Evolving Patterns of the New North American Traveller

Transcript

Joe Mohan:Well, thank you, John. Fantastic. Really good data and a great segue into our next topic.

Andrew Newhart:Pronoun, sorry.

Joe Mohan:Seeing as we're here in Charleston, it's only fitting of a historic place for from the American Revolution, that we have the principal actors of someone in from France, we have the British, and we have some Americans. So we'll get a different perspective on things. But just looking at that data, what we really want to talk about today is the incoming. There's going to be a principal focus on what our panel is seeing from incoming traffic to the US, from an airline perspective, what they are doing about it. We saw that As the cost of fuel increases, uncertainty around travel, and what we're doing from a policy standpoint, what we're doing from a carrier standpoint, and what a travel distributor, B2C, what they're seeing from their customers being the closest to that, and what actions they're taking to try to mitigate this situation. So with that, let me open it up to Andrew, and I'll let them introduce themselves briefly as they go around the—

Adam Scott:Hi.

Joe Mohan:Go around the couch, but Andrew has his own set of data. Some of that matches up with what we just saw, some of it a little bit different, but turn it over to Andrew.

Andrew Newhart:Sure, thanks, Joe. So, Andrew Newhart with the US Travel Association. I'm our Senior Director of Government Relations, so fancy way of saying one of our lobbyists in DC, but we are the national nonprofit that represents all aspects of the travel industry. So we have airlines, hotels, Disney World, destinations, Explore Charleston is one of our members. So our main goal is to increase travel to and within the United States. So as you can imagine, that's been kind of a hard go, especially last year, especially when it comes to international travel. So we did see a steep drop-off in international travel, primarily from Canada, for reasons I think you can suspect. But we just recently released our Spring 2026 travel forecast for this year, and there were some good numbers that came out of that. So I brought some cards. I didn't want to get the numbers wrong, but for 2025, the travel trade deficit reached $72 billion, which outbound travel outpaced international visitation. So it's been a $120 billion swing from our previous $50 billion travel trade surplus.

David Hodges:I see.

Andrew Newhart:And that matters more because international visitors spend 8 times more than domestic visitors. So they're coming here, They're staying longer and they're spending more. So we worked with Tourism Economics on our numbers for '26, and thankfully they came back with some good numbers. So it will hit a record in 2026 with $1.37 trillion and climb to $1.42 trillion in '27. Domestic travel remains the backbone of the industry, accounting for 87% of all spending, and business travel has grown at about 1%. International inbound is expected to resume growth in 2026 after I said falling 5.5%. The US was the only major destination last year that lost international visitation. So definitely not a contest we were trying to win, but it looks like things are going to be turning around, primarily because we have the World Cup coming up with 11 US cities that are hosting, as well as America 250. Not sure how many international folks are going to come for America 250. My boss always likes to say that no one likes their birthday more than themselves, but hopefully that will increase some international travel. But included in the forecast was some downside risks that we just heard about: persistent inflation, energy prices, geopolitical conflict, softening consumer confidence, and barriers for international visitors, including visa wait times and global perceptions of the United States, which I know we'll touch on later. The perception factor has definitely been a hindrance for us.

Joe Mohan:Thanks so much, Andrew. Yeah, I heard it said earlier, you know, what is the impact of the war? And, you know, I could only think of which one. There's been another war over on the other side of the pond for several years that folks have been dealing with over there, uncertainty. Mitzi, what are you guys seeing from Kiwi?

Mitzi Berberi:We've seen also the same decline. We saw Skyscanner clicks are down 19% for EU travelers to the US.

Joe Mohan:What's Skyscanner?

Mitzi Berberi:It's basically— does anybody not know what Skyscanner is? It's basically the number one flight intermediary that people go to.

Joe Mohan:Searches, people are just searching travel less.

Mitzi Berberi:That's down 19%. And then on Kiwi, we're seeing that demand is declining as well, but bookings are more or less flat. Decline 5%, not very, very high, but still showing that there's a definite negative impact based on perception.

Adam Scott:Yeah.

Mitzi Berberi:Being Canadian myself, I think that that also impacts Canadian travel plans. We saw a decline, a sharp decline also, when it comes to Canadian travelers going to the What was—

Joe Mohan:you mentioned and you kind of blew past it, Andrew, the most affected group incoming travel to the US has been the Canadians.

