May 29, 2011
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Luxury sector wants easier US visa rules

May 29, 2011

May 26 - An unfriendly U.S. tourist visa system is bad for the luxury business and the government needs to ease its rules, according to industry officials.

American passport and airplane ticket resting on suitcase (Photo: Corbis)

The expense of applying for a tourist visa for the United States, followed by an often weeks-long wait to get the document, is turning off a lot of wealthy tourists from Russia, Brazil and China and leading them to choose Europe for their shopping vacations, several executives said.

"We absolutely want to support the safety of the U.S., but what's unclear to me is how waiting three months to get a visa because there's a backlog, as opposed to two weeks, makes the country any safer," Starwood Hotels and Resorts Chief Executive Frits van Paasschen told the Reuters Global Luxury and Fashion Summit this week.

International visitors spent $103.1 billion in the United States in 2010, up 10 percent from a year earlier. Spending by Chinese and Brazilian tourists rose 39 percent and 30 percent, respectively.

That growth could be even higher if the United States eased its visa rules, executives said.

"If you go to Paris, to Galeries Lafayette and Printemps, you go to London, you go to Harrod's, the Asian tourists, the Brazilian tourists, the Russian tourists are very brand-conscious, very luxury-focused," Saks Inc CEO Steve Sadove said.

"They would clearly love to see the U.S. cities as much as some of the European cities," he added. Saks' flagship store on Manhattan's Fifth Avenue is a major tourist attraction.

At Starwood's famed St. Regis Hotel in Manhattan, 35 percent of guests are foreign tourists.


Earlier this month, the U.S. Travel Association urged the government to overhaul its visa system, saying it serves as a virtual "keep out" sign.

The trade group wants the U.S. State Department to extend its visa waiver program to more countries, and ensure it has enough staff to quickly process visa applications. It says the steps would boost tourism and tourist spending in the United States, creating 1.3 million jobs.

"If those (visa) regulations were lightened, would it help the tourism business? Absolutely," said Neiman Marcus Group CEO Karen Katz. The chain's Bergdorf Goodman store in Manhattan is also a big draw for tourists.

A State Department official told Reuters the Obama administration understands the industry's concerns and its role in the U.S. economy, but must weigh security and immigration issues, hence the need for in-person interviews for visas.

Department officials met with U.S. Travel Association representatives earlier this month.

Western Europeans, Canadians and Australians are among those who do not need visas when they visit the United States as tourists. Citizens of most other countries need visas.

The State Department says it has issued 13.4 percent more visas so far this fiscal year than in the same period a year earlier. It says the number of tourist visas issued to Chinese nationals has risen 124 percent in the last five years.

Chinese travelers are among the world's biggest spenders. snapping up Louis Vuitton LVMH bags and jewelry at Tiffany & Co in the world capitals they visit.

They are set to overtake their Japanese counterparts as the second-largest luxury spender behind the United States within a few years.

A U.S. Commerce Department study forecast the number of Chinese tourists visiting the United States will more than triple in the next five years.

"Quite frankly, the Chinese tourist is today the dominant influence in the gateway cities," Polo Ralph Lauren Chief Operating Officer Roger Farah said on a call with Wall Street analysts on Wednesday.

Tourists' dollars don't only benefit stores or hotels.

"Our sales at duty free are mindboggling," said Bernd Fritz, chief executive of the perfume company Coty.

(Reporting by Phil Wahba; additional reporting by Jeremy Pelofsky; Editing by John Wallace)

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