[Senate Hearing 111-90]
[From the U.S. Government Publishing Office]


                                                         S. Hrg. 111-90
 
THE STATE OF THE TRAVEL AND TOURISM INDUSTRY: THE MINNESOTA PERSPECTIVE

=======================================================================

                             FIELD HEARING

                               before the

   SUBCOMMITTEE ON COMPETITIVENESS, INNOVATION, AND EXPORT PROMOTION

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 27, 2009

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation


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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii             KAY BAILEY HUTCHISON, Texas, 
JOHN F. KERRY, Massachusetts             Ranking
BYRON L. DORGAN, North Dakota        OLYMPIA J. SNOWE, Maine
BARBARA BOXER, California            JOHN ENSIGN, Nevada
BILL NELSON, Florida                 JIM DeMINT, South Carolina
MARIA CANTWELL, Washington           JOHN THUNE, South Dakota
FRANK R. LAUTENBERG, New Jersey      ROGER F. WICKER, Mississippi
MARK PRYOR, Arkansas                 JOHNNY ISAKSON, Georgia
CLAIRE McCASKILL, Missouri           DAVID VITTER, Louisiana
AMY KLOBUCHAR, Minnesota             SAM BROWNBACK, Kansas
TOM UDALL, New Mexico                MEL MARTINEZ, Florida
MARK WARNER, Virginia                MIKE JOHANNS, Nebraska
MARK BEGICH, Alaska
                    Ellen L. Doneski, Chief of Staff
                   James Reid, Deputy Chief of Staff
                   Bruce H. Andrews, General Counsel
   Christine D. Kurth, Republican Staff Director and General Counsel
                  Paul Nagle, Republican Chief Counsel
                                 ------                                

   SUBCOMMITTEE ON COMPETITIVENESS, INNOVATION, AND EXPORT PROMOTION

AMY KLOBUCHAR, Minnesota, Chairman   MEL MARTINEZ, Florida, Ranking
JOHN F. KERRY, Massachusetts         JOHN ENSIGN, Nevada
BYRON L. DORGAN, North Dakota        JIM DeMINT, South Carolina
CLAIRE McCASKILL, Missouri           JOHN THUNE, South Dakota
TOM UDALL, New Mexico                SAM BROWNBACK, Kansas
MARK WARNER, Virginia                MIKE JOHANNS, Nebraska
MARK BEGICH, Alaska


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 27, 2009.....................................     1
Statement of Senator Klobuchar...................................     1

                               Witnesses

Joseph A. McInerney, President and CEO, American Hotel & Lodging 
  Association....................................................     5
    Prepared statement...........................................     7
John F. Edman, Director, Explore Minnesota Tourism...............     8
    Prepared statement...........................................    11
David Siegel, Executive Vice President, Minnesota Restaurant, 
  Lodging and Resort & Campground Associations and President and 
  CEO, Hospitality Minnesota.....................................    13
    Prepared statement...........................................    16
Dr. Ingrid E. Schneider, Professor, Forest Resources and 
  Director, Tourism Center, University of Minnesota..............    17
    Prepared statement...........................................    20
Mary Somnis, Tourism Marketing Coordinator, Iron Range Resources.    21
    Prepared statement...........................................    23
Diane Brostrom, Director, Grand Marais Area Tourism Association..    25
    Prepared statement...........................................    27
Anna Tanski, Director of Sales, Visit Duluth.....................    38
Hon. Don Ness, Mayor of Duluth, Minnesota........................    39


THE STATE OF THE TRAVEL AND TOURISM INDUSTRY: THE MINNESOTA PERSPECTIVE

                              ----------                              


                        WEDNESDAY, MAY 27, 2009

                               U.S. Senate,
  Subcommittee on Competitiveness, Innovation, and 
                                  Export Promotion,
        Committee on Commerce, Science, and Transportation,
                                                        Duluth, MN.
    The Subcommittee met, pursuant to notice, at 9:09 a.m. in 
The Depot, St. Louis County Heritage and Arts Center, 506 West 
Michigan Street, Duluth, Minnesota 55802, Hon. Amy S. 
Klobuchar, Chairman of the Subcommittee, presiding.

           OPENING STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. OK, we call this hearing of the Senate 
Commerce Committee to order.
    I want to welcome everyone. This is actually an official 
field hearing of the U.S. Senate Commerce Committee so that the 
whole--statements and all of the testimony and questions will 
go on the official Senate record.
    I wanted to thank all of our witnesses for being here. I 
want to acknowledge that Mayor Ness is here and also David 
Ross, from the Chamber, is here, as well, so I want to thank 
them for being here.
    And it's great to be here in Duluth.
    I wanted to mention, first of all, who all of our panelists 
are. We have, at the end here, Joe McInerney, who is President 
and CEO of the American Hotel & Lodging Association, which is 
the largest association representing the United States hotel 
and lodging industry. He has joined us today from Washington, 
D.C. and I want to thank him for coming all the way to Duluth. 
And if you question Duluth's value for tourism, I suggest that 
you look at this picture, today in the paper, of one of the 
biggest trouts ever caught.
    [Laughter.]
    Senator Klobuchar. There we are--on Lake Superior, so you 
can bring that back to the association.
    Mr. McInerney. Thank you.
    Senator Klobuchar. We'll give that to them.
    [Laughter.]
    Senator Klobuchar. We also have with us John Edman, who's 
the Director of Explore Minnesota Tourism, which is the office 
in the State of Minnesota that promotes tourism. And Explore 
Minnesota has recently launched an advertising campaign, which 
I know a lot of people have seen, because they've mentioned it 
to me, where the voice in the commercial states, ``There's no 
substitute for a great Minnesota vacation.''
    We also have with us--and I'm going a little out of order 
here--Dr. Ingrid Schneider, who is the Director of the 
University of Minnesota's Tourism Center. And the University of 
Minnesota's Tourism Center educates students entering 
Minnesota's tourism and hospitality industry, and also conducts 
research for the Minnesota tourism industry.
    Mary Somnis is the Tourism Marketing Coordinator for the 
Iron Range Resources, a State of Minnesota economic development 
agency. We're glad to have her here.
    And then, we also have Diane Brostrom, who's from the Grand 
Marais Area Tourism Association. And I love their website, 
another thing for you to take back, Joe, to Washington. It 
says, talking about the Grand Marais area and the North Shore, 
their website said, ``It's safe to say it's like nowhere else 
on the planet, except for maybe somewhere in New England, but 
they have funny accents.''
    [Laughter.]
    Senator Klobuchar. So, that's pretty good.
    And then we have here, right to my left, David Siegel, who 
is the President and CEO for Hospitality Minnesota, which is 
the association that represents Minnesota's restaurants, 
lodges, and campgrounds.
    So, we are going to have a good group to talk about this 
important issue today.
    I first wanted to just say a few words about this hearing 
and why this is so important to me. Duluth is a site of many 
family trips for our family. My dad and I bicycled up here many 
times. We--my daughter, I've taken her to the aquarium several 
times. And, of course, our family has gone skiing, even just 
last winter, and done a lot of things up on the North Shore, in 
the Duluth area, and, of course, on the Iron Range, where all 
my relatives live. And if I didn't say that, that would be a 
problem.
    And, in fact, we're going to spend 4th of July week up 
here, and do the Iron Range parades. There are about 1,000 
parades in Minnesota, but if I miss the Iron Range parades 
every year, they remind me of that.
    I also love Duluth because whenever my Senate colleagues 
from California are talking about how beautiful San Francisco 
is on the ocean, I can always respond by simply saying, ``San 
Francisco is nice, but it is simply the Duluth of the West 
Coast.''
    [Laughter.]
    Senator Klobuchar. Today's event, as I mentioned, is an 
official hearing. It is the Senate Subcommittee on 
Competitiveness, Innovation, and Export Promotion. I chair that 
Subcommittee, and it has primary jurisdiction over the Commerce 
Department, as well as tourism.
    And I wanted to mention David Strickland. Is he here 
somewhere? Where did he go? He's the head staff person for that 
subcommittee and has been very active, not only in this, but in 
the great work that we did with the toys and some of the 
problems we were having with dangerous toys coming in. David 
headed up that, as well, so I'm glad he came out from 
Washington. And he helped me when we did a hearing in 
Washington called, ``Tourism in Troubled Times,'' which 
actually received a lot of attention nationally. Harry Reid 
spoke, and a number of the other Senators, about the importance 
of keeping our tourism industry strong in troubled economic 
times.
    Today, with the help of our witnesses, we're going to 
discuss both the challenges and the opportunities of the 
tourism industry in Minnesota. I think we all know that 
Minnesota has an abundance of travel and vacation 
opportunities, and I want to make sure that our tourism 
continues to be strong and a vital part of our economy, drawing 
visitors from across the country and across the world.
    As we head into the summer months, families both in 
Minnesota and throughout the country are sitting around their 
kitchen tables looking at their household budgets and wondering 
what kind of vacation, if any, they can take. Well, the tourism 
industry is wondering, too.
    In our State, Minnesota, tourism is incredibly important. 
It's the fifth largest industry in Minnesota, generating $11 
billion in annual sales and providing nearly 11 percent of the 
State's total private-sector employment. Many Minnesotan 
communities have successfully developed tourism's economic 
potential, and Duluth is a great example of that.
    The community here, as we all know, was hard hit by 
recessions in the 1970s and 1980s. I remember this from when we 
would come up to see my grandma, how difficult it was. There 
was that infamous billboard that used to say, ``Will the last 
one out please turn off the lights?'' Well, the lights are 
still on in Duluth. And, while Duluth, like every city in the 
country, is experiencing difficult times because of this 
economic downturn, the lights are still bright here in Duluth.
    The port is essential to Duluth's economy, but the city 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. This building itself is a 
symbol of Duluth's transformation as home to the Lake Superior 
Railroad Museum, the North Shore Scenic Railroad, the Duluth 
Children's Museum, and much more.
    Duluth is also the gateway to the Iron Range and the North 
Shore, and these areas have also seen substantial growth in 
tourism in recent years.
    Tourism is also a major part of the United States economy. 
One out of eight Americans are employed somewhere in the 
tourism industry. And people need to understand, when we talk 
about the tourism industry, it is not just about the CEOs and 
the people running the hotels and the airlines; it's the people 
who make the beds in the hotels, it's the people who make the 
dinners in the hotels, it's the cab drivers, it's the florists, 
it's everyone associated with the travel industry.
    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. But, today in Minnesota and nationally, 
the tourism industry is feeling the impact of the economic 
downturn. Nearly 200,000 travel-related jobs have disappeared 
in this country in 2008, and the U.S. Commerce Department 
forecasts the loss of an additional 250,000 jobs in 2009.
    Families are cutting back on vacations to save money, and 
businesses are cutting back on meetings and events for 
employees and customers. And every time a family decides to 
forego a vacation, or a business cancels a meeting, there is a 
ripple effect in our economy. Fewer airline tickets are sold, 
fewer cars are rented, hotels and lodges rent fewer rooms, and 
tourist attractions have fewer visitors. These are challenges.
    But, even in the midst of these troubled times, as you'll 
hear today, there are also opportunities to strengthen the 
tourism industry.
    First, we should encourage close-to-home trips and make 
sure people know that there are affordable deals out there. 
This year, because of the economy, many families are rethinking 
their vacation plans, and they maybe are going on shorter 
trips, but they certainly can get some good deals around 
Minnesota.
    This could actually be a boost to our tourism; instead of 
maybe going to California or Florida, they will stay close to 
home. And we also are very happy to welcome people from our 
neighboring States, like Wisconsin.
    Right now, many States, including Minnesota, are offering 
great values. At our Senate hearing in Washington, we heard 
from the head of Travelocity, who said that families are 
constantly looking for vacations right now, at the right price. 
So, it's important that people of Minnesota understand there 
are some great deals up here in northern Minnesota. They can 
find them on the Web, and we'll hear today about how they can 
find out about them.
    Second, we must do more to promote the United States as a 
destination for international travel. This is especially 
important for northern Minnesota on the Canadian border. We 
have the Minneapolis-St. Paul Airport, with nonstop flights to 
Asia and Europe, and we're home to the world-renowned Mayo 
Clinic, and, of course, we have the Mall of America.
    In economic terms, international tourism counts as an 
export. Instead of shipping our product to a customer overseas, 
the customer actually comes here to the United States to spend 
their money on goods and services, and that's why it's called 
an export.
    International visitors in the United States spend an 
average of $4,500 every time they come into our country. Last 
year, travel and tourism exports accounted for 8 percent of all 
United States exports and 26 percent of all U.S. services 
exports. Tourism is actually one of the few areas where we have 
trade surplus. But, since 9/11, actually we've seen a decline 
in our percentage of the tourism market in our country. This 
has nothing to do with the current economic recession, because 
this was going on before that. We are down 20 percent of 
foreign visitors visiting our country, and some of that, as you 
well know, on the northern border, is sort of the confusion and 
difficulty with some of the visa issues and the passport 
issues. And I have already talked to the Secretary of Homeland 
Security about this; we need to do everything we can to make 
this as understandable and as simple as possible, and, in some 
countries, to make it--to make a real effort to get the visas 
processed, because it has actually hurt our tourism. And when 
you look at $4,000 a year that people might spend in this 
country, it makes a big difference.
    Byron Dorgan and I are sponsoring the Travel Promotion Act. 
It's a bipartisan bill. We actually think it has a good chance 
of passing, this year, and it, at no cost to taxpayers in our 
country, basically allows a big focus, like they do in other 
countries, on promoting our country abroad and bringing in more 
tourists to our country.
    Finally, we must encourage companies to resume responsible, 
productive spending on business and convention travel. 
Unfortunately, travel is one of the first things that's cut 
when a company's budget is tight; and that's understandable. 
What we've seen recently, though, is companies cutting out 
travel simply because of a few bad actors that got a lot of 
publicity for taking trips that they shouldn't have taken, and 
it's hurt our entire business travel industry. And I've heard 
countless stories of businesses and conventions and trade 
conventions being canceled, and actually people having to spend 
more on the cancellation fee, simply because of the public 
outcry against some of the bad actors.
    So, the U.S. Travel Association has actually put together 
some ethical guidelines for business travel in this country, 
and are encouraging people to travel everywhere. And, as you 
all know in Duluth, this isn't just about Las Vegas and 
Disneyland; there is business travel--smaller business 
conventions that come to places like Duluth, that come to the 
Twin Cities, including large business conventions down there. 
So, we really want to get the business travel back on track, as 
well.
    Tourism is a powerful engine for job creation and economic 
growth, both in Minnesota and nationally. And to revive our 
economy, we need to get the engine back on track and move 
forward at full steam. That was a little depot analogy for the 
end.
    [Laughter.]
    Senator Klobuchar. OK. So, we're going to get started here. 
I also wanted to mention Jake Spano, from our Minnesota office, 
who does a wonderful job on all of our business issues, as well 
as helping to run the office, along with Zack Rodvold, who is 
here with me somewhere. There he is. And he heads up our office 
in the Twin Cities. And we've just been on the road, since 
Memorial Day, visiting flooded areas that are still slightly 
flooded up near Moorhead. So, it's been great to have both of 
them with me.
    Mr. McInerney, do you want to give us a start, from the 
national perspective?

