By Thierry Malleret, economist

If it erupts, a trade war between the US and China would have a significant detrimental effect on the US wellness tourism industry (while benefitting other national wellness travel markets as a result, particularly in Europe—a key alternative destination). A back-of-the-envelope rough calculation demonstrates that for every one million Chinese tourists who disregard the US for another destination, the US economy loses $11 billion in revenues. (This is based on the following observation: in 2016, three million Chinese visited the US, spending an aggregate $33 billion.)

The US wellness travel industry would also forgo significant future revenues as 50 million new Chinese travellers are expected to go abroad over the next five years—a growing proportion of them being wealthy enough to seek wellness destinations and consume wellness services. To put all this into perspective, consider the following: The US has a trade deficit vis-à-vis the rest of the world of about $500 billion (in 2016), but it registers a surplus in services, 33 percent of which are represented by spending of foreign tourists in the US (travel and tourism accounts for 33 percent of service exports and 11 percent of all exports). The overall figure amounts to $293 billion, significantly higher than the sales of semiconductors ($44 billion) or aircrafts ($121 billion) that the current US administration is trying to boost through trade negotiations with China.

The extent to which the tourism industry in general, and the wellness travel one in particular, are being overlooked from a US policy point of view is striking.

There may be a connection with the points above and the US National Travel and Tourism Office’s decision (on April 7) not to release any new data on international arrivals to the US due to “technical issues.” Data is only currently available through September 2017. International arrivals were then down 5 percent year-on-year and 3.8 percent year-to-date.

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