May 30, 2017
by Vijay Dandapani

Trump laptop ban threatens New York City’s tourism industry
Airlines cut flights when a limited prohibition began. A broader ban has been halted but remains “on the table”

The Trump administration’s proposal to extend the laptop ban to flights from nearly 60 airports in Europe has garnering only a glancing mention in the press. But it has caused considerable alarm in the travel industry. And with good reason. The current ban, which prevents U.S.-bound travelers from 10 airports in Muslim-majority countries from bringing laptops on board, has already resulted in airlines from the affected countries cutting flights to the U.S.

While the administration indicated Tuesday it has opted not to impose the wider ban, it said such a move “remains on the table” as it examines intelligence on terrorist threats.

Emirates, which has the second most flights to JFK, has cut its inbound flights by 25%, calling it a “commercial decision.” Emirates’ loss was a gain for American and European airlines as laptop-carrying passengers moved to them. Extending the ban to Europe would end that option.

It is not only airlines that are shuddering at the profound consequences from a decline in business travel that would surely follow this ill-fated measure but also hotels where business travelers contribute the most per capita to the bottom line. Nationally, the International Air Transport Association has quantified the negative effects to be $1.1 billion a year in lost productivity and added travel time.

New York City, the premier gateway into the U.S., welcomed nearly 13 million international visitors in 2016. The U.K. alone accounted for nearly 8% of that. Most international travelers stay in hotels, so extending the bad would deliver a body blow to the city’s hotel industry. New York’s hotels are dealing with a second consecutive year of negative rate growth. The ripple effects of lost taxes and ancillary economic activity would extend far beyond hotels.

Officials from the Department of Homeland Security (DHS) have been cryptic about why it might expand the ban, saying that “we employ a variety of measures, both seen and unseen, to protect air travelers” while noting that “terrorists are pursuing innovative methods to smuggle explosive devices onboard.”

The premise of the ban is the belief that an explosive device would have to be triggered manually by a passenger and that airport security is not geared to detect laptops that have bombs nestled within. Two incidents where terrorists boarded flights in airports in Mogadishu, Somalia, and Sharm-al-Sheikh, Egypt, with laptop-bombs appear to have contributed to the decision to explore the expansion of the ban.

It is unclear why the ban assumes that terrorists won’t, to use Homeland Security’s words, come up with “innovative methods” to circumvent it. And compelling passengers to check their laptops with luggage presents its own problems, as organizations like the Flight Safety Foundation, an aviation safety group, have warned of risks from shifting dozens of lithium-powered devices to the cargo holds of aircraft.

For decades aviation has been a target of terrorists but not the only one. In 1992 a bomb exploded at New York’s Vista Hotel. The Marriott in Jakarta, Indonesia, was victimized in 2003 and the Taj Hotel in Mumbai, India, in 2008. The swift and high-profile media response, concentration of people in a confined space and tremendous infrastructure and economic loss all contribute to making hotels an attractive target for terrorists. However, unlike with airlines where security is almost entirely provided by the government, security in hotels remains largely the domain of hotel companies.

While hotels bear all security-related costs, there is extensive cooperation with law-enforcement agencies. Since 9/11 the Hotel Association of New York City has held regular seminars focused on a range of security issues with participation from the NYPD, Department of Homeland Security and Fire Department. That dialog has resulted in a better security environment for New York City’s hotels.

The Trump administration has not looked for input from the hotel industry, which has been an engine for economic growth since the Great Recession, though this issue has profound economic implications for all. With billions of dollars at stake, the industry would be a willing partner to a process that ensures both security and commerce. An ex-parte decision by the government, on the other hand, would likely cost New York City and the United States billions of dollars in economic activity and enormous goodwill.

Vijay Dandapani is president and CEO of the Hotel Association of New York City.