Majority Statement

• Daniel K. Inouye

  Senator
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  Majority Statement

  Daniel K. Inouye

  Travel and tourism is Hawaii’s number one industry.  In 2006, the Hawaii Department of Business, Economic Development and Tourism reported $12 billion in tourism revenues – a three percent increase over tourism revenue in 2005.

   

  This industry is just as important for the nation’s economy as it is for Hawaii.     Travel and tourism is America's second largest services export industry and its third largest retail sales industry, generating a  $9.7 billion balance of trade surplus in 2005.

   

  The travel and tourism industry has shown resilience since the terrorist attacks of September 11, but America has become a less desirable destination for many international travelers.

   

  According to the U.S. Department of Commerce, in 1992, the U.S. attracted 9.4 percent of all international tourist arrivals from around the world.  In 2004, the United States attracted only 6 percent of total international arrivals.

   

  Success in this industry is unpredictable because of uncontrollable influences such as natural or man-made catastrophic events or economic downturns that impact the pocketbook of potential travelers.

   

  However, there are certain controllable factors such as capital investments, which can benefit the industry and help keep it competitive, and we all know a competitive industry provides a tremendous economic benefit to our nation. 

   

  In fact, prior to 1997, the federal government made capital investments in tourism through coordinated advertising to international markets, and we remained competitive in attracting international visitors. 

   

  To further prove the point that capital investment works, the decline in international visits began in 1997 when the United States government stopped providing funds for international advertising.  The federal government reinstated funding for international advertising in 2003, but we have a long way to go to recover the lost world market share.

   

  Another essential component is to ensure our borders are protected for both Americans and visitors. While we must secure our borders, we must do so in a manner that ensures our international friends continue to feel welcome.  Many in the travel and tourism industry have expressed concerns with the sometimes overly aggressive measures used by the Department of Homeland Security and the Department of State as part of their effort to improve border security. 

   

  I look forward to hearing from the witnesses about how to balance these important goals.

Minority Statement

• Ted Stevens

  Senator
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  Minority Statement

  Ted Stevens

  Thanks you Chairman Inouye for calling this hearing to discuss the important role that travel and tourism play in our country’s economy and the current difficulties it faces.  This industry is not only vital to our two states but it contributes a great deal to the nation’s prosperity.

   

  To our witnesses, I thank you for being here today, and I appreciate the time and energy each of you has spent to bring more visitors to the United States.  Many of you have worked with Commerce Secretary Gutierrez in this endeavor and his and your efforts are appreciated.

   

  The travel and tourism industry is the second largest private sector employer in my state of Alaska.  More than 24,000 Alaskan jobs rely on travel and tourism, contributing to over $2 billion to the state’s economy each year.

   

  While attention to transport security is vital for our country, it is equally important that our security not have the unintended consequence of driving away international visitors and commerce.  If we do not allow for quick and efficient movement through our transportation systems we may soon hamper a critical piece of the nation’s economy.  Our country’s declining share or international visitors may be a warning sign that this already may be happening.

   

  I look forward to hearing the results of you report, and working with both you and the members of this committee to address these important issues.

Testimony

• Mr. Stevan Porter

  President, the Americas, Intercontinental Hotels Group

  Chairman, Discover America Partnership
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• Mr. Jonathan M. Tisch

  Chairman and Chief Executive Officer, Loews Hotels

  Chairman, Travel Business Roundtable
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• Mr. Jay Rasulo

  Chairman, Walt Disney Parks and Resorts

  Chairman, Travel Industry Association and Chairman, U.S. Travel and Tourism Advisory Board
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  Testimony

  Mr. Jay Rasulo

  Testimony of

   

  Jay Rasulo

  Chairman, Walt Disney Parks and Resorts

  Chairman, Travel Industry Association

  Chairman, U.S. Travel and Tourism Advisory Board

   

  Before the

  United States Senate Committee on Commerce, Science, & Transportation

   

  January 31, 2007

   

   

  Mr. Chairman, on behalf of the Nation's travel and tourism industry, I appreciate the opportunity to appear before you to discuss our plan to increase the economic and diplomatic benefits of travel to the U.S. 

