On Tuesday, the 9th U.S. Circuit Court of Appeals in San Francisco heard arguments from the Department of Justice and opposing attorneys from the states of Washington and Minnesota before they decide the fate of President Trump’s executive order banning travel to the United States from seven Muslim-majority countries.
The court can ultimately choose to reinstate the travel ban or uphold the lower court’s ruling on the temporary stay, which would likely result in an appeal to the Supreme Court. According to the Global Business Travel Association, both scenarios will result in a loss for the travel industry and the economy.
Last week, GBTA polled its U.S. and European members to assess the impact of President Trump’s travel ban. In Europe, nearly half of travel professionals reported expectations for their company to reduce business travel over the next three months. Nearly one-third (31%) of U.S. respondents agreed.
The GBTA says that based on the most recent industry data available as of 8FEB, the following is the estimated impact:
USA system-wide business travel transaction levels month-over-month (JAN 2017 vs. DEC 2016) decreased by up to 8% depending on industry and sector.
USA 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% in one week.
In that week, approximately US$185 million in biz travel bookings were lost as the uncertainty surrounding travel in general had a ripple effect on traveller confidence.
In 2016, 87.3% of USA business travel was domestic, 12.7% was international. This action had a significant disproportionate impact on international travel.
For every 1% 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,” the GBTA said in a press statement. “Business travel drives lasting business growth and is a leading indicator for jobs and the economy at large.”
The association added: “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 cancelled.”
The GBTA says that national security is of the utmost importance.
“However, instead of closing our borders, the United States should continue to pursue and focus on expanding security programs like the Visa Waiver Program, which facilitates information-sharing among governments to ensure properly vetted travellers.”
Even in the appeals court upholds the lower court’s ruling, the GBTA still sees a losing situation for the business travel industry.
“The initial impact has already been felt and the uncertainty it will create as we await an appeal to the Supreme Court will continue to make its mark. Advanced bookings will likely slow as travel professionals cannot be sure if and when the ban will be reinstated. Meetings and events may be cancelled altogether.”
Summing up, the GBTA says: “We urge the Trump administration to pause this travel ban action, reassess its path forward with key stakeholders and preserve both our national security and our economy for the future.”