[Senate Hearing 111-378]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-378

                       TOURISM IN TROUBLED TIMES

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

                                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 13, 2009

                               __________

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






                  U.S. GOVERNMENT PRINTING OFFICE
52-163 PDF                WASHINGTON : 2010
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001








       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 13, 2009.....................................     1
Statement of Senator Klobuchar...................................     1
Statement of Senator Martinez....................................     7
Statement of Senator Dorgan......................................     8
Statement of Senator Begich......................................    10

                               Witnesses

Hon. Harry Reid, U.S. Senator from Nevada and Senate Majority 
  Leader.........................................................     1
    Prepared statement...........................................     3
Mary Saunders, Acting Assistant Secretary for Manufacturing and 
  Services, International Trade Administration, U.S. Department 
  of Commerce....................................................    12
    Prepared statement...........................................    13
Jay S. Witzel, President and CEO, Carlson Hotels Worldwide.......    15
    Prepared statement...........................................    17
Sam Gilliland, Chairman and Chief Executive Officer, Sabre 
  Holdings Corporation...........................................    18
    Prepared statement...........................................    19
Jay Rasulo, Chairman, Walt Disney Parks and Resorts..............    24
    Prepared statement...........................................    26
Rossi Ralenkotter, President/CEO, Las Vegas Convention and 
  Visitors Authority.............................................    36
    Prepared statement...........................................    41
Chad Prosser, Director, South Carolina Department of Parks, 
  Recreation and Tourism and Chairman, Travel South USA..........    43
    Prepared statement...........................................    44
Judy Zehnder Keller, President, Bavarian Inn Lodge...............    46
    Prepared statement...........................................    48

                                Appendix

Hon. John Ensign, U.S. Senator from Nevada, prepared statement...    57
Response to written questions submitted by Hon. Tom Udall to:
    Mary Saunders................................................    58
    Sam Gilliland................................................    58
    Jay Rasulo...................................................    60
    Rossi Ralenkotter............................................    61
    Chad Prosser.................................................    62
    Judy Zehnder Keller..........................................    63
Letter, dated May 8, 2009, from Marcheta Sparrow, Secretary, 
  Tourism, Arts and Heritage Cabinet to Commerce Subcommittee....    64
Letter, dated May 12, 2009, from Kelli A. Truble, Secretary, 
  Wisconsin Department of Tourism to Hon. Mel Martinez...........    65
Letter, dated May 12, 2009, from Todd Davidson, CEO, Travel 
  Oregon to Hon. Amy Klobuchar and Hon. Mel Martinez.............    65
Letter, dated April 24, 2009, from Linda M. Parkowski, Delaware 
  Tourism Office to the U.S. Senate Commerce Committee...........    66
Letter, dated May 12, 2009, from Brad Dean, President and CEO, 
  Myrtle Beach Area Chamber of Commerce to Hon. Amy Klobuchar and 
  Hon. Mel Martinez..............................................    66
Letter, dated May 13, 2009, from William G. Miles, IOM, CCE, 
  President and CEO, Hilton Head Island-Bluffton Chamber of 
  Commerce to Hon. Amy Klobuchar and Hon. Mel Martinez...........    67
Letter, dated May 12, 2009, from Joseph P. Riley, Jr., Mayor, 
  City of Charleston to Hon. Amy Klobuchar and Hon. Mel Martinez.    68

 
                       TOURISM IN TROUBLED TIMES

                              ----------                              


                        WEDNESDAY, MAY 13, 2009

                               U.S. Senate,
  Subcommittee on Competitiveness, Innovation, and 
                                  Export Promotion,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10 a.m. in 
room SR-253, Russell Senate Office Building, Hon. Amy 
Klobuchar, Chairman of the Subcommittee, presiding.

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

    Senator Klobuchar. Thank you very much. We are going to 
call the Subcommittee, the hearing to order.
    I am sitting in Jay Rockefeller's chair. I realize he has 
much longer legs than I do. We want to welcome you all and 
thank you for coming this morning.
    Senator Martinez will be here shortly. I am proud to be 
here with Senator Dorgan, who has done so much work in the area 
of tourism. We know how important this hearing is today for an 
industry that employs one out of eight people in this country.
    I am honored to have Majority Leader Reid with us to kick 
off the hearing before the witnesses come up, and we will turn 
it over to him.
    Thank you so much, Senator Reid. We know how important the 
tourism industry is in Nevada.