Andrew Newhart:Yeah, Canadian travel in 2025 was down 21%. So if you took out the Canadian market, which is our biggest market, but if you took out the Canadian market, we were basically flat. But, you know, the talk about tariffs, the talk about the 51st state, I know Mitzi and, you who are from Canada and you have family that have opinions on that, but it just hasn't been great for business, especially in our border destinations, northern border destinations. So we're trying to change the perception, trying to show that we are a welcoming country. I will say, in addition to the travel forecast, we also released data we did with YouGov, where they interviewed 1,200 recent international visitors from Argentina, Brazil, Canada, France, Germany, India, South Korea, and the UK. And their perception of the US was much different than what you're seeing in the news. 91% of them said they were satisfied with their recent trip to the US. More than 4 in 5 thought they felt welcome during their visit. 2/3 said the trip made them feel more favorably towards the US. And more than half said their visit improved the perception of safety. So I think a lot of the news headlines can tell a different story, but once we talk to actual travelers who've been here in the last 6 months, you know, they do feel welcomed and they, and they did have a good time when they were here.

Joe Mohan:So as an OTA, as a travel planner, how do you dismiss— call it misinformation, fake news, whatever you want to call it— but there seems to be a difference, a disconnect in between what we might read in the press and what's actually the situation when people get over to the United States. Are you guys trying to educate? Are you trying to remove some of this uncertainty that—

Mitzi Berberi:Absolutely. Yeah, we try to neutralize it. So it is definitely a question of perception. We were having this conversation earlier, what people think is happening versus what's actually happening on the ground, whether it's a $250 per person fee, searching your phone when you get to the US, flight disruptions, bankruptcies, etc. So people are nervous and they're scared. As an OTA, and like many in the industry, what we're trying to focus on is bring a level of certainty and assurance to travelers. Travelers. We have a few products that are available also by other resellers, so that people feel that if they do get stuck, then they can come back safely to their home or find an alternative flight and so forth. And I think there is something that we can do as an industry also to bring back this element of reality versus fiction when it comes to the dramatizations that we're seeing in the press. That's how they sell. So I think as an industry, we should be trying to focus on, no, this has not been implemented. Your phones are not going to be searched. I think you mentioned that 0.01% of travelers actually get their phones searched, or an increase of 0.01%, rather. And so therefore, it's not really happening, but the perception is that people are nervous about their phones being searched, with burner phones being used, and so forth. So I think education and information is probably something we should all be focusing on.

Joe Mohan:So, David, It seems that, you know, what we saw earlier is that there's uncertainty, maybe there's a certain amount of fear, prices have gone up to a certain extent, but there's an immunization of that to the premium segment. With Virgin, I was— we had dinner last night and I said that I'm probably one of the few people that remember getting an actual— I was looking at the massage outside and had an actual massage on board Virgin. So, You guys were out ahead of the premiumization for many years. What's— how is that insulated Virgin and your joint business partner Delta from some of the situation?

David Hodges:And I was saying to you as well last night, you can now get your massages back in the clubhouse for those who want to travel. So firstly, on the reality side of— I moved to the US a few months ago, so I definitely share the reality. People are very warm and welcoming here. So I think it's really important to get that out. I took over and the VP of Americas job for Virgin. And I think there's— when you look across '25 to '26, and then you look at the changes post the start of the Iran conflict with the fuel price, all that period you can see, and I think it's a postcode phenomenon with premium, where people had those— had an experience where they missed out on travel, and they missed out on kind of those big life moments and experiences that they love. And since then, premium travel has been incredibly strong, and it's been quite resilient even with the price changes that are going on at the moment in the market. But when I also look at UK versus US at the consumer end of the market as well, I look at '25 versus '26, I think the UK takes a slightly different story to Canada maybe and the rest of the EU. Because the UK consumer travel as well has been quite resilient and still is showing that it really wants to travel to the US. And when I look at the difference between '25 and '26, where we probably saw a bit of a dip in '25, a lot of that I think was caused by things like, you look at the FX rates between the UK and the US in January 25th, January 26th, which is a huge booking period for that market, and there was a 13-point swing from 0.23, I think, up to 0.36. So I think economics is still one of the big drivers for people making decisions on at the consumer end of the market. And what we're seeing now though is people making late decisions about travel because they really want to have that experience and really want to have that That family holiday, that, you know, that trip—

Joe Mohan:But they're booking later than they have historically.

David Hodges:Yeah, they're booking later than they have because they're waiting to see what's going on in the market. But from a premium perspective, very resilient.

Joe Mohan:What do you think they're waiting for?

David Hodges:It's a tough one to be exact about. I think some people are probably waiting, oh, will prices come down? I think people are waiting because of some of the uncertainty to make a decision on where they want to go. They're thinking, maybe I go here, maybe I go here, and making different decisions. But fundamentally, what people are deciding to do is they are deciding to travel, and we continue to see, you know, real strength and real resilience, particularly as a premium carrier in that segment of the market.