   

  I speak today from three perspectives. 

   

  First, as 2006 Chairman of the Travel Industry Association, which represents the $600 billion U.S. travel industry.

   

  I also serve as Chairman of the U.S. Travel and Tourism Advisory Board.  This is a panel of the industry’s top CEOs that is charged with advising the Department of Commerce on the creation of a national strategy to compete for a greater share of the growing world travel and tourism market.   

   

  And finally, I am Chairman of Walt Disney Parks and Resorts, which operates 11 theme parks on three continents, a top rated cruise line, and 32,000 hotel rooms.   Here in the U.S., our vacation businesses are responsible for creating 175,000 jobs, while contributing nearly nine billion dollars in economic revenue each year to their local economies.

   

  The challenge that has been described today is not merely an industry challenge or even a private sector challenge – it is America’s challenge – one that both government and the private sector must address together.

   

  When it comes to security and ease of travel, people sometimes mistakenly believe we must choose one or the other – that we can’t have both.  I believe this is a false choice.   And the blueprint we have created shows that it is well within America’s reach to be both more secure and more welcoming.

   

  As my colleagues have described, the solution we propose must unfold in three steps.

  First, we must keep the visa process secure, but make it more user-friendly.

   

  Second, we must strengthen the security of our entry process, but make it more welcoming and efficient.

   

  But it’s not enough to fix the problem.  We must also tell the world we did it.   Because negative perceptions have a funny way of lingering long after the reality has changed.  

   

  That’s why the third step in this process must be the creation of a nationally-coordinated program that communicates these changes to the world. 

   

  In preparing the Blueprint to Discover America, we conducted quite a bit of research to understand why people are avoiding traveling the U.S.  And it was very clear to us that confusion and misperceptions about the entry experience are a far bigger deterrent than the processes themselves.  

   

  The Western Hemisphere Travel Initiative is a perfect example.  This new law requires a passport for travel to and from Canada – and it is causing considerable anxiety and confusion among travelers.  Their confusion is unnecessarily amplified because the U.S. has no dedicated resources to communicate these changes, to counter misperceptions and help people understand and navigate the process.

   

  The government agencies are individually doing what they can with their existing budgets, and so is the private sector.  Many companies -- including Disney – are dedicating marketing and sales resources toward getting the word out.  The Travel Industry Association has even set up a web site called “get a passport now,” which has been visited more than a million times.

   

  But none of this is any substitute for a well-funded, nationally coordinated program that communicates these policies with a single voice.

   

  In fact, this is something that virtually every other industrialized country in the world is already doing.  Australia, for instance, spends $113 million dollars a year communicating and promoting itself to travelers.  Canada spends $58 million dollars.  But the U.S. currently has no such program. 

   

  We envision the creation of a new public-private entity.  We could call it, perhaps, the Corporation to Discover America.

   

  It would combine the expertise of the private sector with the oversight and coordination of the federal government.   It would serve as the primary voice for all travel-related policies, and it would also coordinate our national strategies to maximize the benefits of travel to America.

   

  This program would fill a vital gap in our current strategies to attract more visitors.  And it would pay for itself many times over.

   

  We estimate that almost all of the recommendations in our Blueprint could be implemented at a total cost of under $300 million a year.   If these changes resulted in an increase of only 1 million visitors, the additional tax revenue would cover the investment.

   

  If we recapture 10 million new visitors – which represents little more than one additional share-point of world travel – the added tax revenues would be ten times what we invest.  And that doesn’t include 10s of billions added to the economy, and hundreds of thousands of new jobs.

   

  But this effort also serves a larger national purpose.  It would advance America’s public diplomacy—the public face we present to the world. 

   

  Where I work, we often talk about the magic of Disney, but there is also a magic to America.  People simply need to visit here to feel this magic.  Our research has found that traveling to the United States makes a visitor 74% more likely to feel extremely favorably about this nation. 

   

  If we can get people through the gate, we can change their perceptions of America. 

   

  Imagine the goodwill that will result if we simply let people know we want them to come.

   

  Imagine the benefits that will flow to our nation if other peoples around the globe know that America remains an open, friendly, pleasant place to visit.

