Friday Briefing: As Trump Travel Ban Hits Setback, Travel Groups Warn of Unintended Consequences

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The U.S. Court of Appeals for the 9th Circuit has ruled against lifting the suspension of President Donald Trump’s ban against travel from seven Muslim-majority countries, the Washington Post reports. In a unanimous decision, the court rejected the Trump administration’s argument that the freeze on the ban should be lifted for national security reasons, but said that it was too early for them to render judgement on whether or not the policy was meant to disfavor Muslims. 

In response to the ruling U.S. Travel Association President and CEO Roger Dow  issued a statement recognizing the need to maintain national security, but warning that the order could have unintended consequences that hurt business and leisure travel to the United States

"Over the past two weeks, our members have voiced their concerns about how an unintended consequence of this executive order could be a reduction in both international leisure and business travel to the United States,” Dow said. “Destinations large and small depend on these visitors to sustain local businesses and jobs.

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"That said, we stand with the administration, Congress and law enforcement officials, as we all remain vigilant during an era of constantly changing global security dynamics,” Dow said. “As always, we believe in striking a balance that places a premium on both security and our nation’s history as a welcoming place for travelers from around the globe."

In a blog post issued before the ruling, the Global Business Travel Association (GBTA) warned that the decision could represent a “lose-lose” scenario for business travel, no matter the outcome. 

According to a set of polls released last week by the GBTA, nearly half of travel professionals in Europe said that their company expects to reduce business travel over the next three months due to the ban, while 31 percent of respondents from the United States agreed. The GBTA estimated that U.S. business travel transactions fell up to 8 percent month-over-month from December to January. U.S. business travel had been increasing by 1.2 percent in the week before the ban was issued, but fell 2.2 percent the week after, for a net negative impact of 3.4 percent over the week the ban was issued. That led to approximately $185 million in lost business bookings over the course of that week. 

“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,” the GBTA said. “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 canceled.”

Looking ahead, the GBTA argued that, even as the stay on the ban continues, the uncertainty created by the executive order could continue to slow advance business travel bookings. 

"The cloud of uncertainty could leave a lasting economic impact. Large corporations and small businesses alike will suffer," the GBTA said. "The biggest driver of our economic recovery of the past seven years from the most recent downturn was international outbound travel. U.S. businesses found top line growth and business opportunity from new markets all over the world."

According to the Post’s analysis, the Justice Department could still appeal the case to the Supreme Court. There, the Trump administration would face a court that is ideologically split 4 to 4. While a tie would keep in place the appeals court’s decision, the Post noted that the Supreme Court often defers to the president on matters of immigration and national security. The Justice Department could also ask the full 9th Circuit to take up the case. 

In a press call earlier this week with the American Society of Travel Agents (ASTA), Eben Peck, SVP, government and industry affairs said that the ban was having a “chilling effect” on the travel industry. At the same time, ASTA said that the views of its membership on the policy are split, and that it would soon release a survey diving deeper into what its member agents think of the ban. 

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