THE U.S. SUPREME Court has allowed elements of President Trump’s travel restrictions on immigrants from six majority Muslim countries to take effect. The ban has spurred predictions it could cool travel to the U.S. overall, and some hotel industry leaders are concerned about the impact of the restrictions and other Trump policies, such as his recent reversal of parts of the U.S. normalization of relations with Cuba.
While the Supreme Court still plans to review Trumps travel ban, in a slip opinion on June 26 it partially lifted the suspension of the ban’s implementation placed on it by federal courts. The court ruled that travelers from Iran, Libya, Somalia, Sudan, Syria and Yemen “who lack any bona fide relationship with a person or entity in the United States” would be banned from entry under the terms of Trump’s order. “Today’s unanimous Supreme Court decision is a clear victory for our national security. It allows the travel suspension for the six terror-prone countries and the refugee suspension to become largely effective,” Trump said in a statement.
Industry could choke on restrictions
However, many in the travel and hospitality industry have been concerned the ban would dampen international visits to the U.S. In May, the Global Business Travel Association’s “uncertainty forecast” for 2017 predicted the travel ban, along with other geopolitical concerns, could lead to a $1.3-billion loss in overall travel-related spending in the U.S. On June 5, Loews Hotels & Co. Chairman and CEO Jonathan Tisch told attendees at the 39th Annual NYU International Hospitality Industry Investment Conference the new policies could lead to another “Lost Decade” for the travel industry. He was referring the period after the 9/11 terrorist attacks during which the U.S. lost more than $600 billion in traveler spending and 467,000 jobs related to the industry.
“Ending this ten-year slump required a united industry effort to push for pro-travel policies,” Tisch said. “We learned some valuable lessons that we need to put into action again today.”
Tisch said members of the industry should educate new political leaders on the importance of travel on U.S. economic growth, jobs and the trade deficit. He said travel generated $246 billion in U.S. exports last year, reducing America’s trade deficit by $90 billion. “Travel drives the U.S. economy,” Tisch said. “It’s our job to engage the new leadership in Washington to make sure they understand the role we can play in achieving our shared economic goals. If the Trump administration really wants to cut the trade deficit, they’ll need our help.”
Tisch also defended Brand USA, the public-private partnership established by the May 2011 Travel Promotion Act to promote the United States as a travel destination. Trump’s proposed budget could eliminate funding for the program, Tisch said, even though he said that is “completely at odds with the administration’s own economic goals.”
“Eliminating Brand USA will increase the federal deficit by $510 million over three years. And by reducing international travel to the U.S., it will also widen America’s trade deficit,” Tisch said.
According to Brand USA citing a recent study by research firm Oxford Economics, the partnership’s programs brought 4.3 million incremental international visitors to the U.S. over the past four years, injecting $29.5 billion into the economy.
The Cuba connection
Another Trump policy that affects international travel is his June 16 announcement of new limitations on the normalization of relations with Cuba implemented under Obama. The new policy seeks to prevent U.S. companies from making economic investments that benefit the Cuban military’s Grupo de Administración Empresarial, which the administration claims controls “virtually every profitable sector of the [Cuban] economy.”
Trump’s new policies also limit travel for non-academic educational purposes to groups while prohibiting self-directed individual travel allowed by Obama (with the exception of Cuban-Americans traveling to visit family). The policies also state that “further improvements in the United States-Cuba relationship will depend entirely on the Cuban government’s willingness to improve the lives of the Cuban people, including through promoting the rule of law, respecting human rights, and taking concrete steps to foster political and economic freedoms.”
The Treasury and Commerce Departments have been directed to issue new regulations under the changed policies by mid-July, and the policy changes will not take effect until those regulations are finalized, a process that could take several months. Meanwhile, some hotel brands, including Marriott International, have already made plans to open new properties in the formerly isolated Cuba.
Last year, Starwood Hotels, now owned by Marriott, announced the Hotel Inglaterra and the Hotel Santa Isabel in Havana would join its Luxury Collection. Also, the company operates Hotel Quinta Avenida as a Four Points by Sheraton. The company made the moves specifically in response to Obama’s opening of relations with Cuba, said Kenneth Siegel, then Starwood’s chief administrative officer and general counsel. The company expected the new normalization of relations would lead to 110 daily roundtrip flights to the country and would “vastly increase the number of Americans traveling to Cuba.”
On June 15, Marriott International Chief Executive Arne Sorenson released a statement urging the Trump administration to improve relations with Cuba and to see tourism as a tool for doing so, according to Reuters. “It would be exceedingly disappointing to see the progress that has been made in the last two years halted and reversed by the administration,” Sorenson said in an emailed statement.
Spokespeople for Marriott did not return calls seeking comment on how the company’s plans may be impacted by the policy change. However, Marriott has signed an agreement with Grupo de Turismo Gaviota regarding the rebranding of the Hotel Quinta Avenida. Grupo de Turismo Gaviota, like the Grupo de Administración Empresarial, is controlled by the Cuban military, according to The Cuban History.com.