Foreign visitors to US spent about $150bn this year, supporting nearly 2 million jobs for locals
This holiday season, millions of tourists visited the US Given the economic benefits they bring, the US should be working overtime to welcome their friends and families next year.
An estimated 60 million international visitors arrived in the US in 2011, spending about $150bn, supporting nearly 2 million American jobs and accounting for more than one-quarter of US service exports. From taxi fares to tchotchke purchases, tourists account for a big chunk of economic activity. States from New York (the most popular travel destination) to Colorado and Wyoming (both of which have a high concentration of jobs in tourism) depend on visitors’ dollars.
The good news for Americans is that the US is still the world’s biggest tourist destination by dollar value. (The US ranks second after France as the world’s most popular destination.) After a fall in 2009, tourist arrivals climbed in 2010 and 2011. Still, as groups such as the US Travel Association point out, the US could be doing much better. Although global long-haul travel grew by 40 percent from 2000 to 2010, the US’s share of the market dropped from 17 percent to 12.4 percent. Even taking into account the US’s declining share of the global economy, that’s a steep dip.
One problem is the US visa bureaucracy, which proved unprepared to cope with the growth in demand for tourist and business visas. About 65 million Chinese, for example, are expected to go abroad this year, up 15 percent from 2010, when 800,000 Chinese visitors pumped $5bn into the US economy.
Chinese visa applicants, many of whom travel great distances to get to the US Embassy in Beijing or to one of four US consulates, must sometimes wait weeks for visa interviews. The same bottlenecks bedevil visa operations in other emerging markets, including Brazil and India.
A few sensible reforms could help break the logjams. These include inserting a corps of visa-adjudication officers in high- growth markets, creating video visa-interview centers for applicants who don’t live near a US consulate, and relaxing the requirement for in-person visa interviews. Happily, all three of these proposals were incorporated in the omnibus budget legislation that president Barack Obama signed last week.
Next on the agenda is an expansion of the Visa Waiver Program, which now enables tourists and business travelers from 36 countries to visit the US without a visa. To participate, countries must have a low refusal rate in granting nonimmigrant visas to US citizens, agree to beef up their passport security, and share law-enforcement and security data. When South Korea joined the program in 2008, the US market share of South Korean tourists jumped from 26 percent to 37 percent in 2010. Tourism receipts from South Korean visitors that year rose by $1.6bn over the average from the previous four years.
To expand the program, the Department of Homeland Security must be able to verify the departures of almost all foreign visitors who arrive by air. Yet the department has no reliable system to achieve that goal. For countries like Poland and Taiwan, which show the requisite declines in visa refusal rates, that’s not necessarily a big problem. But for less-developed countries like Brazil, India and China, many of whose citizens would like to reside permanently in the US, the problem is huge.
Anywhere from one-quarter to one-half of the 11 million illegal immigrants currently in the US overstayed their visas - without reliable departure data, it’s hard to tell exactly. To reduce that number, the Department of Homeland Security will have to not only match departures to arrivals, but also do a better job of tracking down those who are out of status. It should focus not on draconian enforcement but on finding those people most likely to threaten national security or public safety.
At the Republican debate on Dec 15 in Sioux City, Iowa, former Ambassador to China Jon Huntsman observed that the US’s share of tourism has declined: “This is an economic development opportunity, and we are missing it.”
We agree. Which is why during this busy travel week, we hope that Congress and the Obama administration are thinking about how to make next year’s holiday even busier for the tourism industry.
(This is a Bloomberg Views piece.)