Airlines and hotels have begun slashing prices as the fall-out from President Donald Trump's policies continues.
The chief executive of the world's largest online booking company Expedia Inc. (EXPE), has warned the tourism market is in for some tough times as holiday goers steer clear of the U.S. due to immigration bans and hard-line border restrictions. "I think that because of some of the perceived positions coming out of the current administration, the U.S. as a destination is potentially looking less attractive as a product," Dara Khosrowshahi, CEO of Expedia, told the Financial Times.
"One of two things is going to happen," he said referring to U.S. tourism generally. "Either the U.S. has to go on sale in order to keep volumes up, or volumes are going to come down. When we look at our business, the leading indicator is pricing. Pricing has come down."
Khosrowshahi, 47, who was born in Iran – one of the seven Muslim countries Trump named in his first Executive Order – was a stern critic of Trump's immigration policy throughout his campaign. Speaking on Expedia's fourth-quarter earnings call Khosrowshahi said, "hopefully we will all be alive to see the end of next year," which many saw as a swipe at Trump. (See also: The Economic Impact of Banning Muslims from the U.S.)
Powerful words: "we remember that the borders of this country closed to us in 1924 with very catastrophic consequences during the Holocaust" https://t.co/YSkmhYThFq
— dara khosrowshahi (@dkhos) February 7, 2017
The pessimistic outlook comes after the World Travel & Tourism Council (WTTC) report in March that projected the $1.5 trillion tourism industry would grow at just 2.3 percent in 2017, down from 2.8 percent. The WTTC attributes much of the projected slowdown to domestic economic issues, but did add that immigration policies will dampen the appetite for travelers. "The ban has sent out a clear message to the world that the U.S. is actually closing, it's not open for business, and it's not just the six countries that were targeted - it's actually showing in the advanced bookings around the whole world," David Scowsill, CEO of WTTC, told CNBC in March. (See also: U.S. Airlines Flying to Cuba Despite Trump Doubts)
Data collected by software company ForwardKeys showed similar findings. In the week between January 28 and February 4 (the travel ban was imposed on January 27), bookings fell 6.5 percent, with the decline coming from all parts of the world. "The turmoil over Trump’s ruling is putting people off traveling to the U.S. from many regions of the world, beyond the Middle East," ForwardKeys said.
Khosrowshahi did not give explicit numbers on the slowdown in bookings. He told the Financial Times the full picture will come in Expedia's first-quarter earnings report due February 9.