                 STATEMENT OF HON. HARRY REID, 
      U.S. SENATOR FROM NEVADA AND SENATE MAJORITY LEADER

    Senator Reid. Senator Klobuchar, Senator Dorgan, thank you 
very much for holding this hearing, and inviting me to testify 
this morning.
    Tourism is an important industry for our country and 
especially for my state, Nevada. I appreciate each of your 
interests in this.
    I also want to recognize a long-time friend of mine, Rossi 
Ralenkotter, the President and Chief Executive Officer of the 
Las Vegas Convention and Visitors Authority, who will be 
testifying later this morning.
    Rossi has been at the Las Vegas Convention and Visitors 
Authority for decades. He can take enormous credit for the 
successes of Las Vegas as a tourism and business destination. 
His agency is responsible, among other things, for the branding 
and rebranding of Las Vegas.
    I come to this Committee today with a simple message--
Nevada is open for business, and we eagerly await your visit. 
We are ready to host your business meetings and serve all of 
your related needs. We are ready to host your next vacation, 
whether that be on the Las Vegas strip, the shores of Lake 
Tahoe, or the trails and crags of the beautiful Rocky Mountains 
in eastern Nevada.
    For business meetings, Las Vegas remains an unmatched 
destination, and that is an understatement. Nowhere else in the 
world will you find the amenities, service, convenience, and 
value that our hotels and convention center offers. Las Vegas 
has more than 10 million square feet of convention space, 2,000 
restaurants, 140,000 rooms with 13,000 more scheduled to open 
later this year. The average nightly room rate is $98, which is 
far lower than any other major convention city in the country.
    Almost 1,000 flights come and go from Las Vegas each day. 
And McCarran International Airport connects with 132 cities 
across America and around the world. Outside of Nevada, much 
attention is paid to Las Vegas, and rightfully so. But many do 
not realize that Nevada is also an outdoor enthusiast's dream.
    Nevada has 26 State and National Parks covering 3.2 million 
acres. We have millions of acres of wilderness. In these areas 
of wilderness and parks, we have mountain sheep. We have 
mountain goats, which are rare in this country, but we have 
them. Antelope. We have basically everything.
    We have 10 mountain ranges that host peaks as high as 
13,000 feet. We have 32 mountains over 11,000 feet high. There 
are only two lakes like it in the world, Lake Tahoe, an Alpine 
glacial lake, and the other is Lake Baikal in the former Soviet 
Union, now Russia. Indeed, Mark Twain described Lake Tahoe as, 
``the fairest picture the whole Earth affords.'' That is his 
quote. And he was right.
    Nevada's many destinations, of course, benefit travelers 
from all over the world. But tourism is also critical to those 
who call Nevada home. Almost a quarter of a million Nevada jobs 
depend on tourism. Nevada has no State income tax, and in 2007, 
almost 30 percent of the State budget came from revenues 
generated by the travel industry.
    Revenues from hotel room taxes, car rentals, and sales 
taxes fund most of the basic services provided by local 
governments scattered around the State. The recent decline in 
visitors to Nevada has, unfortunately, contributed to the worst 
State budget shortfall in our State's history. Simply put, our 
State depends on visitors. The more who come and enjoy our 
State, the better off is Nevada.
    We can be proud of the work we have done in Congress. We 
have done it to get people traveling and to make it easier and 
more inviting for them to do so. Last Congress, we authorized 
and funded the Model Ports of Entry program that places more 
Customs and Border Patrol agents at McCarran airport and other 
places. We are getting more foreign visitors through customs 
more quickly.
    Our economic recovery plan includes tax cuts for the middle 
class to make it easier for them to afford travel, and we have 
funded vital infrastructure projects that will improve roadways 
and transportation facilities.
    I am a co-sponsor of the Travel Promotion Act, a measure 
reintroduced this week by Senator Dorgan. He has been really a 
pioneer in this area, and I commend and applaud the work he has 
done.
    In many respects, this bill uses Rossi Ralenkotter and his 
team's model for Las Vegas but applies it to the country as a 
whole. It creates a corporation for travel promotion to market 
the United States around the globe as a tourist destination.
    This is what the Las Vegas Convention and Visitors 
Authority has been doing for Las Vegas for a long, long time. I 
am confident success can be replicated at the national level to 
benefit all of us.
    Madam Chairman, tourism is the number one, two, or three 
economic driver of every State. Every State depends on tourism 
without exception.
    We know that we continue to endure a very serious 
recession, and it is no surprise that business and leisure 
travel have fallen off as a consequence. But with our important 
work to date and a continued commitment to turn our economy 
around and to promote tourism, the economy will improve for 
Nevada and the entire Nation.
    Madam Chairman, unless you have some questions, could I be 
excused?
    [The prepared statement of Senator Reid follows:]