Joe Mohan:So, Adam, you started an airline, you know, coming out of COVID The bright idea we just saw that, you know, on average industries, all industries average a 19% margin, and airlines, Average of 3, and you start an airline.

Adam Scott:I gotta run for the door right now.

Joe Mohan:Yeah, yeah, yeah. For a McKinsey guy, you know, how smart are you?

Adam Scott:Not McKinsey, Goldman.

Joe Mohan:Even better, even better. What was the investment thesis? Where did the idea of Bermudair, you know, that you had in mind, and how has that changed, and what are you doing about it?

Adam Scott:It's actually, it's an interesting one. Initially, the idea was to build a premium airline, a very small, albeit premium airline, in Bermuda, which was in our mind, you know, an underserved market, but a very strong and resilient market because it has 3 big components. It has high-end leisure, specifically and predominantly in the summer. It has business traffic. Bermuda is the capital, the reinsurance capital of the world. And then it has a very wealthy population as well. It's one of the richest countries on the planet. The idea was initially to be a very, very business-only opportunity, but then out of that, we designed a very beautiful seat and we had a very beautiful product. Unfortunately, the so-called supply chain issues caused us to rethink that. I think rightfully so, we ended up becoming a multiple-product airline. We have business and economy. I think It forced our hands to become much more sophisticated very quickly. The opportunity was really, again, about connecting Bermuda to more markets and then ultimately to show that there was this demand for a premium carrier like Bermudair out there, and eventually, ultimately, not just in Bermuda, but other markets, other premium markets where that demand exists.

Joe Mohan:What are you seeing from the consumer side? Mitzi, we've gotten into the premium, and it seems to be everybody's chasing that customer. Where was that customer before, and why is this now what everybody's after?

Mitzi Berberi:The customer. Well, we're seeing trends when it comes to generational trends, right? When it comes to the US, biggest segment was millennials, and they're choosing to go elsewhere. We're seeing an uptick in terms of Gen X. Travelers, and then it's remaining flat. So where are they choosing to go? I think Canada is— or trying to avoid the US, so Canada is one. And then we're seeing an uptick also within Europe, so Europeans staying within Europe.

Joe Mohan:So how is that, you know, that I can come to Charleston, or, you know, if I'm based in— if I'm living in cold England and I need a sun destination, I can come here, I can go to Miami, or I can go to Amalfi? Where have you seen that shift? Where is that shift going anywhere in particular, or?

Mitzi Berberi:I'd have to look at the data and come back to you more specifically. But definitely what we're seeing is trends of people wanting to stay closer to home. So looking for the same impact. So if you're looking at sunny destination, etc., they'll want to stay closer to Europe rather than travel to the US. Similarly, there are fewer travelers from the US leaving as well. We were discussing Those trends, potentially fear of not being able to come back, not the nationals, but the residents.

David Hodges:Yeah, so I was just going to say, I think what we see is people want those kind of unique personalized experiences. But when it comes to an airline perspective as well, and we talk about premium carriers, and I think a big part of it is in the culture. We've been a premium carrier for 42 years since we started. It's not always been fashionable in the industry to be a premium carrier, but It creates that culture, and what people are looking for with that personal experience is that human touch as well across their whole travel experience. And I think they were talking about it on the panel earlier, but I think you're going to see some, you know, big changes and big developments from technology and how we can give people more of those experiences and more of what they want from a personalized experience.

Joe Mohan:So you guys are in a joint business, and those of you might not be familiar, but When 2 carriers, in this case Virgin and Delta, it's the revenue is pooled, a person who flies, it doesn't matter if they fly on a Delta plane or a Virgin plane, it's all kind of one synthetic virtual airline. When you look at, you know, the product and how that product is designed for this customer, how do you guys maintain your own individual brands and experiences, but also provide something consistent for that customer?

David Hodges:Well, I think one of the real benefits of our joint venture with Delta and also Air France-KLM joined in 2020 is that ability with, you know, 4 very premium carriers to learn from each other and to learn from what we do, what we do well, what they do well, to keep improving that customer experience and able to have those conversations and see. I know from my own experience, the last job I was doing before this was leading our teams at Heathrow Airport, and there's no, you know, no more important experience than leaving on time and the operational side. I spent a lot of time in Atlanta watching what Delta do, and we do it on a much smaller scale, but we change things about how we do that, which really improved our operational performance. On the same front, I was in LA last week, went in the Delta One lounge. It's a fantastic experience, that lounge, and for those that haven't used it, from curbside up to— and it It had some similarities of what we do at Heathrow. It was different. It was Delta. It wasn't Virgin. But it was that premium experience. And I think being able to learn from each other and improve ourselves as airlines with the premium carriers that we are is the real benefit to the customer.

