Testimony of: Greeley Koch, Executive Director/CEO

Representing: Association of Corporate Travel Executives

Presented to: New York City Council’s Committee on Economic Development

Subject: Preparing for the Impact of Federal Travel Bans on New York City’s Economy

Date: April 20, 2017

Contact: gkoch@acte.org

I’d like to thank the Honorable Chair, the distinguished members of this committee, and the City of New York for the opportunity to address this issue: the economic impact of travel bans.

My name is Greeley Koch, Executive Director of the Association of Corporate Travel Executives, a global travel trade group with members in 75 countries, representing more than 50,000 business travelers in the air on any given day—as well as billions of dollars, Euros and yen in annual business travel expenditures. Many of those travelers and a lot of that revenue passes through this city.

You are going to hear some startling numbers today from myself and others. Those numbers will parallel the hard reality of the first and second travel ban timeline. But there is a much harder reality of traveler perception, which ultimately drives the numbers six to twelve months in advance. In other words, the worst may be yet to come.

Here is what we know: 

•  International bookings to the U.S. are down 6.5 percent over the same period last year from countries not affected by the bans.

•  Excluding the Middle East, the highest regional drop in bookings is from Western Europe, down 13.6 percent from last year. 

•  Bookings worldwide to the U.S. have dropped  1.1 percentage points, from3.4 percent to 2.3 percent between January 27 and February 24, 2017.

These figures were provided by Forward Keys, a company that analyzes 14 million travel transactions per day. I have every confidence in their accuracy. 

The February forecast for visitation to New York offered by NYC & Company projected a 2.1 percent drop in international travel in 2017 as compared to 2016. This translates to a loss of about 300,000 visitors compared to 2016 levels (12.7 million falling to 12.4 million).

At ACTE, travel goes beyond numbers. Every statistic has a face, and those faces matter. 

Here is the backstory of those numbers.

In a recent survey of 250 global business travel managers conducted by ACTE, we learned that “uncertainty” regarding travel to the US was suddenly affecting travel agendas.

·       20 percent claimed that the travel ban posed difficulties for their respective companies--and this 20 percent was barely reflected by the seven countries named in the ban.

·       25 percent defined these difficulties as: 

o   Fear of traveler harassment; 

o   Fear of harassment or reprisals of US travelers in the Middle East; 

o   Uncertainty regarding Green Card and approved visa credibility; 

o   Limited access to the employee pool. 

That 25 percent soared to 37 percent when respondents emphasized individual fears.

·       In response to the question, “Will this travel ban reduce your company’s travel?”:

o   3 percent responded “significantly.”

o   36 percent replied “somewhat.”

Business and business travelers abhor “uncertainty.” When travelers are uncertain about the viability of a trip, it gets postponed. That means postponing the hotel stay, the dining, the surface transportation charges, the shopping and the ancillary revenue that floats this city. Sometimes, trips and travelers are rerouted to other places; places with less regulation, equal security, newer meeting facilities and an equal number of options.

New York City is more than just the landmark gateway to the U.S. It is the portal to business, art, music and culture. Why would anyone introduce an aura of uncertainty in traveling to New York?

Business travel brings people together. Barely two months after these bans were announced—and on the heels of the electronics restrictions—the Association of Corporate Travel Executives is convening a global travel conference, and we are doing it right here in New York City. It starts Sunday, April 23, and we have brought 1,000 representatives from 25 countries to discuss issues similar to the ones you are discussing here. I invite you, Mr. Chair, and this committee to join the ACTE conference with me.

The uncertainty about New York needs to end here.

Thank you.

Greeley

Greeley Koch
Executive Director
Association of Corporate Travel Executives (ACTE)