    Prepared Statement of Hon. Harry Reid, U.S. Senator from Nevada 
                       and Senate Majority Leader
    Let me begin by thanking Senator Klobuchar for convening this 
hearing and inviting me to testify this morning. Tourism is an 
important industry for our country and especially for my state, Nevada, 
and I appreciate the Chairwoman's interest in this topic.
    I also want to recognize Rossi Ralenkotter, the President and CEO 
of the Las Vegas Convention and Visitors Authority, who will be 
testifying later this morning. Rossi has been at the LVCVA for decades 
and can take enormous credit for the successes of Las Vegas as a 
tourism and business destination. His agency is responsible, among 
other things, for the branding, and re-branding, of Las Vegas.
    I come to this Committee today with a simple message: Nevada is 
open for business, and we eagerly await your visit. We are ready to 
host your business meetings and serve all of your related needs, and we 
are ready to host your next vacation, whether that be on the Las Vegas 
Strip, the shores of Lake Tahoe or the trails and crags of the Ruby 
Mountains of eastern Nevada.
    For business meetings, Las Vegas remains an unmatched destination. 
Nowhere else will you find the amenities, service, convenience and 
value that our hotels and convention centers offer. Las Vegas has over 
10 million square feet of convention space, nearly 2,000 restaurants, 
140,000 rooms, with 13,000 more scheduled to open this year. The 
average nightly room rate is $98, which is far lower than most of the 
other major convention cities in the country.
    Almost 1,000 flights come and go into and out of Las Vegas each 
day, and McCarran International Airport connects directly to 132 cities 
across America and around the world.
    Outside of Nevada, much attention is paid to Las Vegas, which is 
deserved. But many do not realize that Nevada is also an outdoor 
enthusiast's dream. Nevada has 26 state and national parks covering 3.2 
million acres, 10 mountain ranges that host peaks as high as 13,000 
feet--32 over 11,000 feet--and one of the highest alpine lakes in the 
world in Lake Tahoe. Indeed, Mark Twain described Lake Tahoe as ``the 
fairest picture the whole earth affords,'' and he was right.
    Nevada's many destinations of course benefit travelers from all 
over the world. But tourism is also critical to those who call Nevada 
home.
    More than 230,000 Nevada jobs depend on tourism. Just yesterday, 
hundreds of workers from the tourism sector participated in a rally at 
the Las Vegas Convention Center to celebrate their contributions to the 
Nevada economy as well as celebrate National Travel and Tourism Week.
    Nevada has no state income tax, and in 2007, 27 percent of the 
state budget came from revenues generated by the travel industry. 
Revenues from hotel-room taxes, car rentals and sales taxes fund most 
of the basic services provided by local governments scattered around 
the state. The recent decline in visitors to Nevada has unfortunately 
contributed to the worst state budget shortfall in the state's history.
    Simply put, our state depends on visitors. The more who come and 
enjoy our state, the better off is Nevada.
    We can be proud of the work we have done in Congress to get people 
traveling and to make it easier and more inviting for them to do so. 
Last Congress we authorized and funded the Model Ports of Entry program 
that places more Customs and Border Patrol agents at McCarran Airport. 
They are getting more foreign visitors through customs more quickly.
    Our economic recovery plan included tax cuts for the middle class 
that will make it easier for them to afford travel, and we funded vital 
infrastructure projects that will improve roadways and transportation 
facilities.
    I am a cosponsor of the Travel Promotion Act, a measure re-
introduced this week by Senator Dorgan. In many respects, this bill 
uses Rossi and his team's model for Las Vegas, but applies it to the 
country as a whole: it creates a Corporation for Travel Promotion to 
market the United States around the globe as a tourist destination. 
This is what the LVCVA has been doing for Las Vegas for decades, and 
I'm confident its success can be replicated at the national level to 
benefit all of us. In virtually every state, tourism is the number one, 
two or three industry.
    We know that we continue to endure a very serious recession, and 
it's no surprise that business and leisure travel has fallen off as a 
consequence.
    But with our important work to date, and a continued commitment to 
turn our economy around and to promote tourism, the economy will 
improve for Nevada and the Nation.

