According to DHS, ESTA will allow DHS to screen citizens from VWP  countries who wish to travel to the United States before they depart for  U.S. ports of entry. Elimination of Visa Waiver Program Could Dramatically Increase Visa Demand and Overwhelm Visa Operations in the Near Term, but State Has Not Developed Contingency Plans

Elimination or suspension of the Visa Waiver Program could cause  dramatic increases in the demand for visas that could overwhelm visa  operations in the near term. To meet visa demand, State would need  substantially more staff and facilities. State has conducted  limited planning to address the potential impact of Visa Waiver Program  elimination or suspension. We estimate  that State would have to hire around 540 new Foreign Service officers  worldwide, at an estimated cost of between $185 million and $201 million  per year. In addition, State would have to hire around 1,350 new Foreign  Service national staff worldwide, which would cost around $168 million to  $190 million per year. We calculated that it would cost between $3.8 billion and $5.7 billion to  construct 45 new facilities in these countries. State Would See Significant Increases in Visa Revenues, Offsetting New Staffing Costs

While staffing and facilities needs would increase if the Visa Waiver  Program were eliminated, this scenario also would increase the number of  travelers needing a visa; as a result, we estimate visa fee revenues would  increase substantially. Expansion of the Visa Waiver Program Would Reduce Visa Demand, but Likely Have Limited Effect on State’s Visa Costs and Resources

Expansion of the Visa Waiver Program would reduce visa demand in Road  Map countries, but have a limited effect on the costs and resources needed  to meet the reduced demand and the amount of visa fees received. However, visa volume is relatively small in most  of the Road Map countries. Even if all 13 Road Map countries were to join the program,  and if all of those countries’ citizens who previously traveled with visas  were to travel to the United States without visas, the total reduction in visa  demand would be only around 710,000; more than 400,000 of this  reduction would be in South Korea alone. Officials told  us they generally expect continued visa travel as some percentage of VWP  travelers will be rejected by ESTA and directed to apply for a visa at the  embassy. In total, if  all 13 Road Map countries joined the program, we estimate that about 21  to 31 Foreign Service officers could be moved to other posts in need of  staff and 52 to 77 Foreign Service national positions could be cut. Assuming all 13 Road Map  countries were admitted to the program and that most eligible foreign  citizens traveled under the program, we estimate that State would lose  approximately $74 million to $83 million each year in collected visa fees,  generally offsetting any savings from reduced personnel costs. Most officials predicted that the  percentage of travelers who choose to obtain a visa could exceed potential  ESTA rejection rates of 1 percent to 3 percent. State officials told us that  the influx of even a small percentage of current travelers in larger VWP  countries to obtain visas could significantly disrupt visa operations at U.S.  embassies. For example, if 1 percent of the United Kingdom citizens who  currently travel to the United States without visas needed to or chose to  apply for a visa, visa demand there could increase by 35,000 per year, or  around a 31 percent increase in visa workload. We estimate annual visa  fee revenues would increase and offset the year-to-year recurring staffing  costs. Appendix I: Scope and Methodology

We examined how three changes—Visa Waiver Program (VWP)  elimination, program expansion, and implementation of the Electronic  System for Travel Authorization (ESTA)—would affect the demand for  visas, and how changes in demand would affect the resources the  Department of State (State) needs and the amount of visa fee revenue that  State receives. We did not use data on the  number of travelers coming to the United States under the program  because (1) data from 2001 to 2007 on the number of travelers coming to  the United States under the program were not available; (2) available data  from 2004 to 2007 averaged 12.5 million travelers, a difference of less than  1 percent from the 12.6 million calculated using the number of travelers to  the United States from each VWP country; and (3) we could not  independently calculate the number of travelers coming to the United  States under the program by subtracting the number of visas issued in  each country annually, because not all of those people who received visas  necessarily traveled in that year. GAO Comments

1. 3. We do not believe that DHS should estimate the resources that State  would need to manage increased visa demand or how ESTA could  affect visa fee revenues collected by State as a result of the  implementation of ESTA.
Why GAO Did This Study

Under the Visa Waiver Program (VWP), citizens from 27 countries can travel to the United States visa free. Terrorism concerns involving VWP country citizens have led some to suggest eliminating or suspending the program, while the executive branch is considering adding countries to it. Legislation passed in 2007 led the Department of Homeland Security (DHS) to develop its Electronic System for Travel Authorization (ESTA), to screen VWP country citizens before they travel to the United States; if found ineligible, travelers will need to apply for a visa. GAO reviewed how (1) program elimination or suspension, (2) program expansion, and (3) ESTA could affect visa demand, resource needs, and revenues. We collected traveler, staffing, facilities, and cost data from the Department of State (State), DHS, and embassy officials and developed estimates related to the three scenarios above.

What GAO Found

The potential elimination or suspension of the Visa Waiver Program could cause dramatic increases in visa demand--from around 500,000 (the average number of people from VWP countries who obtain a U.S. visa each year) to as much as 12.6 million (the average number of people who travel to the United States from VWP countries each year)--that could overwhelm visa operations in the near term. To meet visa demand, State officials said they could need approximately 45 new facilities, which we estimate could cost $3.8 billion to $5.7 billion. We estimate State would also need substantially more staff--around 540 new Foreign Service officers at a cost of around $185 million to $201 million per year, and 1,350 local Foreign Service national staff at around $168 million to $190 million per year, as well as additional management and support positions for a total annual cost of $447 million to $486 million. Because VWP elimination would increase the number of travelers needing a visa, we estimate annual visa fee revenues would increase substantially, by $1.7 billion to $1.8 billion, and would offset the year-to-year recurring staffing costs. State has done limited planning for how it would address increased visa demand if the program were suspended or eliminated. Adding countries to the Visa Waiver Program would reduce visa demand in those countries, but likely have a relatively limited effect overall on resources needed to meet visa demand and on State's visa fee revenues. The volume of visa applications is relatively small in most of the 13 "Road Map" countries the executive branch is considering for expansion. If all 13 Road Map countries were to join the program, and if all of those countries' citizens who previously traveled with visas were to travel to the United States without visas, the reduction in workload would, we estimate, permit State to move about 21 to 31 Foreign Service officers to other posts in need, and to cut 52 to 77 Foreign Service national positions. In addition, though program expansion would result in less space needed for visa operations, this would likely result in little or no building or lease savings because any resulting excess consular space is in government-owned facilities, and could not be sold. If all 13 Road Map countries were admitted to the Visa Waiver Program, we estimate that State would lose approximately $74 million to $83 million each year in collected visa fees, offsetting any savings in personnel costs. State and DHS officials acknowledged that the implementation of ESTA could increase visa demand in VWP countries, though neither State nor DHS has developed estimates of the increase. DHS is currently developing ESTA, and DHS officials told us the ESTA rejection rate could be between 1 percent and 3 percent, but they currently do not know. In addition, State and embassy officials believe some travelers might choose to apply for a visa rather than face potential, unexpected travel disruptions due to ESTA. Neither DHS nor State has attempted to estimate how these two factors would affect visa demand, and, as a result, State has not estimated what additional resources would be needed to manage the demand, and what additional visa fees would be received. However, State officials told us that, if 1 percent to 3 percent of current VWP travelers came to embassies in VWP countries for visas, it could greatly increase visa demand at some locations, which could significantly disrupt visa operations.