Adam Scott:I think that the real change and the opportunity for us is actually the soft product, and it's the customer experience. For us, it's really interesting talking earlier on about Connectivity. We don't have connectivity on our aircraft, so we're well behind the curve on that one. However, that being said, the product that we offer— everybody is very welcoming. We promote, you know, you're already on holiday as you get onto the aircraft. You know, you have your drink in a glass and what have you. But our net promoter score, we just hit 70. So people are really looking for the experience. They're looking for—

Mitzi Berberi:Wow.

Adam Scott:When they get on board the aircraft, they're welcomed, there's a smile, they're already sort of in that, they're at their destination. And I think that's a real important move of people to that, looking for that community, looking for that experience, basically.

David Hodges:I think it's a really important point. And I think we often, we, you know, we'll come over and we'll talk about, you know, what we're doing with Starlink or ChatGPT, all these big technology things that are really important. But I Our biggest USP and differentiator remains our ability to recruit the best people. And I think that goes back to that point I was making about culture and having that culture within your organization about delivering premium experience. We know what we're looking for. We know that we're looking for the certain types of people who can deliver certain types of personalized experience. And it's what makes a big difference still, because people want that human touch.

Joe Mohan:They do. What's, as a destination carrier, What percent of your travelers originate, let's say, in the US versus originate in Bermuda?

Adam Scott:Bermuda is very unique because about 40% of the market is Bermuda originating. Again, it's the business traffic. It's the Bermudians. They get rock fever, so they have to fly to the United States to do their shopping and everything else. It's a nice balance. One thing I did want to mention though, in terms of Canadian traffic, we have increased traffic from Canada to Bermuda by 26% in the last year. It's a major sort of story of what's happening with the Canadian market and where people are looking for. Obviously, they come to Bermuda, they see it, but we're doing the same thing in the Caribbean. We launched Anguilla Air, and this year we'll be launching a service from Toronto down to Anguilla as well. We see real opportunity there.

Joe Mohan:That's great. So, Mitzi, we saw earlier with the A4A information that it appears, at least from their data, very little of these fuel increases are being translated into higher fares. You know, rather sizable gap. Are you seeing your average ticket price go up on your customers, or is—

Mitzi Berberi:That's a good size price. I mean, price is always the differentiator, right? We're an OTA, and we're known for lower prices, etc., and that's the first thing that customers will look at. So price is a differentiator. We're definitely seeing an increase in prices. Whether that is the reason why passengers and customers are choosing not to travel to the US, I don't think that that's the driving force behind it. I really think it comes more from the uncertainty than from the price.

Joe Mohan:Sounds like they're not even searching, you know, 17% down. No, absolutely.

Mitzi Berberi:Yeah, 19%. And we saw a 90% increase year on year to travel to Canada. So back to your original question before, maybe that's what's compensating. They're choosing to travel to the US.

Joe Mohan:Is there anything big that you've seen from this latest Israeli-US-Iranian war versus Ukraine? Does it feel the same? Does it seem different from a customer standpoint?

Mitzi Berberi:I think it's— I mean, it's speculating here. This is my opinion, but it seems that it's different because It's much more unpredictable. It was contained when it was the Ukraine. And so people knew if they didn't travel there, then the likelihood of them getting stuck was lower. Whereas now there's pockets of geopolitical issues happening in certain regions and then wars happening in others and conflicts. So I think it's more the unpredictability and uncertainty that's creating this anxiety within travel. And driving people to want to look at alternative destinations, potentially staying closer to home.

Joe Mohan:Andrew, what are your surveys telling you? This uncertainty, what is the uncertainty or the fear that people are—

Andrew Newhart:Yeah, so I mean, it's not unfounded. They're reading headlines and seeing news stories in their countries and changing their mind about where they want to travel to. The issue is with the $250 visa fee, so this was originated back in the one big beautiful bill. They needed to find money to pay for things, so they decided that they were going to charge a $250 fee on all non-immigrant visas to the US. So everyone except a visa waiver visitor would pay an additional $250 on top of the $185 that they were already paying to process their visa. So we kept saying, you know, a family of 4 who wants to come to the US from Brazil, go to a World Cup game, they're paying— they used to pay $740, now they're paying $1,740. Before they even make it to the US. So, you know, they're just deciding to go elsewhere. They can go see a World Cup game in Canada or Mexico. So, you know, we're trying to make sure we get the word out that it has not been implemented yet. We're working hard. We met with the Secretary of DHS 2 weeks ago to talk through it. He's open to changes as long as Congress approves them. I think it was a big bill they pushed through really quickly and didn't really think of the unintended consequences, but From our numbers, we could see 1 million fewer visitors if it's implemented at $250, and $3 billion in lost revenue per year. So, yeah, the perception is real. People think it's in place. When we've traveled overseas, they think it's already here.

