Foreign Visitors Venture Back

Spooked at the thought of flying, Irish tourists Glenda Kavanagh and Stephen McCabe had stayed away from the United States since the Sept. 11 terrorist attacks three years ago. But now they’re back, joining others from Japan, Venezuela, Russia, Holland, Canada and elsewhere last week on Rodeo Drive in Beverly Hills to snap pictures and gawk in the windows of Gucci, Louis Vuitton and other high-end designers.

“I was anxious about coming before because of what happened with the planes,” said Kavanagh, a 25-year-old office worker from Dublin. “But it’s probably more safe now, because there’s more security. They’re looking out now for terrorists.”

Kavanagh represents some welcome news: The number of international visitors to the United States is starting to rise again this year after plummeting following the 2001 terrorist attacks and the introduction of stricter security measures.

During the first six months of this year, the number of visitors increased by 16% and the number of visas for visits rose 14%, according to U.S. government statistics. International spending in the U.S. has also increased for the first time since 9/11 and is projected to rise 7% to $69.4 billion this year.

Even the numbers of visitors from Middle Eastern countries, which experienced some of the steepest declines, have begun inching up. But their numbers remain far below 2000 levels, and many of their U.S. friends and relatives say Middle Easterners have stopped investing, visiting and studying here because of what they perceive as an unwelcoming atmosphere.

The recent U.S. denial of entry to musician Yusuf Islam, a British citizen formerly known as Cat Stevens, inflamed such sentiment, some Muslims say.

California, which attracts more foreign visitors than any other state except Florida, is reaping the benefits of the turnabout. The number of overseas visitors to California increased 21% during the first six months of this year, led by travelers from Japan and Australia.

According to the Travel Industries Assn. of America, international spending in California had declined from $15.1 billion in 2000 to $10.2 billion in 2002, while jobs generated by foreign travel and tourism had also decreased.

The increasing numbers of foreign visitors are credited in part to improved federal visa review procedures, less fear among travelers of an imminent terrorist assault, more confidence in airport security and a weaker U.S. dollar, which makes a visit to this country more affordable.

Anxiety over other factors that have discouraged travel, including the Iraq war and a global outbreak of severe acute respiratory syndrome, or SARS, is also fading, travel experts say.

Despite the early signs of improvement in foreign visitor levels, significant concerns remain among business leaders, economists and others about the mounting costs associated with the stepped-up U.S. security and border controls.

Many had fretted that the last three years have cost the United States both goodwill and hard cash, evident in declines in tourist spending, foreign investment and, on some campuses, foreign student enrollment.

According to the U.S. Commerce Department, international spending in the United States dropped from $82.4 billion in 2000 to $65.1 billion in 2003. Direct foreign investment plunged from $314 billion in 2000 to $29.7 billion in 2003. And the number of overseas visitors admitted as students dropped by 8.5% to 474,920 between 2001 and 2003.

Travelers from Arab and Islamic nations -- particularly those from Saudi Arabia and other Persian Gulf states -- had registered among the steepest declines in visits to the United States.

Hicham Ayloush, 37, of Lebanon, a produce importer in Beirut, used to come to the United States twice a year to buy up to $3 million worth of Washington apples, California almonds and carrots for clients in the Mideast. But on his last visit last year, he says, he was made to sit in the back of the plane with air marshals and then was required by Chicago airport authorities to open his computer files and strip to his underwear.

After that, Ayloush says, he decided to dump most of his U.S. producers. Now he buys primarily from France, Chile and New Zealand.

“I was coming, buying and helping your economy,” Ayloush said in a telephone interview from Beirut. “But now we’ve decided to delay any more visits until we feel we are well-treated.”

Among American Muslims, such stories are commonplace. Mohannad Malas, who owns a Laguna Beach real estate investment firm, and Adnan Khan, a Beverly Hills businessman, share tales of Mideast investors who have pulled out of the U.S. market and once-frequent visitors who no longer come.

Malas says all of his investors have told him they want to sell their U.S. assets as soon as possible, drawn by higher returns elsewhere and discomfited by “humiliating” treatment when they visit the United States.

