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Travel ban, strong dollar seen putting damper on U.S. tourism sector

Tourists and visitors crowd The Mall in pre-inaugural Washington DC

Tourists and visitors crowd the Reflecting Pool and the Washington Monument (C) with the U.S. Capitol in the background, in the days prior to Donald J. Trump’s inauguration, in Washington, U.S., January 15, 2017. REUTERS/Mike Theiler

FRANKFURT (Reuters) – Travel and tourism’s contribution to the U.S. economy will grow at a slower pace this year than in 2016 due to a strong U.S. dollar and a perception that the country is less welcoming to foreigners, the World Travel and Tourism Council (WTTC) said.

U.S. President Donald Trump earlier this month signed a revised executive order banning citizens from six Muslim-majority nations from traveling to the United States, which some have warned could deter visitors.

Those countries account for a tiny percentage of visitors to the United States, but there is growing concern that the order could hurt the country’s image and scare other tourists away.

“The travel ban is not having a material impact yet. But we are seeing the unintended consequences of this now because the message has gone around the world that the U.S. is not open for business,” the WTTC’s President David Scowsill told Reuters.

The travel and tourism sector’s contribution to the U.S. gross domestic product (GDP) is expected to grow by 2.3 percent this year, a slowdown from an expansion of 2.8 percent seen in 2016, the WTTC said on Monday.

Growth will be driven by trips from the United States to elsewhere as the strong U.S. dollar makes it cheaper for Americans to travel to destinations in Mexico and the Caribbean.

“Overall the U.S. is still robust,” Scowsill said. “The most important thing is that we get to the end of this (travel ban) situation,” he said.

The U.S. travel and tourism sector is the biggest in the world, accounting for $1.5 trillion, or around 20 percent of the world’s travel and tourism GDP contributions.

Globally, the sector’s contribution is expected to grow by 3.8 percent this year, generating $7.9 trillion and accelerating from a 3.3 percent increase in 2016.

Some destinations suffered last year as attacks prompted travelers to head elsewhere, with tourist spending dropping in Belgium, France and Turkey. But the WTTC said that consumers switched to other destinations such as Bulgaria, Cyprus or Spain rather than putting off travel altogether.

“In Europe, people have still been getting on airplanes and traveling. They just haven’t been going to those places, Scowsill said.

(Reporting by Maria Sheahan; Editing by Toby Chopra)

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