Joe Mohan:Mm-hmm.

Andrew Newhart:And then for our closest traveling partners, for visa waiver countries, the ESTA application, they've decided they want to make changes to that and require social media, family history, DNA. I mean, it was— the list was Crazy. And they were at our conference last week in Fort Lauderdale and told us that they got this overwhelming number of comments and responses from us and from others in the industry. So they are going to scale that back when they finally propose the final rule. But, you know, these are the people that come here, spend a lot of money, enjoy themselves. They go back to their home countries, say how great their trip to America was, and we're going to make it harder for them to come here? It just doesn't really make sense. We know that You know, the president likes big, beautiful things, and we're trying to make sure that the World Cup is big and beautiful and successful, but they're doing these policies. It's like death by a thousand cuts, you know, charging more for national parks, charging more for your visa. You know, if this $250 goes through, we'd be the 2nd highest country to visit in the world, 2nd only to Bhutan. But Bhutan has a $100—

Joe Mohan:Not the company we—

Adam Scott:Yes.

Joe Mohan:Striving to compete with.

Andrew Newhart:Right. And they have like an environmental fee of $100 per person per day. So it's not even really on par with the visa fees. So we would be the most expensive country to visit. So not the best.

Joe Mohan:Expensive, yet it seems like people are still coming.

Andrew Newhart:Yeah, people want to come here. We're the most desired— even though of all the things that are going on and geopolitical issues and whatnot, we are still the most desired destination in the world.

Joe Mohan:So just a reminder, we'd love to get some Some questions from within the app. I believe we can— you can submit questions. We have about 15 minutes left and would love to start integrating those into the panel. If you want to send those, they'll queue them up here for us. So policy, you know, we're in the policy realm now. What is your guys' wish list? What does Andrew need to head back to Washington with to try to get change?

Adam Scott:Yeah.

Joe Mohan:And feel free to chime in from the crowd as well, so we can task him appropriately.

David Hodges:Well, I think fundamentally, the harder you make it for people to travel, or the more expensive, you know, through any costs you put on, then fundamentally you are always going to see that have an impact. The question is the scale of the impact, and when do you sort of hit a tipping point. But, you know, the ESTA changes certainly made headlines in the UK. They were on the BBC News. It then has obviously all gone quiet. So it's great to hear there's been some progress made because that reality versus perception is going to be really important going forward. But I think, you know, that I'm sure the, the industry over here, we work closely obviously in the UK with the industry over there. It's the same challenges, uh, you know, in, in both countries where making sure that you make it as easy and as, uh, as comfortable as people to come to your country And enjoy it, because we know both the UK and, you know, in the US—

Joe Mohan:Isn't that what all your loyalty programs are for? They're there for that too. You get a special line over here, you know, you get a special line through TSA.

David Hodges:You can get through quicker with certain things, but yeah, fundamentally, you know, thinking about the bigger picture, it's how do you make it easier for people to come here.

Andrew Newhart:And as part of our pushback, we talked to our EU counterparts and said, you know, if you guys were to say that if this were to go through on the ESTA, We would retaliate and do the same things. And they're like, why would we ever do that? We want you guys to come here. We're like, exactly. But if you threaten it, hopefully, you know, cooler heads will prevail and they will not go through with the changes, which I think for the most part, we've definitely made more progress on the ESTA changes than I think the visa integrity fee. And the arguments don't really hold water when they say that, you know, this $250 fee would prevent someone— their whole goal is to prevent people from overstaying their visa. We tell them, okay, well, if someone really intends on coming here to overstay their visa, $250 is not going to prevent them from doing that. But $250 will prevent someone from coming here for leisure travel who intended to abide by the visa and go home.

Adam Scott:Mm-hmm.

Andrew Newhart:So, you know, that family from Brazil is not going to come here. So, hopefully, we convince the administration and Congress to tweak it a little bit. Some of our ideas were to, you know, only apply it to those countries that have extremely high overstay rates. Why would we apply it across the board? So I think we're making progress, and, you know, with my directions from you all, I will go back to DC and continue that work.

Joe Mohan:Anything from Adam?