Khan says two of his friends, Pakistani industrialists, used to come every year, dropping $100,000 or more at Las Vegas casinos while their wives shopped at upscale clothing stores. But after their last visit this year, he said, they told him they would not be returning because of “rough treatment” at the airport.

“With the rise in oil prices, people in the Mideast have gotten filthy rich, and they’re ready to invest,” Khan said. “But when I talk to them about the U.S., they aren’t interested. All they want to do is invest in Europe.”

“I want terrorism stopped and I want my country to be safe, but we shouldn’t hassle people,” Khan said. “I see us losing people, losing investments, one by one.”

But the U.S. government’s latest statistics show that visitors from Middle Eastern countries are starting to return, registering a 14% rise during the first six months of this year over the same period last year. Visitors from Saudi Arabia had declined by 73% between 2001 and 2003, for example, but increased by 5.5% during the January-to-June period this year.

U.S. consular officials say investments in faster automated systems to screen visa applications and better data-sharing among agencies have helped clear a 2,000-case backlog. They have also cut visa processing times to close to pre-9/11 levels, with the vast majority of applications now handled within 30 days, said Kelly Shannon, spokeswoman for the U.S. Bureau of Consular Affairs.

“We’re better able to process in a timely manner these [applications] without compromising security, and I think the numbers show it,” she said. “We’ve really been able to turn a corner.”

According to Shannon, student visa applications increased by 9.4% and visa issuances by 11.2% during the first six months of 2004 compared to the same period last year.

Those figures have heartened educators, who have been concerned that visa delays were jeopardizing their ability to attract the best and brightest foreign students. A recent survey by the Council of Graduate Schools found an 18% decrease in admissions of foreign graduate students this fall compared to last year. In May, 35 organizations of higher education, science and engineering warned of “irreparable” harm to U.S. interests without action to improve the visa system.

At USC, which has the nation’s largest number of foreign students, administrators were unnerved by a 30% plunge in graduate school applications this year.

Dixon Johnson, executive director of the university’s office of international services, said the drop was caused by a perception that “the U.S. is less than a welcoming society,” more difficulty in obtaining visas, greater job possibilities in China, India and other countries that typically send students here, and an increase in competition from universities in Canada, Australia, Britain and New Zealand.

But Johnson said the number of new graduate students who ended up enrolling this fall was down by only 3.8%, and the university’s overall foreign student population is expected to register a modest increase this academic year to more than 5,500.

Although some students are still encountering visa delays, Johnson and others say that U.S. officials have made marked improvement in expediting the process.

“In the visa world, 9/11 was like an earthquake. It shook a lot of things up, and a lot of rebuilding had to take place,” said Allan Goodman, president of the New York-based Institute of International Education. “Now we are well on the way to improvement.”

In Beverly Hills, city officials say hotel occupancy rates are up, and a spokesman for high-end fashion designer Versace reports a “significant increase” in foreign tourists --particularly from the Mideast, Russia and Eastern Europe -- in the last six months.

Gregg Donovan doesn’t need data to tell you about the tourist turnaround. As the official “ambassador of Beverly Hills,” Donovan figures he greets hundreds of tourists a day, hailing visitors in dozens of languages as they alight from buses at the corner of Rodeo Drive and Dayton Way. After 9/11, Rodeo Drive was in the doldrums, he says. This summer, the foreign visitors started coming back.

“I haven’t been this jubilant since I started five years ago,” Donovan says. “People are coming from all over the world. The Japanese are back. The Russians are back. Even the Saudis are back. I escorted them personally to Jose Eber, and they loved it,” he said, referring to the upscale hair salon.

Sinnathuri Puvanendran of Canada said he sometimes drove across the border after 9/11 but didn’t have the nerve to fly here until last week. “I am going to give a message to all of my cousins and brothers that you are free here and it’s OK to come,” he said, beaming, as he boarded a tour bus to the Farmers’ Market and Universal Studios.

Japanese visitors Reina Taga and Mari Hirose, both 24, said fears over traveling to America were fading in Japan, considered one of the largest, most loyal and most lucrative markets for U.S. tourism.

“Just after 9/11, there weren’t many people who wanted to go to America,” said Hirose, who planned to spend a week each in San Francisco and Los Angeles. “But things have settled down. The sense that America is dangerous is disappearing.”