This Week's Herman Trend Alert

Leadership in Normal 2.0

  The Herman Trend Alert

November 2, 2005

Rate of Visitors to US Decreasing

Overseas travel to the United States this year is expected to be 15 percent below the peak year of 2000, according to the Travel Industry Association (TIA). The number of international visitors should have been above 60 million this year, instead of an expected 46 million.

Since visitors from other countries added over $93 billion to the US economy in 2004, this decrease has a significant economic impact. Hotels, airlines and related businesses need a strong flow of international tourists; the reduced traffic slows their recovery. Damage from hurricanes in tourist areas---and forecasts of more serious storms---also depresses the international travel market.

Observers suggest that other factors influence the number of visitors as well. Some attribute the decline to anti-Americanism sentiment because of the war in Iraq. Tourism officials focus even more on the “hassle factor” associated with new visa applications and security procedures. Increased security measures at airports also have a negative effect on all travel, domestic as well as international.

In addition, concerned travel industry leaders report that aggressive campaigns by other countries to lure tourists have had a significant impact. Some industry executives believe that the government needs to do more to improve the image of the United States to attract foreign visitors. With all the demands on government dollars, US tourism companies and their trade associations will see the need to invest more of their own resources to rebuild and strengthen their global position. Expect to see more lobbying in Washington to ease entry restrictions for visitors.

The number of visa applications from foreign travelers has dropped by one-third since the terrorist attacks of September 11, 2001. Whether the motivations are fear, political feelings about the US, or other more attractive alternatives, the reduced travel flow has far reaching effects.

One side effect is fewer foreign students applying to US colleges. Universities are feeling the pinch and will step up recruitment with more attractive educational packages. Some university educators are reluctantly turning their recruitment sights to domestic candidates, opening more seats to students who might not have met the standards when demand was higher.

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