Mitzi Berberi:I agree. I think we just have to make it as simple as possible. Decisions are being made last minute. These, you know, visas take longer to execute. So if people are waiting longer to travel and they want to take a last-minute trip to New York, for example, if they now have to apply for a visa and wait 48 hours for that to be cleared and confirmed, I think it's an additional friction point that makes travelers hesitate on coming to the US as a, you know, last-minute destination.

Adam Scott:Yeah, I think for us, we have great access, fortunately, with preclearance in Bermuda. One thing that I would say to add to this discussion, though, is we see a lot of people in Bermuda where the diaspora is in the Caribbean that want to avoid traveling through the US, of course, because of this uncertainty, because of these And so one of the things that we're very, very keen to pursue is direct access, you know, avoiding traveling through the United States as an opportunity for those travelers as well. It is a major issue.

Joe Mohan:Yeah, it's, you know, what sounds like what I'm hearing is US has always kind of been the safe, easy destination with excellent shopping. And so, you know, if there's chinks in that armor, The long-term consequences we might not see in the data immediately, but yeah, in the future.

David Hodges:And particularly to Mitzi's point, if people are making later booking decisions, then that's going to have an impact. But we used to see people when I was at Heathrow turn up at the airport all the time without their ESTA, but they were able to get it very quickly. If things like that start to change, then, you know, you, you, you start to have an impact on consumer behavior.

Andrew Newhart:And the sad thing is, on the visa front, we were making progress with the administration, I think, since COVID Visa wait times around the world had skyrocketed. We were finally starting to chip away at how long it was taking folks to get a visa. They instituted a FIFA FastPass. So if you had a ticket to the World Cup, your visa interview in your home country could be expedited. So, you know, we're gung-ho. This is all great news. And then this new fee comes into place and it's going to deter more people from coming here. So it's really trying to balance the good with the bad.

Joe Mohan:So the World Cup. I think for US Americans, probably don't have a conception of, you know, how exponentially bigger it is than the Olympics or, you know, anything else for pretty much everywhere else in the world, the rest of the world but us. In the world, yeah. How much is at risk with what you were projecting or what you guys might have, you know, been expecting from the World Cup versus Is it still tracking or is that starting— are you starting to get worried?

Andrew Newhart:Yeah, so I think, I mean, we felt very lucky as a policy person advocating. We had the World Cup, America 250, and the LA Olympics. We were like, these are these huge events that the president secured and wants to be successful. So that's where we always was our backdrop of what we were advocating for. And the initial numbers we had were, I think, $100 billion in economic revenue and 40 million international visitors. I do not think we're going to hit those numbers for the World Cup. Demand is still strong. Ticket sales are still strong. So we're hopeful. But I think it all remains to be seen. I think kickoff is June 12th, so we're only a few weeks away. But we're hopeful. I mean, this— I think the numbers in our forecast, I think built into— there's going to be significant international visitation. And not only from folks who are coming here just to watch the game. There's fan festivals around the country. If they don't get tickets, they could still come here and be part of the experience. So we're hopeful that for destinations, you know, large and small, whether they're a host city or not, you know, these travelers, when they— original international travelers come here, I think it's usually a week to 10 days. For the World Cup, it's 2 weeks plus. So they're not going to stay in New York or in, you know, the Bay Area. They're going to want to travel while they're here. So we're hopeful that the economic impact is felt, you know, around the country.

Joe Mohan:And it's that you mentioned earlier, international travelers, 8 times more than a domestic traveler? Is that for the World Cup? I don't know, $100 train into— from New York City. Is it 20 times? You know.

Andrew Newhart:We didn't get into like the whole train debate in New York, New Jersey. It's more of a state issue. But they're expected to spend more than $5,000 per person, which is 1.7 times more than a typical international traveler. So they're going to spend a lot more money. So we want as many of them to come here as possible.

Joe Mohan:Did we have any questions come through the app that you want to queue up? Doesn't seem like it. Okay, get those questions in. And I'm just looking at my picture. I think that was my high school graduation picture on this. I did not choose this picture.

Andrew Newhart:I think there's just general audience questions.

Joe Mohan:Disingenuous. Sorry, mic's not on yet.

Mitzi Berberi:Hi, mainly for USTA, but when do you expect the sort of ruling, final ruling, or, you know, what do you see as the timeline on the visas and any of the other documents for visitors to, you know, be final by this administration?