 STATEMENT OF JOSEPH A. McINERNEY, PRESIDENT AND CEO, AMERICAN 
                  HOTEL & LODGING ASSOCIATION

    Mr. McInerney. Chairman Klobuchar and other distinguished 
guests, thank you for the opportunity and privilege to appear 
before you on behalf of the American Hotel & Lodging 
Association.
    I'd like to begin my remarks by thanking the Senator for 
your leadership in calling these series of hearings on our 
industry's behalf, and for your recent vote for the 2009 Travel 
Promotion Act. Your leadership on this issue is essential to 
making our voices heard in Minnesota and nationwide and in 
passing this long-awaited legislation that I will discuss a 
little bit later.
    We have been the main point of contact for our nearly 
12,000 members, and have seen and heard their individual 
stories of how the recession has been hurting their businesses. 
Therefore, today I'd like to address the topic of the business-
related travel, including travel for meetings, conferences, 
events, and incentive performance programs.
    Business travel creates 2.4 million American jobs, $240 
billion in spending, and $39 billion in tax revenue, and the 
trickle-down effect of the enterprise and local communities is 
more impactful because it touches every part of the community.
    The business travel segment of our industry has been the 
source of undeserved and crippling attacks in recent months. 
Critics have mislabeled many meetings and events as unnecessary 
and frivolous, causing companies that receive Federal 
Government funding, plus many that have not, to cancel meetings 
and travel activities. An environment--this environment has 
created an America where legitimate business travel is being 
questioned and canceled. This translates into the additional 
loss of jobs, taxes, and travel-related revenues for the 
industry, and is already hard-hitting from the general economic 
recession.
    Business travel is not an operational luxury or perk of 
well-paid executives. Meetings mean business to the American 
economy. There is no substitute for the face-to-face, hand-to-
hand, and heart-to-heart results of a business meeting.
    As an industry, we have lost, as the Senator has said, 
nearly 200,000 related jobs in 2008, and an additional 247,000 
will be cut this year, according to the U.S. Department of 
Labor. Those who are losing their jobs represent the hard-
working faces of American bellmen, the room attendants, the 
banquet service, cooks, and middle management. And with so much 
at stake, we seek your support on three key issues:
    First, we are asking all Members of Congress and Federal 
policymakers to change the rhetoric that labels business 
travel, meetings, and incentive travel as frivolous and 
unnecessary.
    Second, we ask your support for a unified set of meeting 
standards for companies receiving emergency government 
assistance and funds that have been developed by hotels, 
travel, and meeting and incentive industries. These guidelines 
were submitted to the Treasury Department in February as a 
policy for companies to guide them in organizing justifiable 
meetings, events, and incentives. We appreciate if you would 
contact the people at the Treasury in asking them to pass these 
best practices on to the TARP recipients.
    With business travel as an essential element to our 
livelihood, leisure travel is also a key to the economic 
component. In general, the economy is looking up for the 
average American, and many of the industries have been busy 
making travel affordable for those who believe it is their 
right, not a luxury, to travel. The truth is that, with the 
multitude of value-added promotions at hotels, reduced prices 
of airlines, and reasonable prices at the gas pump, it's a 
great time for travelers to see the United States and enjoy 
their vacation in a cost-effective way.
    Last, we'd like to ask for your continued support of the 
bill dedicated to reviving America's travel industry in both 
the leisure and the business sectors, the Travel Promotion Act. 
We're thrilled that this legislation was passed by the Senate 
Committee on Commerce recently. We would like to acknowledge 
that it wouldn't have passed its first steps without your 
important leadership support. The goal of this bill is to 
increase the number of potential international visitors to the 
United States which spend, as the Senator said, $4,500 per 
person per trip. We fully support this pending legislation as a 
fundamental strategy to create jobs in travel, tourism, and 
hospitality. It will make America more competitive in the 
global travel market and grow the Nation's inbound travel.
    As the country starts to recover from the deep recession, 
our government needs to seize every opportunity for growth and 
economic stimulation. Today, we ask for your continued support 
in making that happen.
    Thank you, Chairman, for your leadership and engagement in 
these important issues.
    [The prepared statement of Mr. McInerney follows:]

     Prepared Statement of Joseph A. McInerney, President and CEO, 
                  American Hotel & Lodging Association

    Chairman Klobuchar and other distinguished guests: Thank you for 
the opportunity and privilege to appear before you on behalf of the 
American Hotel & Lodging Association, the only national organization 
dedicated to serving the interests of hoteliers on Capitol Hill. I 
would like to begin my remarks by thanking Senator Klobuchar for your 
leadership in calling these series of hearings on our industry's 
behalf, and for your recent vote for the 2009 Travel Promotion Act. 
Your leadership on this issue is essential in making our voices heard 
in Minnesota and nationwide, and in passing this long-awaited 
legislation that I will discuss a little later on.
    For nearly a century, the American Hotel & Lodging Association is 
the sole national association representing all sectors of the lodging 
industry, including individual hotel property members, hotel companies, 
student and faculty members, and industry suppliers. We are 
headquartered in Washington, D.C., and provide our members with 
national advocacy on Capitol Hill, public relations and image 
management, education, research and information, and other value-added 
services to provide bottom line savings and ensure a positive business 
climate for the lodging industry. In addition, we are partnered with 43 
state associations to provide local representation to our members.
    Based on our lobbying efforts, we have been the main point of 
contact for our nearly 12,000 members, and have heard their individual 
stories of how the recession has been hurting their business. 
Therefore, today I would like to address the topic of business related 
travel, including travel for meetings, conferences, events, and 
performance incentives. Business travel creates 2.4 million American 
jobs, $240 billion in spending and $39 billion in tax revenues. And the 
trickle down effect of this enterprise in local communities is even 
more impactful. Here in Minnesota in 2007, travel spending totals $10.3 
billion and travel tax receipts are $3.0 billion. Approximately 140,400 
Minnesotans are employed by the state's hospitality industry, with a 
payroll of $4.1 billion.
    Again on the national level, the business travel segment of our 
industry has been the source of undeserved and crippling attacks in 
recent months. Critics have mislabeled many meetings and events as 
unnecessary and frivolous, causing companies that have received Federal 
Government support--plus many more that have not--to cancel business 
travel activities. An environment has been created in America where 
legitimate business travel is being questioned and canceled. This 
translates into additional loss of jobs, taxes, and travel-related 
revenues for an industry that is already hard-hit from the general 
economic recession.
    Business travel is not an optional luxury or a perk of well-paid 
executives. Meetings mean business to the American economy. There is no 
substitute for the face-to-face, hand-to-hand, and heart-to-heart 
results of business meetings. They are a strategic tool for training, 
education, sales, customer interface, new product development, and 
motivating performance. All of these are vital in rebuilding America's 
economy and creating new jobs that we so badly need at this time.
    But the trend is ominous. According to estimates by Smith Travel 
Research and the U.S. Travel Association, meetings, events and 
incentive cancellations in January and February of 2009 resulted in 
more than $1.9 billion in lost travel spending and cost nearly 20,000 
America jobs. Nearly 200,000 travel-related jobs were lost in 2008 and 
an additional 247,000 will be cut this year, according to data compiled 
by the U.S. Department of Labor. Those who are losing their jobs 
represent the hard working faces of America: bellmen, room attendants, 
banquet servers, cooks, and middle management.
    With so much at stake, we seek your support on three key fronts. 
First, we are asking all Members of Congress and Federal policymakers 
to change the rhetoric that labels business travel, meetings and 
incentive travel as frivolous and unnecessary. The unintended 
consequence of this mischaracterization is job loss, lost tax revenues 
and further stress on this important industry.
    Second, we ask your support for a unified set of meeting standards 
for companies receiving emergency government assistance funds that have 
been developed by the hotel, travel, meeting and incentive industries. 
These guidelines were submitted to the Treasury Department in February 
as a policy for these companies to guide them in organizing justifiable 
meetings, events and incentive travel. They also represent a common 
sense approach that would apply to any business. They serve as a 
standard of ``best practices'' for corporations to conduct meetings, 
incentives and events with complete transparency and accountability.
    With business travel an essential element to our livelihood, 
leisure travel is also a key economic component. In general terms, the 
economy is looking up for the average American, and many in the 
industry have been busy making travel affordable for those who believe 
it is their right--not a luxury--to travel. The truth is that with the 
multitude of value-added promotions at hotels, reduced prices on 
airplanes, and reasonable prices at the gas pump, this is a great time 
for travelers in the U.S. to enjoy their vacations in a cost-effective 
way.
    Lastly, we ask for your continued support of the bill dedicated to 
reviving America's travel industry in both the leisure and business 
sectors--The Travel Promotion Act. We are thrilled that this 
legislation was passed by the Senate Committee on Commerce just 
recently. We would also like to acknowledge that it wouldn't have 
passed its first steps without the important leadership from Senator 
Klobuchar.
    The goal of this bill is to increase the number of potential 
international visitors to the United States, which spend an average of 
$4,500 per person, per trip. International travel promotion is part of 
the solution of stopping domestic job losses and welcome billions in 
new spending by international visitors.
    The bipartisan legislation creates a public-private partnership 
with a budget of up to $200 million annually to attract international 
travelers to the United States by better communicating America's 
security policies and competing for visitors. According to an analysis 
by Oxford Economics, the program could drive $4 billion annually in new 
spending by international travelers to the United States. The Travel 
Promotion Act specifies that travel promotion would be paid for by 
private sector contributions and a $10 fee on foreign travelers from 
visa waiver countries that do not pay $131 for a visa to enter the 
United States. The legislation requires no contributions from U.S. 
taxpayers.
    We fully support this pending legislation as a foundational 
strategy to create jobs in travel, tourism and hospitality. It will 
make America more competitive in the global travel market and grow the 
Nation's inbound travel.
    After the past few months filled with negative press portraying our 
economically-stimulating industry as a frivolous luxury, more positive 
news and a renewed confidence are starting to emerge throughout the 
country. As the country starts to recover from this deep recession, our 
government needs to seize every opportunity for growth and economic 
stimulation. Today, we ask for your continued support in making that 
happen.
    Thank you again Chairwoman Klobuchar for your leadership and 
engagement on these important issues.

    Senator Klobuchar. Thank you very much.
    Mr. Edman?

             STATEMENT OF JOHN F. EDMAN, DIRECTOR, 
                   EXPLORE MINNESOTA TOURISM

    Mr. Edman. Thank you, Madam Chair.
    On behalf of the entire tourism industry in Minnesota, 
Madam Chair, I cannot thank you enough for holding this U.S. 
Congressional hearing about travel and tourism. In the 8 years 
that I've been Director, and even going beyond that, I cannot 
remember a time where a Congressional committee took the time 
to devote to the importance of our industry.
    Senator Klobuchar. Thank you.
    Mr. Edman. So, thank you very much, on behalf of everyone 
in Minnesota.
    Our industry isn't often in the spotlight. And, 
unfortunately, sometimes it takes a disaster to call attention 
to the importance that travel and tourism plays in our economy. 
In the past few years, we've had a wildfire, floods, bridge 
collapses have all brought attention, media attention, to 
tourism in Minnesota. And now, unfortunately, a recession has 
brought attention to tourism and travel, as well, and the 
negative consequences of a downturn in travel, by business and 
by consumers. But, I think the point that we're trying to make 
is that tourism means business. It means business here in 
Minnesota, in communities all across the State, whether you're 
in the metropolitan area or in Greater Minnesota.
    Madam Chair, you mentioned that tourism is an $11-billion 
industry in Minnesota, generating about $33 million a day. 
Putting some of that into perspective, tourism is comparable to 
agriculture, in terms of its importance to the State. We think 
of this State as being important for agriculture, in terms of 
contributions to gross domestic product; tourism contributes 
the same amount. Fifteen percent of all State sales tax in 
Minnesota comes from travel and tourism, and 10 percent of all 
the employment in Minnesota is from the travel and tourism 
industry.
    And I could probably spend the entire time today talking 
about the wonders of the product that we have in the State, and 
I'm going to leave that up to my colleagues, but there's an 
estimated 39 million people that travel in Minnesota each year, 
and they--their travel not only impacts those direct 
businesses, but those other businesses, as well, the indirect 
businesses. The car dealerships, the insurance companies, the 
grocery stores all depend on a healthy tourism economy, and are 
not even counted in our $11-billion figure.
    Like other industries, the travel business is beginning to 
feel the economic impact of the downturn. In the past 6 months, 
both business and leisure travel has declined. We've seen 
occupancy at hotels and lodging businesses down since last 
summer, and it's not expected to rebound soon. And this has led 
to different changes in the way that people are traveling. 
People are still traveling, but they're traveling differently, 
and they're looking, not necessarily just for deals, but for 
value. Those are the things that we're emphasizing--the value 
that a vacation offers, and the values of reconnecting with 
family and friends.
    We just did a survey of about 315 lodging properties 
throughout Minnesota, and about half of the businesses expect 
business this summer to continue at normal levels, with 32 
percent anticipating occupancy to match last year, and 21 
percent exceeding. But, on the other hand, just about half 
expect occupancy to drop. And so, this somewhat more troubling 
outlook does impact consumers that are frazzled and they're 
looking to take a break.
    Madam Chair, you mentioned our campaign, and I won't go 
into the details of that, but we're looking at putting together 
a campaign right now, that there is no substitute for a great 
Minnesota vacation. People want to get away, and we have the 
great product here to provide that.
    In addition to our leisure marketing, we're also focusing 
now on the meetings and conventions market. This is something 
that, as State tourism agencies, we had not been involved in, 
in any great degree in the past, but now communities throughout 
Minnesota are trying to work together to say, ``We need to keep 
meetings strong.'' It's good for business, and it's good for 
the State. And so, we're launching a PR campaign on that now, 
and doing some additional marketing, as well.
    On the Federal level, there are just a couple of things I 
want to touch on, legislation that could significantly impact 
Minnesota. Obviously, Canada is an important international 
travel market to Minnesota, and we have to, of course, maintain 
border security, but also the free flow of travel across our 
borders, and that's vitally important for a State like 
Minnesota.
    The U.S. also needs to promote itself as a travel 
destination. Other countries throughout the world have a 
national promotion organization and effort; we do not, in the 
United States. We are so proud that you're one of the leaders 
in that effort to get that going.
    The travel industry also hires many employees from other 
countries. Comprehensive immigration reform could help ensure 
an adequate legal workforce for our industry. Changes in visa 
processing in the guest worker program to facilitate the hiring 
of non-U.S. labor would also be beneficial.
    And then, we also recently did some 20-20 visioning 
processes, and what our tourism industry said is that 
transportation infrastructure is also essential for a thriving 
travel industry. We need to maintain our Nation's bridges and 
highways, invest in aviation infrastructure, including 
modernized air traffic control, runways, air service, et 
cetera. These are issues that normally are sometimes thought of 
outside the leisure and hospitality industry, but they're 
critical to maintaining a healthy industry.
    And finally, we need help--Federal help to protect our 
natural resources. In Minnesota, our woods and our waters are 
one of the main draws of why people travel here. And it's 
critical that we do all we can to protect our natural 
environment, to ensure that these resources are here for 
Minnesota and for visitors to enjoy in the future.
    So, in conclusion, Madam Chair, the tourism industry is a 
key sector of both our State and national economies. Here in 
Minnesota, every corner of the State benefits, and it takes 
actions on all levels, from the community level to State level 
to the Congressional level, to keep our travel industry 
thriving.
    Thank you very much, Madam Chair, for giving me this 
opportunity to talk about something I'm very passionate about, 
travel and tourism in Minnesota.
    Thank you.
    [The prepared statement of Mr. Edman follows:]

   Prepared Statement of John F. Edman, Director, Explore Minnesota 
                                Tourism

