Young foreigners say no to NYC - Trump's travel ban leads to drop in bookings

As published in Crain's New York Business on March 14, 2017

New York has been bracing for a falloff in foreign tourism—and the business that comes with it—ever since the Trump administration's chaotically executed travel ban in late January spooked potential visitors to the United States. But it's not just big-spending shoppers who might be avoiding Gotham.

Hotel managers and others are reporting that student and youth groups have been canceling trips or delaying plans in response to the administration's travel policy and the unwelcoming atmosphere critics say it has fostered. Those groups' second thoughts could have consequences not just for tourism dollars but also for America's image in the world as well as for cultural exchanges with other countries.

"I've got trepidations about what we're going to be facing within the millennial market," said Russ Hedge, chief executive of Hostelling International USA. "My hunch is we're going to continue to see an impact."

The nonprofit organization, which runs youth hostels across the country, reported that five international groups canceled their stay after President Donald Trump signed a Jan. 27 executive order barring travelers from seven Muslim-majority countries.

One of the biggest cancellations was at its New York Hostel on Amsterdam Avenue at West 103rd Street. International youth group World Merit, based in England, had booked between 800 and 1,000 beds over 10 days, starting in late August. The reservations were in conjunction with WorldMerit360, an annual event that draws young people from around the world to tackle the United Nations' sustainable development goals. But World Merit has decided to hold it in the United Kingdom instead.

"My understanding is they were concerned about being welcome in the U.S., especially people traveling on dual-citizenship passports," Hedge said. "Part of the group might have been able to enter the country while the other part couldn't."

In an email over the weekend, Chris Arnold, the founder and chief executive of World Merit, wrote that the “general tone and messaging” of the administration post-inauguration also played a role in the decision, with 62% of the membership voting to move the event to another country.

“The travel ban, take two, has only created more uncertainty, and I think everyone is now feeling that we made the right decision,” he wrote.

Image problem

Trump's revised travel ban, issued last week after federal courts blocked the first one, bars visitors from six of the original seven nations and, unlike the first order, allows visa and green card holders into the country. Although its critics have challenged the president's assertion that it is needed to protect the country from terrorists, the new executive order has not caused as much of an uproar as the first one.

The first one, however, may have done lasting damage to America's role as a travel destination for young people. "I was over at two hostel conferences, in Dublin and Amsterdam, four weeks ago," Hedge said. "At that time, the 18- to 30-year-olds were trying to figure out what America was about and whether they wanted to visit."

The Alliance for International Exchange, an advocacy group in Washington, D.C., is reporting steep declines in the number of foreign students interested in living for a year with an American family. Most of the group's 18 member organizations that sponsor high school student exchanges are reporting a 30% to 50% drop in applications from Western Europe for next year's programs. Those students are primarily from France, Germany and Sweden.

"They are not from countries affected by the travel ban," said Ilir Zherka, the alliance's executive director. "But their parents are concerned about the reception of their children in the U.S.—and that [foreign students] are not as welcome here as they have been in the past."

Zherka pointed out that the students are usually dropped off by their parents, who tend to then sightsee and spend money on hotels and restaurants. "Not only does it hurt the economy," he said of the steep declines, "it hurts relations between countries."

Other exchange programs include college students who obtain J1 visas to work at hotels and restaurants in the New York area during the summer. Zherka said it was too early to know if those numbers will be down as well.

The indications from other student visitors are not promising.

The Marrakech Hotel, a budget-oriented establishment on the Upper West Side that gets about 15% of its business from international youth and student groups, said many of them are holding back on their travel plans.

"Groups are hesitant to lock in blocks of rooms," said Keith Acker, general manager of the hotel, which is on Broadway near West 103rd Street. As with World Merit, school-trip organizers are worried about some members' being denied entry for having been born in one of the countries singled out by the president.

Acker said he doesn't see Trump's second executive order as an improvement. "It's still preventing travelers from coming in," he said. "A lot of groups are from Denmark, and some of the students could have moved there from one of the [targeted] countries."

He’s also worried about what an inhospitable message can do to his business. About 70% of the Marrakech's guests are foreign travelers.

"The long-term effect will be negative views of the United States," he said. Foreign tourists, he predicted, will choose "more welcoming tourist destinations."