As the world remembers the events of September 11th 10 years on, Euromonitor International examines the impact on international tourism to the US and New York City.
A decade of political turmoil for the US…
2000 was a record year for inbound tourism, with 51 million arrivals to the US, but the events of September 11th caused a decline of 8% in arrivals during 2001. Air travel came to a standstill and the fear of further attacks kept foreign travellers at home. Arrivals also declined in 2002 and 2003. At the end of 2003, 10 million fewer foreign tourists had visited the US than in 2000, representing a decline of 20%.
In addition to the fear of terrorist attacks, the invasion of Afghanistan (October 2001) and Iraq (March 2003)also harmed the US’s reputation abroad and contributed to a decline in international arrivals in 2002 and 2003. The situation further worsened with tighter airport security measures, including fingerprinting and photographing all visitors to the US, starting in 2004. Many travellers complained that obtaining a visa became much more difficult.
Additionally, the US government started the Electronic System for Travel Authorization (ESTA) in 2009 for visitors from countries that do not need a visa to visit the US. These travellers need to register online at least 72 hours prior to their travel to the US to receive approval to visit the country. They also need to pay a US$14 fee every two years when they travel to the US. US$10 goes to the Corporation for Travel Promotion, which promotes the US internationally, while US$4 goes to the Department of Homeland Security to implement ESTA. Although industry players complained that ESTA adds to the hassle factor of travel and makes the US more expensive to visit, it seems to have a negligible impact on inbound tourism. Over time, travellers have grown accustomed to the additional security measures implemented by the US.
….led to slow international tourism recovery
International tourism did not start to recover until 2004, with recovery driven by arrivals from Mexico and Canada. In 2007, international arrivals finally surpassed the 2000 record thanks to strong growth in arrivals from Mexico and Canada. However, many other key source markets did not recover until 2008, such as Germany. In fact, the UK and Japan (the third and fourth largest source markets) have yet to recover to their 2000 peak levels.
While the global economic recession may be impeding growth in arrivals from the UK and Japan, total arrivals to the US declined by 5% in 2009, which was slightly worse than the global decline of 4%. However, arrivals rebounded strongly with growth of 8% in 2010, higher than the global growth of 6%, thanks to the weak dollar.
New York City bounces back stronger
International arrivals to New York City returned to their 2000 peak levels two years ahead of the county’s total arrivals in 2005. A recovering economy, the weakening of the US dollar, and visits to friends and relatives led to tourists flocking to New York City.
Growth persisted thanks to New York City’s position as a world class leisure and business destination. The total number of arrivals to New York City was 9.7 million in 2010—an increase of 43% since 2000. This is significantly higher than the 15% growth in arrivals to the country overall during the same period. International arrivals to the city rebounded by 13% in 2010 after a 10% decline in 2009 to reach the new record of 9.7 million tourists.
The next five years look brighter for the US
Tighter security measures remain in place and are continuing with the controversial introduction of body scanners across airports. However, the US government has recognised the need to balance security with hospitality as the country saw its share of global arrivals fall from 7% in 2000 to 6% in 2010.
One of the first steps is the creation of the Corporation for Travel Promotion, finally created in November 2010. It will be responsible for marketing the US internationally and will, hopefully, erase negative perceptions of the country. The government also continues to evaluate countries that may be eligible for the Visa Wavier Program, adding Greece to the programme in 2010, and continues to pursue open skies agreements. These efforts, in conjunction with the weak dollar, are expected to lead to much stronger growth in arrivals than seen over the 2000-2010 period. Euromonitor International predicts 31% growth in arrivals during 2010-2015, reaching 78 million arrivals. This will increase the country’s share of global arrivals from 6% in 2010 back up to 7% in 2015. Uncertainty and risks remain, though, due to a gloomy global macroeconomic outlook, especially in Western Europe, which remains a major source market for the US.