Marriott International CEO Arne Sorenson described President Donald Trump's travel ban as being "not good, period" for the hotel industry at a recent meeting in Dubai. However, the luxury hotel segment stands to be hurt the most by Trump's executive order.
That's because while travelers from the six Muslim-majority countries in the Middle East and North Africa targeted by Trump's ban account for less than one percent of bookings at Marriott, for example, they are easily among the industry's biggest-spending guests, according to the New York Post.
Omni Berkshire Place managing director and former Lotte New York Palace general manager David Chase told the Post it's a "shockingly significant number."
"In a banner year, business from these guests at The Palace contribute up to 10 percent of annual room revenues - or about $12 million," Chase told the Post. "They travel in groups of 20 to 80 and they will take entire floors at the hotel for months at a time."
Therefore, any notable downturn in bookings from those regions could have a notable impact. Last month, Sorenson said that bookings at Marriott from those regions fell by as much as 30 percent in February, the month after Trump signed his initial executive order.
While the revised executive order Trump signed last month has since been blocked by a federal judge, it's generated tremendous uncertainty for foreign nationals considering a trip to the U.S.
Cynthia Chung, who runs a New York City-based company that makes travel arrangements for the super-wealthy, points out that the uncertainty may indirectly deter big spenders from booking a luxury hotel in the U.S.
"Many families in the Middle East recruit personnel from [those banned] countries and these are the royal households that might refuse to travel to the U.S.," Chung told the Post. "They are accustomed to the services of their trusted staff."
Beyond just hotels, Trump's controversial ban is expected to have a much broader negative impact on the travel and tourism sector at large. Last month, Expedia CEO Dara Khosrowshahi said the U.S. travel industry is in for "a turbulent year amid falling international interest in visiting the country."
What's more, recent polling conducted by tourism marketing agency Brand USA of travelers from 11 different countries not included in Trump's ban found that more international travelers now believe they are less likely to visit the U.S. in the next 12 months due to the changing political climate compared to late last year.
[READMORE] READ MORE: What The New Trump Travel Ban 2.0 Means for US Travel[/READMORE]
But it's possible the controversy surrounding the U.S. as a destination in wake of Trump's executive order will lead more Americans to travel domestically. A recent Virtuoso poll found that, among U.S.-based travel advisors, 10 percent said clients are changing their travel plans due to concerns over anti-American sentiment, with some opting instead to travel within the U.S.
Still, it's difficult to accurately map the impact since sentiment doesn't always correlate with booking behavior. Plus, many within the industry have expressed optimism.
"They've said things are stable if not growing," Brand USA economist Carroll Rheem told the Associated Press. "So some of the headlines out there about dramatic downward shifts or challenges in bookings are not really consistent with what we've been seeing in that data."
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