UK Visits off 4% in 2017: Is it Brexit, Trump, or Currency?
According to the numbers in the latest monthly report from the UK’s Office for National Statistics (ONS) on preliminary figures for overseas travel by UK residents, it seems as if the combination of Brexit anxiety, an anemic performance by the British pound on international currency markets and a distaste for U.S. President Donald Trump seems to be guaranteeing that 2017 is going to be a lost year for growth for the USA’s largest overseas source market, the UK.
Released before the Thanksgiving Holiday in the U.S., the ONS report, which covers international travel departures for the peak travel month of August, shows that:
- In August 2017, UK departures to North America—usually, about 90 percent of North American traffic visits the U.S.—were 520,000 (vs. 543,000 in April 2016), which is down 3 percent from a year ago.
- For the latest three months, total traffic to North America was 1,210,000 (vs. 1,231,000 in 2016), a decline of 2 percent from last year.
- Year to date for 2017, North American arrivals reached 2,580,000 (vs. 2,679,000 YTD in 2016), a number that is off 4 percent year-on-year vs. 2016.
Below is a table we’ve prepared which tracks monthly UK arrivals in North America over a five-year window.
These Numbers are no Surprise: Such a disheartening accounting is hardly a huge surprise, with the August figures coming—as they did—following the recent World Travel Market during which a number of reports revealed that more British travelers than usual were forgoing long-haul travel in favor of close-in holidays of shorter duration because of a UK pound that seems to be the victim of fatigue as the country’s citizens await closure of discussions surrounding the withdrawal of the UK from the European Union—a process that is schedule to be completed in early 2019. In the meantime, the British pound has yet to recover fully from the hit it took in the immediate wake of the June 23, 2016 vote in which UK voters approved a referendum to exit the EU. The graph below shows why the USA has been a costly expenditure for UK holiday makers.
Source: Xe.com
And Trump Doesn’t Help the Outlook: The British travel trade journal, TTG reported last week that the average room rate at President Donald Trump’s 13 Trump-branded hotels in the U.S. had fallen, year-over-year, at all but one of the properties, by up to 63 percent. Analysis by FairFX , a London-based firm that specializes in currency cards and international transfers, showed that a standard double room at Trump Las Vegas in January 2017 prior to Trump’s inauguration was priced at £637 ($850) but one year later, a two-night break in January is being offered for on offer for £237 ($316).
TTG subsequently asked its readership—comprised mostly of travel agents and other travel trade professionals—whether they would stay in a Trump hotel. Eighty-seven percent replied “no,” stating that they did not want to support Donald Trump or any of his businesses. Only Just 12 percent said yes, indicating that “it was just a hotel and politics has nothing to do with it.”
FairFX cautioned that other factors may be involved, such as currency exchange rates (i.e., a strong U.S. dollar), pointing out that the falling prices were suggestive of a widespread fall in demand.
Students Generating Almost 3 Million Arrivals a Year—50% from China and India
Chinese Students as a Group Would be a Top 25 Overseas Source Market: The just released Open Doors Report on International Educational Exchange for 2017, issued by the Institute of International Education (IIE), shows that 1.079 million students came to the United States during the recently completed 2016-2017 school year, an increase of more than five percent over the previous school year.
So large, in fact, is the student segment of Chinese visitors to the United States that, were its more than 350,000 students/visitors tallied as a separate entity, it would be a Top 25 overseas inbound source market—at about the same level as Denmark and Chile, which are Visa Waiver Program countries.
The implications for the inbound tourism market are significant. Students usually have at least their parents—and, possibly, members of their extended family—accompany them on their trips to the United States. Or, family members and friends visit them at least once during the school year. This suggests that the student-driven market might generate well over 3 million or more arrivals to the USA annually.
Another factor worth noting is that the top three source markets for international students—China, India and South Korea—have been strong growth markets during the past decade. The following table lists the Top 25 source markets for students coming to the United States.
Top Places of Origin of International Students in the United States
Note: The Institute of International Education (IIE) has conducted an annual census of international students in the U.S. since its founding in 1919. Known as the Open Doors Report since 1954, and supported by the Bureau of Educational and Cultural Affairs of the U.S. Department of State since 1972, the report provides detailed data on student flows into and out of the U.S. For more information, visit http://www.iie.org/opendoors.
Where they go to School: California, by far, hosts more international students (nearly 150,000) than any other state. The top cities for attracting international students are New York, Los Angeles and Boston, respectively, each of which has two universities with substantial international student populations. The following two tables detail the Top 10 states for international students in the U.S., as well as the Top 20 universities for international student populations.
Top U.S. States Hosting International Students
(State, Number of Students for Past Two School Years, and % Change)
Top U.S. Institutions Hosting International Students 2016/2017
(University, Location and Number of Students)
Their Families Have Deep Pockets: Three out of five international students in the United States are funded by their families and themselves, suggesting that the students, as well as their families, have sufficient resources to travel to and within the USA.
