John D. Rockefeller, IVSenator
I would like to welcome everyone here today, and express my regret for not being in attendance. I would like to thank Senator Klobuchar for calling this hearing and for her dedication to shining the light on an industry that must flourish if our economy is to recover from the current economic downturn.
I would like to thank our distinguished Majority Leader, Senator Harry Reid from Nevada for coming before the Committee today, along with representatives from this Administration and industry leaders. Leader Reid, your dedication to Nevada families is admirable and we thank you for sharing your expertise and much-needed perspective.
Essential facts tell the story of the challenges we face.
Millions of American jobs depend on the tourism industry and 90 percent of those jobs are in small-to-medium sized enterprises.
In 2009 alone America has seen a significant drop in numbers for the first quarter and according to the Department of Commerce, current estimates on international visitors are down 10% compared to this time last year.
The United States Travel Association claims that a one percent increase in the international traveler market share results in a $3.9 billion dollar increase in payroll receipts for American workers.
It is imperative that the federal government support, promote, and help this nation compete for every international traveler possible. The economic livelihood of our local communities depends on it.
In my own state of West Virginia, travel generated spending equates to $3.9 billion dollars a year; roughly $10.9 million dollars per day. These dollars directly support about 44,000 jobs with earnings of $854 million dollars. Local and state tax revenues from travel spending were $546 million dollars in 2006. Without this source of revenue, each household in West Virginia would have to pay an additional $715 dollars in state and local taxes to replace this money in the state’s budget .
Now is the time for the United States to work on a comprehensive approach to promoting some of our nation’s greatest assets: our small towns and villages, our thriving metropolitan cities, and our beautiful National Parks system.
Solutions are needed now and that is why we are here today. Families, businesses, and communities who rely on this revenue to stay afloat know - we don’t have a moment to wait.
Thank you all for coming today to examine the state of our tourism industry during these troubled economic times. Today, with the help of our witnesses, we will be looking at both the challenges and the opportunities.
As we head into the summer months, families – both here and in countries around the world – are sitting around their kitchen tables, looking at their budgets. We want them to know that there are a lot of opportunities for affordable travel in the United States.
I have a lot of memories from my family vacations. Growing up, we would rent a camper and head out west to the Black Hills or Wyoming. We took the Milwaukee Railroad to Wisconsin and bicycled up to the cabins and lodges of northern Minnesota.
America is home to some of the world’s wonders, with so much to offer travelers.
• Whether it’s stunning national landmarks like the Grand Canyon, Mount Rushmore and the Statue of Liberty.
• Whether it’s our oceans, lakes and rivers. … our mountains, forests and beaches.
• Whether it’s scenic country towns or the bright lights of the big cities.
• Whether it’s centers of fun and entertainment like Las Vegas or Disneyworld.
From the heartland to the coasts, every state has an economic stake in the tourism industry.
Throughout the United States, many communities – large and small – have discovered and successfully developed the economic potential of travel and tourism.
• One out of every eight Americans is employed by our travel economy.
• Each year, travel and tourism contribute approximately $1.3 trillion to the American economy.
• And the travel economy contributes $115 billion in tax revenue to state, local, and federal governments.
I remember, back in the old days in Duluth in Northern Minnesota, they were having economic troubles and there used to be a billboard on the edge of town that said: “Last one out, turn off the lights.” Well, I can tell you, the lights are still on in Duluth – and they’re brighter than ever before.
The port remains vital to its economy. But thanks to strong local leadership, Duluth has also transformed itself into a popular tourist destination – welcoming nearly 4 million visitors each year with an annual economic impact of over $700 million.
Not bad for a small city that’s frozen half the year!
Travel is a part of the fabric of our country. As someone once said, “Americans have always been eager for travel, that being how they got to the New World in the first place.”
But today, the tourism industry is feeling the impact of the economic downturn.
Families are cutting back on vacations to save money. And businesses are cutting back on meetings and events for their employees and customers.
When a family decides to forgo a vacation or a business cancels a meeting, there’s a ripple effect across the country.
