What Trump's Travel Ban Could Mean For Airline Ticket Prices

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Nick Mafi

Research shows how Trump's travel ban is hampering the number of tourists visiting America from abroad.Photo: Getty Images

Earlier this morning, the Trump administration unveiled its second iteration of an executive order baring entry for migrants from predominantly Muslim nations. The first attempt was met with massive protest throughout the country. And while the 9th U.S. Circuit Court of Appeals eventually struck down the travel ban, the ripple effect was palpable around the world. Including, of course, within the travel industry.

According to the Hopper—a company founded in 2008 that collects airfare search data from companies that serve travel agents around the world—international flight searches to the U.S. have dropped since Trump’s inauguration on January 20. The results indicated that San Francisco and Denver saw the largest declines in search interest from abroad, while Las Vegas, Orlando, and Chicago rounded out the list of most affected city's.

What was most interesting from the findings, perhaps, was that the largest declines in flight search demand correlated to dates when President Trump's executive orders or rallying events (such as a recent one in Florida) dominated news coverage. The biggest drop, however, occurred after Trump's initial January travel ban—a hastily rolled out plan that was in the news cycle for weeks. After the ban was announced, airline search demand to enter the United States dropped 17 percent. What's more, the study found that there was a 30 percent decrease in predominantly Muslim countries regardless of whether they were included in the ban. In Saudi Arabia, for example, flight searches dropped by 33 percent, even though they were not included in the President Trump’s executive order.

Of all the questions swirling around the travel ban, the effects it will have on the airline industry, as well as ticket prices is one that analytics could help us answer. "It's becoming increasingly evident that news coverage of the travel ban brings down demand for airline search results from abroad to the U.S.," says Patrick Surry, Chief Data Scientist at Hopper. "So, the longer this is a hot topic, the longer people will be deterred to visit the U.S., the result could have a significant impact on a multi-billion-dollar airline industry."

What exactly that means for airline tickets in the long term is still difficult to say. Yet, Surry and his team believe we will see an effect in the near future. "Weaker demand will ultimately lead to lower prices, like we've seen in Europe over the summer," explains Surry. "Airlines began reducing prices by 10 to 15 percent to destinations in Britain and Europe after Brexit for flights originating in the U.S. These are the lowest prices we've seen to Britain in the last three years."

When asked what this potentially means for domestic travel within the U.S., Surry's research had interesting findings. "We've seen some evidence that Americans are increasingly likely to travel domestically rather than internationally, which might actually lead to an uptick in domestic demand."

What is certain, however, is the travel ban coverage doesn't bode well for short-term tourism in America from abroad. In fact, Surry hasn't seen this type of decrease in travel into the U.S. after a major, news-driven travel story dominated headlines. "When studying different international events, such as terrorist attacks or plane crashes, we almost always see a short term increase because users around the world are trying to alter their plans. But these past few months have been the first time we've seen a decrease like this, where a news event is so significantly affecting airline search. The data is telling us that, for now, foreign tourists aren't attempting to cancel or change their travel plans—they are simply less interested in coming to the U.S. altogether."

 

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