International Students in the United States:
Primary Source of Funding
(Sources of Funding, Number of Students and % of Total)
NAJ’s RTO Summit West Introduces “Buy-The-Minute” Luncheon Sponsorships
Receptive Tour Operator of the Week
A little more than 15 years old, JBS Group Inc., a U.S. hotel booking agency whose international clientele consists of most countries in Asia, with China being its main focus—has grown considerably over a short period of time. With its online reservation system and a knowledgeable U.S. multi-lingual customer service team, JBS is able to provide online reservation confirmations, direct contact with hotels, and a quick turnaround response—within 48 working hour—for all requested bookings. To better serve its Chinese tour operators, JBS works directly with hotels in popular cities such as Los Angeles, Las Vegas, San Francisco, San Diego, New York, Washington, D.C. and Chicago.
Germany: Three Operators Differ on Dimensions of the Trump Slump One Year Later
While conclusive hard data which might illustrate Donald Trump’s impact on travel to the USA are still difficult to come by, there is more evidence that, one year after his Nov. 8, 2016 election as U.S. president, his policies and his rhetoric have turned off overseas travelers in some key markets (the UK in particular) while anecdotal evidence suggests that it is having little effect in other markets, such as Germany. The latest developments:
The recent World Travel Market was the setting for the release of survey results showing that UK travel executives said that 40 percent of them do not think that the U.S. is a good place to business with for as long as Trump is president. The figure was one of the findings in the World Travel Market London 2017 Industry Report.
In the survey, when presented with the statement “With Donald Trump as president, America is a country to do business with,”
- 19 percent said that they strongly disagreed;
- 21 percent disagreed slightly;
- Just 15 percent of respondents agreed with the statement and
- 44 percent neither agreed or disagreed.
The report also revealed that:
- 16 percent of travel industry executives said the Trump election has had the biggest impact on their organization in the past year; and
- 16 percent are adapting their marketing strategy as a result of the U.S. presidential election.
Meanwhile, another survey of 1,000 British holidaymakers found that
- 27 percent said they were less likely to visit the US in the future because of Trump’s presidency.
- At the same time, 67 percent said say it made no difference to their decision.
- 6 percent of holidaymakers said they would be more likely to visit the U.S. now Trump is in power.
Addressing the results of the two surveys, WTM London’s Paul Nelson said: “Since the announcement a year ago, on the last day of WTM London 2016, that Donald Trump had been voted in as the next US president, there has been concern and speculation about what effect a Trump presidency would have on tourism.”
He added, “Many of his policies, tweets and executive orders have proved controversial and have impacted on travel and tourism and there is now clear evidence that some people are being put off visiting the U.S. and some of travel’s top executives are concerned about the Trump effect on their businesses.”
German operators differ on impact: According to the German travel trade publication FVW, “Germans are continuing to go on holiday to the USA this year, countering fears they would stay away due to President Donald Trump’s controversial comments and policies.” Citing a report from the German Press Agency (DPA), FVW highlighted comments from some key German tour operators that suggested there is no cause for alarm over the impact of Trump.
—A spokeswoman for TUI , the largest tour operator in Germany (and in Europe) said the company saw a “fulminant” start to the 2017 summer season which then weakened during the year. Yet, U.S. bookings remain higher than last year overall. “Looking at our figures we cannot see any ‘Trump effect’. We had a strong USA year,” she said, adding that it was too early to make any forecasts for 2018.
—Jörn Kraußer, head of long-haul holidays for DER Touristik, which claims to be the country’s leader in long-haul travel, said his company is seeing good demand for USA holidays in winter 2017/18, noting, “We have a single-digit increase for our brands Dertour and Meier’s Weltreisen. Summer 2018 is also well booked. So we cannot observe any influence of Donald Trump’s presidency on booking decisions … Customers are interested above all in what they get for their travel budget. The holiday price and the exchange rate play a much bigger role than politics or the behavior of the president.”
—Fabio Negro, North American product manager for FTI, indicated that the company is very satisfied with the summer 2017 season and currently has a double-digit rise in bookings for next summer, commenting, “We cannot see any slump in demand for USA trips and therefore no great Trump effect.”
However …
—Tilo Krause-Dünow, owner of the North American holiday specialist, Canusa Touristik, put it this way: “With our efforts to promote the USA emotionally positively, we are unfortunately left standing without the help of the White House.” Krause-Dünow said that he heard doubts from customers at the start of this year but this changed over the last few months, observing, “In our experience, Germans still want to go to New York, San Francisco, Hawaii, Miami and the National Parks, and experience the beaches and a lot more.” At the same time, he added, Canada had much higher double-digit growth in visitor numbers this year, suggesting, “That will continue for Canada in 2018 while we expect USA demand at the level of 2017.”
