii. Some travel officials in the state say they are concerned about the Trump administration’s effect on travel. Reene Ho-Phang, Hawaii Tourism China’s managing director, said the executive order limiting travel from specific regions of the Middle East and Africa may not be aimed at Asia, but it creates unease for Chinese visitors who fear travel restrictions could worsen.
Against this backdrop, the Honolulu Star-Advertiser reported last week that more than 2,000 of the 6,000 distributors of the personal care products company Nu Skin in China and Hong Kong who were planning to attend a conference in Hawaii were not able to attend because of visa trouble. Next month’s convention of the direct marketing company was to be Hawaii’s largest incentive travel group from China.* Bloomberg News, with additional reporting by the Associated Press.