USA Tourism: Striking a Balance

The barrage of x-rays, baggage checks, and new visa requirements may have prevented another terrorist attack on the US airline industry, but it has done little to make ordinary tourists feel welcome. Now the head of the World Travel and Tourism Council (WTTC) has warned that the US risks being overtaken by China as a tourist destination, unless it starts streamlining its security checks and giving the industry more support.

In a manifesto for the US tourist industry, published on October 3rd, the WTTC warned that in the past five years alone, tourist arrivals to the US have dropped 7% to 49m, while the rest of the world enjoyed a 17% rise in international arrivals during the same period. "I never have seen such a robust travel and tourism economy all over the world," said Jean-Claude Baumgarten, president of the WTTC. "Why should the travel and tourism economy in the States go downward while the rest of the world's is expanding?"

Part of the blame lies with the 9/11 terrorist attacks in 2001, which pushed arrivals down sharply. The Economist Intelligence Unit projects that US arrivals will only regain their pre-9/11 levels this year, when they edge above 51m once again. But the WTTC says that the attacks themselves were only part of the problem: the slump was then exacerbated by the introduction of tougher visa and security regulations, which have been deterring travellers from entering the US.

Combined with a lack of coordinated marketing, these have slowed the growth in US tourism sharply, at a time when the international industry has resumed its traditional rapid growth. With Chinese arrivals growing particularly rapidly, the US risks being overtaken as the world's third most popular tourist destination after France and Spain, warns the WTTC. Indeed, the Economist Intelligence Unit forecasts that China will overtake the US as early as 2008.

The news is not all bad, with the US remaining the world's biggest tourism earner. The Economist Intelligence Unit projects total international tourist receipts for the US of nearly US$90bn in 2006, 70% more than those of second-placed Spain (US$53bn). The WTTC says that this translates into total demand for tourism at US$1,653bn for 2006, and forecasts that demand will grow by 3.4% a year to US$2,908bn by 2016. Nevertheless, this is slower growth than elsewhere in the world and well short of the US potential, warns the WTTC.

The WTTC's warnings are echoed by the Travel Industry Association of America, which has been lobbying hard for the industry to be given more support. The association calculates that the US economy has lost an average of US$20bn a year in tourist revenues over the past 15 years, with the decline of the industry pushing the US share of international arrivals to an all-time low. Recapturing just one percentage point of market share could create 153,000 jobs.

The war on tourists?

Given the threat of terrorism, the WTTC and other tourist organisations do not go so far as to recommend dropping some of the safety barriers that have been put in place (as Irish airline Ryanair has suggested in the UK). After all, another attack on the scale of 9/11 would be highly damaging for the industry. But the WTTC does recommend streamlining the vetting process to ease the delays at airports and passport offices.

Efforts in this direction have been hampered by the ongoing row between the EU and the US over passenger data. In May, a 2004 agreement to swap details was declared illegal by the European Court of Justice, forcing both sides to debate the issue once again. But a new deal has been held up by US demands to keep the data for longer than the EU deems necessary ? or legal. The hope is that talks will be concluded this week, after a crucial deadline was missed at the weekend.

More progress has been made on the issue of biometric passports

These are all important issues, says the WTTC, but they are not the only ones. The organisation argues that, beyond making entry easier for tourists, the US also needs to encourage them by improving the country's marketing. Currently, most marketing is left to individual states or to the private sector, as DisneyLand and its ilk try to lure in the crowds. Unlike most countries, the US has only a small national tourism organisation, with a budget of just US$5.7m a year. That compares with US$75m a year for Spain's tourist board, and US$80m for Australia's.

That needs to change, argues the WTTC, and not just for economic reasons. Encouraging tourism is also important tool in foreign policy, helping to improve a country's image abroad. It is a point US officials would do well to ponder, as they contemplate their next steps in fighting international terrorism.

SOURCE: Industry Briefing

Copyright: IndustryWire -- 10/6/06

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