PHOENIX — Yet another summer passed that saw Americans traveling across the Atlantic Ocean to Europe, making hoteliers in the U.S. wonder when there will be a reprieve from negative international inbound numbers.
During the "A View from the Top" session at The Lodging Conference, hotel executives spoke about the lingering deficit between international inbound and outbound travel in the U.S.
Wyndham Hotels & Resorts President and CEO Geoff Ballotti said the U.S. has "fallen behind" in regard to international inbound travel.
"Seventy million people went out of our country last year is the statistic. Fifty million came in. We're a net-exporter of travel," he said. "There's no reason we should have fallen behind the way we have over the last few years."
Visa wait times and the amount of visa waiver countries are two of the main factors leading to the underwhelming international inbound numbers, Ballotti said. The average visa wait time in the U.S. is at about 250 days, and the U.S. only has 41 countries in its Visa Waiver Program compared to the United Kingdom, which has more than 100 countries eligible for visa-free travel.
International inbound travel is down about 15% compared to 2019 levels while outbound travel is up 120%, BRE Hotels & Resorts President and CEO Joe Berger said. The concern with inbound travel isn't with European countries, but rather with Asian countries.
"Where we're seeing real softness is out of Asia, particularly China and Japan. China has some economic problems, which I think is impactful. And Japanese travelers are very careful travelers and haven't really begun traveling to Hawaii and the West Coast as they had before, but hopefully we see that pick up a little bit," he said.
Arash Azarbarzin, principal and CEO at Highgate, said his company's Hawaii portfolio has seen a demand drop-off due to the lack of travel from Japan. While travel has picked up in countries like Korea and Taiwan, it hasn't been enough to offset demand from Japan.
"We have this portfolio of hotels in Hawaii ... and Hawaii is one of the No. 1 destinations for Japan. We're definitely feeling the pain — and it is coming back slowly, slightly," he said.
One main reason for the slow return of Japanese travelers is Japan applying tariffs on tickets leaving the country to promote domestic travel, Azarbarzin said.
Sonesta International Hotels President and CEO John Murray said his company's hotels have similarly felt the impact of decreased international inbound travel from Asia.
"Our West Coast hotels are really feeling the impact. We have gateway, full-service hotels in Seattle, Portland, San Francisco, L.A., and their demand levels are down significantly, and a lot of that is international inbound travel from Asia just hasn't returned," he said. "If international travel is [about] 80% back versus 2019, Asian international travel must be more like 50%, so it's having a real negative impact."
Looking ahead to the future, though, there are some major events in the U.S. that will drive international inbound travel, such as the World Cup in 2026 and the 2028 Summer Olympics in Los Angeles.
Azarbarzin said the 2024 Copa America tournament this summer drove demand from Latin America on the East Coast and Florida, perhaps a harbinger of outsize demand for sporting events in the coming years. Host markets must start preparing now to take full advantage of the influx of tourism.
The World Cup and Olympics "happens every four years, but for us, it happens every 20 years before they come back to the U.S.," he said. "It's really important to make it as easy and seamless as possible for tourism in advance of these major events."
Beyond the international demand these sporting events will bring, G6 Hospitality President and CEO Julie Arrowsmith said they will be a boon to her company's demand base.
"We're very excited about some of those big events like the World Cup and Olympics because not only does it bring the tourists for those types of events, but it's all the technicians and the back-of-the-house event management that fills our hotels, as well," she said.