International Travel: Boosting America's Biggest Export Industry

Most Americans don't think of themselves as living in a lucrative destination for tourism. Moreover, after the terrorist attacks on 9/11, procedures for anyone visiting the United States were understandably tightened. But partly are a result of not perceiving the opportunity and partly as a result of overcautiousness, the U.S. economy is missing out on the potentially job-rich growth of  international tourism.


A few months ago, I touched on this theme when writing about  "Where Will America's Future Jobs Come From?"  A McKinsey Global Institute report looked at opportunities in different sectors for job creation and noted: "[T]o reach the high-job-growth scenario, the United States needs to retake lost ground in global tourism. ... In particular, the United States is not getting its share of tourism from a rising global middle class. More Chinese tourists visit France than the United States, for example."



Roger Dow, who is President and CEO of the trade group the U.S. Travel Association, wrote an op-ed in the Wall Street Journal on November 21 called "America's Lost Decade of Tourism." His piece hit the high spots of a longer report from the U.S. Travel Association called "Ready for Takeoff: A Plan to Create 1.3 Million U.S. Jobs by Welcoming Millions of International Travelers."
Here are some facts and comments from the report (footnotes omitted for readability):

"Between 2000 and 2010, the international long‑haul travel market grew by 60 million travelers each year. And yet, in 2010, the United States attracted essentially the same number of travelers as in 2000. International travel remains one of the few bright spots in the global economy, generating exports worth $1.1 trillion and supporting more than 96 million jobs worldwide in 2010. Despite the fragile economic recovery, global travel spending continues to grow at impressive rates, leading
some economists to describe it as a “gold rush.” ... Over the coming decade, long-haul arrivals are
forecast to rise by an additional 40 percent. Global travel spending is forecast to double between 2010 and 2020, reaching $2.1 trillion and making travel an increasingly important contributor to GDP growth for countries able to attract more overseas visitors."

"Lawrence Summers, former director of the National Economic Council, recently observed that “the easiest way to increase exports and close the trade gap is by increasing international travel to the U.S.” In fact, international travel is already the United States’ largest industry export, representing
8 percent of U.S. domestic exports of goods and services in 2010 and nearly one-fourth of services
exports alone."
"Therefore, the United States should make it a national priority to restore our share of the global long-haul travel market, currently at 12 percent, to the 2000 level of 17 percent. Achieving this goal by 2015 and sustaining it through 2020 would add nearly $390 billion in U.S. exports over the next decade and create 1.3 million more American jobs by 2020."

"[T]oday 35 percent of overseas visitors to the United States require an entry visa. Looking forward, that number is expected to rise to 51 percent. Put another way, the greatest growth in the world travel market is expected to occur in countries where the U.S. is already unable to meet existing demand for visas. The visa system is undermining our ability to compete for travel exports."


"Overall, the entire visa application process from end to end can take as long as 145 days in
Brazil and 120 days in China. In comparison, the United Kingdom takes an average of 12 days to process visas in Brazil and 11 days in China. ... In our survey, more than 40 percent of Chinese
respondents, 35 percent of Indian respondents and 29 percent of Brazilian respondents cited visa
costs as a barrier. For millions of overseas travelers seeking admission to the United States, the $140
application fee for a U.S. visa represents just the tip of the iceberg. Travelers must also
pay additional fees that vary from country to country, but can add as much as $50 to the
application fee. On top of these fees, travelers who do not live in a city where a U.S. consulate is located must incur hundreds or thousands of dollars in expenses (and take time off from their
work or studies) to complete the mandatory face-to-face interview. In Brazil, for example, just one embassy and three consulates serve a country spanning 3.3 million square miles with a population of 199 million. Eleven cities with more than one million inhabitants do not have a U.S. visa-processing center. The lack of accessibility to consular offices is an even bigger issue in China, where the United States has just five visa processing operations serving a much larger market. Indeed, there are 27 cities in China and eight in India with more than two million inhabitants that do not have a U.S. visa-processing center. By comparison, the United Kingdom has 12 visa facilities in China and 10 in India, while France has six in China and five in India."

"Among all overseas travelers to the U.S., those from China, India and Brazil rank first, second
and fourth, respectively, in spending. Because of these high levels of traveler spending, one visitor
from India is roughly equal to two visitors from the United Kingdom, Germany or France in
terms of average spending."


The U.S. Travel Association report starts with a provocative comparison that sums up the effects of these barriers imposed by the current visa process:  "Imagine an overseas biker desperate to own a Harley-Davidson—a purchase that would increase U.S. exports and improve our trade balance. Unfortunately, his government has put in place several barriers that make it more difficult and expensive to purchase this American cultural icon. Before he can even place his order, he must wait several weeks for an interview and travel hundreds of miles to a distant government office to get to an appointment. On top of that, he must pay $140 up front just to request the opportunity to purchase a Harley, with no assurance he will actually be able to buy one. ... If any foreign government even attempted to create such onerous barriers to U.S. exports, members of Congress would instantly threaten trade reprisals; U.S. government trade lawyers would quickly file legal actions with the World Trade Organization; and government policymakers at all levels would search to find a way to end these restrictions. Amazingly, the United States has imposed almost exactly these types of restrictive trade barriers on itself while competing in one of the most critical global export markets—the $1.1 trillion market for international travel."

Sure, the U.S. Travel Association is a trade group. Take its details of predictions about gains from tourism with a grain of salt. But the overall storyline is correct: The U.S. is missing an opportunity for a major growth industry as a destination for international tourism, where the major hurdle is the inability of the federal government to set up a timely and convenient process for tourist visas.