    I am the Director of Explore Minnesota Tourism, the tourism 
promotion office of the State of Minnesota. I appreciate the 
opportunity to discuss the importance of the tourism industry in 
Minnesota and the areas in which the Federal Government can help states 
stay competitive in this important area of commerce.
    Our industry isn't often in the spotlight. And unfortunately, 
sometimes it takes a disaster to call attention to the important role 
tourism plays in the economy. In the past few years, a wildfire, floods 
and bridge collapse have all brought media attention to tourism in 
Minnesota. And now, unfortunately, a recession has brought attention to 
tourism and travel, and the negative consequences of a downturn in 
travel by businesses and consumers.
    Tourism means business. In communities across Minnesota, the 
dollars that travelers spend at a wide variety of businesses contribute 
significantly to their bottom line. In fact, tourism is comparable to 
agriculture in its contributions to the gross state product.
    Travel and tourism generates $11 billion annually for the Minnesota 
economy, with travelers spending an average of $33 million a day in the 
state. It also generates almost $680 million in sales tax revenue, 
supporting programs that benefit all state residents. The leisure and 
hospitality industry accounts for 247,800 jobs across the state, almost 
11 percent of private sector employment, with $3.9 billion in wages. 
Virtually every county across the state feels the positive economic 
impact of tourism.
    Northern Minnesota, with its thousands of lakes, draws visitors for 
fishing, golfing and other outdoor recreation, resort stays, incredible 
scenery, and a wide array of intriguing museums and attractions, 
including the port of Duluth. This area, including the northeast, 
central and northwest regions of the state, benefits from $2.2 billion 
in gross travel and tourism sales.
    But Minnesota tourism isn't all ``Up North.'' In fact, the 
Minneapolis-St. Paul metropolitan area is the top destination in the 
state. Visitors come for its arts and culture, family attractions, 
major festivals and events, sports, conventions and shopping, 
especially at Mall of America. It all adds up to an economic impact of 
$7.3 billion for the metro area.
    Southern Minnesota is a travel destination as well, especially for 
weekend getaways and day trips. Charming towns, B&Bs, bike trails, 
wineries, art galleries, antique shops, historic sites and festivals 
are all part of the lure here, with tourism contributing $1.3 billion 
to this region.
    Many businesses across the state benefit from these tourism 
expenditures. Hotels/motels, resorts, campgrounds and B&Bs all rely on 
travelers for their business success, but many more ``Main Street'' 
businesses in our communities receive significant income from visitors: 
restaurants, shops, service stations, grocery stores, museums and 
theaters, and more. And spending by tourism-related business supports 
print shops, ad agencies, food and beverage suppliers, accountants and 
lawyers, hospitals, and many other types of businesses.
    In addition to the significant economic benefits of the travel 
industry, tourism and the visitor spending it generates support local 
amenities that residents enjoy in communities across the state: 
theaters, museums, restaurants, trails, amusement parks, shops and much 
more. In many communities, these amenities could not exist without 
income generated by tourism.
    An estimated 39 million people travel in Minnesota each year. When 
people travel in Minnesota this summer, their trips will benefit not 
only them but also the communities and businesses they visit, and 
everyone whose job is supported by tourism.
    Like other industries, the travel business is feeling the impact of 
the economic downturn. In the past 6 months, both business and leisure 
travel have declined. Occupancy at hotels and other lodging businesses 
has declined significantly since last summer and is not expected to 
rebound quickly. However, people are still getting out on day trips, 
brief getaways and short vacations. Stable gas prices have consumers 
looking at driving trips to nearby destinations.
    The difficult economy has led to changes in travel patterns, with 
consumers choosing closer-to-home destinations, taking shorter trips, 
spending less, making more last-minute reservations and looking for 
multi-night discounts and other deals.
    In spite of the challenging economy, Minnesota tourism businesses 
are hoping to provide relief to stressed-out consumers by offering the 
affordable, close-to-home getaways travelers will be looking for this 
summer. Pent-up demand among consumers to take long-delayed breaks 
could help Minnesota lodging businesses weather this year's financial 
storm.
    Among the more than 350 lodging and camping businesses across the 
state responding to a recent poll by Explore Minnesota Tourism, half 
expect business this summer to continue at normal levels, with 32 
percent anticipating occupancy to match last summer and 21 percent 
expecting an increase in occupancy. On the other hand, just under half 
(48 percent) expect occupancy to drop from last summer, and even more, 
51 percent, expect their revenues to decline as they lower rates to 
attract customers.
    The somewhat more positive outlook for the upcoming summer tourism 
season is based on hopes that frazzled consumers will be ready for a 
break and that Minnesota offers nearby, economical destinations. 
Campgrounds have the most optimistic outlook for summer, as some 
travelers choose camping as a more affordable vacation option this 
summer. Many B & Bs continue to attract guests for quick getaways and 
special occasion weekends, such as weddings and anniversaries.
    However, more than half of resorts, hotels and motels expect a 
decline in business this summer over last. Hotels and motels, in 
particular, are feeling the impact of a significant decline in business 
and convention travel, and also report fewer international travelers. 
Those resorts with a more positive outlook cite repeat customers 
returning from previous years, stable gas prices, family reunions, and 
their own marketing efforts as reasons to be hopeful for a good summer 
season.
    The majority of poll respondents, about 60 percent, rated their 
business' financial health as ``stable, but positive'' or ``growing,'' 
although a significant number also reported declining financial health. 
Most businesses responding to the poll think that the Minnesota tourism 
economy will not begin to recover until next year.
    Tourism marketing this year is geared toward encouraging consumers 
to get out and travel, promoting Minnesota as a nearby destination for 
affordable getaways. Explore Minnesota Tourism markets the state of 
Minnesota as a travel destination. On the local level, convention and 
visitor's bureaus and chambers of commerce promote their own 
communities as travel destinations, playing a significant role in 
drawing visitors to their cities. These efforts result in significant 
payback. For instance, every $1 invested in state tourism marketing 
generates $53 in spending by travelers.
    Since people will be traveling closer to home this year, Explore 
Minnesota Tourism is focusing its advertising in Minnesota and nearby 
markets in neighboring states and provinces. Recognizing that consumers 
have had a stressful year and that there may be a pent-up demand for 
getting away after months of reduced travel, the ads remind people that 
``There's no substitute for a great Minnesota vacation.'' The current 
Explore Minnesota ad campaign includes television, online media and 
travel-related websites, magazines, consumer recommendations, and the 
``I'd Rather Be on Vacation'' Sweepstakes.
    Beginning this spring, Explore Minnesota Tourism has teamed up with 
the Department of Natural Resources (DNR) to promote outdoor recreation 
and visits to state parks, with ads running now on metro area radio 
stations. With more travelers looking for affordable, close-to-home 
getaways, it's the perfect time to remind them to `go outside and play' 
in Minnesota's backyard, at our amazing parks and trails.
    In addition to promoting leisure travel, Explore Minnesota Tourism 
is partnering with several convention and visitors bureaus to remind 
corporations that holding meetings is good for business. Business and 
convention travel has dropped significantly, due to business spending 
cutbacks and negative publicity about some types of business travel. 
This has hurt hotels, motels, convention centers and resorts with 
conference facilities, and this new promotion was planned to address 
this area of travel business. The promotion includes a new website 
promoting meeting and convention travel, providing information about 
Minnesota venues to meeting planners. This information is at 
meetinminnesota.com.
    Leisure travel is a major and expanding area of worldwide commerce. 
As countries such as China grow their economies, the pool of 
international travelers will grow. The U.S. needs to stay competitive 
to attract these international travelers and the revenue they bring to 
our country and our state.
    On the Federal level, there are several areas where action on 
policies, legislation and funding could significantly enable the 
tourism industry to thrive in Minnesota and other states.
    Canada is Minnesota's largest international travel market. In 2007, 
Canada generated approximately 2.5 million person-visits to Minnesota, 
with Canadian visitors spending approximately $278 million. Congress 
should ensure that the Departments of State and of Homeland Security 
have the capacity to efficiently implement the new requirement that 
travelers entering the U.S. from North and South America have a 
passport or similar, secure travel document. We need to make sure our 
guests can cross our borders with ease, while still ensuring our 
national security.
    In addition, our country needs to promote itself as a travel 
destination by launching an international campaign to encourage travel 
to the U.S. All other major destinations in the world have such travel 
promotions. This could be accomplished for the U.S. through a public-
private partnership, matching funding from the travel industry with 
Federal funds. A visa-waiver program fee could create a lasting, 
significant funding source of up to $100 million annually to support an 
initiative to attract international visitors to our country. 
International visitors take longer trips and spend more than domestic 
travelers, and their spending can be a significant contribution to the 
U.S. economy. It is critical that the U.S. be competitive, to get a 
healthy share of the international leisure travel market.
    The tourism and hospitality industry also hires many employees from 
other countries. Comprehensive immigration reform could help ensure an 
adequate, legal workforce for our industry. Changes in visa processing 
and the guest worker program to facilitate the hiring of non-U.S. labor 
would also be beneficial.
    Adequate funding for our country's transportation infrastructure is 
also essential for a thriving travel industry. We need to maintain and 
improve our Nation's bridges and highways and invest in our Nation's 
aviation infrastructure, including modernized air traffic control, 
additional runways, continued air service to secondary markets, and 
reforms to improve security screening and greater on-time performance. 
Long-distance, high speed rail service also holds great potential to 
enhance tourism.
    And finally, we need Federal help to protect our natural resources. 
In Minnesota, our woods and waters and parks are a major part of our 
appeal, both as a place to live and a place to visit. It is critical 
that we protect our natural environment to ensure that these resources 
are here for Minnesotans and our visitors to enjoy in the future.
    In conclusion, the tourism industry is a key sector of both our 
state and national economies. Here in Minnesota, virtually every corner 
of the state benefits from tourism. It takes actions on all levels, 
from the local community to Congress, to keep the travel industry 
thriving.
    Thank-you for giving me the opportunity to discuss travel and 
tourism, a vital interest of importance to this region, the state, and 
the Nation as a whole.

    Senator Klobuchar. Thank you.
    Mr. Siegel?

STATEMENT OF DAVID SIEGEL, EXECUTIVE VICE PRESIDENT, MINNESOTA 
               RESTAURANT, LODGING AND RESORT & 
        CAMPGROUND ASSOCIATIONS AND PRESIDENT AND CEO, 
                     HOSPITALITY MINNESOTA

    Mr. Siegel. Well, Madam Chair, thank you very much. You 
learn as you hear.
    Back in 1958, three segments of the hospitality industry in 
our State decided it would look--probably work better if they 
collaborated in the way that they operated, so the State 
Restaurant Association, the State Lodging Association, and the 
State Resort Association came together in a collaborative 
partnership and formed a management entity to manage that. And 
they own that entity. It's called Hospitality Minnesota. And 
so, there's Hospitality Minnesota and then three State 
associations, trade associations, underneath Hospitality 
Minnesota.
    So, I serve as the President and CEO of the management 
entity, and I serve as the Executive Vice President of the 
three trade associations.
    It's a pretty unique arrangement around the country, one of 
the only States that in the Nation that has this arrangement, 
and it's really a reflection of--I think, of Minnesota, of the 
idea of partnership and collaboration and working together. So, 
I'm here on behalf of those three trade associations and our 
members. I want to thank you very much for the opportunity.
    I want to address three key issues facing the industry. The 
first is developing and attracting a high-quality work force. 
The second is the challenge of regulation, fees, licenses, 
that, in some cases, can stifle our business and our industry. 
And the third is the entrepreneurial spirit of our industry and 
the potential for the future.
    Ours is not always perceived as an industry providing 
excellent career opportunities. Counselors are sometimes loath 
to recommend the hospitality industry to students in high 
schools, for example. But, the U.S. Department of Labor has 
highlighted substantial future need for management personnel in 
our industry. So, we not only need line employees, as we call 
them in the industry, we also need a substantial number of 
management personnel, and that's true in Minnesota, as well.
    Ours is certainly an industry that provides an initial 
experience, work experience, for almost 50 percent of 
Americans. About half of us got our first job in the 
hospitality industry and learned the culture of work in the 
hospitality industry. And certainly we provide great 
opportunity for immigrants. We're--we teach countless new 
Americans the culture, we prepare them for work and for great 
futures in our country. And ours is certainly an industry that 
welcomes those that have mental or physical disabilities. And 
we're an industry in which you can advance without a formal 
education.
    All those things are true. But, we're also an industry that 
doesn't get recognized for providing the substantial career 
opportunities that exist in the unheralded career path that we 
have. You can make pretty good money managing a Marriott Hotel 
or managing a McDonald's. And you can certainly be successful 
owning your own restaurant or hotel or resort or campground. 
And while you can advance without a formal education in our 
industry, as this becomes an increasingly complex world and an 
increasingly complex industry, the need for education becomes 
much more apparent. We've started a scholarship program. We 
gave out $30,000 in scholarships, this past year, to nine 
students who are pursuing higher education in the hospitality 
industry. And we also have a high school curriculum, teaching 
1,000 students in restaurant management and lodging management 
across the State.
    So, I guess one important message that I'd like to impart 
is that there are great jobs and excellent career opportunities 
in our industry, and we would like to see government agencies 
pursue policies and allocate resources that encourage today's 
youth to pursue careers in our industry.
    Second, I want to focus attention on the challenges that 
hospitality business operators face navigating the complex 
rules, laws, and regulations that impact our industry. I 
brought one--I have it in a briefcase--we do an annual law 
review. It's 150 pages of laws and regulations that impact 
Minnesota's hospitality businesses. And that's not 
comprehensive. There are another 100 pages of food code, and 
there are some additional resources that we could certainly 
provide. But, our operators are expected to know and understand 
all aspects of those laws, regulations. And that's a challenge 
for anyone who is in business.
    So, I guess, certainly the message that we'd like to share 
is that we need to provide--we need to have--certainly, we need 
to have regulation, we need to have oversight, but we want to 
balance that with the need to have operators' ability to expand 
and grow their businesses.
    We provide, as was stated, somewhere between 10 and 11 
percent of the private-sector jobs in our State, and operators 
just want the chance to do better. We just want to employ more 
folks to grow our businesses.
    Often, our hospitality businesses are the cornerstones of 
the community. Think of the Little League team that celebrates 
at the Dairy Queen, for example, after the tournament, or think 
of the--before the high school dance evenings at family 
restaurants, and think of honeymoons on the North Shore and 
women's weekends on the Gunflint Trail.
    Senator Klobuchar. Or the guy with the fish.
    Mr. Siegel. Yes, and the guy with the fish.
    [Laughter.]
    Mr. Siegel. Think of the family reunions in Brainerd and 
the corporate meetings in Minneapolis.
    Past president of our Resort and Campground Association 
once read a letter at one of our meetings. She had received 
this letter from the family of a mother who was dying of 
cancer, and the mother's wish was to spend a week at a 
Minnesota resort. So, they made that happen. They stayed at the 
resort. And the family sent this letter afterward. It was just 
a gut-wrenching letter about what that experience had meant to 
her and how important it had been to her family to spend that 
week, really, shortly before she passed away.
    So, finally, I want to recognize the entrepreneurial spirit 
of all those in our industry. It takes guts to sell your home, 
cash in your investments, maybe get some help from family and 
buy a resort or open a small restaurant. One of my members 
financed his first hotel by maxing out multiple credit cards. 
I'm not recommending it, but it's an option.
    [Laughter.]
    Mr. Siegel. Credit is tight these days.
    These business operators want to succeed so they can 
provide a service to their communities and hire and train 
workers. They see their employees as family, and they want to 
simply provide the maximum benefits and growth opportunities.
    The answer is not always to raise prices. A resort operator 
I spoke with last week said he's never seen such pressure on 
rates. The question at the end of the conversations he's having 
with prospective guests are, ``Is that the best that you can 
do?'' So, there certainly is pressure on rates, and I think 
lawmakers need to understand that raising rates isn't always 
the answer, that we have to address costs of business 
operations. So, whether it be menu labeling, increased taxes, 
Department of Health rules, Department of Labor standards, 
sales tax definitions, we would just ask that government 
agencies acknowledge the reality of the economic impact of 
their activities.
    So, in conclusion, the industry provides a wonderful career 
path and a wonderful way to make a living, in addition to its 
reputation for excellent entry-level opportunities, and we'd 
just ask policymakers and agencies to truly understand the 
business model and provide balanced regulation and taxation so 
that our Minnesota hospitality industry operators can grow, 
create jobs, pay more taxes, and continue to be the 
cornerstones of their communities.
    And we'd like to acknowledge the entrepreneurial spirit of 
our operators so that they'll continue to take risks and that 
the industry then has a bright future in our State.
    So, Madam Chair, thank you again for giving me the 
opportunity to highlight those three areas for the tourism 
industry in our State.
    [The prepared statement of Mr. Siegel follows:]

Prepared Statement of David Siegel, Executive Vice President, Minnesota 
     Restaurant, Lodging and Resort & Campground Associations and 
                President and CEO, Hospitality Minnesota

    In 1958, three major segments of the hospitality industry in 
Minnesota--restaurants, lodging and resorts--considered the benefits of 
working collaboratively. Their elected leadership decided it would make 
sense to bring these three independent trade associations together in a 
cooperative arrangement that would maximize their impact.
    The three agreed to retain their unique identities, but to be 
managed collectively by a common management company. This is how the 
Minnesota Restaurant Association, Minnesota Lodging Association and 
Minnesota Resort & Campground Association came together to form their 
own management entity, Hospitality Minnesota, which they continue to 
own today.
    I serve as the Executive Vice President of the three Associations 
and President & CEO of Hospitality Minnesota, the management company 
they collectively own. It is a privilege and honor to serve this 
industry and I am equally pleased to be provided this opportunity to 
share a broad perspective drawn from the thousands of hospitality 
businesses across our state.
    I plan to address three key issues facing our industry. The first 
is developing and attracting a high-quality work force. The second is 
the challenge of regulation, fees and licenses that in many cases 
stifle our industry. The third is the entrepreneurial spirit of our 
industry and the potential for the future.
    Our industry is not often perceived as providing excellent career 
opportunities. Counselors are sometimes loath to recommend a career in 
hospitality. But the U.S. Department of Labor has highlighted a 
substantial future need for management personnel in our industry.
    True, ours is an industry that provides that initial work 
experience for nearly 50 percent of America's adult work force--entry 
level jobs. We provide jobs for recent immigrants. We teach countless 
new Americans our work culture and prepare them for great futures in 
our country. Ours is an industry that welcomes those with mental or 
physical disabilities. We are an industry in which one can advance even 
without a formal education.
    But we are also an industry providing a tremendous and unheralded 
career path. You can make pretty good money managing a Marriott or a 
McDonald's. And you can certainly be successful owning your own hotel, 
resort or campground. And while you can advance without a formal 
education in the field, as the world becomes increasingly complex, 
technology and marketing become ever more sophisticated, it is clear 
that education in our industry is the future.
    To that end, we have introduced a high school curriculum for 11th 
and 12th graders called ProStart for restaurants and Lodging Management 
Program for hotels that teaches young people about our industry. We are 
presently in 34 high schools throughout the state and are teaching 
1,000 students. Our goal is 75 schools and 2,000 students annually.
    Further, we are providing scholarships for graduates from this high 
school program who go on to pursue higher education in our field. Just 
last week, we gave $30,000 in scholarships to students with amazing 
career goals.
    So if I could impart an important message regarding our industry, 
it is simply that the jobs are excellent and the career path is real. 
Government agencies would be wise to pursue policies and allocate 
resources that encourage today's youth to consider a career in 
hospitality.
    Secondly, I want to focus attention on the challenges that 
hospitality business operators face navigating the complex regulations 
and laws that impact our industry. Our Associations produce an annual 
law review that is 150 pages long regarding laws and regulations 
impacting our industry. That's not even comprehensive. It doesn't 
include the Minnesota Food Code, which is another 100 pages or more.
    To further complicate matters, hospitality business operators, and 
most are truly small businesses, must navigate between Federal, state 
and local statutes. While regulation and inspection is necessary and 
important, we would urge government to do all in its power to reduce 
burdensome regulations and laws.
    We need to create an environment in which these small business 
owners can grow and provide more jobs to Minnesotans. We provide nearly 
11 percent of the private sector jobs in our state. Our operators 
simply want the chance to perform even better. We have to understand 
that the collective burden of multiple mandates can be stifling. 
Recognizing the very real impact of regulation and laws, and developing 
a balanced approach to governance is extremely important.
    Often, these hospitality businesses are the cornerstones of their 
community. Think of the little league celebrations at the local ice 
cream store or the before-high-school dance evenings at a family 
restaurant. Think of the honeymoons on the North Shore and the womens' 
weekends on the Gunflint Trail. Think of the family reunions in 
Brainerd and the corporate meetings in Minneapolis.
    A past president of the Minnesota Resort & Campground Association 
once read a letter she had received from a family with a mother, dying 
of cancer, whose wish was to spend a week with her family. The family 
spent the week at her resort and shortly thereafter the mother died. 
You couldn't read the letter from that mother's family without tearing 
up. The week together meant the world to that family. That's what this 
industry is all about.
    Finally, I want to recognize the entrepreneurial spirit of those in 
our industry. It takes guts to sell your home, cash in your 
investments, get some help perhaps from a family member and buy a 
resort, or open a small restaurant. One of my members financed his 
first hotel by maxing out multiple credit cards.
    These business operators want to succeed so they can provide a 
service to their communities and hire and train workers. They see their 
employees as family--and they want to provide maximum benefits and 
growth opportunities. That has certainly been difficult in this 
economic environment. It would be unrealistic to suggest that 
government simply get out of the way. We have always advocated for 
health inspections, for example. But hearkening back to the second 
point, for entrepreneurs to grow, and to invest more resources, 
government must create policies that foster development.
    I recently heard from a small restaurant in southern Minnesota that 
was debating whether to dig into savings to continue operations or 
whether, facing a challenging minimum wage increase, it would be 
required to close its doors. The decisions that elected officials at 
both the Federal and state level make really do have an impact on 
business. If the costs of operation get too great, the business is not 
sustainable.
    And the answer is not simply to raise prices. A resort operator I 
spoke with last week said he's never seen such pressure on rates. The 
question at the end of each conversation with a prospective guest is, 
``is that the best you can do?'' I hope lawmakers understand that the 
resistance to raising rates is real--both on the part of the owner and 
his or her guest.
    Whether it be menu labeling, increased taxes, department of health 
rules, department of labor standards or sales tax definitions, we would 
ask that government agencies acknowledge the reality of the economic 
impact of their activities.
    In conclusion, the hospitality industry provides a wonderful career 
path and a tremendous way to make a living, in addition to its 
reputation for excellent entry-level opportunities. The industry needs 
policymakers and agencies to truly understand its business model and 
provide balanced regulation and taxation so that our Minnesota 
hospitality operators can grow, create jobs, pay taxes and continue to 
be the cornerstones of their communities. Finally, we need to 
acknowledge the entrepreneurial spirit of the operators in this 
industry and encourage them to continue to take risks so that the 
hospitality business in our state has a bright future.
    Thank you for giving me the opportunity to discuss the hospitality 
industry in our state and reflect on its significance and importance to 
our economies and our communities.

