Travel Promotion Act
The U.S. tourism industry has waited a long time for this. The U.S. Senate passed the Travel Promotion Act last Friday (and I thought all they were doing was bickering over health care) and it is going to the White House for President Obama’s signature. The bill establishes a national tourism organization for the United States with the catchy name of the Corporation for Travel Promotion.
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Few Americans ever think of tourism as an export industry, despite seeing thousands of foreign tourists in major U.S. cities, exploring the national parks and shopping malls, or sunning on local beaches. You see, to most people, exports have to be things that can be loaded on a ship in a 40′ container. But attracting foreign visitors to the United States has the exact same effect on our balance of payments as selling a new 777, so it really is an export. And the U.S. Congress has finally glommed onto that. It took a lot of years. The Commerce Department knew tourism was an export, but could make little headway within the government. And the new act took years of lobbying by the visitor industry.
Travel and tourism generates $1.3 trillion in business in the United States annually and supports some 8.3 million jobs. Largely due to 9/11 restrictions, the country attracted 933,000 fewer overseas visitors in 2008 than in 2000 (and it has gotten worse during the recession). The average overseas visitor spends $4,500 per trip (visitors driving in from Canada or Mexico spend about $900 per visit), so that missing 933,000 represents a lot of lost revenue and more than 200,000 lost jobs.
The new Corporation for Travel Promotion will focus on promoting travel to the United States, but a major part of that, unfortunately, will involve teaching potential customers how to cope with tight, sometimes humiliating security restrictions and visa requirements. The CTP will be a so-called public/private partnership with half its money coming from fees collected by the U.S. Government and the other half from private matching funds. This makes sure that both the travelers and the industry feel the pain, but it also provides budgetary independence for the new organization. Travelers from countries in the Visa Waiver Program will pay $10 each every two years, which is expected to raise $100 million annually, to be matched equally by industry funding. I don’t much like charging customers for promotion costs, but $10 doesn’t compare to what they are already paying for travel and visas, so it is unlikely to deter anyone. It’s certainly not as much a deterrent as today’s visa application fees ($131 whether you get the visa or not).
If the projections are right, the United States will suddenly have one of the most powerful travel promotion organizations in the world. We spent about $6 million on travel promotion at the national level in 2005 (that’s the most recent comparable data), while countries like Greece, Australia and Mexico spent more than $100 million each. What can we do with a $200 million promotion budget? Stay tuned.
For international travel industry news, produced in Hawaii. check out Jürgen Thomas Steinmetz’s eTurboNews.
