The Obama effect

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ATN looks at the impact the new US presidency will make on the country's ailing inbound tourism industry.

The inauguration of America's 44th president and its first-ever African-American leader, Barack Obama on January 20 is set to bring about many changes, not only in the US, but across the globe, given this nation's super-power status.

Many are waiting with baited breath to see if Obama will follow through on his promises, which could see phenomenal changes to the world in which we live given his commitments to tackling issues such as the current recession, global warming and conflict in the Middle East.

Hopes are high and for the first time in many years, the US is regarded as a friend by many, as opposed to a foe.

This fresh perception will have repercussions on the travel industry at large.

Firstly, travel trade professionals worldwide believe that America's new ‘friendly' image will encourage more tourists to travel there.

In addition, the US travel trade hopes that Obama's administration will put measures in place to help inbound visitor numbers reach their pre-9/11 highs.

Figures from the US Department of Commerce, the Office of Travel and Tourism Industries and the US Travel Association reveal there were 35 million more people around the world travelling overseas in 2007 than in 2000, but not only did the US fail to capture any of these new travellers, it lost two million overseas visitors.

In 2000, 122 million people travelled overseas, including the 26 million who visited the US and in 2007, 157 million people travelled overseas, 24 million of whom visited the US.

In other words, global overseas travel grew 28% between 2000 and 2007, while overseas travel to the US declined by 8%.

Further research by the same sources reveals that visitor numbers to the US from most of its key source markets slumped between 2000 and 2007, which could be attributed to many factors including the 9/11 terrorist attacks and the subsequent visa-tightening processes enforced, which made it so difficult for some nationalities to visit that many didn't bother.

In addition, even residents of countries subject to a joint visa-waiver programme with the US complained of being treated with suspicion and even contempt when entering the country.

As a result, while long-haul travel from the UK increased by 32% between 2000 and 2007, travel from the UK to the US decreased by 4% over the same period.

Other European markets such as Germany, France and the Netherlands followed similar patterns and visitor numbers from Japan and Brazil to the US also dipped.

However, the country did witness good arrivals increases from Australia, China, India, Russia, South Korea and Spain.

US trade plea

The US Travel Association (formerly the Travel Industry Association or TIA) has made it clear to the US Government that more needs to be done to entice international travellers to the country's shores.

In a letter to US Senate leaders, the association stressed the views of economists that "increasing international travel to the United States represents one of the country's best opportunities to stimulate broad-based economic growth".

The letter notes that a 1% increase in US market share of world international travel would result in 8.8 million extra visitors to the country and more than $15 billion new economic activity.

The association also quotes statistics from Oxford Economics projecting that a $100 million promotion programme for travel would yield "hundreds of thousands of new visitors" and $2.5 billion in visitor spending.

The Travel Promotion Act, which is pending approval from the US Senate, would create a not-for-profit entity, called the Corporation for Travel Promotion, which would be responsible for the international promotion of the US as well as distribution of travel information to foreign visitors, a report by Euromonitor International Americas travel and tourism manager Michelle Grant reveals.

Its budget could range from $10 million to $100 million, funded by private donations and a $10 fee levied on visitors who do not pay the $131 required for a US visa.

Obama is a co-sponsor of the act and has endorsed overseas destination advertising if it proves to offer a return on investment.

Grant is confident that even if this act is not passed immediately, government investment in transportation infrastructure is likely to remain a top priority.

"President Obama has expressed his support to modernise the air traffic control system in the US and to develop high speed rail networks," she says.

"He proposed the creation of a National Infrastructure Reinvestment Bank to supplement federal funding of these projects."

Grant's recent report, The Impact of the New US Government on the Travel Industry, also reveals that the US Visa Wavier Program (VWP) is expected to continue to expand after seven new countries (Czech Republic, Hungary, Estonia, Latvia, Lithuania, Slovak Republic and South Korea) joined the scheme in October 2008.

"Obama has been a strong supporter of the VWP and, as Chicago has a large Polish community, it is expected that he'll work closely with the Department of Homeland Security to help Poland make it onto the list," says Grant.

"He has also mentioned that countries such as Greece and Brazil should be included in the programme."

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