Following Donald Trump’s re-election as US President, industry analysts are scrutinising the implications of his second term for them, and the travel and tourism sector is no exception.
Bookings down
The ramifications of US elections for travel and tourism tend to make themselves felt before any votes are cast, with a slowdown occuring in the period prior to and after the polls. Airlines Delta, United, and Jetblue were all anticipating an election lull, according to Pax Media, and big names including hotel chains such as Marriott International noted the period’s “meaningfully lower bookings”. Meanwhile car rental service Avis Budget Group told an earnings conference that during a national election “people tend to stay home.”
So the US travel sector, still the world’s most powerful according to the World Travel and Tourism Council, has already seen bookings and revenues dropping. And now that the election result is known, the “Trump factor” is being calculated into industry projections, with a predicted “negative 300 basis points in November and negative 100 basis points for the quarter” which Marriott’s CFO Kathleen Oberg pointed out is “double that of past election cycles.”
US avoidance?
Some operators have noted a tendency among tourists to avoid travel to or via the States due to Trump’s presence in the White House. Many foreign clients deliberately request intercontinental flights that do not connect through the United States, Pax has reported, as well as a disinclination from certain groups, such as LGTBQ+ travellers, to visit the US due to a perceived safety threat from Trump’s regime.
Border-related issues
Biden and Harris had worked with US Secretary of State Antony Blinken to improve visa application backlogs at the border, recruiting staff and introducing waivers, as well as issuing 11.5 million visas in fiscal year 2024, with visitor visas up 10% to 8.5 million year-on-year. The sector was predicted to hit a national target of 90 million visitors overall by 2026.
Under Trump however, border delays worsened due to increased screening and rejections of many countries flagged as “security concerns” by the President, making some fear the same will happen again. Making visa processing more bureaucratic and time-consuming increases uncertainty which negatively impacts would-be visitors travel plans – something that commentators say could prevent the US reaching its growth goals.
Travel bans
Another thing that increases uncertainty and puts potential visitors off their trips, affecting growth, is the likely introduction of travel bans on swathes of nations by Trump. In his first term, he put limits on entry for citizens of Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen. He has already signalled he has similar intentions for his second mandate. With a great deal of noise during Trump’s campaign about Haitian immigrants and others, many communities in the US and around the world will be waiting with baited breath before making travel plans for the USA. This again could affect the US’s ability to hit its 90 million target.
Another result of tighter immigration policies and fewer visa applications is pressure on the US employment market, with fewer candidates pushing up wages, increasing labour costs in aviation and hospitality.
Aviation regulations and competition
US flyers face higher air ticket costs than Europeans already, due to a number of factors, one of which is the mass consolidation of US airlines that has taken place over recent years, reducing competition and pushing prices up. Biden-Harris cracked down on such mergers, preventing both JetBlue and Spirit, and Northeast and American, from joining forces.
Biden-Harris also worked hard with the Department of Transport to make airlines more transparent and force them to respect customers’ rights, for example to accessible travel and to refunds in the case of service failure.
It is not yet clear which way Trump will lean on a forthcoming bill that would force more transparency from airlines, but he usually favours a non-interventionist approach to business.
Taxes and tariffs
Trump could well reduce taxes which could favour airlines, reducing costs and freeing up capital expenditure for investment, but the potential positive effect of this on the industry could be offset by two things.
Firstly, there is a risk Trump will remove government incentives for airline and hotel infrastructure projects. Secondly, it is likely the US will see another trade war through the introduction of protectionist tariffs, if Trump 2.0 pursues a similar diplomatic style to that adopted in his first term. China, poised as the world’s second biggest travel and tourism market, is set to take the upper hand in any such duel.
The green transition
Notoriously climate-sceptic, Trump pulled out of the Paris Climate Accord in his first term and does not believe in sustainability incentives. This means that airlines, working to reduce carbon emissions by investing in green transition solutions, could be hung out to dry by the removal of government subsidies, Skift reports. And in turn, that means progress towards decarbonisation will falter.