—Timo Kohlenberg, president and CEO of America Unlimited, was direct in his opinion. “Yes, the Trump Effect could be felt,” he said. His company’s U.S. business dropped by 5-10 percent at different phases this year, while Canada had profited. However, U.S. booking picked up again recently, suggesting that, in fact, there might even be a positive Trump effect now. “The initial euphoria and belief in Trump’s political aims have disappeared into thin air and the euro has strengthened well against the dollar,” he observed. And, as a consequence, U.S. trips are cheaper again.
Up in the Air—New Air Service
—United Airlines launched its longest route from Los Angeles (LAX) on October 27th—a flight of more than 8,750 miles to Singapore. The daily flight is United’s second non-stop route to Singapore from the U.S. after San Francisco.
—Hainan Airlines began service last month from Chengdu to New York/JFK The new service operates three times per week.
—WOW Air, a low-fare carrier based in Iceland, will begin service from New York/JFK to Europe this spring, with the inaugural flight scheduled for April 26, 2018. Passengers will be able to travel from JFK to Reykjavik daily throughout the summer. In addition, the airline is extending service out of Newark Liberty International Airport (EWR) with 13 flights per week starting May 2018.
—United Airlines has begun a new flight New York/Newark to Buenos Aires Ezeiza, a daily connection that will face no direct competition. United already offers daily flights to Ezeiza from Houston Intercontinental.
—El Al has resumed flights from Tel Aviv to Miami, a route last served in August 2008, with a four times weekly service. Launched on Nov. 1st, the four-times-a-week route is the only non-stop connection between Florida and Israel. Miami becomes the airline’s fifth route in the U.S. and the service faces no direct competition.
—Aer Lingus is adding another U.S. route next year with the launch of Dublin-Seattle service that will operate four times a week. The new flight will launch on May 18, 2018. It will be the carrier’s 12th transatlantic route from Dublin. Passengers clear U.S. customs and immigration at Dublin before the transatlantic flight. Seattle will be the third city on the US west coast for Aer Lingus, joining San Francisco and Los Angeles in its network.
—Aer Lingus will also begin a service to Philadelphia on March 25. The latest addition means Aer Lingus has launched 10 new transatlantic services from Dublin since 2014.
At a Glance: Alexandria, Virginia
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HODGE PODGE: Shifts, Shakeups and Occasional Shaftings in the Tour and Travel Industry
Cancun, Mexico-based Best Day Travel Group has announced the appointment of Enrique Salas as executive vice president. A holder of Master’s degrees from the Stevens Institute of Technologies and George Washington University, Salas has held senior executive positions in different multinational companies such as AT & T and Lucent Technologies. Salas succeeds Rafael Durand, who has left Best Day.
In the UK, Graham Balmforth, national sales manager of Super Break, is retiring after 23 years at the short breaks operator. Balmforth joined Super Break in January 1995 from Wallace Arnold Tours, will leave the business in January. His departure follows that of sales director Jane Atkins in March and key account manager Claire Dutton in September, both of whom joined Shearings Holidays.
Megan Ryburn has left her post as tourism sales manager at New Orleans Plantation Country to join the Louisiana Office of Tourism, where she will oversee domestic sales. Ryburn had been with Plantation Country for five-and-a-half years.
At TUI Germany, the company’s commercial managing director, Oliver Beck, will be leaving at the beginning of December after seven years. In addition to his position as managing director, Beck was also the director for the sales strategy for TUI Germany. The separation takes place on Beck’s “own desire,” the company said.
Kathleen Conaway has been named domestic and international group sales director at VisitPittsburgh.
Intrepid Group, a global adventure travel company with offices in Australia, the USA and Canada has promoted Leigh Barnes (left) to the role of chief purpose officer, and Michael Edwards to the role of chief growth officer. Edwards, currently Intrepid’s regional director in Europe, Middle East and Asia, will move into the role of chief growth officer, effective January 1, 2018, based in London, UK. Barnes, Intrepid’s director of North America, will take on the role of chief purpose officer July 1, 2018, returning to Intrepid’s global headquarters in Melbourne, Australia.
Danny Liedka has been named president and CEO of Visit Syracuse. Liedka, a former mayor of East Syracuse who is now closing out his final term as an Onondaga County (N.Y.) legislator, is a former on-air television commentator for Time Warner Cable Sports, Beg East Network and ESPN U. He was also a game radio host for Syracuse University Basketball on Clear Channel Radio.
JTA Travel has appointed Dave Green as head of tour operations. Green, who joins from Holiday Malta Company / Belleair Holidays where he was a director, has had a 30-year career in travel, having held different senior positions within the Thomas Cook Group.
Esteban Velásquez has left his position as CEO of Cancun, Mexico-based PriceTravel after having served in the post for four-and-a-half years. His decision follows as a merger (PriceTravel is merging with the Colombian OTA, Los Tiquetes Más Baratos) and an impending ownership change, which has resulted in a different direction for the Cancun, Mexico-based OTA. PriceTravel had earlier brought on former Expedia executive Pablo Castro as directing of marketing and service to suppliers.
