ICYMI: ETIAS, rents, airfares, and other cost insights

Welcome back to In Case You Missed It! We have a number of things to share with you that have the potential to impact corporate global mobility programs. Let's look at what's going on around the world. 

First, with international travel booming, U.S. domestic travel has dipped as the post-pandemic urge to explore (#revengetravel) seems to be easing. Heading into Q3 of 2023, many expect generally leaner demand and a lowering of domestic airfares within the U.S. With hindsight, data seems to even show a peak back in early April. Since then, airline fares have declined 11%. 

Per this article in The Messenger:

The average U.S. fare for the rest of the year is $257 round-trip, down 11% from last year, and 9% from 2019, according to Hopper, a Montreal-based tech startup that tracks airfares. For September and October, two of the industry’s traditionally slowest months, U.S. fares average $218, 15% below 2022.

Internationally, fares for the balance of the year average $960, 8% above last year and 24% from 2019 prices, according to Hopper.

For anyone traveling within the U.S., note that we may also be in a small summer resurgence of COVID-19. Time recently highlighted that "the number of coronavirus infections is rising, along with test positivity, emergency department visits and — most alarmingly — hospital admissions."

Aside from U.S. travel changes, here are some other countries to pay attention to:

1. United States: This will be the last summer for U.S. passport holders to travel to Europe without a new travel document known as the European Travel Information and Authorisation System (ETIAS) which comes into effect in 2024. It impacts passport holders from a total of 60 nations who are inbound into 30 European countries for stays of up to 90 days. At some point in 2024 (date not specified yet), if you want to go to popular destinations like France, Germany and Italy as well as non-Schengen E.U. members Bulgaria, Romania, and Cyprus, you'll have to apply and pay 7 euros for the authorization. You can also read more on in this article from Time. ETIAS is an initiative by the European Union to secure borders and mitigate terrorism risks. This is a big change for Americans, since there hasn't been a visa requirement to visit EU countries until now. 
   
   Also, for those companies bringing expat talent to the U.S., the strength of the U.S. dollar has pushed the United States up the rankings into the global top ten most expensive locations to relocate staff. And now, ICYMI, the Fed just approved another 0.25% rate hike. That brings the federal funds rate range to 5.25%–5.50%, which is the highest level in 22 years and we are watching to see where this pushes mortgage rates!
   
   Lastly, per Fragomen, the USCIS has announced that it has completed the second Fiscal Year (FY) 2024 H-1B cap lottery selection process. Sponsoring employers and their attorneys have been notified of the selection results and are now able to view the status of their submissions in their registration accounts.
   
   
2. United Kingdom: The UK is now the most expensive country in the world to relocate employees according to this article from HR News, based on data from ECA International. Soaring rents drove a 15% increase in the overall cost of mobility benefits. Expatriate annual pay and benefits packages cost businesses an average of £351,992 last year, up £33,887 or 11% from 2021. Rising costs of common expatriate benefits, such as accommodation, international schools, and car leases, made up more than half of the increase. For the same period the average salary increased by only £2,998 per annum or 5% since 2021, to £63,250 for a middle management position. The figures also do not take into account recent visa cost rises. 
   AIRINC also notes that London rents rose in the second quarter; vacancy rates remain low, and demand has increased from all sectors. The pace of rental inflation is slowing but rents are still up across the city. The situation is similar in most UK locations; Aberdeen rents increased as demand grows in an already tight market. New “green” laws in Scotland have also forced landlords to comply with new regulations which have had a knock-on effect on rent prices. Grimsby is up due to the increasing number of people moving to the area with a limited supply of quality housing.
   
   
3. Switzerland: According to ECA International data, Switzerland ranks as the second most expensive country in Europe for expat pay and benefit packages. Swiss salaries are also the highest in Europe. Due to low taxes and businesses needing to pay less for employee benefits, overall costs remain slightly less than the UK. However, the Swiss National Bank recently raised mortgage rates and many anticipate rent increases of at least 3% for any expat rents tied to the previous rate, which is more than half of leases currently across the country. Per Packimpex, due the number of increases in the cost of borrowing (i.e. mortgage rates), this "Hypothekarischer Referenzzinssatz" is being applied more regularly than in the past. An increase of 3% would add CHF 30 per month to each 1,000 CHF of rental cost. So, for example a 3% increase on a 5 thousand per month rental will be CHF 150, which would ultimately translate into an annual increase of 1800 CHF ($2062 USD).
   
   
4. France: The Rugby World Cup is coming to France in September. Expect an influx of tourists, hotel bookings, and delays at airports for employees trying to enter and stay in the country. The matches begin September 8^th and will run until the 28^th of October. France is stated to be expecting an influx of over 600,000 visitors for the matches.
   
   
5. Italy: New regulations have introduced simplifications allowing non-EU residents to start work immediately after entering Italy with their work visas. They are not required to sign their work contract before beginning. The affected visas are the EU Blue Card, Intra-Company Transfers, and EU Intra-Company Transfer permits. 
   
   
6. Ireland: As of July 31^st, Ireland has implemented changes to its immigration laws with intent of improving efficiency and civil processes. These changes include reducing residency requirements for children born in Ireland with a different nationality who wish to apply for citizenship, allowing immigration authorities to serve certain documents visa email or a customer portal that the government is planning on launching to further streamline the process.
   
   
7. European Union: The European Parliament approved a draft legislation to bring Romania and Bulgaria into the Schengen zone. When passed, this would allow Schengen zone residents to travel to Romania and Bulgaria without a visa and make travel easier for foreign nationals.
   
   
8. Saudi Arabia: A new Electronic Visa Waiver (EVW) has been implemented for UK nationals to enter Saudi Arabia. This EVW allows a single entry stay for up to six months for business, tourism, study, or medical treatment. The visa approval will be sent to the applicant within 24 hours of submitting their application. This comes in response to the UK implementing a similar visa waiver earlier this year for Saudi nationals.
   
   
9. Japan: Remaining the second most expensive location in the world to send expats, a weaker Japanese yen has recently held cost increases to only 5%. When converted to GBP for comparison purposes, packages are actually cheaper than last year, costing an average of £295,000 and widening the gap between the top two most expensive locations in the world. Tokyo has also dropped from 5th place to 10th on the list of most expensive cities. According to AIRINC, sources noted that higher rents this year are due to high demand and a very limited number of large apartments and houses. Many Americans have returned to Japan, now that pandemic restrictions have lifted. Some companies are moving in from Hong Kong and China, creating new Asian headquarters in Tokyo. Along with new and returning expatriates, Japanese executive families are also competing for larger units in prime areas.
   
   
10. China: Visa free travel into China for Singaporeans has resumed. In March of 2020, China suspended visa free travel for Singaporeans with no end date in sight. Finally, after more than three years, Singaporeans may enter China without a visa for a maximum of 15 days. Additionally, China has implemented an opportunity for 10-year visa holders to apply for extensions of up to three years without facing additional fees.