13 May, 2011

How a Harley-Davidson Can Help the U.S. Eliminate Visa Bottlenecks

Imtiaz Muqbil

In a unique attempt to help U.S. policymakers and politicians understand the implications of cumbersome visa application procedures and its impact on visitor arrivals, jobs and economic growth, the US Travel Association (USTA) has invoked one of the most visible icons of Americana – the Harley-Davidson motorycle.

Accompanied by a gleaming black-and-white visual of a well-polished Harley, a report on America’s visa woes issued by the USTA on May 12 says, “Imagine an overseas biker desperate to own a Harley-Davidson — a purchase that would increase U.S. exports and improve our trade balance. Unfortunately, this government has put in place several barriers that make it more difficult and expensive to purchase this American cultural icon.

“Before he can even place his order, he must wait several weeks for an interview and travel hundreds of miles to a distant government office to get to an appointment. On top of that, he must pay $140 up front just to request the opportunity to purchase a Harley, with no assurance he will actually be able to buy one. Instead of dealing with this hassle, he gives up and buys a different motorcycle brand produced in another country —a clear economic loss for the United States.

“If any foreign government even attempted to create such onerous barriers to U.S. exports, members of Congress would instantly threaten trade reprisals; U.S. government trade lawyers would quickly file legal actions with the World Trade Organization; and government policymakers at all levels would search to find a way to end these restrictions.

“Amazingly, the United States has imposed almost exactly these types of restrictive trade barriers on itself while competing in one of the most critical global export markets — the $1.1 trillion market for international travel.”

Building on the impossible-to-miss Harley example, the report shows how the stringent visa arrangements of the post 9/11 era have cost the U.S. billions of dollars in lost economic growth and earnings. It will be of significant interest to countries facing similar visa challenges because it calls the adoption of a whole range of revolutionary measures that essentially seek to alter the mindset of visa processing and consular officers and make smoother visa processing a means of addressing America’s declining tourism competitiveness globally.

It says, “The stated mission of the Department of State’s Bureau of Consular Affairs is to ‘protect the lives and interests of American citizens abroad and to strengthen the security of United States borders’—with no mention of competitiveness or export growth. While security should be a priority for the U.S. State Department, so should the facilitation of legitimate leisure, business or study travel to our country. Otherwise, the problems that plague our visa system will persist—costing the U.S. job creation, new exports and economic growth.”

A full copy of the report can be downloaded here free of charge. (It’s 33 MB file. Pls be patient).

Citing research showing that U.S. visa processing hurdles are identified as one of the key reasons why the U.S. has become seen as an “unwelcoming” country in the aftermath of 9/11, it says, “Unnecessary visa barriers not only limit our ability to grow travel-related exports and employment, they also hurt America’s competitiveness.

“For example, multinational companies avoid holding international meetings in the United States because they cannot count on key staff being able to clear the visa process in time to attend, and industry trade shows and exhibitions lose roughly 116,000 potential customers and exhibitors and an estimated $2.4 billion in sales each year.”

The report cites the President’s Export Council highlighting of the role the visa process plays in facilitating international trade: “Efficiently transporting and relocating talent around the world are critical to the survival of U.S. businesses in a world characterized by just‐in‐time global supply chains and immediate customer and supplier demands. Many American companies utilize business‐related visas to facilitate the entry of suppliers, customers, foreign employees, business partners, prospective investors, and conference and trade show participants.”

In addition to citing the economic damage to the country and its lost potential growth (always a good thing to do at the start of a new presidential election season) the report compares the U.S. visa process to that of close competitors such as the European Union, especially in attracting visitors from the expanding Brazil, China and India markets; cites interviews with tour operators and travel planners who specialize in bringing business to the U.S. and share survey results that show the impact of the visa system on international travelers’ decision making; and provides a “clear roadmap for improving the efficiency and competitiveness of visa processing” in three key markets (Brazil, India and China)  including “sensible, cost-effective recommendations for wait times, processes, resources, staffing and technology that maintain the necessary security programs that have been put in place since 9/11.”

