The impact of the strengthening U.S. dollar and perceptions that the U.S. is rolling up the welcome mat to international visitors were topics of discussion at the recent Hunter Hotel Investment Conference.
ATLANTA—Hotel companies with properties in gateway cities, such as New York City, Miami and Los Angeles, likely would take the biggest, and earliest, hit from any ban on inbound travel to the United States, hotel executives said.
A revised executive order, signed by President Donald Trump and delayed by a federal court ruling that questions its constitutionality, would block travel to the U.S. from six Muslim-majority countries. What concerns some hoteliers more than the ban itself is the perception it could create around the world that the U.S. is unwelcoming to international travelers.
If that’s the message being sent, the effects could ripple “throughout the entire country,” said Mitch Patel, president and CEO of Vision Hospitality Group.
Other factors are at play in dissuading international travel to the U.S., perhaps most notably the strength of the dollar, which is making it more expensive to visit from other countries.
Hotel News Now caught up with hotel executives during the Hunter Hotel Investment Conference to get their thoughts on the topic. We asked: “International travel spending is expected to fall in the U.S. because of the strong dollar and recent travel policies; how do you think this will affect your company?”
Vision Hospitality Group
Mitch Patel, president and CEO of Vision Hospitality Group
“Directly, it’s not going to be as huge of an impact to our company as it would be others. Our presence is not in New York City, Miami, (Los Angeles), San Francisco and Seattle and the larger markets, where they do have a tremendous amount of international travelers.
“I just got back from New York City. The hotel I was staying at, it looked like 70% to 80% of the people staying there were international travelers, so obviously hotel markets like that would get impacted.
The markets we’re in, it shouldn’t have as much impact. But you know what, we’ve become a German community in Chattanooga, Tennessee. It’s the North America headquarters of Volkswagen—not the corporate headquarters but the plant where they build the Passat and the new SUVs—so we get a lot of travel from Germany.
“There is that trickle-down effect. When the New York Citys and the Miamis and the Seattles get affected, it absolutely ripples throughout the entire country.
“When you visit this country for the first time, what’s on your bucket list? NYC maybe, Miami, San Francisco, but now you’re on your fifth trip. They may want to go to Nashville; they may want to go hike up in the Appalachian Mountains and really immerse themselves into these other communities they’re reading about, they’re hearing about.
“I think that travel opportunity is only going to grow. Even in the communities, the smaller secondary and tertiary communities, we’re starting to see that. We’ll see these tour groups that will come into these smaller markets, and they’re taking these tours and seeing New York and Los Angeles is America, but then there’s this real homeland America as well, and there’s people that want to see that.
Don’t we want to do that when we go to Spain? We go to Madrid or Barcelona, but then we want to go out into the countryside and see those villages. That could potentially get affected.
“I think that they’re smart people hopefully making these policies. They will realize that it affects our economy and affects this industry, (which) is very important to this country. I mean the amount of people we employ is amazing; the economic impact that our industry has is amazing. I hope that they realize that and make the right decision.”
Mary Beth Cutshall,
Mary Beth Cutshall, SVP and chief business development officer, Hospitality Ventures Management Group
“It depends on where your hotels are located. Gateway cities will possibly have more risk of impact. It’s not only travelers from banned countries—there are many around the globe who are not happy with our policy and choosing to bring their money somewhere else. We’re starting to see that translate into clicks for potential bookings—they’re going down a little. I do think there are travelers out there wondering how (a travel ban) might translate to them, so they might be apprehensive and choose another place to go.
“Plus, it’s expensive to travel here now with the dollar strength. To me, that translates to a potential impact for our industry. Some areas are more sensitive to that and it’s something we all need to watch. We’ve made an effort as an industry to make it easier for international travelers to come to our country to travel, and now that’s reversing a bit.”
Beau Benton, president, LBA Hospitality
“We’ve seen (some impact) in our south Florida and central Florida markets with some of the economic troubles in Brazil and some other countries, even before you had the strengthening dollar. And those markets are very critical to success. But I think all of these things are things that happen slowly over time, and as long as we can anticipate, and things happen at somewhat of a slowing pace, then we can deal with it as an industry. The travel ban in most of our markets is not as big of an issue, but I’m sure in more of the gateway cities, the Miamis, the New Yorks, the LAs, that’s definitely an area of concern.”