Fewer airline tickets are sold…fewer cars are rented…hotels and lodges rent fewer rooms…tourist attractions have fewer visitors…
These are serious challenges.
But, even in the midst of these troubled times, there are also opportunities for us to help the tourism industry.
First, we should promote the United States to international travelers.
International visitors to the U.S. spend an average of $4,000 per person while they’re here. This is money going into our big cities, into lodges near our National Parks, into places like the Mall of America in my state.
In economic terms, international tourism to the U.S. counts as an “export.” And here we have a trade surplus.
Last year, travel and tourism exports accounted for 8 percent of all U.S. exports – and 26 percent of all U.S. services exports. In fact, tourism is one of the few economic sectors where we enjoy a substantial trade surplus.
But things aren’t going as well as they could – or should.
While more people around the world are traveling, a smaller percentage of them are visiting the United States. Since 2000, the U.S. share of the world travel market has decreased by nearly 20 percent, costing us some 200,000 jobs and billions of dollars in revenue.
This is lost market share that we must recapture it.
We are a country that has opened our arms to people around the world. So we need to look at new, creative and compelling ways to promote travel to the U.S. Passing the “Travel Promotion Act” this Congress would be a good first step. And that is why I am so pleased that Byron Dorgan is here today. I am a cosponsor of this bill and I want to thank Senator Dorgan for his work on this issue.
Second, we should encourage close-to-home trips and make sure people know that there are affordable travel deals out there for their families.
This year, due to the economy, many families are rethinking their vacation plans. For some, a major vacation this year may not be possible. But there’s still the option to take shorter, more affordable breaks – like day trips, weekend get-aways and short vacations.
Right now, many states, including Minnesota, are offering great values for get-aways. So, we need to help families learn about these affordable vacation opportunities. We look forward to hearing about those deals from you, Mr. Gilliland.
And finally, we need to encourage businesses to travel again.
Unfortunately, travel is often one of the first things that’s cut when a company’s budget is tight.
But most business travel is essential to doing business – and succeeding at business. Companies use travel to seek new customers … to develop client relationships … to shop for suppliers … to encourage professional development … and to reward and incentivize employees for a job well done.
For companies, these kinds of travel are considered investments in their business.
Business travel is also important to the rest of the economy. Meetings and events make up nearly 15 percent of all domestic travel, accounting for more than $100 billion in spending.
Yet, many businesses are canceling their travel in the current environment.
The U.S. Travel Association estimates that the tourism industry lost more than $1 billion from meeting and event cancellations – and this was just from the beginning of January to the end of February of this year.
As we know, the highly-publicized excesses of a few bad actors have discouraged many companies from spending on meetings and events, even when they know it’s not in their best interests. There are ways for businesses to conduct meetings and events in a way that is responsible and productive.
And when they’re not, it isn’t good for their business – and it’s not good for the tourism and travel industry
So we need to do what we can to encourage companies to spend on travel again – in an ethical, acceptable manner – so these investments can pay off for individual businesses and for the travel industry.
These are just some of the things we need to do to get our travel industry moving again – and to get the American economy moving forward.
I look forward to hearing more from our witnesses.
Across our country, the tourism industry is an engine for economic growth, and today our task is to get that engine moving at full steam again. Thank you.
Witness Panel 1
The Honorable Harry ReidUnited States SenatorNevada
Witness Panel 2
Mary SaundersActing Assistant Secretary for Manufacturing and ServicesU.S. Department of Commerce
Witness Panel 3
Jay WitzelPresident and CEOCarlson Hotels
Sam GillilandChairman and CEOSabre Holdings; Parent of Travelocity.com
Jay RasuloChairmanWalt Disney Parks and Resorts
Witness Panel 4
Rossi RalenkotterPresident and CEOLas Vegas Convention and Visitors Authority
Chad ProsserDirectorSouth Carolina Department of Parks, Recreation, and Tourism
Judy Zehnder KellerOwnerBavarian Inn Lodge, Frankenmuth, Michigan