   

  Again, I thank you for the opportunity to speak here today, and I look forward to addressing your questions.

• Mr. James C. May

  President and Chief Executive Officer

  Air Transport Association
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  Testimony

  Mr. James C. May

  Statement of Jim May

  President and CEO of Air Transport Association

  Senate Committee on Commerce; Hearing on Travel and Tourism

  January 31, 2007

   

  Good afternoon, Chairman Inouye and Vice Chairman Stevens.  I appreciate being here.

   

  We have just heard testimony about the “Blueprint to Discover America.”  Their three main goals – a faster and more secure visa system, more rapid processing of passengers at airports, and creating a more welcoming environment for international passengers – are goals that we all agree upon.

   

  The good news -- and I am sure it is the result of the good work by Partnership members, is that these are also goals that are already being addressed by several federal agencies.  

   

  The fact that we are sitting together today tells us that there are a lot of committed people working together on these issues in the Administration, in affected businesses, and in the airlines.

   

  The Rice-Chertoff Initiative, the DHS/State Department “Secure Borders, Open Doors” initiative, the US-VISIT program, and the Commerce Department’s U.S Travel and Tourism Advisory Board, have all focused on these same goals to improve the international traveler experience.

   

  These government initiatives, such as E-passports, model airports, developing a “single portal” for transmission of passenger information, adding new consular positions and decreasing the wait time for visa applicants, are going a long way towards improving the passenger experience.  As I compared the government’s programs with the objectives of the “Blueprint,” I felt that those “Blueprint” objectives were being addressed.

   

  Having noted the consistency of the objectives between the “Blueprint” and the government initiatives, there is one glaring inconsistency.  The “Blueprint to Discover America” goes against one of the key recommendations put forth by the government.  The Travel and Tourism Advisory Board raised concerns about imposing taxes on passengers.  It explained how those can “increase the cost of travel and can dampen demand for inbound travel.”   

   

  The “Blueprint” proposes to pay for all these initiatives with a $5 fee for “all travelers leaving the United States via air” or with a charge of approximately $10” to be added to the cost of “purchasing the airline ticket.”  To be fair, the “Blueprint” offered a third funding alternative, the issuance of $1 billion in tax free bonds.

   

  Why would we want to charge passengers more at the same time we are trying to get more of them visit the U.S.?  That just does not make any sense.

   

  I would like to remind the committee that international airline passengers are already paying approximately $50 in U.S. taxes and fees for each trip to America. What passengers should expect for $50 is an efficient system to get them through our airports.  

   

  Travel and tourism create spending of over $650 billion a year in the U.S. and generate approximately $100 billion in additional taxes for state, local, and federal governments. If more needs to be done to expedite handling airline passengers or processing visas, and it does, the federal government needs to commit to use a portion of those additional tax revenues to these efforts.

   

  The “Blueprint” also says that “all foreign travelers into the U.S. should be greeted at the inspection booth with the words ‘Welcome to the United States’.” 

   

  While I appreciate a warm welcome – it is hard for me to support charging passengers a $5 fee to purchase a smile and a greeting.

   

  The ATA strongly favors securing America’s borders, and we can do that by eliminating inadequate processes and transitioning to electronic visa application forms, making visa appointments on-line, sharing data among government agencies to avoid duplicative work, and adding even more consular positions and locations. 

   

  ATA has been working very closely with government agencies to implement these initiatives.  We have long been an advocate for full coordination among government agencies and support a DHS-lead “single face” at U.S. airports of entry.

   

  I want to reiterate – we support these fundamental changes in the “Blueprint” to speed passengers through airports, to expedite visa processing and enhance security, and to make the travel experience more enjoyable.   We think they are already being addressed by the State Department, the DHS, and the Commerce Department – but that they could be done with a little more vigor and with a greater sense of urgency. 

   

  America has to effectively compete for those visitors or otherwise millions or travelers will take the billions that they would have spent here, and spend it elsewhere. Our airlines are eager to bring more international visitors to America so they can experience first hand what we already know – that America is a great country to do business with, and to visit.    

   

  Thank you.