Says the report, “On a worldwide basis, total international arrivals will grow from 930 million to almost 1.3 billion between 2010 and 2020,10 resulting in $2.1 trillion in visitor direct spending and 118 million jobs. Over the same period, international travel revenue as a share of global GDP is forecast to increase by 10 percent.

“Based on forecast demand—and our historic share of the world travel market—the United States has every possibility of capturing enough of this future growth to significantly increase travel-related exports and create more than a million jobs.

“While we ultimately aspire to capture a much larger share of the international travel market, we first need to regain the competitive ground lost over the past decade in long-haul travel. Therefore, the United States should make it a national priority to restore our share of the global long-haul travel market, currently at 12 percent, to the 2000 level of 17 percent. Achieving this goal by 2015 and sustaining it through 2020 would add nearly $390 billion in U.S. exports over the next decade and create 1.3 million more American jobs by 2020.

It says that today 35 percent of overseas visitors to the United States require an entry visa. Looking forward, that number is expected to rise to 51 percent. “Put another way, the greatest growth in the world travel market is expected to occur in countries where the U.S. is already unable to meet existing demand for visas.”

Currently, in some critical travel markets such as Brazil, the wait time for visa interviews can be as long as 142 days. Of course, not all applicants are legitimate or qualify under U.S. law, but the fact that there is no guarantee of visa issuance, even after having paid the $140 application fee, acts as a further disincentive to travel.

“And the real cost of obtaining a U.S. visa may be several times that fee, when you include the cost of a mandatory trip to a U.S. consulate, often hundreds of miles away—where applicants often must wait hours for an interview that takes on average 3 minutes.

“We are losing millions of potential visitors from Brazil and other countries—and billions of dollars—because of the hassles associated with obtaining a U.S. visa.”

It says that solutions such as expanding the Visa Waiver Program, increasing consular capabilities and using existing resources more effectively, and improving customer service could be implemented relatively quickly and at a reasonable cost. “These solutions would not be expensive— especially when compared with the return on investment we can achieve.”

Excerpts from the report:

++ A U.S. Travel Association survey of 1,500 travelers from Brazil, China and India suggests that an overwhelming majority of travelers find the U.S. a tough place to visit.46 As shown in Figure 13, an astounding 94 percent of Brazilian travelers said they found it “somewhat difficult,” “very difficult” or “nearly impossible” to travel to the U.S. And roughly 80 percent of Chinese and Indian travelers echoed those sentiments.

++ Based on Commerce Department arrival projections for 2011, U.S. Travel estimates that consulates in Brazil, China and India will need to interview approximately 400,000 additional travelers seeking entry into the United States. By 2015, these offices will need to interview an additional 3.6 million people to meet the Commerce Department arrival projections. Can U.S. visa offices handle the additional strain and still meet the State Department’s current 30-day standard at current staffing levels and facility space? Not likely, according to our research.

Based on available data such as the number of visas issued, the average time spent conducting an interview, average and peak wait-time data, and the number of total consular officers in Brazil and China, we estimated how many hours a day each officer would need to work to actually meet the State Department’s current 30-day standard in these three countries.

To meet the projected demand for interviews in 2011, officers would need to conduct interviews for over 11 hours a day in Brazil, more than eight hours a day in China and seven hours a day in India. By 2015, if the State Department maintains existing staff levels, these numbers would jump to more than 21 hours in Brazil, nearly 20 in China and more than 12 hours a day in India.65

++ In 2010, travelers from Visit Waiver Program countries made up 17 million of the 26 million overseas visitors to the United States, or 65 percent. In recent years, however, the number of visitors from traditionally strong markets such as the United Kingdom and Germany has decreased due to several factors, including competition from other destinations and negative perceptions about the U.S. entry process.