Sunday, November 24, 2024
HomeTourismWhat a Trump Win Might Imply for Journey

What a Trump Win Might Imply for Journey


An uncertain election day that many believed would end with a long wait before a declared victory, wrapped up just after 5:30 a.m. Eastern time Wednesday. The Associated Press confirmed that former president Donald Trump flipped Wisconsin, putting him over the 270 electoral college votes needed to win back the presidency he lost four years ago when Joseph R. Biden Jr. narrowly won Wisconsin and several other battleground states, including Arizona, Georgia, Michigan and Pennsylvania. 

While several battlegrounds still were counting ballots—including Pennsylvania, which many political analysts believed would be a necessity before declaring a winner—Republicans swept aside Vice President Kamala Harris in what appears to be a referendum on Biden administration economic and immigration policies. 

What a Trump win means for the travel industry—and specifically business travel—in and out of the United States won’t be clear for some time, but certain moves from Trump’s previous administration could give some clues on what to expect: 

Mergers and acquisitions—Travel industry mergers and acquisitions are likely to find a welcome reprieve under a business-friendly Trump administration after struggling through headwinds under Biden’s Department of Justice. Airlines, in particular, have been denied in their efforts to join up for close alliances and full mergers over the past four years. 

During that time, the DOJ under U.S. Attorney General Merrick Garland broke up the JetBlue-American Airlines Northeast Alliance, filing an anti-competition suit against the airlines in 2021 and forcing it to dismantle the alliance in 2023. It also denied JetBlue’s merger with Spirit Airlines. In October, the Department of Justice along with the Department of Transportation launched an anti-competitiveness investigation into the airline industry. Airline industry lobbying group A4A has called the investigation “overreach” and the U.S. Travel Association called it a “disappointing political stunt.” 

How far that investigation will go before the administration changes hands is up for grabs, but the airline industry would be looking to the Trump administration for a break in the regulatory action and would be likely to get it. 

Infrastructure and Development—Congress in 2021 passed the bipartisan Infrastructure and Investment and Jobs Act, which authorized $1.2 trillion for investment in roads, bridges, rail infrastructure and airport improvements over the following 10 years. The deal has distributed $9 billion for airport improvements and was slated to fund 122 rail-oriented projects in 41 states as of October. Two weeks ago the Biden administration pledged another billion to be dedicated to airport improvements. 

For the business travel industry, the infrastructure deal has been a boon, with executives for airlines and, particularly, midscale hotel companies like Best Western and Choice commenting frequently about their growing business of housing crew workers associated with infrastructure projects funded by the deal. 

As congressional legislation, the infrastructure and jobs deal isn’t easy for a new administration to roll back, and it’s been in place long enough that it is likely to escape—if Trump’s first administration is a preview—what promises to be aggressive use of congressional review, especially if the GOP gets a clean congressional majority, which is yet to be determined. 

Travel and the Environment—The Biden administration’s plans for infrastructure investments had a very clear arc toward environmental conservation and greenhouse gas emissions reduction, which is unlikely to be an overarching concern for the Trump administration. However, the Inflation Reduction Act, which was passed in 2022 and has a major focus on green energy production and emissions reduction, is very likely to be in the crosshairs of the new administration. Some aspects of the act, however, have benefitted Republican-majority states and may be politically difficult to undo. 

On the international stage, whether Trump withdraws again from the Paris Accord will be a bellwether. A campaign spokesperson told Politico in June such a move was on the agenda as a priority; the outlet reported that at least one version of the plan included withdrawing from the United Nations Framework Convention on Climate Change, which would take the United States out of broader efforts to counteract global warming. 

For the travel industry, and airlines in particular, reduction of environmental policies would place fewer demands on the business for cleaner operations. That said, aviation is a global concern, and airlines—along with partner corporations—have invested billions in emissions reduction efforts, not least of which has been in the production of alternative aviation fuels, which are in short supply. European governments are looking to stimulate the market via regulations, whereas the Biden administration has worked with incentives. It pledged in August nearly $300 million in funding for alternative aviation fuel production as part of the Inflation Reduction Act. The shape of such investments and incentives under a Trump administration are likely to change dramatically.

Travel and Immigration—Travel has boomed since Trump
departed the office of the 45th presidency. Hotels and airlines have
turned in record-setting earnings reports, and profitability is high after
driving efficiencies during the pandemic. IATA in June projected U.S. airline
revenues would grown 9.7 percent over 2023 and operating profits would grown
14.7 percent. STR
in August
held its projections steady looking to a 2 percent increase in
revenue per available room for hotels for the year.

For the hospitality industry and hotels, in particular, the
cost of labor has been an issue. The U.S. Travel Association has underscored
that as
many as 1 million jobs
are left unfilled in the travel industry and limits
on H-2B visa programs for seasonal workers have challenged the industry. With
immigration under the microscope in a Trump Administration, the chances of
increasing access to such visas might be slim.

Whether a Trump administration will be good for the business
of travel is one question. How the new administration will impact the global
perception of the United States and whether Trump will enact policies that will
dissuade visitors or weaken government policies that facilitate the health of
the travel industry remains a concern.

Trump has said he will
reinstate
what became known as his travel
bans
, which were among the first moves he made as president in January 2017
and which the Global Business Travel Association said were among Trump’s travel
policies that cost the industry more than $1.3 billion in travel-related
revenue that year. Much of that loss may have been perception oriented, since
the travel bans were not focused on countries that delivered significant
leisure or business travel.

That said, throttling international travel, which still has
not recovered since the pandemic, is a continuing concern.

U.S. Secretary of State Antony Blinken and Commerce
Secretary Gina Raimondo said last week the U.S. should see 90 million
international visitors in 2026. One limiting factor has been wait times for
U.S. visas, which in 2023 averaged 400 days for the top 10 inbound countries.
That trend, however, has been reversed with a record-breaking 8.5 million
visitors’ visas issued in fiscal year 2024 and wait times down by 60 percent.

The travel industry, just now welcoming back those
international visitors, would not want to throw any kinks into the works of an
industry that supports 10 million American jobs and $2.3 trillion in economic
activity, according to the Commerce Department.

Business travel is yet to recover fully to pre-pandemic
levels. A friendly business environment under Trump could support more business
travel, especially if tax cuts for businesses are extended, which during his
first administration drastically
reduced the tax burden for America’s most profitable companies
. That said,
the business travel environment has changed, and U.S. companies are currently
experiencing a robust economy. The business travel industry overall has largely
acknowledged current business travel levels as the “new normal.” Whether that
would change in the U.S. under beneficial tax codes and a reduced focus on
environmental sustainability remains to be seen. Whether U.S. companies would
buck the trend and spend more dollars on travel in a world where some business
trips have shifted into technology mediated formats is a question that may
simply have to be about the return on the travel investment. 

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Recent Comments