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Trump could put people off picking the US for their vacation: Research

Statue of Liberty and New York City skyline.
Alison Langley | Getty Images
Statue of Liberty and New York City skyline.

Foreign travel to the U.S. is set to weaken in 2017 as the negative impacts of a stronger dollar and poor global growth could be compounded by the shock of Donald Trump's U.S. Presidential election victory, according to a report released Monday by Oxford Economics.

Analysts at the global advisory firm allied to Oxford University's business college say they expect the President-elect to only proceed with diluted versions of his campaign pledges and policies, which should therefore lead to only "marginally slower" economic growth over the next two years.

But the report warns: "Travel is notoriously more reactive to external events. International leisure travelers in particular have discretion in their choice of destinations and readily shift preferences based on any number of real or perceived factors."

"Trump's policies and persona represent a real market risk if they translate into antipathy towards the U.S. in general and dissuade travel to the U.S."

Looking at historical data, the analysts note that the visitor markets which held a relatively poorer view of the U.S. in the period 2000 – 2006 supplied less tourists to the country during that time.

However, the research team also cautions that this link is "rather tenuous" as they say the data-crunched correlation is somewhat weak and economic conditions are shown to play a more important role.

A clearer correlation is found in the impact of currency markets with weakness in both the Canadian dollar and the Brazilian real in recent years seen as a key factor in the 8 percent expected drop in Canadian visitors to the U.S. in 2016 and the 16 percent fall in Brazilian visitors during the first nine months of this year.

According to Oxford Economics, further dollar strength - seen as likely should the Federal Reserve proceed with a widely anticipated decision to raise interest rates at its December 13-14 meeting - combined with weak global growth, are expected to be larger determinants of the resilience of appetite for inbound tourism.

"While unpopular presidents and policies can negatively affect inbound travel, the historic indication is that this effect is not significant for the U.S. A continued strong dollar and modest global economic growth will remain the prevailing headwind for the U.S.," articulated the research.

Condo buildings line the beach in Sunny Isle, Florida.
Getty Images
Condo buildings line the beach in Sunny Isle, Florida.

Indeed, the authors' outlook for the world economy is of particular concern, with their expectations for global growth in 2016 sitting at only 2.2 percent – a rate which would be the slowest since the great recession.

Sean Tipton from the Association of British Travel Agents (ABTA), told CNBC via email that demand from the U.K. to the U.S. is holding up for now.

"Bookings to the USA in 2016 held steady with a slight year-on-year increase, Florida remains the most popular U.S. destination for U.K. holidaymakers," he said.

"So far bookings for summer 2017 are up year on year, but the impact of a weakened pound may well be seen in the key booking period of January and February."

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