    Senator Klobuchar. Thank you. I'm learning a lot, too. This 
is good.
    OK. Dr. Schneider?

       STATEMENT OF DR. INGRID E. SCHNEIDER, PROFESSOR, 
        FOREST RESOURCES AND DIRECTOR, TOURISM CENTER, 
                    UNIVERSITY OF MINNESOTA

    Dr. Schneider. Great, thank you so much for the opportunity 
to be here.
    I'm a professor in the University of Minnesota's Department 
of Forest Resources in the College of Food, Agricultural, 
Natural Resource Sciences, and director of the University's 
Tourism Center within the University of Minnesota Extension. My 
statement is from this unique perspective of this role, where 
the University creates new knowledge related to tourism and 
provides research-based education and engagement for tourism-
dependent communities and businesses.
    From Minnesota's iconic attractions to the small towns on 
the way to those attractions, tourism has significant impact. 
From travelers who wine and dine in Minnesota's thriving 
metropolitan areas, to those who paddle, pedal, or putter 
through Greater Minnesota, their impact is far-reaching.
    Minnesota businesses, communities, and residents are faced 
with critical decisions for their future and for our future. 
Those decisions demand research-based information and analysis 
to sustain successful tourism endeavors and maximize positive 
impacts for Minnesota's residents and resources. Those 
decisions also demand professionals prepared with integrated 
planning, management, and marketing education offered by the 
University.
    I'd like to expand on the impacts of tourism in our State. 
Perhaps the most tangible impacts, as some have noted, are the 
impacts to the economy. Minnesota is known for both its 
shopping and lake-based opportunities. Beyond those, however, 
consider the more subtle and emerging tourism areas that can 
lead to both urban and rural revitalization.
    To understand the impact of recreational trails that are so 
important in Minnesota communities and quality of life, 
SAFETEA-LU recreational trail program dollars are supporting a 
study to assess the economic impact of trail-related travel in 
Minnesota. Off the trail, Minnesota's emerging wine tourism 
segment is another example of tourism's sometimes subtle 
tourism impact. A 2000 study of Minnesota grape growers 
revealed the value of winery tourism alone was 14 million in 
Minnesota.
    This subset of agricultural tourism is just one way tourism 
has contributed----
    Senator Klobuchar. Well, that's a new fact.
    Dr. Schneider.--to rural revitalization. Fortunately, 
Minnesotans recognized the importance----
    Senator Klobuchar. We didn't know that we were in Mecca for 
wine.
    [Laughter.]
    Voice.--to the people in California.
    Senator Klobuchar. Yes, those are things that you'd better 
get out there. And how much money do you think we spend on bait 
and worms?
    [Laughter.]
    Senator Klobuchar. You'd better have the answer, because 
I'm going to ask you.
    [Laughter.]
    Senator Klobuchar. OK, go on.
    Dr. Schneider. Fortunately, Minnesotans recognize the 
importance of tourism. An annual survey conducted by the 
University of Minnesota Tourism Center indicates that more than 
nine of ten Minnesotans indicate tourism is important to 
Minnesota's economy. Providing decisionmakers with the best 
possible information is critical to maximize return on 
investment. As tourism is generally revenue-positive, 
investments to support relevant information acquisition and 
dissemination seem both prudent and powerful.
    Beyond economics, tourism both depends on and impacts the 
environment. Minnesota is a national leader in sustainable 
tourism, as evidenced by our hosting one of the first State 
sustainable tourism conferences, innovative monitoring of 
sustainable tourism industry practices, and cooperatively 
creating environmental marketing opportunities for Minnesota 
tourism businesses. The University's Travel Green education 
effort will continue to advance those environmental efforts.
    To remain competitive in this evolving environment, 
Minnesota must be prepared with accurate, timely, and objective 
environmental data, as well as educated professionals who think 
both critically and holistically.
    Finally, tourism impacts individuals in communities. I 
think we can all attest to the renewal we experience following 
a quick weekend escape or a longer travel opportunity. Travel's 
social benefits stimulate society by creating more productive 
employees and stronger social bonds.
    Social impacts also occur in the communities we visit. 
Certainly, the attractions, the restaurants, the aesthetic 
qualities of destinations improve a resident's quality of life. 
Further, the sense of community pride facilitated by heritage 
festivals or a heightened awareness of our history creates a 
sense of community many U.S. residents seek and need in these 
times.
    To address the challenges of destination development and 
equitable benefit distribution, inclusive and collaborative 
community planning can retain and sustain the qualities that 
make the community attractive to both residents and visitors 
alike.
    In sum, tourism has significant impacts for Minnesota, its 
residents, and resources. To better understand, predict, and 
subsequently plan for successful and sustainable tourism, 
additional information is mandatory.
    The information obtained and shared by the University of 
Minnesota Tourism Center has had significant impact on 
Minnesota communities and businesses, from increased return on 
investments to stronger social networks.
    The Center makes a difference for Minnesota tourism. As the 
world flattens and Minnesota diversifies, the tourism product 
must innovate and adjust. Information provided by the 
University and its partners informs innovation. Deliberate, 
inclusive, and science-based planning can sustain the 
communities and economies Minnesota tourism supports.
    Continued and enhanced support for such informed planning 
and tourism professional education will maximize tourism's 
return on investment economically, environmentally, and 
socially.
    Thank you so much for the opportunity to present this.
    [The prepared statement of Dr. Schneider follows:]

   Prepared Statement of Dr. Ingrid E. Schneider, Professor, Forest 
    Resources and Director, Tourism Center, University of Minnesota

    I am Ingrid Schneider, Professor in the University of Minnesota's 
Department of Forest Resources in the College of Food, Agricultural and 
Natural Resource Sciences and Director for the University's Tourism 
Center, within the University of Minnesota Extension. My statement is 
from the unique perspective of this joint role where the University 
creates new knowledge related to tourism and provides research-based 
education and engagement for tourism-dependent communities and 
businesses. The Tourism Center makes a difference for Minnesota by 
providing applied research and targeted education to sustain tourism 
businesses and communities. The Department of Forest Resources advances 
science and management of forest and related natural resources as well 
as prepares professionals to manage these resources upon which 
Minnesota depends for much of its tourism.
    From Minnesota's iconic attractions to the small towns on the way 
to those attractions, tourism has significant impact. It's not only the 
tangible dollars that circulate in our economy, but the less tangible , 
readjustment of tourist psyches and contributions to residents' quality 
of life, as well as the impacts on our environment. From travelers who 
wine and dine in Minnesota's thriving metropolitan areas to those who 
paddle, pedal or putter through greater Minnesota, their impact is far-
reaching. As the economic crisis continues, the degree of negative 
impact remains uncertain. But make no mistake, Minnesota businesses, 
communities and residents are faced with critical decisions for their 
future and our future: those decisions demand research-based 
information and analysis to sustain successful tourism endeavors and 
maximize positive impacts for Minnesota's residents and resources. 
Those decisions also demand professionals prepared with the integrated 
planning, marketing and management education offered by the University 
of Minnesota.
    I'd like to expand on the impacts of tourism in our state.
    Perhaps the most tangible impacts of tourism are impacts to the 
economy. In 2008, tourism contributed more than $11 billion to 
Minnesota's economy and employed 247,000 people. Certainly these 
numbers are impressive, but to make them more meaningful, we can 
consider the economic impact of specific activities or sectors. 
Minnesota is known for both its shopping and lake-based opportunities. 
Beyond those, however, consider the more subtle and emerging tourism 
areas that can lead to both urban and rural-revitalization. For 
example, although 8 of 10 Minnesotan's think outdoor recreation is 
important, fewer probably recognize its impact as tourism activity. The 
economic impact of state parks like those along Lake Superior's north 
shore was estimated at $300 million earlier this decade. To further 
understand the impact of trails that are so important to Minnesota 
communities and quality of life, SAFTEA-LU Recreational Program Trail 
dollars are supporting a study to assess the economic impact of trail-
related travel. With these results and through our assistance, 
communities can make research-based decisions on infrastructure 
development and planning that can simultaneously improve their 
attractiveness as a destination and as a choice of residence. Off the 
trail, Minnesota's emerging wine tourism segment is another example of 
tourism's sometimes subtle economic impact. Minnesota hosts 35 wineries 
and the University has facilitated the development of two wine trails, 
with another in process. A 2007 study of Minnesota grape growers 
revealed the value of winery tourism alone was $14 million. This subset 
of agricultural tourism is just one way tourism can and has contributed 
to rural revitalization. Fortunately, Minnesotan's recognize the 
importance of tourism. An annual survey supported by the Tourism Center 
indicates that, for the fourth year in a row, more than 9 of 10 
Minnesotan's indicate tourism is important to Minnesota's economy. As a 
destination that people primarily drive to, the role of tourism in 
Minnesota will remain or increase in importance in the current economic 
situation as tourists take shorter, closer to home vacations and 
business travelers decide to `meet in the middle' of the U.S. As such, 
providing decisionmakers with the best possible information is critical 
to maximize return on investment. As tourism is generally revenue 
positive, investments to support relevant information acquisition and 
dissemination seem both prudent and powerful.
    Beyond economics, tourism both depends on and impacts the 
environment. As such, the retention and reparation of high quality 
environments is essential. Sustainable tourism includes an emphasis on 
the environment, as well as the economic and social aspects. Minnesota 
is a national leader in sustainable tourism as evidenced by our hosting 
one of the first state sustainable tourism conferences, innovative 
monitoring of sustainable tourism industry practices, and cooperatively 
creating environmental marketing opportunities for Minnesota tourism 
businesses. The University's Travel Green education effort will 
continue to advance these environmental efforts. Given Minnesota's 
great dependency on the environment for tourism, understanding the 
impacts of our changing climate on tourism activities will be an 
important step moving forward. While opportunities to extend our summer 
season can be advantageous, a shortening of winter has significant 
implications. To remain competitive in this evolving environment, 
Minnesota must be prepared with accurate, timely and objective data as 
well as educated professionals who think critically and holistically.
    Finally, tourism impacts individuals and communities. I think we 
can all attest to the renewal we experience following either a quick 
weekend escape or a longer travel opportunity. Like the economic 
benefits that stimulate our economy, travel's social benefits stimulate 
society by creating more productive employees and stronger social 
bonds. Social impacts also occur in the communities we visit. Certainly 
the attractions, restaurants and aesthetic qualities of destinations 
improve a residents' quality of life. Further, the sense of community 
pride facilitated by heritage festivals or heightened awareness of our 
history creates a sense of community many U.S. residents seek and need 
in these uncertain times. However, challenges such as congestion and 
density may emerge as destinations evolve. To address the challenges of 
destination development and equitable benefit distribution, inclusive 
and collaborative community planning can retain and sustain the 
qualities that make the community attractive to both tourists and 
residents alike.
    In sum, tourism has significant impacts for Minnesota, its 
residents and resources. To better understand, predict and subsequently 
plan for successful and sustainable tourism, additional information is 
mandatory. The information obtained and shared by the University of 
Minnesota Tourism Center has had significant impact on Minnesota 
communities and businesses: from increased return on investments to 
stronger social networks, the Center makes a difference for Minnesota 
tourism. As the world flattens and Minnesota diversifies, the tourism 
product must innovate and adjust. Information provided by the 
University and its partners informs such innovation. Deliberate, 
inclusive and science-based planning can sustain the communities and 
economies Minnesota tourism supports. Continued and enhanced support 
for such informed planning and tourism professional education will 
maximize tourism's return on investment economically, environmentally 
and socially.
    Thank you for the opportunity to present this statement.

    Senator Klobuchar. Thank you very much.
    Mary?

 STATEMENT OF MARY SOMNIS, TOURISM MARKETING COORDINATOR, IRON 
                        RANGE RESOURCES

    Ms. Somnis. Thank you for your support and for inviting us 
to be here today.
    Tourism is essential to the economy of the Arrowhead. A 
friend of mine, a native Iron Ranger who moves earth for a 
living, put it this way, ``Here we live near these great 
Minnesota hills--the Laurentian Divide, the Superior Highlands, 
the Sawtooth Mountains. Imagine, if you will, that the economy 
is like a hill. At the base, we have solid ledge rock, the 
mining industry. Even now, big projects are moving forward 
relative to mining and minerals. On top of the ledge are some 
really big boulders--industries like manufacturing, healthcare, 
education, construction, professional services. And filling in 
the space between is smaller rock--hospitality, recreation, 
tourism. Our economy is not built on tourism, but tourism is 
critical to its strength, as sand is to the hill.'' Interesting 
analogy from a person who moves rocks every day. He has no 
stake in tourism, but he can see the value of it from his point 
of view.
    Many believe that tourism provides only low-paying, part-
time, seasonal jobs; they forget the small business owners and 
entrepreneurs. Tourism provides second incomes for working 
families, full- and part-time jobs for families with children 
who need to manage schedules and priorities. Many young people 
have been introduced to the workforce with jobs in tourism, 
learning life skills that will serve them throughout their own 
careers. One of my favorite stories is about the young man who 
grew up working as a dock boy at a resort on Lake Vermilion, 
and went on to manage the Chicago Hilton. Just one example of 
how tourism can provide so much more than a paycheck.
    If not for tourism, our communities would not be able to 
sustain the number of restaurants, gas stations, grocery 
stores, and other retail and service options that we enjoy. 
Service-sector employees also support doctors, dentists, 
lawyers, and other professionals in the communities.
    The economic impact for the Arrowhead indicates that, for 
the period from June of 2007 to May of 2008, travelers spent 
$1.6 billion in the Arrowhead, supporting 33,500 full-time-
equivalent jobs, producing over $668 million in wages, 
salaries, and proprietary income, also resulting in $194 
million in State government revenues and $59.8 million in the 
local-government revenues. That's just in the Arrowhead.
    Overall travel was down last summer, when compared with the 
year before. We had very cool and wet weather, so the economy, 
the weather, and the gas prices were all factors affecting 
travel. And anecdotal information tells us that travel this 
past winter was also flat or down. And, as John indicated 
earlier, predictions are about even for what is going to happen 
this coming season.
    For the first time, some resorts are offering peak-season 
discounts for the coming summer. Lodging that historically 
needed to be reserved months in advance is now available at the 
last minute. As is true of everything right now, last-minute 
bargains are great for the buyer, not so good for the seller.
    On the bright side, campgrounds had great visitation last 
summer, and reservations are looking good for this year. Retail 
and attractions are reporting that people are around, but 
purchasing less. For the most part, people are traveling, but 
their spending behavior has changed with the times.
    About half of the travel to the Arrowhead comes from the 
Twin Cities. We're a rubber-tire destination for the 
metropolitan market. The travel trend for shorter vacations 
closer to home has, and will likely continue to serve our 
region well.
    The tourism industry has partnered with Iron Range 
Resources for more than 10 years to promote travel to the 
Arrowhead. Our tourism budget and the community partners 
contribute funds. The Northeast page on the website of our 
partner Explore Minnesota is the fulfillment piece to the 
campaign. Participating communities are featured prominently on 
that website.
    This spring, we launched our MinNEcations Campaign to 
promote vacations closer to home. MinNEcations is the first 
half of ``Minnesota'' and the second half of ``vacations.''
    Senator Klobuchar. Oh, I get it. Thank you.
    [Laughter.]
    Ms. Somnis. ``MinNEcations.''
    [Laughter.]
    Senator Klobuchar. They'll get that in Washington----
    [Laughter.]
    Ms. Somnis. We tagged the brand with ``Drive a little and 
play a lot.'' The campaign is activity-oriented, focusing on 
things that people do when they come here--fishing and lakes, 
biking and hiking, wilderness adventure, scenic and wildlife 
viewing, golf, motor sports events, arts, and culture. Isn't it 
time for a MinNEcation?
    We'll see new people traveling to this area for the first 
time, exploring Minnesota closer to home. In this group, there 
is new potential for long-term economic development. As people 
discover this area, they fall in love with it, and they may 
move their business here or retire here. Our incredible natural 
resources and quality of life attract people who wish to live 
and work where they play. Many business and community leaders 
in this region are former visitors who have become permanent 
residents.
    In addition to the marketing campaign, Iron Range Resources 
offers a grant program for culture and tourism projects. 
Funding is provided to initiatives that stimulate tourism and 
enrich communities through artistic, heritage-related, or 
recreational activities. Desired outcomes include improved 
quality of life and economic return on investment to the 
communities.
    Most of the Arrowhead, with the exception of Duluth, is a 
small-meeting destination. In some communities, we don't even 
have convention and visitors bureaus, we have visitor and 
tourism bureaus. The majority of our travel is leisure. 
However, there are parts of our region where business travel is 
doing well right now. Planning and construction of a number of 
projects are bringing consultants, researchers, contractors, 
and workers to the region. We are optimistic that, as the 
economy improves, corporate business will continue to grow. We 
have fabulous venues, activities, and services to offer this 
market. We must continue to work together at all levels, 
nationally, statewide, and locally, in public-private 
partnerships, to promote tourism and travel. Once the guests 
have arrived, we need to exceed their expectations, provide 
them with a quality guest experience and excellent customer 
service.
    Thank you again for the opportunity to share this with you 
today. Enjoy your time, and we'll look forward to when you come 
again.
    [The prepared statement of Ms. Somnis follows:]

