More than 250 travel buyers responded to an Association of Corporate Travel Executives survey over the weekend to voice concern about President Trump's
immigration
ban on travelers who have citizenship in Iran, Iraq, Libya, Somalia, Sudan,
Syria and Yemen. The ban, which evolved over the weekend to exclude permanent
U.S. residents (green card holders) from the restrictions, put a 90-day stop on
travelers from these seven nations entering the U.S. It closed U.S. borders to
all refugees from around the world for 120 days and halted immigration of
Syrian refugees indefinitely.
Thirty-nine percent of ACTE survey respondents said the travel ban could
reduce business travel for their corporations overall, while 20 percent say the
ban already is causing problems for their travelers and programs. Among those
already experiencing difficulties, 25 percent worry about all the following:
traveler harassment in general, harassment of U.S. travelers in the Middle East,
uncertainty regarding green card and approved visa credibility to enter the U.S.
and limited access to prospective employees. Seventeen percent were concerned about at
least one of these outcomes.
Asked about the lasting impact of the ban, 11 percent project canceled
contracts between U.S. and Middle Eastern companies, 22 percent are concerned about
intensified threats against U.S. travelers abroad and 23 percent project
complications with existing travel arrangements for a significant number of
travelers.
ACTE executive director Greeley Koch said, "If there is doubt about the validity of a visa or worry about
entering the U.S. or fear of reprisals, then business travelers will opt not to
go. Companies with duty of care concerns will not subject their employees to
these kinds of risks. This level of uncertainty is bad for business. The travel
industry needs policy that eliminates confusion and uncertainty. Not policy
that fosters it."
In addition, Koch voiced concerned
about the health of the industry that supports business travelers. “This
does have the potential to impact airlines, hotels, restaurants, ground
transportation—all the travel infrastructure. When corporate travel is
suppressed, all of these [players] have to shoulder the consequences.”
While some of these buyer concerns
are projected, a BCD Travel spokesperson said the mega travel agency is
experiencing increased calls from corporate buyers about the issue but has not
confirmed whether travelers have actually been impacted. "Following Mr. Trump's executive order on immigration,
corporate travel managers have been asking what the order means for their travelers.
It's possible that some of our clients' travelers may be affected by the
immigration ban. That said, we haven't seen a significant uptick in
cancellations or rebooking requests," the spokesperson said. "We're
advising clients whose travelers may be affected to work with the appropriate
departments within their companies—e.g., Human Resources, Legal, etc.—to obtain
clarification."
Travel Industry Analysts & Stocks Register Market Reaction
Corporate travel buyers aren't the
only ones concerned about future travel volume. Industry analysts have
spoken, and so has the stock market.
By Monday afternoon, airline stocks had dropped across the
board. American Airlines dropped 5.7 percent, United slid 4.1 percent and Delta
sank 4 percent. Buckingham Research cited the wide-ranging protests as the root
of the airline stock declines: "We're
more concerned about the widespread protests, which will likely foster business
travel book-away as travelers look to avoid travel at some of the largest airports
in the country." Hints dropped during American Airlines' Friday earnings
call about domestic capacity increases, as well as a Delta systems
outage that cancelled more than 250 flights Sunday and Monday, also
complicated airline stock performance. Regarding the protests, several analysts
said the stock dips would be short lived.
Still, investor fears about the ban's impact on global hotel
bookings applied downward pressure on lodging stocks. Red Lion Hotels dropped
4.7 percent, Extended Stay America slid 2.4 percent, Hyatt Hotels Corp. dropped
2 percent, InterContinental Hotels Group lost 2.1 percent, La Quinta Holdings
dropped 3.2 percent and Hilton Worldwide Holdings lost 1.1 percent.
Similar drops hit hotel investment companies, including Sunstone
Hotel Investors (down 3.3 percent), DiamondRock Hospitality (down 3.64
percent), FelCor Lodging Trust (down 3.21 percent) and LaSalle Hotel Properties
(down 2.82 percent).
That's a stark contrast to the 2017 bullishness expressed at
last week's Americas Lodging Investment Summit, where hoteliers and industry
analysts alike were upbeat about the improved economic outlook in recent months
and the shared belief that President Trump would be a friend to the hospitality
industry.
—Additional
reporting by Julie Sickel