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Opinion: It’s the Summer of No Love for American Tourism

The economy is part of the immigration debate, whether we like it or not

America’s tourism industry has taken a hit in the Trump era, and that could spell trouble for the economy, Megan and Brown write. Above, travelers arrive at Chicago’s O’Hare International Airport in April. (Scott Olson/Getty Images file photo)
America’s tourism industry has taken a hit in the Trump era, and that could spell trouble for the economy, Megan and Brown write. Above, travelers arrive at Chicago’s O’Hare International Airport in April. (Scott Olson/Getty Images file photo)

Graduation season is wrapping up and summer vacation season is just beginning, rites of passage enjoyed by Americans and visitors alike. Foreign tourists flock to America’s beaches, parks and cities, and students travel from all over the world to study in our world-class universities. But data suggests this summer may bring fewer of both.

Tourists and students account for roughly 80 percent of total non-immigrant visas issued by the U.S. each year. They spur demand for goods and services, which pads economic growth and helps to power the tourism industry and higher education system.

International tourism directly contributed more than $200 billion to the U.S. economy in 2017, and international students contributed close to $40 billion. These also count as “services exports,” improving our trade balance with the world.

Yet evidence suggests that fewer overseas travelers are choosing to come to America, which poses a threat not only to these industries, but to economic growth writ large. Specifically, since a 2015 peak, issuance of B visas — for both business purposes and pleasure — have fallen by up to 15 percent by one government count.

Meanwhile, the number of international students opting to study in the United States also fell. During the 2017-18 academic year, American colleges and universities saw a drop in international enrollment for the first time in over a decade. A 4 percent slump hit undergraduate and graduate programs alike, translating into 32,000 fewer international students than the previous year.

Thinking twice

Several factors are to blame. For one, the U.S. dollar has strengthened over the past few years, which hurts the purchasing power of foreign visitors and might give vacationers pause.

Recent policy changes — and political rhetoric — may also play a role. Though the United States has long had an arcane visa and visa waiver system, the Trump administration has increased barriers to entry for foreign guests.

The infamous travel ban, along with administrative changes to the visa vetting process, mean several countries are now seeing fewer visas approved. Two-thirds of American colleges and universities cite visa delays and denials as the major factor contributing to declining international enrollment.

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What’s more, the Trump administration has ramped up airport security procedures some guests might view as invasive. And it last year proposed to eliminate BRAND USA, a federal initiative housed in the U.S. Commerce Department that seeks to promote tourism and explain the visa process to prospective visitors.

“Fewer overseas travelers are choosing to come to America, which poses a threat not only to the tourism industry, but to economic growth writ large.” Other changes may make students wary of studying in the United States.

Under one proposal, students would be required to reapply for a new visa every year, instead of once at their initial time of enrollment. This would impose additional paperwork and financial burdens and could introduce anxiety over future denials.

The administration also recently decided it would crack down on students who may fall temporarily out of status after dropping classes or transferring schools and on those who overstay their visas.

Future students may also face fewer opportunities for employment in the United States. One proposed change would cut work permits for J-1 exchange visitors, while another would affect students with F-1 Student and M-1 Vocational Student visas by increasing oversight into a program that allows them to work in the U.S. for a set period after graduation. And some higher education advocates have expressed concern that the debate over limiting the number of H-1B visas for temporary foreign workers could hurt international enrollment.

Worrying trends

These parallel declines in international students and tourists could stifle economic growth. During the 2016-17 academic year, international students supported an estimated 450,000 American jobs. The tourism industry is a similarly powerful force, and early reports already indicate that the plunging numbers are hurting the economy. According to one analysis of Commerce Department data, the decline in tourism during 2017 affected 40,000 jobs and came with a $4.6 billion spending drop.

Policymakers should worry about these trends. Both the tourism and higher education industries employ thousands of Americans, and both rely on the revenues generated by foreign guests. Foreign tourists and students also generate demand for goods and services, which spurs economic growth and increases national wealth.

Ultimately, Americans should recognize these enormous benefits, and embrace these people for the value-add they deliver. Whenever we talk about changes to immigration policy, the economy is part of that conversation — whether we like it or not.

Kenneth Megan is a senior policy analyst at the Bipartisan Policy Center, focused on higher education policy and labor market analysis.

Theresa Cardinal Brown is director of immigration and cross-border policy at the Bipartisan Policy Center. She has served in key policy roles with U.S. Customs and Border Protection and the Department of Homeland Security, where she was attaché to the U.S. Embassy in Ottawa, Canada.

The Bipartisan Policy Center is a D.C.-based think tank that actively promotes bipartisanship. BPC works to address the key challenges facing the nation through policy solutions that are the product of informed deliberations by former elected and appointed officials, business and labor leaders, and academics and advocates from both ends of the political spectrum. BPC is currently focused on health, energy, national security, the economy, financial regulatory reform, housing, immigration, infrastructure, and governance. Follow BPC on Twitter or Facebook.

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