Main concern

Recently, the US travel industry has been impacted by a variety of events. The events include the recent Paris terror attacks, the Brussels terrorist attack, the Zika virus outbreak, and the strong dollar. However, one thing that beats these issues is the Republican presidential candidate—Donald Trump. “Trump fear” also resonated at the NYU International Hospitality Industry Conference held in June 2016.

Why Is the Travel Industry Concerned about Trump?

Under President Barack Obama, many pro-US tourism steps have been taken. These include the creation of Brand USA—an agency aimed at boosting travel to the US. Visas between China and US were extended for ten years—compared to one year earlier. China is deemed to lead the next phase of growth for the travel industry. Millions have been spent towards this cause. Of course, the reward is much greater—for example, Brand USA aims to earn $250 billion from 100 million tourists by 2021.

Trump’s foreign policies

Most of the travel industry thinks that if Trump wins, it could undo most of these efforts.

Trump proposed imposing a severe tariff against China. This would end China’s much-hyped tourism potential. In fact, it could also ignite a trade war between the two countries.

His beliefs that international alliances aren’t working well for America and that globalization hurt Americans could be disruptive for tourism.

His anti-immigration policy, an all-Muslim ban, and building a wall along the entire Mexico-US border haven’t been popular.

In fact, a report by the Economist Intelligence Unit rates a Trump presidency as a top ten event that would disrupt the world economy, lead to political instability, and increase security risks in the US. If there isn’t global economic growth, you might as well forget growth in travel and tourism.

Alienating most countries

Political analysts think that these policies could alienate the US economy from the rest of the world. In turn, it would be difficult for Americans to travel, work, or study elsewhere in the world.

Remember, investors can get exposure to online travel agents like Priceline (PCLN), Expedia (EXPE), TripAdvisor (TRIP), and Ctrip (CTRP) by investing in the Consumer Discretionary Select Sector SPDR Fund (XLY).

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