President Obama believes more foreign tourists can help boost the U.S. economy — and retailers agree.
This story first appeared in the January 20, 2012 issue of WWD. Subscribe Today.
The President on Thursday granted one of retailers’ long-held wishes when he signed an executive order that seeks to dramatically reduce visa processing delays, increase tourism and create jobs in the U.S. The move was applauded by major retailers, which have been lobbying the administration aggressively to ease visa rules so tourists, especially those from fast-growing economies like China and Brazil, can more easily visit the U.S. and spend their money on luxury goods and fashion items here rather than in Europe.
As part of the executive order, Obama charged the State Department and Department of Homeland Security with increasing visa processing capacity for tourists from China and Brazil by 40 percent in 2012, ensuring that 80 percent of non-immigrant visa applicants are interviewed within three weeks of receiving their applications. The order also increases efforts to expand the Visa Waiver Program and travel by those nationals eligible to participate.
The Obama plan calls for the creation of an interagency task force on “travel and competitiveness” to develop a national travel and tourism strategy, promoting domestic and international travel opportunities throughout the U.S. The Commerce Department has been tasked with creating a Web site to assist industries and travelers with information and statistics about the visa process, as well as entry times into the U.S.
“In 2010, nearly 60 million international visitors helped the tourism industry generate over $134 billion,” Obama said in a speech at Disney World in Orlando, Fla. “Tourism is the number-one service that we export…and that means jobs. More money spent by more tourists means more businesses can hire more workers. It’s a pretty simple formula.”
The National Retail Federation has lobbied for easier visa rules for visitors from China, India and Brazil, the three fastest-growing emerging markets in the world.
“Anything the government could do to facilitate visitors to the U.S. is an enormous positive,” said Bloomingdale’s chairman and chief executive officer Michael Gould, who noted how impressed he was by how many Chinese tourists he saw in Paris and, to a lesser degree, in London, during a trip to Europe after Christmas. “We need to make the Chinese, the Brazilians and tourists from other countries feel more welcome.”
Sources said tourists, including those from abroad and the U.S., account for between 25 and 30 percent of the volume at Bloomingdale’s 59th Street flagship in Manhattan. Gould would not comment on the statistic, though he did say, “Tourism has been up. We feel good about it.”
Stephen I. Sadove, chairman and ceo of Saks Inc., said the President’s initiative was “extremely encouraging and a great opportunity for both job creation and retail.” Tourism is most prevalent at Saks on Fifth Avenue in New York, and at the Boston, Los Angeles and Miami stores.
Along with the NRF, “We have been very involved in talking to Congress and the administration. It’s been good to see there’s an open ear on the Hill and with the administration,” the Saks executive said.
Sadove pointed out that in China, the average waiting period for getting a visa to the U.S. is more than 100 days. It requires five or six interviews at the consulate, and about a two-month wait for the visa, in contrast to a 10-day wait for many European countries. But if they make it to the U.S., the Chinese “tend to buy brands and focus on luxury,” he added.
According to 2010 statistics from NYC & Co., Brazilian tourists spent the most in New York City, with 589,000 people spending $1.6 billion. There were even more visitors from France, with 596,000, but they spent $1.3 billion.
There were just 266,000 visitors from China, spending $877 million, yet there were some 900,000 Chinese who visited France. The NRF says international visitors to the U.S. on average spend a total of $4,000 for shopping, food and beverages per trip, whereas the Chinese spend closer to $6,000.
“In a global economy, importing customers is a key component in the balance of trade,” said Matthew Shay, president and ceo of the NRF. “Speeding up the visa process is one of the quickest ways to boost the U.S. economy. There are millions of citizens of nations with growing economies who want to come to the United States to shop for brands that are known around the world. We shouldn’t let long lines at U.S. embassies and consulates make them decide to take their shopping dollars elsewhere.”
Robert A. Iger, president and ceo of Walt Disney Co., said on a conference call, “There are some very tangible parts of this initiative that can have an impact on our business and the economy of the United States and on job creation very quickly.”
Iger said the goal of reducing visa processing is key.
“It is estimated that for every 65 people that visit the United States, one job is created,” he added. “I know from the Walt Disney Co. perspective, we have an ability to create many more jobs by simply adding to our visitation more people from these international markets.”
Obama said citizens from 36 countries can visit America with just a valid passport, not a tourist visa. He said he has directed his administration to work on allowing more countries to join the program.
“Let’s also realize that in the years ahead, more and more tourists are going to come from countries not currently in this program, countries with rapidly growing economies and huge populations and emerging middle classes, countries like China and India and…Brazil,” Obama said. “But we make it too hard for them.”
Valerie Jarrett, senior adviser to the President, said by 2016, the number of travelers from China is projected to grow 135 percent, while the number of those from Brazil is expected to increase by 274 percent, compared with 2010.
“In addition, according to the Commerce Department, Chinese and Brazilian tourists currently spend more than $6,000 and $5,000, respectively, each per trip to the United States,” Jarrett said. “In fiscal year 2011, counselor officers adjudicated more than one million visa applicants in China and more than 800,000 in Brazil, representing 34 percent growth in China and 42 percent growth in Brazil.”