   Prepared Statement of Mary Somnis, Tourism Marketing Coordinator, 
                          Iron Range Resources

    Thank you, Senator Klobuchar, for your support and for inviting us 
here today. I am pleased to talk with you about tourism in northeastern 
Minnesota's Arrowhead Country.
    Tourism is essential to the economy of the Arrowhead. A friend of 
mine, a native Iron Ranger who moves earth for a living, put it this 
way:
    We live near great Minnesota hills--the Laurentian Divide and the 
Superior Highlands, including the Sawtooth Mountains. Imagine that 
building an economy is like building a hill.
    At the base we have solid ledge rock--the mining industry. Even 
now, we have big projects moving forward relative to mining and 
minerals.
    On top of the ledge are some really big rocks--boulders--industries 
such as manufacturing, health care, education, construction, 
professional services.
    Filling in the space between is smaller rock--industries like 
tourism, hospitality and recreation.
    Our economy is not built on tourism, but tourism is critical to its 
strength--as sand is to the hill. Interesting analogy, from a person 
who moves rock every day! He has no stake in tourism, but can see the 
value of it from his point of view.
    Many believe that tourism provides only low paying, part time and 
seasonal jobs. They forget the many small business owners and 
entrepreneurs. Tourism provides second incomes for working families; 
full and part time jobs for families with children who need to manage 
schedules and priorities.
    Many young people have been introduced to the workforce with jobs 
in tourism, learning life skills that will serve them throughout their 
careers. One of my favorite success stories is about a young man who 
started working as a dock boy at a resort on Lake Vermilion and grew up 
to manage the Chicago Hilton. One of many great stories, showing that 
tourism jobs can provide so much more than a pay check.
    If not for tourism, our communities would not be able to sustain 
the number of restaurants, gas stations, grocery stores and other 
retail and service options that we enjoy. Service sector employees also 
support doctors, dentists, lawyers and other professionals in 
communities.
    Economic impact research for the Arrowhead indicates that, for the 
period from June 2007-May 2008:

   Travelers spend $1.6 billion in the region, supporting

   33,500 full time equivalent jobs, producing

   $668.4 million in resident income (wages, salaries and 
        proprietary income),

   $194 million in state government revenues, and

   $59.8 million in local government revenues.

    Overall, travel was down last summer when compared with the summer 
of 2007. Spring and early summer of 2008 were very cool and wet in the 
Arrowhead. The economy, weather and gas prices were all factors 
affecting travel to our region last year. Anecdotal information tells 
us that travel this past winter was either flat or down.
    Early predictions are about even for whether this coming season 
will be up or down from last year.
    For the first time, some resorts in the Arrowhead are offering peak 
season discounts for the coming summer travel season. Lodging that 
historically needed to be reserved months in advance is now available 
at the last minute. As is true of everything right now, these last 
minute bargains are great for the consumer . . . not so good for the 
seller.
    On the bright side, campgrounds had great visitation last summer 
and reservations are looking good for this year. Retail and attractions 
are reporting that people are purchasing less. For the most part, 
people are traveling, but their spending behavior has changed with the 
times.
    About half of the travelers to the Arrowhead come from the Twin 
Cities area. We are a ``rubber tire'' destination for the metropolitan 
market. The travel trend for shorter vacations closer to home has, and 
will likely continue, to serve this region well.
    The tourism industry of the Arrowhead region has partnered with 
Iron Range Resources for more than 10 years to promote travel to 
northeastern Minnesota. Our tourism budget and the community partners 
each contribute funds. The northeast page on the Explore Minnesota 
website is the fulfillment piece to the campaign. The participating 
communities are featured prominently on the website.
    This spring we launched our MinNEcations campaign, to promote 
vacations closer to home. We've tagged the brand with . . . drive a 
little and play a lot! The campaign is activity-oriented, focusing on 
the things that people do when they come here: fishing and lakes, 
biking and hiking, wilderness adventure, scenic and wildlife viewing, 
golf, motorsports, events, arts and culture. Isn't it time for a 
MinNEcation?
    We will see new people traveling to this area for the first time, 
exploring Minnesota closer to home. In this group, there is new 
potential for long-term economic development. As people discover this 
area, they fall in love with it and may move their business here or 
retire here. Our incredible natural resources and quality of life 
attract people who wish to live and work where they play. Many business 
and community leaders in this region are former visitors who have 
become permanent residents.
    In addition to the marketing campaign, Iron Range Resources offers 
a grant program for Culture and Tourism projects. Funding is provided 
to initiatives that stimulate tourism and enrich communities through 
artistic, heritage-related or recreational activities. Desired outcomes 
include improved quality of life and economic return on investment to 
the communities.
    Most of the Arrowhead (with the exception of Duluth) is a small 
meeting destination. In some communities, we do not even use the name 
``Convention and Visitors Bureau'' but rather ``Visitor and Tourism 
Bureau.'' The majority of visitation to the region is leisure travel.
    However, there are some parts of our region where business travel 
is doing well right now. Planning and construction of a number of 
projects are bringing consultants, researchers, contractors and workers 
to the region. We are optimistic that, as the economy improves 
corporate business will continue to grow. We do have fabulous venues, 
activities and services to offer this market.
    We must continue to work together at all levels--nationally, 
statewide and locally--in public/private partnerships to promote 
tourism and travel. Once the guests have arrived, we need to exceed 
their expectations, provide them with a quality guest experience and 
excellent customer service.
    Thank you again for the opportunity to be here with you today--
enjoy your time--and come again!

    Senator Klobuchar. OK. Fourth of July.
    [Laughter.]
    Senator Klobuchar. All right.
    Diane?

            STATEMENT OF DIANE BROSTROM, DIRECTOR, 
             GRAND MARAIS AREA TOURISM ASSOCIATION

    Ms. Brostrom. First, thank you very much for this 
opportunity to join today's discussion.
    I'm Diane Brostrom, Director for the Grand Marais Area 
Tourism Association, a nonprofit whose mission is to increase 
the economic benefit to the Grand Marais area through the 
promotion of sustainable tourism. This organization was founded 
in 2000 and is funded largely through the lodging tax collected 
in the Grand Marais area.
    As background, I have provided a report written in 2007 by 
the Cook County Economic Analysis Council. Sizable report. This 
is a thorough analysis of the economy and the impact of 
tourism. Although it is 2 years old, this study is the most 
exhaustive of its kind, and its statistics and conclusions are 
still valid today. In fact, the serious issues it identifies 
are all the more pronounced in 2009. Truly, I believe that Cook 
County is Minnesota's favorite county, with a destination 
downhill ski area, a vibrant----
    Senator Klobuchar. I can't comment on that.
    [Laughter.]
    Ms. Brostrom. I'm not objective.
    [Laughter.]
    Ms. Brostrom. We have a vibrant arts community, private-
sector nonprofits, such as North House Folk School, the Grand 
Marais Art Colony, and the Grand Marais Playhouse, topnotch 
restaurants, a variety of lodging, Native American culture, and 
protected wilderness and public lands which comprise 90 percent 
of our county.
    Even with these amazing facets of the jewel we call Cook 
County, this past winter was a tough one for tourism, and 
difficult--and the difficult countywide trend continues.
    Cook County is a one-factory community, and that factory is 
tourism. It accounts for 80 percent of the economy, which makes 
us the most tourism-dependent county in Minnesota.
    In the Greater Grand Marais area, we have 37 lodging 
facilities, 23 restaurants and coffeehouses, and 27 specialty 
shops and galleries. Nearly all are owned and operated by local 
residents, and there are only 1,414 year-round residents in 
town, and about 5,000 in Cook County. Tourism R Us.
    In general, unfortunately, our wage scale is often low, 
with few or no benefits offered. Tourism is highly seasonal, so 
many are under- or unemployed for significant portions of the 
year. The cost of living is high, and continues to rise nearly 
monthly.
    People working in tourism are extremely dedicated to their 
own businesses, to the local economy, and yes, dedicated to 
providing the best experience possible for our visitors.
    Given the gorgeous natural beauty of the area, tourism is 
understandably weather-dependent. The newly created Cook County 
Events and Visitors Bureau is founded on an event-based 
strategy intended to create reasons to visit that are not 
totally dependent on deep snow or warm sunshine. This entity 
represents an unprecedented level of cooperation among tourism 
communities that even recently regarded each other as rivals. 
But, the ever-rising costs of doing business in the face of a 
very nervous public has made bedfellows of us not anticipated 
even 5 years ago.
    In Grand Marais, my task has been to rebrand this wonderful 
harbor village to widen our message and to carry that branding 
through our new website, award-winning visitor guide, and in 
all our marketing efforts. The Grand Marais Visitor Center now 
represents all of Cook County's visitor destinations in order 
to be full-service. I interface with Explore Minnesota Tourism 
and other tourism-based communities in northern Minnesota to 
cooperate in some of our marketing efforts.
    The psychological and tangible realities of our recent 
economy are daunting, despite all our best efforts. The effects 
have spread from tourism to real estate, banking, construction, 
grocery stores, and many other second- and third-tier 
businesses, resulting in layoffs and closures. Most impacted 
are our largest tourism businesses that have the greatest costs 
and investments and who also pay the higher annual wages, and 
this threatens our local economies even further.
    In Grand Marais, and Cook County as a whole, we would 
benefit from an infusion of new infrastructure. Although 
incredible assets are already in place on the North Shore, we 
do not have a countywide transportation system or one 
connecting Cook County to Duluth. We do not have affordable 
housing for many of our workers. We lack a large venue for 
meetings, conventions, or entertainment, which restricts that 
tourism niche and keeps our numerous festivals and events on a 
small, less cost-effective scale. Local investment for such 
infrastructure is simply not available.
    The cost of marketing creates difficulties for businesses 
to do their own. With fewer visitors and less revenue in 
lodging tax, entities such as mine also have less to spend to 
do our job for our communities.
    In closing, tourism is a powerful force in Cook County. I 
would ask for continued funding, both at the State and Federal 
level, to fuel the programs that result in its growth, to 
support the marketing efforts of Explore Minnesota Tourism, and 
to consider seriously the recommendations of Senator Amy 
Klobuchar and others who advocate for the growth of tourism.
    Thank you again for this opportunity to speak with you, and 
I look forward to seeing you in Grand Marais.
    [The prepared statement of Ms. Brostrom follows:]

            Prepared Statement of Diane Brostrom, Director, 
                 Grand Marais Area Tourism Association

    First, thank you for this opportunity to join today's discussion. 
My name is Diane Brostrom, and I am the Director for the Grand Marais 
Area Tourism Association, a non-profit whose mission is ``to increase 
the economic benefit to the Grand Marais area through the promotion of 
sustainable tourism''. This organization was founded in 2000 and is 
funded largely through the lodging tax collected in the Grand Marais 
area.
    As background, I have provided the report written in 2007 by the 
Cook County Economic Analysis Council.* This is a thorough 
analysis of our economy and the impact of tourism. Although now 2 years 
old, this study is the most exhaustive of its kind, and its statistics 
and conclusions are still valid today. In fact, the issues it 
identifies are all the more pronounced in 2009.**
---------------------------------------------------------------------------
    \*\ The executive summary of this report is attached.
    \**\ The full report is maintained in the Committee's files.
---------------------------------------------------------------------------
    Truly, I believe that Cook County is Minnesota's favorite county, 
with a destination downhill ski area, a vibrant arts community, private 
sector non-profits such as North House Folk School, the Grand Marais 
Art Colony and the Grand Marais Playhouse, top-notch restaurants, a 
variety of lodging, Native American culture, and protected wilderness 
and public lands which comprise 90 percent of the county. Even with 
these amazing facets of the jewel we call Cook County, our local 
economy is in trouble. Despite all our efforts and good snow, this past 
winter was a tough one for tourism, and the difficult countywide trend 
continues.
    Cook County is a one-factory community, and that factory is 
tourism. It accounts for 80 percent of our economy, which makes us the 
most tourism-dependent county in Minnesota. In the greater Grand Marais 
area, we have thirty-seven lodging facilities, twenty-three restaurants 
and coffee houses, and twenty-seven specialty shops and galleries. 
Nearly all are owned and operated by local residents--and there are 
only 1,414 year round residents in town and about 5,000 in Cook County. 
In general, our wage scale is low, with few or no benefits offered. 
Tourism is highly seasonal, so many are under or unemployed for 
significant portions of the year. The cost of living is high and 
increases nearly monthly. People working in tourism are extremely 
dedicated to their own businesses, to the local economy, and yes, 
dedicated to providing the best experience possible for our visitors.
    Given the gorgeous natural beauty of the area, tourism is 
understandably weather dependent. The newly created Cook County Events 
and Visitors Bureau is founded on an event-based strategy intended to 
create reasons to visit that are not totally dependent on deep snow or 
warm sunshine. This entity represents an unprecedented level of 
cooperation among tourism communities that even recently regarded each 
other as rivals. But the ever-rising costs of doing business in the 
face of a very nervous public have made bedfellows of us not 
anticipated even 5 years ago.
    In Grand Marais, my task has been to rebrand this wonderful harbor 
village to widen our message, and to carry that branding through our 
new website, award-winning visitor guide and in all our marketing 
efforts. The Grand Marais Visitor Center now represents all of Cook 
County's visitor destinations in order to be full-service. I interface 
with Explore Minnesota Tourism and other tourism-based communities in 
northern Minnesota to cooperate in some of our marketing efforts.
    The psychological and tangible realities of our present economy are 
daunting, despite all of our best efforts. The effects have spread from 
tourism to real estate, banking, construction, grocery stores and many 
other second and third-tier businesses, resulting in layoffs and 
closures. Most impacted are our largest tourism businesses that have 
the greatest costs and investment, and who also pay higher annual 
wages; this threatens the local economy even further.
    Grand Marais, and Cook County as a whole, would benefit from an 
infusion of new infrastructure. Although incredible assets are already 
in place on the North Shore, we do not have a countywide transportation 
system, or one connecting Cook County to Duluth. We do not have 
affordable housing for many of our workers. We lack a large venue for 
meetings, conventions or entertainment, which restricts that tourism 
niche, and keeps our numerous festivals and events on the small, less 
cost-effective side. Local investment for such infrastructure is simply 
not available.
    The costs of marketing create difficulties for businesses to do 
their own. With fewer visitors and less revenue in lodging tax, 
entities such as mine also have less to spend to do our jobs for our 
communities.
    In closing, tourism is a powerful force in Cook County. I would ask 
for continued funding at both the state and Federal level to fuel the 
programs that result in its growth, to support the marketing efforts of 
Explore Minnesota Tourism, and to consider seriously the 
recommendations of Senator Amy Klobuchar and others who advocate for 
the growth of tourism. Thank you again for this opportunity to speak 
with you, and I look forward to seeing you in Grand Marais.
Economic Analysis of Cook County
Plan to Improve the Economy and Quality of Life for Cook County 
        Residents

                        Final Preliminary Report
Executive Summary
Purpose
    The Cook County Economic Analysis Council was formed to identify 
and analyze some of the critical economic and quality of life issues 
facing County residents, to serve as a catalyst to stimulate further 
discussion, and to propose possible solutions. Information was gathered 
from governmental sources, individual businesses and public forms and 
meetings held over the past year.
    This Council is a grassroots committee, founded by members whose 
businesses total approximately 20 percent of total sales in the County 
and employ a similar percentage of the County's work force. The Council 
represents an historic cross-County partnership with proportionate 
representation from three economic districts in the County (Lutsen/
Tofte/Schroeder, Grand Marais and the Gunflint Trail) to protect, 
strengthen and enhance the economic and social well-being of Cook 
County residents. Its members are:

        Bill Hansen, Sawbill Outfitters

        Bruce Kerfoot, Gunflint Lodge

        Charles Skinner, Lutsen Mountains Ski Area and Eagle Ridge 
        Resort

        Jan Sivertson, Sivertson Gallery

        Scott Harrison, Lutsen Resort

        Teresa Sterns, East Bay Suites

        Tim Kennedy, Gunflint Realty and Grand Marais City Council

    Other participants in the meetings of the Council have included:

        Bob Fenwick, Sawtooth Lumber and Cook County Commissioner

        Mark Sandbo, Grand Marais Mayor (through December 2006) and 
        Manager of Aspen Lodge Hotel

        Matt Geretschlaeger, Director of Cook County/Grand Marais 
        Economic Development Authority

Background
    Cook County is one of Minnesota's most treasured and stunning 
natural recreation areas. From the rugged Sawtooth Mountains, to the 
Boundary Waters Canoe Area Wilderness and the shores of the world's 
greatest freshwater lake, tourists are drawn to this corner of our 
State. It is no wonder that over 80 percent of Cook County's economy is 
driven by tourism.
    As business leaders and community servants, we are proud guardians 
of Cook County as an international tourist destination. We are 
concerned, however, that Cook County does not have the financial 
resources, professional expertise, or public tourism-oriented 
infrastructure to sustain, let alone improve, this tourism economy so 
vital to our residents' livelihood and quality of life.
    Cook County has some significant private tourism infrastructure: 
top notch lodging, retail shops, restaurants and outfitters, a 
destination ski area, a vibrant artistic heritage, and strong private 
sector non-profits such as North House Folk School and the Grand Marais 
Playhouse. Cook County also has some public infrastructure, including a 
hospital, art center, recreation trails, and protected wilderness and 
public lands encompassing 90 percent of the County. The Council's 
research, however, indicates that there are significant areas that need 
immediate attention and critical investment.

