Travel Group Urges White House, Congress to Take Steps to Boost Industry
WASHINGTON — The travel industry has made progress in recovering from the depths of the coronavirus pandemic, but a full recovery won’t be achieved until the last COVID restrictions are lifted, including restrictions on travel from China, representatives of the U.S. Travel Association said on Thursday.
The briefing with reporters in the Lincoln Library of Washington’s Waldorf Astoria Hotel was the association’s first quarterly report of the year, and the organization’s president and CEO, Geoff Freeman, wasted no time before highlighting the importance to … well … just about every aspect of the U.S. economy.
“This industry, the travel industry, really is every industry,” Freeman said during his opening remarks.
“Our getting people from point A to point B is integral to manufacturing, it is integral to education, it is integral to policymaking. In fact, what we learned during the pandemic is that this industry is integral to just about everything we do,” he said.
Chris Nassetta, president and CEO of Hilton Hotels and incoming national chair of the U.S. Travel Association, sought to underscore that point by offering some statistics “to provide people with a sense of the size and scope of what we’re talking about.”
He noted that in 2021, the industry accounted for some 12 million jobs, down from almost 17 million just prior to the onset of the pandemic.
“Today, travel and tourism and hospitality account for one-in-20 jobs, down from one-in-10 jobs in 2019. At the same time, leisure and hospitality was responsible for nearly 30% of all new jobs created in 2022 and we currently represent about 1.5% of the nation’s gross domestic product,” he said.
Assessing the industry in terms of “tailwinds” and “headwinds,” Nassetta, who officially assumes his new role with the association later this month, said a number of the former are helping the travel and hospitality sector.
“Consumers continue to have a significant amount of disposable income,” he said, citing one example. “Savings are $1.5 trillion higher than they were before COVID and people have a burning desire to get out and get on with their lives.
“At the same time, we also saw very strong trends in terms of the recovery of business travel and they continued into the fourth quarter of last year,” Nassetta continued. “What’s interesting is it’s been driven by small- and medium-sized enterprises, where some of the bigger corporations have lagged behind.”
The other big tailwind the Hilton Hotel chief mentioned was international travel, though he said, “I think we’re only at the tip of the iceberg in that regard.
“Though we saw a big increase in international travel at the end of last year, I think we’re nowhere near where we were before the pandemic and there are huge opportunities in that environment.
“For example, prior to the pandemic, the world was visited by over 200 million Chinese travelers, and that pretty much went to zero. Today, China is about where the U.S. was a year ago in terms of recovering from the pandemic. It will be interesting to see what happens as they get through their situation.”
While Nassetta ranked uncertainty around the Federal Reserve’s management of the economic recovery as the number one headwind buffeting the travel sector, there were a number of other policy issues that could make or break the travel industry’s long-term health.
One both he and Freeman spoke on at length was the excessive wait times that many international travelers are currently experiencing — sometimes extending to the hundreds of days, another is the vaccine requirements the U.S. continues to impose on foreign visitors, and finally there are concerns that as the funding from the bipartisan infrastructure bill is distributed, it may not adequately address the improvements needed to the nation’s travel infrastructure.
When it comes to international, inbound travel into the U.S., Freeman said the association estimates that in 2022 “we only welcomed about 63% of what we welcomed in 2019, and spending was only about 53% of what we saw four years ago — and when you adjust for inflation, that’s nearly an $8 billion difference.”
“And while, as Chris mentioned, domestic travel is up, depending on the market, we’re still only about 70% to 80% of where we were before the pandemic, so clearly we need to work in partnership with others to figure out how to fully revive the industry,” he said.
Freeman said when it comes to visa wait times to get into the U.S., waits that extend into the hundreds of days are essentially a travel ban.
“What you’re telling these travelers is to go somewhere else. We don’t want your business,” he said. “And many of these travelers, as you can imagine, are going to choose to visit markets that want their business — and that’s a threat to the United States.
“Last year, we lost about $5 billion in travel spending due to visa delays. This year, if we don’t get a handle on the problem, the association estimates we’ll lose about $7 billion,” he added.
Freeman said the State Department has made some strides in addressing the issue, “But we need to do better.”
He went on to say he also believes it’s high time that the Biden administration eliminate its vaccine requirements on international travelers.
“This may have been a necessary policy during the pandemic — and we supported it — but we are now the only country in the world that has vaccine requirements for international business travelers,” he said. “We’re hopeful that now that the Biden administration has announced it is ending emergency measures in May that this is a signal the vaccine requirement will also be eliminated.
“But why wait? The administration has the power, right now, to remove this requirement, and we would certainly welcome it doing so,” Freeman said.
When it comes to China, Freeman said the U.S. share of the nation’s 200 million travelers was about 3 million people annually.
“That said, the United States was still the number one spending market for Chinese travelers,” he said. “Obviously, those travelers are impacted by the factors we’ve already talked about. Our question for the administration is, ‘What is our plan for bringing those travelers back?’”
The other issue Freeman and Nassetta addressed was the domestic travel experience.
“Every one of us knows that air travel in the United States is safe,” Freeman said. “We also know the experience is remarkably inefficient. Fifty percent of travelers who responded anonymously to a recent poll rated their air travel experience as subpar.”
The survey was conducted before thousands of flights across the U.S. were canceled or delayed on Jan. 11 due to a breakdown in a system that offers safety information to pilots.
Since then, thousands of additional flights have been canceled or delayed due to winter weather, including 2,000 flights on Wednesday alone.
“All of this is unacceptable,” Freeman said. “Fortunately, we have an opportunity to address many of the issues here in 2023, with the pending FAA reauthorization bill.
“The reality is, we have far fewer air traffic controllers today than we had 10 years ago, and we’re losing more pilots. The FAA reauthorization is an opportunity for Congress to invest in the sector and to invest in the technology that we need to turn these things around.
“The other thing we need to recognize is that some of the factors that diminish the consumer’s air travel experience have nothing to do with the weather, the skids or air traffic control,” he said.
“For instance, in recent years there has been a surge in Customs and Border Patrol Officers at our nation’s airports. … And while it’s understandable, it has also resulted in increased wait times at our airports. This is another issue we can address through the reauthorization.”
But even if the association got everything it wanted in the FAA reauthorization bill, Freeman said the legislation isn’t going to solve all of the travel industry’s problems.
“That’s why we’re forming a commission to look at the issue as a whole, while asking ‘What does the air travel experience in the future look like?’ ‘How can we ensure travelers traverse airports more effectively?’ ‘And how do we reach a point where the kind of rampant delays and cancellations we’ve witnessed in recent months are a thing of the past?’
“This is the same approach we took 10 years ago when we as an industry successfully advocated for a TSA pre-check program, and we’re confident that we’ll be able to figure out ways in which to strengthen this industry while benefiting the U.S. economy,” Freeman said.