A “lose-lose” scenario for business travel
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Business travel and meetings industry organizations are taking stock of what’s next after a court ruling maintaining the suspension of U.S. President Donald Trump’s ban against travel into the United States from seven Muslim-majority countries.
The Washington Post reports that U.S. Court of Appeals for the 9th Circuit has ruled against lifting the suspension of the executive order. In a unanimous decision, the court rejected the Trump administration’s argument that the freeze on the ban should be lifted for national security reasons, but said that it was too early for them to render judgement on whether or not the policy was meant to disfavor Muslims.
In response to the ruling U.S. Travel Association President and CEO Roger Dow issued a statement recognizing the need to maintain national security, but warning that the order could have unintended consequences that hurt business and leisure travel to the United States.
«Over the past two weeks, our members have voiced their concerns about how an unintended consequence of this executive order could be a reduction in both international leisure and business travel to the United States,” Dow said. “Destinations large and small depend on these visitors to sustain local businesses and jobs.
«That said, we stand with the administration, Congress and law enforcement officials, as we all remain vigilant during an era of constantly changing global security dynamics,” Dow said. “As always, we believe in striking a balance that places a premium on both security and our nation’s history as a welcoming place for travelers from around the globe.»
In a blog post issued before the ruling, the Global Business Travel Association (GBTA) warned that the decision could represent a “lose-lose” scenario for business travel, no matter the outcome.
According to a set of polls released last week by the GBTA, nearly half of travel professionals in Europe said that their company expects to reduce business travel over the next three months due to the ban, while 31 percent of respondents from the United States agreed. The GBTA estimated that U.S. business travel transactions fell up to 8 percent month-over-month from December to January. U.S. business travel had been increasing by 1.2 percent in the week before the ban was issued, but fell 2.2 percent the week after, for a net negative impact of 3.4 percent over the week the ban was issued. That led to approximately $185 million in lost business bookings over the course of that week.
“While the White House’s stated goal was acting in the interest of national security, it did not give the civil servants responsible for implementing the ban any chance to do so effectively,” the GBTA said. “There was too much uncertainty and a lack of clarity around the executive order, leading to general confusion. The net effect was that business travel bookings were delayed or canceled.”
Looking ahead, the GBTA argued that, even as the stay on the ban continues, the uncertainty created by the executive order could continue to slow advance business travel bookings.
«The cloud of uncertainty could leave a lasting economic impact. Large corporations and small businesses alike will suffer,» the GBTA said. «The biggest driver of our economic recovery of the past seven years from the most recent downturn was international outbound travel. U.S. businesses found top line growth and business opportunity from new markets all over the world.»
According to the Post’s analysis, the Justice Department could still appeal the case to the Supreme Court. There, the Trump administration would face a court that is ideologically split 4 to 4. While a tie would keep in place the appeals court’s decision, the Post noted that the Supreme Court often defers to the president on matters of immigration and national security. The Justice Department could also ask the full 9th Circuit to take up the case.
Shortly following the announcement of the ban, meetings industry association UFI had released a statement calling for freedom to travel.
Photo: Bangkok Airways
“International exhibitions rely on the free exchange of goods and ideas, and on business people from all around the world having access to these unique market places,” said Dr. Andreas Gruchow, president of UFI, said in a written release. “Most leading exhibition markets aim to become ever more international to serve these needs, and to grow as businesses. As countless impact studies show, this growth hugely benefits local, regional and national economies, who benefit from the direct business that exhibitors and attendees bring to town. Exhibitions are not only good businesses – they are also an enormous catalyst for economic growth.”
“As the Global Association of the Exhibition Industry, UFI is always promoting free exchange of ideas and travel for mutual benefit,” said Dr. Gruchow. “As an industry, we are representing billions of USD in direct and indirect economic investments. We call upon associations and businesses in our industry to also make their voices heard on this matter, and we stand ready to support them through activities like ‘Global Exhibitions Day’ on June 7.”
The International Association of Exhibitions and Events (IAEE) also issued a statement expressing concern over the policy’s effect on the industry.
“The global exhibitions industry contributes more than $200 billion to world economies, with roughly $77 billion contributed to the U.S. GDP annually,” said Ryan Strowger, CEM, chair of IAEE and SVP of exhibitions, conferences and sales with the International Association of Amusement Parks and Attractions (IAAPA). “Furthermore, more than 42 million visitors attend 9,400+ business-to-business exhibitions and events in the U.S. alone and IAEE members and stakeholders are rightfully concerned about the long-term ramifications of restrictions placed on global travelers coming to the U.S.”
Source: International Meetings Review