The Concern
    Decades' long declines in logging, fishing and mining have made 
Cook County a one-factory community, and that factory is tourism. 
Tourism accounts for over 80 percent of the economy, making Cook County 
more dependent on tourism, by far, than any other Minnesota county. 
Until the late 1990s, tourism continued to grow, propelling growth in 
employment and sales.
    Due to a lack of resources to invest in relevant public 
infrastructure or broaden tourism beyond snow-based recreation 
activities during the 7-month low season (mid-October through mid-
June), the economy of Cook County has stagnated and become highly 
seasonal. Lodging visitation, the engine of tourism in Cook County, has 
not grown since 1999, resulting in parallel stagnation at restaurants, 
bars, retail shops, recreation facilities and other businesses. The 
total dollars flowing through the economy fall to 35 percent to 55 
percent of peak summer sales levels from mid-October through mid-June.
    This economic weakness affects the entire County. Businesses are 
forced to take out credit lines to survive. Too few year-around 
positions with benefits are available, and seasonal unemployment is 
high. The County has been unable to attract or retain younger workers 
or families, or provide adequate housing, public transportation or 
other community infrastructure.
    In order to solve these problems, Cook County needs to address the 
following issues:

   Lack of Relevant Public Investment in Tourism Economy: Other 
        tourism communities have made public investments in concert/
        performance halls, convention centers, movie theaters, museums 
        or aquariums, shuttle transportation, and affordable workforce 
        housing, or funded the activities of a convention, events and 
        visitors bureau. Cook County has no events and visitors bureau 
        and its few investments, such as Superior National Golf Course 
        or the Gitchi Gami trail, provide benefits primarily during the 
        summer when the economy is already at or near capacity. Cook 
        County needs to invest in infrastructure and programming that 
        will provide benefits during the seven-month low season.

   Inadequate Promotional Funds for Tourism: For the last 15 
        years, one-half of the 3 percent lodging tax in Cook County has 
        been diverted to pay for the County-owned golf course, Superior 
        National, leaving Cook County with only one-half of the 
        requisite promotional funds. There is an immediate need to 
        restore the full 3 percent for promotional purposes for Cook 
        County.

   Lack of Event-Based Strategy to Reduce Dependence on Snow-
        Based Activities: During the seven-month low season, snow-based 
        recreational activities (primarily alpine skiing, plus cross 
        country skiing and snowmobiling) are the main draw for 
        visitors. This makes Cook County vulnerable to low-snow years 
        and results in a particularly anemic economy in November, April 
        and May. Out-of-state tourism communities with a similar 
        dependence on snow-based activities, as well as many Minnesota 
        communities seeking additional tourists, have broadened their 
        draw by hosting music events, cultural performances and 
        festivals. Cook County needs to do the same.

Public Concensus-building Process and Plan
    Over the past year, this Council, in cooperation with other 
community groups, has held dozens of public meetings and public forums 
and discussions regarding solutions to the County's infrastructure and 
event and festival needs. These public forums have included radio and 
call-in shows, newspaper stories and editorials, public township 
meetings, retail shop forums, meetings with restaurant and bar 
proprietors, forums with outfitters and other recreation businesses, 
meetings with non-tourism businesses, non-profit meetings and numerous 
other public forums, discussions and public meetings.
    By the end of 2006, a consensus had developed to raise funds 
through a combination of a reauthorization of the current 1 percent 
local sales tax (set to expire in late 2007 with the full funding of 
the hospital infrastructure) and new tourism-targeted local sales 
taxes. In mid-February 2007, the County's three tourism associations 
(Gunflint Trail Association, Lutsen Tofte Tourism Association and Grand 
Marais Area Tourism Association) formally approved this package. On 
February 27, 2007, the Cook County Board of Commissioners, by a 
unanimous vote, adopted resolutions approving the sales tax package:

   One percent Local Option Sales Tax for Cook County 
        Infrastructure: The County Board recommended that ``the 
        Minnesota Legislature amend existing legislation to allow use 
        of the 1 percent local sales tax for Cook County infrastructure 
        that benefits recreation and economic development (and to 
        defray operation costs and physical maintenance costs for such 
        infrastructure), which infrastructure benefits county citizens, 
        enhances the county economy, and supports county economic 
        development [which] if approved by the Minnesota Legislature, 
        the Board would impose continuation of the 1 percent sales tax 
        . . . subject to voter approval in November 2007.'' This will 
        raise approximately $1.1 million per year for these 
        infrastructure improvements. Approximately $200,000 per year 
        (out of the $1.1 million) is intended to be used for the first 
        4 years to pay off the remaining bonds on the County-owned golf 
        course, which will restore the full 3 percent lodging tax 
        proceeds to the Counties tourism associations for promotional 
        purposes.

   One percent Lodging Tax/3 percent Recreation/Entertainment 
        Sales Tax for a new Cook County Event and Visitors Bureau 
        (``CCEVB''): The County Board recommended that the Minnesota 
        Legislature authorize ``the following tourism-focused sales 
        taxes to fund a new Cook County Event and Visitors Bureau 
        (CCEVB) that will primarily organize, operate and promote 
        events and festivals, and community-wide branding and general 
        marketing during slower tourism periods of the year (currently 
        mainly mid-October through June) to increase tourism visits 
        during such periods for the benefit of economy and residents of 
        Cook County.'' The new tourism sales taxes consist of: (i) a 
        new 3 percent tax on recreation/entertainment sales (i.e., 
        admissions to ski, golf and other recreation or entertainment 
        facilities and rental of recreation equipment such as skis, 
        canoes and kayaks) and (ii) a new up to 1 percent lodging sales 
        tax matched by the use of \1/2\ percent of the existing 3 
        percent lodging sales taxes from the three tourism 
        associations. This will generate approximately $650,000 per 
        year ($520,000 in new taxes) to fund the new CCEVB.

Justification
    The Council's analysis indicates that the investment of $650,000 
per year for the new County-wide event/visitors bureau to implement a 
series of events and festivals throughout the slower periods (bolstered 
by the $1 million per year investment in community infrastructure that 
will also help spur economic activity) will increase total sales by 
$31.4 million. This investment will increase the year-around, full-time 
employment with benefits for residents, and generate $11.4 million in 
additional wages for Cook County residents. The additional wages will 
average $5,856 per worker based on an estimated 1,948 affected workers 
(out of a total workforce of 2,500 workers). The new events, festivals 
and recreation amenities will increase entertainment options and 
enhance the quality of life for both residents and visitors.
    Using sales tax proceeds to support tourism economies is a common 
and effective practice in local economies comparable to Cook County. 
Similar out-of-state tourism-dominated communities, such as Crested 
Butte, CO, Sand Point, ID, and Telluride, CO, have successively used 
public funds to coordinate tourism planning, invest in public tourism 
infrastructure, and organize events and festivals to improve the 
economy and quality of life for their residents. Many Minnesota 
communities have also invested general sales tax and tourism-targeted 
sales taxes in both infrastructure and to promote tourism and festival 
and events (e.g., the Duluth DECC) for the benefit of their 
communities.
    The overall sales tax plan is consistent with both Minnesota and 
out-of-precedents. Cook County already has a 1 percent sales tax for 
hospital infrastructure which will be fully funded in late 2007, and so 
this component of the sales tax package will not increase overall 
taxation in Cook County. Since the lodging and recreation/entertainment 
sales taxes will be paid almost entirely by visitors to Cook County, 
this component will have no impact on local resident spending. 
Additionally, the total state and local sales taxes on visitor spending 
in Cook County will remain well below combined taxes on tourism sales 
in other tourism destinations around the country (which are often 20 
percent or more), and will also be less than many Minnesota communities 
(which impose up to 7 percent taxes on lodging and 3 percent on 
recreation/entertainment, and up to 3 percent on restaurant and bar 
sales).
    Events and festivals have proven effective in Cook County. Examples 
include a ski race held at Lutsen Mountains in early April, which has 
transformed a slow time near the end of the ski season when most ski 
areas are already closed to a week-long event that fills more than 50 
percent of the lodging capacity in the Lutsen/Tofte/Schroeder area. 
Other examples include music performances (jazz and bluegrass 
festivals) and other cultural events or festivals whose potential has 
not been fully realized due to a lack of a marketing budget and that 
organization, execution and promotion of the event did not benefit from 
any professional expertise or staffing and were held solely through the 
efforts of a few unpaid volunteers. Cook County, with only 5,000 
residents, does not currently have the resources, either through the 
efforts of volunteers, the already-struggling tourism businesses or 
under-funded tourism associations, to mount a coordinated or consistent 
strategy of festivals and events during the seven-month low season.

Implementation
    This Council is preparing organizational documents for the 
formation of the CCEVB \1\ and gathering additional information 
relevant to the formation and initial activities to be undertaken by 
the CCEVB. It is anticipated that approximately one-third of the budget 
of the CCEVB (approximately $220,000 initially) will pay for 
professional staffing and other administrative costs to operate the 
CCEVB and that the balance (approximately $430,000) will utilized to 
pay for the programming and promotional costs of the various events, 
festivals and performances organized by the CCEVB. This Council is also 
developing benchmarks (such as increases in lodging sales and overall 
sales) to evaluate the success of the events and festivals.
---------------------------------------------------------------------------
    \1\ Cook County's three tourism associations have agreed that the 
CCEVB will be governed by a thirteen (13) member board of directors 
with County-wide representation proportionate with the tax collections: 
four (4) directors to be appointed by the Grand Marais Area Tourism 
Association (GMATA), two (2) directors to be appointed by the Gunflint 
Trail Association (GTA) and seven (7) directors to be appointed by the 
Lutsen Tofte Tourism Association (LTTA), plus a non-voting advisory 
board member appointed by Grand Portage. The resolutions passed by the 
three tourism associations and the County Board provide that the CCEVB 
will continue for an initial period of five (5) years and thereafter 
for successive five (5) year periods in the absence of a vote prior to 
the end of the fourth year by any of the three partner tourism 
associations to not support the continuation of the additional tourism 
taxes (in which case the use of the \1/2\ percent of the existing 3 
percent lodging taxes would be restored for promotional uses by the 
respective tourism associations).
---------------------------------------------------------------------------
    Infrastructure improvements funded by the 1 percent local sales 
taxes will be approved by the County Board of Commissioners. The 
Board's resolution lists three specific recreation projects that 
community groups have been working on for a number of years including a 
swimming pool, a public library addition and community center amenities 
(including a skateboard park, ball fields, tennis courts, youth 
activity room and group meeting space), and notes the intention that 
approximately $200,000 per year (out of $1.1 million) be utilized for 
approximately 4 years to make the remaining payments on the bonds for 
the County-owned Superior National Golf Course. The stated goals of the 
resolution include providing recreational amenities for both visitors 
and residents that will support economic development efforts by 
enhancing the appeal of Cook County for residents and visitors, help 
the County retain service workers for the tourism industry and 
contribute to the tourism industry. This Council will work with the 
Board and other community groups to accomplish these goals.

How Residents and Visitors Win

A. Improved Economy
    1. Reduced seasonality and $31.4 million in additional sales
    2. Less dependence on snow or good weather
    3. $11.4 million additional wages ($5,856 per worker for 1,948 
workers)
    4. More universal year-around employment with benefits
    5. More affordable home-ownership and improved young worker housing 
options
B. Enhanced Quality of Life for Visitors and Residents
    1. Opportunities for local musicians to perform and local artists, 
photographers and craftspeople to showcase their work and learn from 
top artists from around the world
    2. New events, concerts, performances and recreational amenities to 
enjoy
    3. Free shuttle service will permit travel around the community to 
restaurants, retail shops and performance venues, or workplaces, 
without driving.


























    Senator Klobuchar. Thank you.
    Last--and I'm glad she could be here today--is Anna Tanski, 
who will deliver the remarks from Visit Duluth on behalf of 
Executive Director Terry Mattson. Visit Duluth is the Duluth 
tourism bureau or--how--what--describe what you are so I know. 
I've certainly----
    Ms. Tanski. I will do that right now.
    Senator Klobuchar.--heard of you before. All right----
    Ms. Tanski. Thank you, Senator.
    Senator Klobuchar.--thank you.

         STATEMENT OF ANNA TANSKI, DIRECTOR OF SALES, 
                          VISIT DULUTH

    Ms. Tanski. On behalf of Visit Duluth, the official 
destination marketing organization for Duluth, Minnesota, and 
the community's tourism and hospitality industry, we emphasize 
the value and importance of tourism to our city and its 
residents.
    Tourism is Duluth's number-one locally owned industry, 
consisting of hundreds of small businesses, all of which are 
being tested by one of the toughest and most difficult times 
since the Great Depression.
    The impact of tourism greatly affects everyone in this 
region, whether they are directly related to the industry or 
not. Duluth visitor direct expenditures are estimated to be 
$780 million annually. Conservatively, State government 
collects $59 million and local government collects $20 million 
each year attributable to Duluth tourism. Annual Duluth travel 
expenditures also support nearly 18,000 full-time-equivalent 
jobs. About three-quarters of these jobs--nearly 14,000--are 
directly supported by Duluth visitors.
    Duluth tourism promotion is the number-one way to jump-
start our local economy, according to the Knight Foundation. 
Even small percentage increases or decreases in visitor 
spending have a significant impact on the bottom line.
    The visitor industry applauds the vision and efforts of 
Senator Amy Klobuchar, as Chair of the Senate Commerce, 
Science, and Transportation Subcommittee, hoping to boost 
travel throughout the United States and our region. Let's all 
do--let's do all we can to grow and enhance tourism and the 
local quality of life, and ultimately ease our future budget 
problems.
    Despite consumers watching their discretionary spending 
more closely than any time in recent history, 2008 Duluth 
tourism revenues increased for the 20th consecutive year, and 
reached an all-time high. First-quarter 2009 reports show 
declines compared to the same time last year, however. The 
trend for much of America is far more ominous. We remain 
hopeful that these are challenging times; whether it's 
marketing the United States to international travelers or 
encouraging close-to-home trips, meetings and conventions, or 
business travel, the tourism industry represents real economic 
development.
    Duluth tourism is one of America's great success stories, 
yet ``flat'' may be the new ``up'' for the foreseeable future.
    [Laughter.]
    Ms. Tanski. This is an industry fueled by promotion. There 
are ways governments can help. Tourism is one of the few areas 
where government actually makes more money by investing its 
resources in the common good. Jobs, families, livelihoods, and 
government services all depend on tourism. Tourism also opens 
doors for all other forms of economic development. Additional 
tourism promotion will result in greater prosperity for all 
citizens and greater economic health for our city, state, and 
country.
    We thank you, Senator Klobuchar, for your appreciation of 
public/private partnerships that make us a competitive travel 
destination. Tourism represents an opportunity to help everyone 
out of the economic downturn. The return on investment and 
ability to create more jobs is unparalleled. With your help, 
tourism will continue to be a critical economic engine keeping 
people employed.
    Thank you.
    Senator Klobuchar. Thank you.
    I also wanted to let Mayor Ness say a few words here. I'm 
so glad he stayed with us through this.
    I know how busy you must be. So, thank you for doing that.

