Two months after Donald Trumpbecame the 45th president of the U.S.A., it’s becoming clear the election south of the border not only impacts America, but the world. Already, Trump’s administration has fuelled anxiety, fear and protests around the globe. From a business perspective, a report from the Washington, D.C.-based Global Business Travel Association (GBTA) revealed the dramatic impact Trump’s travel ban had on business travel in the week following the announcement. According to the report, approximately $185 million in business-travel bookings was lost in the first few weeks.
The GBTA polled its U.S. and European members to assess the impact of the travel ban. In Europe, nearly half of travel professionals reported expectations for their company to reduce business travel over the next three months and 31 per cent of U.S. respondents agreed. Based on the most recent industry data available as of mid-February, the following is the estimated impact:
- U.S.A. systemwide business-travel transaction levels month-overmonth
(January 2017 vs. December 2016) decreased by up to eight
per cent, depending on industry and sector;
- U.S.A. systemwide business-travel transaction levels were increasing
by 1.2 per cent the week before the travel ban, but decreased by 2.2 per
cent the week after, for a net industry drop of 3.4 per cent in one week;
- In 2016, 87.3 per cent of U.S. business travel was domestic, while 12.7
per cent was international. This action had a significant disproportionate
impact on international travel;
- For every one-per-cent impact on business-travel spending annually,
the U.S. gains or loses 71,000 jobs, nearly $5 billion in GDP, $3 billion
in wages and $1.2 billion in tax collections.
Clearly, as the GBTA states, “Business travel drives lasting business growth and is a leading indicator for jobs and the economy at large.” At press time, while the ban had been temporarily suspended and President Trump’s next steps remained unclear, anxiety continued to persist. In light of this continued uncertainty, the GBTA suggests that “meetings and events may be cancelled altogether.”
From a Canadian perspective, travel restrictions to the U.S. may produce positive spillover results, with many foreign companies perhaps choosing to hold events here instead of in the U.S. Additionally, some corporations may even opt to move their offices to Canada altogether as a result of continued uncertainty in the U.S.
Time will tell what happens, but as the GBTA states, “The cloud of uncertainty could leave a lasting economic impact.”