Andrew Newhart:So when we met with Secretary Mullen and DHS policy, Um, they said obviously none of this will happen prior to the World Cup. On the ESTA front, um, they had already done a 30-day comment period and then received an overwhelming number from industry folks. They're going to do another— they're going to release an updated proposal and do another 30-day comment period. So I think likely by the end of the fiscal year, if not the end of the calendar year, on the ESTA changes, which will hopefully not be as burdensome as the original proposal. On the visa integrity fee, we are working as hard as we can in Congress. You know, Secretary Mullen said if, you know, they're willing to tweak it, we're okay with it. It originated in the Judiciary Committee, so we've met with those folks. The subcommittee chair in Immigration said that he was kind of unaware of it. He's like, it was a big bill, we didn't kind of know everything that was in there. So he's open to changes, whether that means keeping the fee but but giving it back, because as it's written, the fee gets collected by the US government and they keep it for the validity of the visa. So a B-1/B-2 tourist or business visa is good for 10 years. So you're going to keep this $250 where? You're going to refund it at what exchange rate? You know, if a family gets it for their 16-year-old kid, is the 26-year-old adult going to get the money, or the parents going to get the money? So it was clearly— it looked good on paper, but implementing it is going to be Quite the challenge. Not only the fact that they tasked it to DHS when it's actually the State Department and Customs who will be collecting the fee. So it is very messy and they're open to changes. So we're going to work our damnedest to try to make sure that if they do go through with it, I mean, they have to, it's in the law, that there's some significant changes that it's not so burdensome for the industry.

Joe Mohan:So we had a few—

Adam Scott:I have a question over here.

Mitzi Berberi:What role will AI and tech play in the future traveler experience?

David Hodges:From, from my— from an airline perspective, I think it's going to play an increasingly big role in terms of how we can personalize that experience. But I think one of the critical things, kind of going back to talk about earlier, is how we maintain that human touch. If I look at some of the examples of what we're doing with AI, if you look at the booking process, we've launched the first-ever airline app. Through ChatGPT where people can go on and in normal kind of speak and ask for what they want, be given an itinerary, and then go through to the website. That gives them that personalization. But then when I look at what we're doing through the booking process where they have challenges with our customer center, we're using AI to be able to give our people information quicker so they can respond quicker. But we're still giving it to our people and they're still giving that human touch to So I think you're going to see developments like that with AI where it's a real opportunity to— how do we give our people the tools to be able to do a better job for our customers in a quicker way? The same with our cabin crew on board our aircraft. There's lots of examples that will come from it, but I think that's really where you'll start to see the difference from a premium airline perspective.

Joe Mohan:And from an OTA standpoint?

Mitzi Berberi:I think there's 2 ways to look at AI. One is from the inspiration to travel, so where customers are going to go and people are just going to search and use AI as their agent to find destinations that correspond. I think on a previous panel, that's what they were looking at. You know, you're going to London and how are you going to build your trip or where do you want to go for a culinary experience? So that's the first use of AI, which is currently external to the booking process. And then once you're in the customer flow and customer journey, as an OTA, we're embracing AI a lot on many levels. From the customer service perspective, we've adopted AI very early on and actually the NPS when it comes to customers using AI to respond to general queries, etc., is much higher than it was through human agents. But we do have the opportunity to still escalate because people do want to have that human touch.

Joe Mohan:So I know that you launched 7 new destinations last year. And we heard earlier, I think David Neelman was mentioning, which has been the historic travel pattern is, you know, I choose where I want to go, then I figure out how the cheapest way I can get there on price and, you know, easy, and then the hotel comes last. When you're looking, we've seen an explosion of what secondary smaller European cities from American carriers, and what do you look for when you're trying to find a new place to fly? You know, when you You flew to Charleston. What did you see that was appealing in choosing this?

Adam Scott:The greatest thing about Charleston, and I still want to come here back at some point in the future, was the way that we worked with the community here and the support, you know, the airports, you know, the whole ecosystem to support the opportunity was fantastic here. I think when we look at other airports, other destinations to travel to, new islands in the Caribbean, for example, it's all about making sure that everybody is around the table and working together to support, you know, the introduction of this new service, because it's so fundamental, so critical that we do work together to make sure that it is successful.

Joe Mohan:And how do you— you know, there was a conversation last night where before, you know, maybe you would go to Kiwi.com, and you would try to figure out a new destination, or you would be doing a Google search, or you'd be doing whatever. And it seems like new route launches from an airline standpoint, you know, to their captive audience of their elite members has become a really big deal these days. Have you guys been doing much of that?