                  STATEMENT OF HON. DON NESS, 
                   MAYOR OF DULUTH, MINNESOTA

    Mr. Ness. Well, thank you.
    Senator Klobuchar. You're almost--the microphone's almost 
tall enough for you.
    [Laughter.]
    Mr. Ness. Well, thank you, Senator. And thank you very much 
for holding this hearing in Duluth. And I want to welcome the--
our visitors to the City of Duluth. Very appropriate. And I 
hope you enjoy your time and spend a lot of money in----
    [Laughter.]
    Mr. Ness.--in our economy.
    Tourism is important to the City of Duluth. And, as Ms. 
Tanski mentioned, it is a--I think, a historic success story 
for our Nation. When you think of Duluth in the late 1970s and 
early 1980s, we were kind of on that downward spiral, and it 
was our investment in tourism and our hospitality industry in 
Duluth that created this beautiful waterfront that all of the 
State of Minnesota can be proud of, and provided a foundation 
for us to achieve greater growth and employment.
    And the strength of Duluth's tourism industry is the 
strength of the relationships between government, our local 
businesses, especially those that are locally owned, and those 
that work in the tourism industry. And we have representatives 
from the HERE Local 99 who have been strong partners in 
advocating for continued investment in the tourism industry. 
We've had, in recent times, questions of, when facing budget 
challenges, Do we continue to invest in the tourism promotion 
in the City of Duluth? Do we continue to tax ourselves in order 
to build a new arena in the City of Duluth? And the local labor 
community has been a strong advocate for making those 
investments, and we thank them for that.
    We're looking ahead in the City of Duluth. We see some 
really exciting possibilities with the construction of our new 
arena along the waterfront, the eventuality of passenger rail 
connection to downtown Minneapolis, a vision for a new 
multimodal station right across the avenue here that will make 
it convenient for our visitors to get anywhere around our 
community, and that continued strength of that partnership--
business, labor, government--all working together to make 
tourism a vital part of our local economy.
    And we know that we cannot take our success for granted. We 
need to continue to make those investments, continue to promote 
our visitor industry, and to make sure that our visitors have a 
world-class experience every time that they come to Duluth.
    So, again, thank you so much for being here and sharing 
your expertise and your insight on the tourism industry. It's 
fascinating for us in Duluth. I am sure we'll take lessons away 
from this.
    And, Senator, thank you so much----
    Senator Klobuchar. Thank you.
    Mr. Ness.--for being here.
    And the Senator really isn't a visitor; she's here so 
often----
    [Laughter.]
    Senator Klobuchar. I'm an honorary citizen----
    Mr. Ness.--and just--as everywhere in the State of 
Minnesota, we call Amy Klobuchar one of our own. So, thank you 
again for----
    Senator Klobuchar.--and your only----
    [Laughter.]
    Senator Klobuchar.--Senator. No, but thank you for that 
nice remark. I will say, I was thinking, as you spoke, mayor, 
about how when I was growing up, our family would come up a lot 
to the North Shore, we would go to that range, and we would, 
you know, go to Split Rock. But, before you developed that 
waterfront, so I'm growing up in the sixties, I don't really 
remember us doing that. And, my family, on the other hand, 
still does those other activities, but we always stop in 
Duluth, or stay overnight, and go on the waterfront and go to 
all those little shops.
    So it really is an example, in my own family, of how it's 
changed because of that tourism development in Duluth. So I 
think you're right, it's quite a amazing success story of how a 
mid-sized town is able to do that. So, thank you. Thank you for 
that.
    I also wanted to mention--I think it was you, Mr. Edman, 
that talked about how we've had our first Congressional 
hearing, which is true. But, I was with Congressman Oberstar a 
few weekends ago, and I actually, with all of his work in 
transportation, was not aware he kind of got his start in 
Congress working on tourism. And I told him I was doing this 
hearing here, and he said, ``Oh, you know,'' it's a long 
historical story of his involvement in tourism. And so, for all 
we know--and maybe the Mayor would know this--probably 20 years 
ago, he had a hearing like this here.
    [Laughter.]
    Senator Klobuchar. I don't know; I'm making that up.
    [Laughter.]
    Senator Klobuchar. But, he clearly had been very involved 
in tourism at the beginning of his career in Congress, so that 
was something I didn't know.
    I thought I'd start with you, and people, if you have 
questions, should--after I ask a few, should come up.
    But, this issue of business travel, Mr. McInerney, I mean, 
clearly we've had some difficulties. I mentioned, you know, 
AIG, some of these companies, what happened here. And what had 
happened, nationally--and I've heard this from CEOs all across 
the countries, small and big--they literally canceled their 
business trips, even though it wasn't actually based on 
economics. And so many of them saw it as a smart way to get 
their employees together, reward for sales. And then, I also 
heard about these trade conventions--and I hadn't really 
thought about this, but, for small businesses, it's really 
their only way to share their goods and to sell things to each 
other and to figure things out. And then some of those were 
canceled, as well.
    So, could you comment about the need for business travel 
and what you foresee is happening----
    Mr. McInerney. Well legitimate business is being questioned 
and canceled. It is an important part of our economy.
    Senator Klobuchar.--as the economy, hopefully, improves, 
here?
    Mr. McInerney. Sure. The important part of that is, some of 
the irresponsible rhetoric on the part of some people in 
Washington have really created a backlash for companies having 
their events in destination resorts. Las Vegas, since the 
middle of December until the end of April, lost 402 
conventions. Those cancellations are putting people out of 
work, and that's putting the waiters and the waitresses and 
bellmen, stewards and other hotel workers out of their jobs.
    Companies that have canceled meetings have to pay a 
cancellation fee. There's a company that canceled the meeting 
in Las Vegas, paid $600,000, the cancellation fee, moved their 
event to San Francisco, paid double the price for their hotel 
rooms, but they weren't on the front page of their newspaper or 
on the 11 o'clock news.
    Senator Klobuchar. But, if they had come to Duluth----
    [Laughter.]
    Mr. McInerney. Yes.
    Senator Klobuchar.--you know? That would have been OK with 
us.
    [Laughter.]
    Senator Klobuchar. But, I mean----
    Mr. McInerney. But, the cancellations are causing people to 
lose their jobs.
    Senator Klobuchar.--I think, though----
    Mr. McInerney. But, the community loses jobs and revenue.
    Senator Klobuchar.--the story is, even with the 
cancellation fees, people lose the revenue----
    Mr. McInerney. The hotel loses revenue.
    Senator Klobuchar.--from the----
    Mr. McInerney. More importantly, revenue in the community 
is lost.
    Senator Klobuchar. Right.
    Mr. McInerney. And it's not just the hotels. That revenue 
turns over about ten times in the community. It's the retail 
establishments that really become affected, the small, 
independent owners of these businesses. I mean, my daughter, in 
New York City, had a lady's dress shop that she had to close 
because of the downturn in the economy. So, it affects the 
small businesses when people aren't coming there to spend their 
dollars.
    Hopefully, the information that we sent to the Treasury 
Department in February will come out as a regulation for people 
to have meetings, and why they should have them, and putting up 
a fiscal responsibility and accountability on it so that it 
isn't anything that shouldn't happen, and that companies that 
are not receiving TARP money can use that then as the best 
practices for their businesses. Because hand-to-hand meetings 
and face-to-face meetings are the things that are very 
important.
    If you remember, back maybe 10 years ago, when the United 
Airlines, in the downturn, had a commercial on, and the 
chairman of the board went around and handed out tickets, ``We 
now have to go out and see our customers, because we're 
starting to lose market share.'' And if you're not out there 
seeing your customers, you're going to lose market share, and 
it's going to affect the local community.
    Senator Klobuchar. We had someone here from Delta, as 
well--a very strong airline----
    Mr. McInerney. Yes.
    Senator Klobuchar.--in Minnesota, that supplies a lot of 
jobs. We also have Cirrus in Duluth, the general aviation, that 
produces smaller planes.
    Mr. McInerney. Yes.
    Senator Klobuchar. So, we see that effect, as well, on the 
industry in our State.
    Mr. Edman, Mr. Siegel, do you want to just comment on this 
issue of the business travel and how--you know, we're talking, 
here--and not Las Vegas-style conventions in Duluth or in the 
Twin Cities, but how you--if you think it's possible that we 
can get some equilibrium back again to get these conventions 
going, and the value of this to businesses?
    Mr. Edman. Well, Madam Chair, I was referencing, in my 
earlier remarks, that, as Explore Minnesota, we started to work 
with the convention and visitors bureaus throughout the State 
on a Meet in Minnesota Campaign. And that's rather historic, 
because traditionally it was not perceived as the role of the 
State tourism marketing organization to be promoting meetings 
and conventions. That was the purview of the local convention 
and visitors bureaus and the destination marketing groups. But, 
because of the things that are happening right now in the 
economy, things on a national level from all the bad PR, 
they've all come together and said, ``You know, we have to 
start working together as never before.'' And so, what we did 
is, we started out with a small PR campaign. We enlisted some 
political, as well as some business, leaders together to do a 
press conference, we've created some websites, we've done some 
ViralVideos about----
    Senator Klobuchar. Viral?
    Mr. Edman. If you go to ExploreMinnesota.com, you go to our 
meeting page, you'll find a fun little video about, What if you 
had a meeting and no one came? Basically a meeting of one 
person meeting with himself, basically. It's a lot of fun.
    [Laughter.]
    Mr. Edman. And it is--it is fun. But, it is just one 
element on a short-term effort, that we have--that we all have 
a part in this, that it's good for business. It's good, not 
just for the businesses that are affected, but for the 
businesses that are meeting, in terms of developing sales, 
doing research, trying to develop and how their businesses can 
grow, as well as the businesses that we represent, the 
convention centers, the hotels, and things like that, that 
benefit.
    Senator Klobuchar. Right.
    Mr. Edman. So, it's good for business----
    Senator Klobuchar. Well, and especially----
    Mr. Edman.--business and good for----
    Senator Klobuchar.--in this day, where----
    Mr. Edman.--the State.
    Senator Klobuchar.--so many people communicate over the 
Internet and on the telephone, sometimes for businesses that 
have different offices across the country or across the State, 
this is their one opportunity to bring people together. So----
    Mr. Edman. And we hope to expand on this effort. In fact, 
we just had a meeting yesterday----
    Senator Klobuchar. Good.
    Mr. Edman.--with Bloomington and Minneapolis and Rochester, 
on how to expand this into a longer-range program.
    Senator Klobuchar. OK.
    Mr. Siegel?
    Mr. Siegel. I would just add to it that I think that, 
certainly in our case, State government can play a role in 
this, as well, in that there has long been some challenges with 
State agencies holding meetings at Minnesota resorts, and 
there's a perception issue that occurs there, that we really 
have to kind of get out on the table and be open about and 
suggest that it's OK for State agencies to hold those meetings 
and come to Duluth or go to Brainerd or go to the southern part 
of the State and host those meetings.
    Sometimes there's a--there's a negative perception, driven 
by the media; they're going to be there, they're going to take 
a picture of somebody who's out on the golf course instead of 
being at the meeting. And that's happened in our State, 
certainly, in the past.
    And so, we just want to encourage those various State 
agencies that are facing these challenging decisions about 
meeting, themselves, that it can be very economical, and, in 
fact, sometimes it's the most economical choice, to go offsite 
and do a meeting at a Minnesota resort or a Minnesota vacation 
destination that also has meeting capability.
    Senator Klobuchar. OK.
    Ms. Tanski, just this issue of business and conventions in 
Duluth, your perspective on this and----
    Ms. Tanski. Well, for----
    Senator Klobuchar. I remember when, before I was in 
government, I went to the Minnesota State Bar Association 
several times at the DEC Center.
    Ms. Tanski.--they will be here----
    Senator Klobuchar. Oh, good. All right. Good.
    [Laughter.]
    Ms. Tanski. For 18 years, I have worked passionately 
selling the destination for meetings and conventions. That has 
been the primary focus of what I do in this industry. And not 
only do I see it as vital and essential for what we do; that 
portion of what Visit Duluth works on is about a $36-million 
economic impact, just in meetings and conventions, alone, but 
what we're working on, in collaboration with Explore Minnesota 
Tourism, as John mentioned, is, this is something we're seeing 
as an opportunity, because Minnesota is a vibrant meeting 
destination with such a variety of destinations that can 
accommodate every meeting that's out there, virtually. And so, 
we are, as Duluth, situating ourselves and actually seeing an 
increase in interest from meeting planners who are looking for 
a viable destination that is not going to put them on the front 
page of the paper.
    Senator Klobuchar. There you go----
    [Laughter.]
    Ms. Tanski. And so----
    Senator Klobuchar.--Mr. Edman. You just----
    Ms. Tanski.--we are trying to----
    Senator Klobuchar.--send them----
    Ms. Tanski.--capitalize----
    [Laughter.]
    Senator Klobuchar.--we'll take them in.
    [Laughter.]
    Ms. Tanski.--on the fact that Duluth is not always front-
page news. But----
    [Laughter.]
    Ms. Tanski. And that can be a good thing.
    Senator Klobuchar. OK, this is very interesting.
    [Laughter.]
    Senator Klobuchar. OK, we won't tell Harry Reid about this, 
but we have a plan to----
    [Laughter.]
    Ms. Tanski. A plan.
    Senator Klobuchar. No, it's good.
    I want to talk a little bit about this--just with 
passport--passport card requirement now coming in, in June. I 
think it's--does anyone remember the date? It's June----
    Mr. Siegel. June 1.
    Senator Klobuchar. June 1? And obviously we've actually 
just opened up a passport office in Minnesota, something I've 
been pushing for. It's in the Twin Cities, but it'll help to 
expedite some of these emergency calls that our office gets. 
But, the Canadian travel, people coming in from Canada, it's 
very important. And I thought maybe, Ms. Brostrom, do you want 
to talk about that? I mean, we want this to go smoothly. The 
passport card is half the cost of a passport, I think, and will 
work for coming in from Canada.
    Ms. Brostrom. Yes, we've been concerned about this, for 
several months or more, ever since the idea was floated, that, 
people are going to have to have the passport. On our own 
website, right on the home page, you can click onto another 
page that tells the latest requirements of coming to, coming to 
northern Minnesota and then hoping to get into Canada and 
coming back into Minnesota. So, we're trying to get the word 
out.
    The Canadian visitor is very important to Grand Marais; 
we're just 40 miles from the border. And people in Thunder Bay, 
for instance, it's a 90-minute drive, and they love Grand 
Marais. In a very--in 90 minutes, it's--it's a whole 'nother 
world for them. And they----
    Senator Klobuchar. Without an exit.
    [Laughter.]
    Ms. Brostrom. Yes. I didn't know I had one, but----
    Senator Klobuchar. No, no, no, that's what your website 
says, though.
    [Laughter.]
    Senator Klobuchar. I'm just using your own marketing, and 
repeating it so that----
    Ms. Brostrom. So----
    Senator Klobuchar.--it'll get in people's heads.
    Ms. Brostrom. Yes. But, the interesting thing, I'm 
finding--because my--I'm a marketing person, but my office is 
right in the same--just behind the visitor center, in the same 
room, so I have my door open all the time, and I'm listening 
and helping people. And I'm really pleased that so many people 
coming to Grand Marais, and then they ask about Thunder Bay, or 
going to the border, they have their passports. So, somehow the 
word is getting out. The passport card, I think, is a good 
idea.
    And I met, yesterday, with the folks--the director of 
tourism in Thunder Bay and so on, and we were also talking 
about this issue. So, on both sides of the border, we're trying 
to get the word out.
    And it's much quicker in Canada to get a passport now.
    Senator Klobuchar. Right. And those are some of the 
things--when I first came in, there were some huge problems, 2 
and a half years ago.
    Ms. Brostrom. Yes.
    Senator Klobuchar. I'm looking at Zack, back there. We 
handled, between Senator Coleman's office and ours, we each 
handled about 1,500 emergency cases for passports, people that 
called their Member of Congress because they had requested them 
6 weeks before and they didn't have them.
    Ms. Brostrom. Yes.
    Senator Klobuchar. We saved 17 brides' honeymoons, and lost 
one.
    [Laughter.]
    Senator Klobuchar. And it was not exactly what I wanted to 
be doing in our first 2 months, with these ideological young 
people that had joined the office, was working on college kids' 
trips to Cancun. But, it was----
    [Laughter.]
    Senator Klobuchar.--what we were left with, because of 
disorganization in the Federal Government at the passport 
office. And so, it has improved over the years.
    Ms. Brostrom. Yes.
    Senator Klobuchar. That was such a fiasco. And so, it's 
improved, but it still isn't where it should be, if we really 
want to promote this international travel----
    Ms. Brostrom. Yes. I was----
    Senator Klobuchar.--especially with----
    Ms. Brostrom. Yes. I was----
    Senator Klobuchar.--the Canadians.
    Ms. Brostrom.--stunned to learn, yesterday, that in Thunder 
Bay you can get a passport there in about 10 days.
    Senator Klobuchar. So, that's why I hope having this 
Minnesota office will help us for our travel. But, mostly what 
I'd like to see is just help international visitors----
    Ms. Brostrom. Yes.
    Senator Klobuchar.--to come here.
    So, Ms. Somnis, I thought one of your most interesting 
points was just about the workers and what this means. And I 
