The Global Business Travel Association is projecting a loss of more than $1.3 billion in travel expenditures for 2017, based on global uncertainty and policies that could curb inbound travel to the United States. Among those expenditures are hotels, food, rental cars and money that inbound travelers would typically spend shopping in the U.S. The projection, dubbed the "uncertainty forecast" by GBTA, was based on first-quarter ticketing data from Airlines Reporting Corp., publicly available travel data, and GBTA's economic research and models.
"There is no question that uncertainty is bad for business travel and bad for the global economy," wrote GBTA executive director and COO Michael McCormick, left, in a blog post. Included in the $1.3 billion is a $250 million loss in spending from would-be travelers from Europe and the Middle East. "The even greater concern is that the longer-term impact on business travel will become even larger as companies begin to host meetings and events in other destinations," added McCormick. A survey of GBTA's European members in early March revealed that 45 percent would be less inclined to plan meetings and events in the U.S. based on the travel-related executive orders issued by President Trump.
The numbers projected by GBTA could have a far-reaching impact if they come to pass. The forecast projects a resulting loss of nearly $300 million to the U.S. GDP, a potential loss of 4,200 jobs in the tourism and hospitality industries, and resulting drops of $170 million in wages and $70 million in collected taxes.
While the numbers are indeed projections, McCormick pointed out that such hits due to public perception of government policy are not without precedent. A study from Visit Indy, Indianapolis' destination marketing organization, found that Indiana's religious-objections law might have cost the state $60 million in hotel profits and tax revenue, among other benefits, while an Associated Press analysis projected potential losses in North Carolina of more than $3.76 billion over 12 years as a result of the "bathroom bill," which the state recently repealed.
"As we await the verdict on a possible expansion of the electronics ban," wrote McCormick, "we have yet another uncertainty factor. While it is certainly different from the travel-ban executive orders, and there is no doubt that the electronics ban is based on a clear security threat, it is the cumulative impact of antitravel policies that leave the perception to many that the United States is closed for business. It goes without saying that GBTA strongly supports all efforts keep our skies safe, but we encourage TSA to pursue alternative options to effectively reduce the risk of terrorism.
"If it is in the best interest of security," McCormick continued, "business travelers are willing to comply with these types of measures; however, most business travelers would much rather accept a far more rigorous screening at the airport than to part with their devices."
McCormick estimates that expanding the electronics ban and not allowing business travelers to bring laptops aboard transatlantic flights would result in corporate productivity losses of about $900 million. "We urge the Trump administration to consider the important lasting impact of business travel and enact policies going forward that preserve both our national security AND our economy for the future," McCormick concluded.