David Hodges:Well, I think I know that obviously Delta have done some work on that, but I think when we're looking at new new places to fly to. You know, we're looking at a combination of factors, and I don't think that fundamentally has, uh, has changed a lot probably in quite a long time. Passengers per day each way, all that kind of market intelligence, etc. Um, and from a US perspective, actually what we're seeing is, you know, markets that we're increasingly strong in. I was, I was in India in 2018 for Virgin for a couple of years. We had one flight a day to Delhi. By the time I left, we had 3 flights. We're now up to 6 flight today to India. So it's places like that as well where you're seeing a mix of people wanting those different experiences, as well as there's other reasons why we fly to India. And the US consumer as well in particular is, you know, is looking at those places more and more and how it can get there and how it can connect to those places best.

Joe Mohan:So they're less risk-averse in choosing places, but they want a really comfortable seat to get there.

David Hodges:Absolutely.

Joe Mohan:So it looks like we have a question coming. A few questions coming in.

Mitzi Berberi:There's a live audience one.

Joe Mohan:Do you see customers choosing airlines travel flight times based on aircraft selection in more premium cabin, lower emissions, newer planes, or does price still win?

Mitzi Berberi:Price.

Joe Mohan:Price still wins. All right, you probably don't like that.

David Hodges:I think it's value proposition for our customers. So price is an important part of the value proposition, but so is the aircraft that I'm sat on. So everyone's got a different value proposition, right? So some people, sustainability is a really important value proposition, and we see that more and more. So there's different things, but I think in this market in particular as well, with the fuel price as it is, people are looking even more at value proposition, and I think that's where premium airlines will perform particularly strongly and why we're seeing real resilience at the moment.

Adam Scott:I think it's so important when you look at When we look at our customer profile as well, we have— even though we don't have Wi-Fi, as I said, even though we don't have a frequent flyer program yet, it's in the works. We have so many customers that have flown with us 50 or 100 times in literally, you know, our less than 3 years, you know, existence. And I think that's because people are looking for the whole experience. And it is, you know, it's the staff, it's the face of the island, of the airline.

Joe Mohan:So could this question around passenger protection requirements increase demand for international travelers coming to the US? So, Andrew, that might be— seems like we have sufficient passenger protections, but is that something you guys have looked at? Yeah.

Andrew Newhart:So as part of US Travel, we have Delta, American, and United Airlines. I think back during the Biden administration, there was obviously a big push on consumer protections for things like canceled flights and family seating. And then those have since been sort of rolled back under the current administration. But I think the airlines themselves are kind of taking the right steps to implement those on their own, especially with the family seating. But I don't think that that is necessarily I know we talked about like the European refunds you can get. I don't think that's necessarily one of the causes, at least not what we're seeing in the data as to why folks are choosing other destinations. But, you know, anything's possible, I guess.

Joe Mohan:Well, I've did a considerable amount of work in Brazil where 90% of all lawsuits related to airline disruption are filed. And don't go there. No, I just say don't go there.

Andrew Newhart:I think there's an audience question too. Henry Hardeveld from Atmosphere Research. There is a proposal by the Department of Homeland Security to reduce Customs and Border Patrol staffing at international gateway airports in so-called sanctuary cities unless those cities do more to cooperate with ICE, Immigration and Customs. So I'm just curious what the panel thinks about this idea. It seems DHS thinks airlines can simply reroute flights to hubs elsewhere. I think those of us in the room know that's not practical, but I'm just curious what you're thinking, especially Andrew, from the policy standpoint. So this is a proposal that Secretary Mullen floated on TV a few months ago, and we were like, oh, he's not being serious. And then we brought some CEOs in to visit with him 2 weeks ago to talk about the visa integrity fee and the ESTA changes to make sure he was aware of our concerns. And unprompted, he brought up this proposal to remove CBP officers at so-called sanctuary cities and redirect flights and cargo to other destinations. We obviously told him this would be devastating not only to the airports themselves, but to the travel industry, to the travelers coming here. Like, you just can't reroute all of these flights. I think they're using it more as sort of a threat. I mean, I'm sure there'd be an injunction. I'm not a lawyer, but probably pretty immediately. But I think they're using it as a bargaining chip with these cities to be more compliant with some of their immigration policies. But we're sounding the alarm along with A4A and others that this would be devastating not only to the industry but to the communities that rely on not only the passengers that are going to arrive at those airports, but they're— a lot of them, that's not their final destination. So you're going to impact cities around the country. He repeated it yesterday. So he's giving it more oxygen.

Mitzi Berberi:Yeah.

Joe Mohan:So treat it seriously.

Andrew Newhart:We are.

Joe Mohan:Okay. So looks like we're out of time. Thank you very much. Really enjoyed your perspectives and enjoy your time in Charleston.

David Hodges:Thank you. Thank you. Thank you.

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