loved that story of a kid working as a dock boy on Lake 
Vermilion--I'm going to use that example; I told Mr. Siegel he 
should, too--going on to manage the Chicago Hilton. But, just 
what you've seen, in terms of the jobs, in a very difficult 
economic time, especially with iron-ore mines--the mines were 
going strong for a while, and how they've--because of the 
worldwide demand, are now back where they were. We hope they're 
going to come back again. But, just the possibilities for 
employment and what you see.
    Ms. Somnis. Well, I think that there are people working in 
retail service, tourism and hospitality jobs right now 
throughout the Arrowhead that would never have, in the past. 
But, they are--they are needing to redirect themselves, feed 
their families. And hopefully, with the travel trend for the 
vacations closer to home----
    Senator Klobuchar. Right.
    Ms. Somnis.--our region will be busy this spring and summer 
travel season, and we'll be able to put some of those----
    Senator Klobuchar. And for----
    Ms. Somnis.--people to work and----
    Senator Klobuchar.--for people to find out deals in the 
Arrowhead, whether they're--wherever they are. Are there 
websites that people can check in these----
    Ms. Somnis. Yes. They can check MinNEcations.com.
    Senator Klobuchar. Oh, of course, I----
    [Laughter.]
    Senator Klobuchar.--I forgot.
    Ms. Somnis. And on that----
    Senator Klobuchar. OK.
    Ms. Somnis. On that website, we go--you go to the Northeast 
page of Explore Minnesota Tourism----
    Senator Klobuchar. OK, I see.
    Ms. Somnis.--and the 15----
    Senator Klobuchar. And inside the----
    Ms. Somnis.--communities who are participating in the 
campaign----
    Senator Klobuchar. They're all----
    Ms. Somnis.--are linked there.
    Senator Klobuchar. OK.
    Ms. Somnis. And they all have their deals on their----
    Senator Klobuchar. OK.
    Ms. Somnis.--on their pages. And so, yes, we encourage all 
kinds of travel, to come and keep our kids busy and some of us 
adults, as well.
    Senator Klobuchar. OK, very good.
    Mr. Siegel. If I could just piggyback on--we did a survey 
on our--we have a Board of Directors for the Restaurant 
Association of 28 restaurant operators, and went around the 
table at a recent board meeting. A little over half of them got 
their start either washing dishes or busing tables. So, I think 
that's just indicative of the same story that you're telling, 
that this is an industry where you really can start really in 
the back of the house and move your way up and get into 
management.
    Ms. Somnis. But, I--if I may, I----
    Senator Klobuchar. Go ahead.
    Ms. Somnis. Many years ago, when I first moved to the North 
Shore, I worked at Edgewater, which is now Bluefin Bay, and Rob 
Buntz, the developer of that resort, likes to say that I am a 
poster child for tourism careers because I grew up starting, 
waitressing, housekeeping, cooking, and managed to evolve into 
a full-time professional----
    Senator Klobuchar. Yes, I did that, too, but then I spilled 
12 iced teas on one customer, and that was----
    [Laughter.]
    Senator Klobuchar.--my career in the hospitality industry.
    [Laughter.]
    Senator Klobuchar. Anyway, that's great. So, you are one of 
the success stories.
    Ms. Somnis. Yes, I could be one of those, myself, yes.
    Senator Klobuchar. Dr. Schneider, this idea of marketing 
Minnesota internationally and--what we're trying to do on the 
Federal level, obviously, is to market, America, but part of 
this will be, if we get this bill passed and start going, 
there's going to be a $10 fee on visas on--for people coming in 
from other countries, so it won't be on the tax of our 
taxpayers. And again, it's exactly what other countries have 
done that have been basically eating into our share of 
international tourism. As this develops, I can easily see the 
Mall of America being a place that people will want to travel 
to; they already are--and then they--then we somehow promote 
Minnesota, because I think--we have the Canadians coming down, 
which is a major piece of our international travel, but just--
studies you've seen, how do you promote other parts of the 
country? Because sometimes people come for 3 weeks, and if they 
come to the Mall of America, we'd like them to come elsewhere, 
as well, in our State.
    Dr. Schneider. Other parts of the country, or other parts 
of the State? I'm sorry.
    Senator Klobuchar. Oh, we want them to come to our State.
    Dr. Schneider. Oh, OK, sure. Well, certainly, I think there 
are some cooperative efforts underway and in discussion, in 
terms of promoting day trips or 3- to 5-day trips. And I think 
the packaging is really important. And the ease of 
transportation is one thing we consistently hear, from 
international visitors, is that we need easier transportation 
information, because there is an assumption that you can take a 
train up to Duluth or to Grand Marais or down over to 
Worthington or----
    Senator Klobuchar. So you could see----
    Dr. Schneider.--Detroit Lakes. So, certainly some 
transportation information is necessary, and possibly 
infrastructure, as well. But, definitely packaging accurate, 
up-to-date information, as Explore Minnesota and other websites 
are providing, would be helpful.
    Senator Klobuchar. Yes. Because I was thinking, I went, 
once, with our family to Denmark, and we went to Copenhagen and 
then we wanted to go somewhere that wasn't just some big town, 
so I looked on the website, and they have this thing in Denmark 
where they promote little--they're basically bed-and-
breakfasts, but they--you stay on a farm. So, they said that 
this particular farm I thought my daughter would love would 
have horses, sheep, and pigs. And it had, in fact, three 
horses, one sheep, and 3,000 pigs.
    [Laughter.]
    Senator Klobuchar. It was a hog farm. But, it was 
actually--it was actually great. It was fine. We had a great 
time. But, my point is----
    [Laughter.]
    Senator Klobuchar.--I was thinking, if this develops--and 
again, we want to make the market there for bringing people to 
our State, and we're going to have to get this bill passed and 
work on this, but we have to think creatively about things that 
Minnesota could offer----
    Dr. Schneider. Well----
    Senator Klobuchar.--as part of that, as part of a package 
deal that doesn't just take you to the Twin Cities.
    Dr. Schneider. Certainly, and there are a number of 
products and experiences Minnesota offers. And, along those 
agricultural lines, we've just completed a study, with a number 
of partners, about the interests and opportunities for 
agricultural tourism in farm stays in the State of Minnesota.
    Senator Klobuchar. There you go. All right, very good.
    Yes?
    Mr. Edman. Yes, Madam Chair, if I could just comment just 
about the U.S. promotion effort, right now in Minnesota we 
market overseas, we market to Japan, Germany, the U.K., and the 
Scandinavian countries, but our budget is relatively limited. 
And we do----
    Senator Klobuchar. So, that's----
    Mr. Edman.--we do a lot of cooperative marketing with other 
States--for instance, the Great Lakes States or the States 
along the Mississippi River. But, unfortunately, in the United 
States--I mean, one of the things that makes us great is 50 
unique States, but that also makes it difficult, where right 
now all the international marketing is done on a State-by-State 
basis. You have a State----
    Senator Klobuchar. Exactly.
    Mr. Edman.--like Florida or Nevada that's doing a lot----
    Senator Klobuchar. So, that allows these bigger States to--
--
    Mr. Edman. Minnesota is not doing as much. And so, I think 
a U.S. travel promotion organization not only would allow us to 
compete, grab market share from other countries that are 
capturing it away from the United States, but it also provides 
experiences for travelers. Travelers do not travel--
particularly international--to geopolitical units of States; 
they travel for experiences, they travel to destinations. And 
right now we don't market the United States that way. This act 
will allow us----
    Senator Klobuchar. Right. That's----
    Mr. Edman.--to do that.
    Senator Klobuchar.--the plan. Thank you.
    Questions? Comments on these, anyone? Probably--yes, that's 
good, because Don put that thing up there pretty high. Take it 
down, there.
    OK?
    Mr. Erickson. Hi. Yes, I'm too tall. I would pull it up----
    [Laughter.]
    Mr. Erickson. But, just a couple of comments. I heard a lot 
of information here today, a lot of--a lot of big numbers, 
actually. That's good. Billion, trillion? In my industry, I 
represent low-wage hotel/restaurant workers, so I'd like to 
talk about some small numbers. And it's just kind of an FYI--my 
personal experience.
    I represent workers in the hotel/restaurant industry, in 
Duluth, the Iron Range, and International Falls. So, there are 
issues on the border with Canadians coming across. I've been 
hearing that. But, I would just like to bring some of the--just 
a couple of quick life stories that I am hearing from my 
members.
    You know, the economy is bad. I won't use any names, but 
Joe, at the Pickwick, who is a buser who's raising two 
daughters, has been cut 1 hour a day. Well, at $8 an hour, you 
know, 1 hour a day isn't a lot of money, but if you times that 
out in a week, it's 5; in a pay----
    Senator Klobuchar. Yes.
    Mr. Erickson.--period, it's 10 hours.
    Senator Klobuchar. Exactly.
    Mr. Erickson. Through the course of a year, it's--it could 
be anywhere from, you know, $1,600. He's not going on vacation. 
And when he does go on vacation, it's very local. It's to his 
parents' cabin. It's very local.
    So, you know, and us continuing to build relationships and 
work together, I really think, you know, if we take care of the 
line workers, as were mentioned, you're going to see, 
hopefully, a spike back up in tourism. You know, very 
important, I think, you know, as----
    Senator Klobuchar. Right.
    Mr. Erickson.--part of that.
    Mr. McInerney. Yes, I think that I can respond to that. 
Because I think one of the reasons why the hotels now are 
discounting heavily is to keep as many people employed, because 
when we are going to come out of this, and when we turn around, 
we want to make sure that we have those trained people that are 
there. So, it's unfortunate that we have to cut some hours. We 
cut middle management out of most of the hotels, back in 
October, November, December, when it first started, but the 
important part now is to keep the people working, at the line 
level, so when we come out of this thing and the transition 
occurs next year, and when business is significantly better in 
2011, we need those people to be there.
    Mr. Erickson. Absolutely. And that's kind of what I am 
bracing for is the future.
    Senator Klobuchar. We had testimony from a woman who had 
this Bavarian Inn in Michigan, and she had--I asked her what 
she cut, because I actually thought she was--and she had cut 
hours, like you said, but she had cut mostly middle managers, 
which is bad. I mean, it's jobs that they've cut, but I think, 
again, your story illustrates how improving this climate, in 
the economic climate, generally, but then making sure that 
people see this as, it's OK to have business conventions. Maybe 
you're going to scale back a little bit and go somewhere else, 
but we'll keep our workers employed, and that that's so much a 
piece of this, as well. So.
    Mr. McInerney. Can I just give you an example of----
    Senator Klobuchar. Yes.
    Mr. McInerney.The Broadmoor, in Colorado Springs, is one of 
the biggest private employers there. Their business is down 
significantly. They had a 72-hour special book now deal where 
you called and received a 50-percent discount on any room 
between now and the end of the year. They wanted to sell these 
rooms to keep their over 1,200 employees working. They thought 
they could sell about 7,500 rooms. They sold over 13,000. And 
it'll keep all those people working throughout the summer, into 
the winter season, so that next year, when they come out of 
this, they'll have those employees there.
    Senator Klobuchar. OK. I was asking these guys if they had 
a deal that they wanted to advertise, too.
    [Laughter.]
    Senator Klobuchar. No, we know that they are there. So, 
that's a very good point. And I think people are looking for 
deals, and it, again, will keep workers employed and keep the 
business going. So, anything else from the----
    Yes?
    Mr. Buehler. If I may, Senator--thank you very much for 
coming. I'm Ken Buehler. I'm the Executive Director of----
    Senator Klobuchar. Oh, well, thank you----
    Mr. Buehler.--the St. Louis County Heritage and Arts 
Center, and we're very proud to have you and the rest of your 
honored and distinguished guests with us today.
    I want to go back to a comment that Mr. Siegel made which 
was kind of following up on one that John made, which was about 
infrastructure and getting people around. As you know, because 
you've been very supportive of it, we're working on a project 
to return rail passenger service between here and the Twin 
Cities.
    You mentioned airlines and airports, and I'm just 
wondering, Senator--I know you've been supportive in the past--
rail seems to be a real interest of this particular 
administration, and there is Federal stimulus money out there 
for train service, there's the Amtrak bill that was passed last 
year, and Congressman Oberstar is working very hard on the next 
TEA bill, which we also hope will include some transportation 
funding for----
    Senator Klobuchar. Yes.
    Mr. Buehler.--rail. And I'm just wondering if anybody has 
any comments about the importance of rail, not necessarily our 
efforts on the Northern Lights Express, which I've left some 
posters around. Gee, I don't know how that happened.
    [Laughter.]
    Mr. Buehler. But, it just kind of did.
    [Laughter.]
    Mr. Buehler. So, I'm just kind of hoping that there would 
be some support, as you have been, in the past----
    Senator Klobuchar. Right, and----
    Mr. Buehler.--about something that----
    Senator Klobuchar. Both Congressman Oberstar and I have 
made requests for that project.
    Mr. Buehler. Right.
    Senator Klobuchar. We have other projects I've made 
requests for, as well, in Minnesota. And you are right, the 
Administration's--a major priority. Vice President Biden came 
out to our State and spoke about it. There's $8 billion in the 
stimulus plan for rail projects that people are bidding on 
right now, and then we also will have additional money in the 
transportation bill. We are behind compared to other developed 
nations, even developing nations, when it comes to rail, and it 
creates some great opportunities.
    I always like traveling by rail with my husband, because 
then we don't get into a fight about directions.
    [Laughter.]
    Senator Klobuchar. And so, I think that there are some 
great possibilities, here. So, I don't know if anyone else 
wants to comment about it.
    Mr. McInerney. About traveling by rail?
    Senator Klobuchar. Yes.
    Mr. McInerney. I think it's a great way to go from New York 
to Washington, D.C., without all the confusion.
    Senator Klobuchar. Yes, exactly. Well, we have some great 
routes that we want to have here, too, as well.
    All right, anybody want--oh, Tammy, yes.
    Ms. Stanoch. Senator Klobuchar, I'm Tammy Lee Stanoch, Vice 
President of Corporate Affairs at Delta Airlines. Thank you all 
for being here. And just because I'm in airlines doesn't mean I 
don't like rail; I think that's great, too.
    [Laughter.]
    Ms. Stanoch. All forms of transportation are good. But, I 
particularly want to thank you all for talking about what 
you're doing to promote tourism here in northern Minnesota, 
because we are not successful as an airline if we don't have 
people that want to fly to these great destinations. And 
Northwest had a long history as--of serving the Heartland in 
Minnesota, now Delta wants to continue that, as well. But, if 
people don't want to fly to their lake cabins in International 
Falls or Hibbing or Brainerd or Bemidji or Duluth, we're not 
going to be able to be successful, either.
    So, thank you very much for what you're doing. And thank 
you, Senator Klobuchar, as well.
    Senator Klobuchar. Right, OK, thank you.
    Anything more?
    Voice. [Off Microphone.]
    Ms. Brostrom. I'm not able to stay very much longer, 
because the grand opening is today, and I'm missing it. And 
it's--they are--the grand opening is on the very first day that 
it is opening. It's--you know, so they didn't have a soft 
opening. But--so, what I can say is, though, is it's a 
beautiful--really, for--especially in Grand Marais, for our 
scale of buildings and so on--there's a beautiful building that 
has been built, a coffee shop inside is--are--some pretty fancy 
touchscreens for all kinds of information, particularly 
promoting, you know, Canadian travel. And even though my job is 
to promote, you know, business within Grand Marais, I welcome 
this, because we have so many travelers coming up, especially 
from the Twin Cities or, you know, south of us, who spend time 
in our area, and then they go on into Canada. So, it's a very 
educational sort of a building and experience. So--you know, 
and cultural, as well, so it's touching on those parts of 
tourism that we could use some growth in our area.
    So, as I say, I'm missing the grand opening, the bagpipers 
and everything else, so----
    Senator Klobuchar. OK.
    Ms. Brostrom.--I guess we can just say, ``Stay tuned,'' 
yes.
    Senator Klobuchar. All right. Well, I wanted to thank 
everyone for coming today. And this has been very helpful. 
Wouldn't you say, Mr. McInerney, it's even less stuffy than the 
Washington hearing?
    Mr. McInerney. Oh, I think this is a lot friendlier.
    Senator Klobuchar. Yes.
    [Laughter.]
    Senator Klobuchar. Exactly. And actually, I've gotten a lot 
of good ideas from this that I can bring back to Washington, 
good examples that we can use.
    We are feeling very positive that we could finally pass 
this bill that's been kicking around Washington for years and 
years and years. And sometimes an economic crisis has some 
silver linings, and one of them has been the increased focus on 
how important the tourism industry is to our country. And if 
that's what gets us there, OK. But, it would be very helpful 
for our country, for the long term, to pass this bill, to make 
sure people know, in Minnesota, that there are good deals close 
to home, that we want to promote, this summer, if even people 
go for 2 or 3 days. And then, also to understand the importance 
of the workers to this industry.
    And then, finally, business travel, that it is OK for 
businesses to travel again. Obviously, they'll have to look at 
their bottom line, and maybe they're going to scale back, but 
we want to make sure people understand that there may have been 
a few bad actors out there, but they shouldn't ruin it for 
everyone, including our workers in the travel industry.
    So, thank you for being here. This hearing is officially 
adjourned.
    [Whereupon, at 10:37 a.m., the hearing was adjourned.]

                                  
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