Tourism in the US economy is hurting

One of the biggest pieces of the US economy stands to be decimated when it could be growing…

Dateline: Panama City, Panama

Panama is one of the easiest countries on earth for Americans to visit. In fact, the visa-free access here is so generous that you can basically live in Panama year-round with little in the way of “visa runs”.

At 180 days, Panama’s borders are open for tourists.

To be honest, I’ve noticed a bit of a disturbing trend over the last few days here in Panama City. Locals are so content to be “the richest” country in Central America that there is little effort to strive for more.

In some stores and restaurants, the level of arrogance practically exceeds what you’d find in The Land of the Free.

So frustrated of Colombians and Venezuelans “over running” their country, many Panamanians seem to be content with being “the next Singapore” rather than actually becoming another Singapore.

One of my friends who runs an international business here is actually planning to relocate the operation back to high-tax Europe where he feels quality help is much easier to find.

That’s not to say there isn’t plenty of opportunity here in Panama; you just have to know the rules. As with anything, “don’t be dogmatic” is some of the best advice I could give you about doing business or living in Panama or anywhere else.

There is always a bit of an adjustment.

One country that has been shown to be even less able to make an adjustment into its new role in the world, however, is the very country whose citizens can easily enter Panama as tourists.

Unlike Panama, this country is making it harder and harder for people to enter its country for tourism or even for transit.

That country is the United States.

I want to speak to a fast growing sector of the global economy today. We frequently talk about newly middle class Chinese and Asians who consume not only more food, but more expensive food, as they become more affluent.

This has led to a global trend in agriculture investing. It just makes good sense.

However, there is another sector that is growing just as rapidly as the number of consumers with disposable incomes explodes. That sector is tourism.

And the United States is doing a horrible job at managing its tourist economy.

Tourism in the United States is responsible for well over $100 billion in annual spending. People from all over the world long to see the Statue of Liberty, the Grand Canyon, and Rodeo Drive.

So much so that tourism is, if not the largest source of employment, among the top three industries in 29 states. Seven million people in an ever-shrinking US workforce derive a paycheck from the tourism industry.

As much as oil or natural gas or other untapped resources could lead to an employment boom if fully exploited, tourism is the sector no one talks about.

All because US persons are all too content to wave their American flags and say “we’re number one”, their country is losing out on billions of dollars and millions of new jobs.

I was talking to a Colombian friend of mine here in Panama the other day. We debated the fact that she wanted to visit the United States and tour Hollywood with her friends.

To even get a tourist visa to the United States requires anyone between the ages of 14 and 79 to attend an in-person interview at a US consulate, where you will be spit on and harassed within an inch of your life.

I’ve actually accompanied foreigners to US visa interviews and I can confirm this happens. US officials are far and away the least hospitable on planet earth. It’s so bad I wonder why anyone even tolerates it.

There are persistent rumors that US consulate workers demand sexual favors in exchange for visas. Barring that, the chances of someone from Colombia or a similar country getting a US tourist visa are relatively slim, especially someone who is a 27-year-old girl.

There are tens if not hundreds of millions of wealthy, high-earning people from “third world countries” who have no interest in living in the United States but would like to visit and spend money. I have a few Japanese friends who routinely fly to Los Angeles to blow $1,000 a day on vacations.

There are millions of Chinese who would do the same if only getting a visa weren’t so difficult. Spending $2,000 and two days in another city just to have your family be interrogated by the US government for a tourist visa doesn’t sound fun.

Heck, even a one-hour layover in the United States is forbidden without a transit visa, which requires an interview.

It’s no secret I believe US immigration and tax policy is by far the most draconian in the world. US persons have been stewing in a pot of jingoism for so long that their desire to keep evil foreigners out is now costing them serious money.

Because statistics show that tourism to the United States is declining compared with the world average.

Las Vegas, for instance, continues to have its clock cleaned by Macau when it comes to tourism revenue. While I still get desperate emails from hotels on The Strip offering me free room nights to come and stay with them, you can’t even book a room at Wynn Macau on a Friday or Saturday night.

Not that it’s difficult. It is literally impossible for the next three years.

Look at virtual any US tourism statistic and if it’s not declining, it’s underperforming the global average.

I learned this lesson first hand last year in Montenegro when I was invited on the yacht of a wealthy Russian guy who told me flat out, “if Europe and America don’t want us, we’ll go elsewhere”.

This guy has all the money in the world and he refuses to jump through government hoops. If Spain won’t have him, he’ll go to Montenegro. Plenty of fish in the sea, he figures.

The Chinese feel the same way. In fact, I’ve suggested that the first Asian country to offer total visa-free travel to Chinese passport holders will win a tourism “space race” and capture tons of dollars.

One insider in Bangkok told me last year that Thailand had an interest in doing this, but was afraid their most popular tourist attractions literally couldn’t handle the huge influx of Chinese tourists and their money.

Imagine having such a good problem.

Countries like Thailand and Malaysia are already making a huge push for medical tourism dollars from China and other countries where the rich feel their medical care is poor.

The United States will never understand, because they are too busy trying to keep “terrorists” and pesky poor people out that they literally throw the baby out with the bath water.

At a time when most of the top ten jobs in the United States pay peanuts, US policies are keeping out hundreds of millions of potential tourists begging to dump their bags of money on American soil.

But the US government won’t allow it. Few countries require more wealthy foreigners to go through a humiliating visa process. Even China streamlined the visa process for US citizens last year, in addition to allowing almost anyone a day or two in Beijing, Shanghai, or other major cities visa free.

China, a culture that understands how money works, knows that letting rich foreigners spend a one-day layover in Beijing will dump more money into the country and help them with their ongoing inflation-vs-unemployment issue.

The United States ought to help the people displaced by its ongoing economic malaise by allowing people to visit the country. Heck, allow people to fly through it.

The fact that even my Austrian employee couldn’t fly American Airlines through Dallas without applying for ESTA, an online pre-clearance visa, means that millions of people are likely avoiding doing business with US companies, flying US airlines, and bringing money into the United States.

Perhaps that’s why the US has some of the world’s ugliest airports and worst business class lounges.

Economies run on margins, and as tourism dollars go everywhere but the United States, American jobs and the economy will suffer.

All because of a government stuck in the 1950s.

How to profit from bad US tourism policies

Purchase, or in some cases even rent, real estate in growing tourist destinations that understand the value of tourism.

Central Europe has some of the world’s best yield opportunities right now, what with declining currencies like the Polish zloty offering cheap properties that tourists have an interest in.

Just one month ago, for example, I was seriously looking at a decent one-bedroom apartment a short walk from Krakow, Poland’s main square for about $60,000.

Even before the US-Saudi smackdown on Russia over oil, Russians much preferred getting a Schengen visa to visit Europe than a visa to the United States. Middle Easterners prefer Europe to the US for a different reason.

More and more, I see tourists staying in their own region. The Chinese realize there are plenty of great places to visit right in Asia (countries like Vietnam and Cambodia make getting a visa a total joke, too).

To make money as a US person, you must realize there are opportunities that go against the “we’re #1” indoctrination you’ve spent your whole life receiving. Find where people who are agnostic to the whole thing are going and follow suit.

Andrew Henderson

Andrew Henderson

Andrew has been internationalizing since 2008, and has learned what works and what doesn't work when it comes to reducing taxes, increasing personal freedom, and creating wealth. Click here to work with him personally.
Andrew Henderson
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