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February 9, 2017

GBTA Calls Trump Travel Ban "Lose-Lose" Scenario for Business Travel

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In a post on its blog the Global Business Travel Association (GBTA) called the court fight over U.S. President Donald Trump's executive order banning travel from seven Muslim-majority countries a "lose-lose" scenario for business travel. 

The court case, which is currently before the 9th U.S. Circuit Court of Appeals in San Francisco, is underway and could either result in the court reinstating the ban or issuing a temporary stay, an outcome that would likely result in an appeal to the Supreme Court. The GBTA argues that both scenarios result in a loss for the travel industry and the economy. 

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 estimates that the following will be further impacts from the ban:

  • U.S. system-wide business travel transaction levels month-over-month (January 2017 vs. December 2016) decreased by up to 8 percent depending on industry and sector
  • U.S. system-wide business travel transaction levels were increasing by +1.2 percent the week before the travel ban but decreased by -2.2 percent the week after the travel ban for a net negative industry impact of -3.4 percent in one week
  • In that week, approximately $185 million in business travel bookings were lost as the uncertainty surrounding travel in general had a rippling effect on traveler confidence
  • In 2016, 87.3 percent of U.S. business travel was domestic travel, 12.7 percent was international travel. This action had a significant disproportionate impact on international travel
  • For every 1 percent impact on business travel spending annually, the United States gains or loses 71,000 jobs, nearly $5 billion in GDP, $3 billion in wages and $1.2 billion in tax collections

"We say it time and again. Business travel drives lasting business growth and is a leading indicator for jobs and the economy at large," the GBTA said on its blog. "Upholding the travel ban will clearly cause a rippling effect through the travel industry, ultimately hurting the economy. It also unleashes travel disruption like we saw when the order was first implemented. 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. 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."

At the same time, the GBTA argued that upholding the lower court's ruling is also a "losing situation" for business travel because the initial impact of the policy has already been felt, and the uncertainty created by the executive order will continue as the case makes its way to the Supreme Court. The GBTA predicts that advance bookings will slow down as travel professionals cannot be sure whether or not the ban could be reinstated, and that meetings and events may be cancelled altogether. 

"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."

The GBTA called on the Trump administration to pause the travel ban and reasses the path ahead. 

Source: GBTA

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