PricewaterhouseCoopers Expects National Security
Regulations to Remain Deterrents to Inbound Travel Contributing to Arrivals
Pre-September 11 Share of 13 Percent of Total
NEW YORK, July 29, 2004 - PricewaterhouseCoopers predicts overseas arrivals
to the U.S. will increase by 3.1 percent from 2Q 2004 to 4Q 2004, reaching
a level of 1.59 million arrivals in December 2004, as compared to recent
troughs of 1.48 million and 1.49 million overseas arrivals in August 2002
and September 2003 respectively.
A number of factors including the value of the dollar, and the extended
period of time without acts of terrorism on U.S. soil, among others have
drawn travelers back into the country. However, visitors wishing
to enter the United States now face tougher restrictions at the borders.
Congress has passed acts affecting visitation and immigration into the
United States. Visitors wishing to enter the country now face longer
waits for visas, greater scrutiny at ports of entry, and/or higher visa
application fees - all contributing to concerns about convenience of travel
into the U.S.
"Laws passed and policies implemented to secure the nation due to the
events of 9/11 have had unintended effects on international travel into
the U.S.," says Bjorn Hanson, Ph.D., global industry leader, PricewaterhouseCoopers
Hospitality & Leisure practice. "Although recovery has started,
as of March 2004, the number of overseas arrivals was still only 71 percent
of the previous peak in overseas arrivals and only 90 percent of previous
peak arrivals from Canada and Mexico in January 2001." Currently,
residents of Canada and Mexico, with the exception of government officials,
do not need a visa to enter the U.S.
The following is a summary of restrictions imposed on in-bound travelers
to the U.S.:
The USA PATRIOT Act, enacted in October 2001 established provisions to
grant border surveillance privileges to the FBI and CIA, expand deportation
and detention powers, and strengthen anti-money laundering laws.
Consequences for non-U.S. nationals visiting the country include warrantless
surveillance of email, written correspondences, health records, and other
business documents. According to Travel Business Roundtable, the
act also moved the deadline for mandatory machine readable passports (MRPs)
from 2007 to 2003; however, the Secretary of State may extend this deadline
if it is determined that a visa waiver country is taking steps towards
complying with the technology requirements.
In November 2001, the government drafted a profile of the Islamic suicide
attackers that were involved in the September 11 events. This profile
tightened surveillance of Arab travelers between 16 and 45 of age at U.S.
borders, affecting the entry process of approximately 900,000 visitors
from the Middle East in each of the past two years.
In May 2002, the Enhanced Border Security and Visa Entry Reform Act was
established to provide for electronic tracking of visitor with visas entering
the U.S. This act mandates aliens entering the country to provide
detailed background information regarding family, address, and employment
The Enhanced Border Security and Visa Entry Reform Act also requires individuals
from the 27 countries participating in the visa waiver program to provide
machine readable passports containing biometric identifiers by October
26, 2004, a deadline that the U.S. itself could not meet until late 2005.
If this deadline is not met, visitors from visa waiver countries will undergo
interviews along with non-visa waiver visitors as part of the entry process.
As a result, 2005 visa applications are expected to be double 2003 levels.
According to Travel Business Roundtable, visitors from visa waiver countries
represented about 68 percent of all overseas visitors to the U.S. in 2002
and 49 percent in 2003.
In December 2002, the Justice Department mandated that all male, Islamic
visitors currently in the U.S. over age 16 appear before the INS for questioning,
fingerprinting and photographing. As a result, arrivals from the
Middle East declined 7.3 percent from 2002 to 2003.
In January 2004 the US-VISIT program began at 115 airports and 14 seaports
by requiring visa-holding visitors to the U.S. to submit digital photographs
and fingerprints. These biometric readings are then compared electronically
to international watch lists, according to Travel Business Roundtable.
By December 31, 2004, the VISIT program will be in place at the 50 busiest
land border ports. The exit component of the VISIT program is currently
in place at one airport and one seaport as part of a test phase.
This component serves to help determine when a visitor has outstayed his
or her approved time in the U.S.
"These restrictions have affected decisions of international visitors wishing
to enter the U.S.," says Hanson. "The weak dollar and strengthened
foreign economies have offset some of the deterrent effect of these regulations,
and overseas arrivals have begun to rebound. These economic factors
will help arrest further decline in the share of overseas travelers of
total lodging demand in 2004. After falling from 13 percent of total
lodging demand in 2000, overseas travelers' lodging demand will stabilize
at nine percent in 2004."
On June 14, 2004, legislation delaying biometric identification requirements
until 2005 passed on the floor of the House of Representatives.