    Senator Klobuchar. You certainly can, Mr. Leader. Thank you 
very much for being here.
    We have been joined by Ranking Member Martinez and welcome 
you here.
    Senator Martinez. Thank you, Madam Chairman.
    Senator Klobuchar. We are going to give some statements up 
here, and should we have the witnesses come up right now, if 
you want to just get ready to go for when we are done?
    I also wanted to introduce, while they are getting up here, 
a few of the workers that are here because we want to all 
remember what this industry really is about, and that is the 
people working on the front line.
    We have Johnny Harrington. Where are you, Johnny? He is a 
cook at the Gaylord National. Thank you for being here with us.
    Paul Jones? Where are you, Paul? Right there. He is a 
houseman with the Marriott Wardman.
    Josefa Andrade. There you are. Good to see you. She is a 
housekeeper at the Marriott.
    Velma Terrell. She is in laundry at the Capitol Hilton, 
reminding me what I need to do when I get home. Thank you.
    [Laughter.]
    Senator Klobuchar. And Ernest Bester. Where are you? Right 
there, Ernest. He is also a cook at the Gaylord National.
    I just want to thank you because people have to remember 
when we are talking about this industry and these jobs, they 
are the ones that we are talking about.
    I want to thank you again for coming. We really see this 
industry as major backbone to our economy, and we have to look 
at both the challenges and the opportunities ahead today.
    As we head into the summer months, families, both here and 
in countries around the world, are sitting around their kitchen 
tables looking at their budgets. We want them to know, first of 
all, that there are a lot of opportunities for affordable 
travel in the United States.
    I have a lot of memories from my own family vacations 
growing up. We would rent a camper and attach it to the back of 
my dad's car. Only one time did he drive one way and the camper 
drove the other. But we would head to the Black Hills or to 
Wyoming. We took the Milwaukee Railroad to Wisconsin, and we 
would bike in northern Minnesota, up where the cabins and 
lodges are.
    As the Leader mentioned, America is home to some of the 
world's wonders with so much to offer travelers, whether it is 
the stunning national landmarks, like the Grand Canyon, Mount 
Rushmore, and the Statue of Liberty; whether it is our oceans, 
lakes, and rivers, or our mountains, forests, and beaches; 
whether it is the scenic country towns or the bright lights of 
the big cities; whether it is the centers of fun and 
entertainment, like Las Vegas or Disney World.
    From the heartlands to the coast, every State has an 
economic stake in the tourism industry. Throughout the United 
States, many communities, large and small, have discovered and 
successfully developed the economic potential of travel and 
tourism.
    As I mentioned, one out of eight Americans is employed in 
our travel economy in some way. Each year, travel and tourism 
contribute approximately $1.3 trillion to the American economy, 
and the travel economy contributes $115 billion in tax revenue 
to State, local, and Federal governments.
    I remember back in the old days up in Duluth in northern 
Minnesota, which can be a pretty cold place, and they were 
having economic troubles. And there used to be a billboard on 
the edge of town that said, ``Last one out, turn off the 
lights.''
    Well, I can tell you the lights are still on in Duluth, and 
despite this economy, tourism has made a major impact there. 
They bring in nearly 4 million visitors each year, with an 
annual economic impact of over $700 million. That is not bad 
for a city that is frozen half the year.
    As we know, travel is part of the fabric of our country. As 
someone once said, Americans have always been eager for travel, 
that being how they got to the New World in the first place.
    But today, the tourism industry is feeling the impact of 
the economic downturn. Families are cutting back on vacations 
to save money, and businesses are, unfortunately, cutting back 
on meetings.
    When a family decides to forgo a vacation or a business 
cancels a meeting, there is a ripple effect across the country. 
Fewer airline tickets are sold. Fewer cars are rented. Hotels 
and lodges rent fewer rooms. Tourist attractions have fewer 
visitors.
    These are serious challenges. But even in the midst of 
these troubled times, there are also opportunities to help 
promote the tourism industry.
    First, we need to promote the United States to 
international travelers. International visitors to the U.S. 
spend an average of $4,000 per person when they are here. That 
is money that is going into our big cities and to lodges in our 
national parks and into places like the Mall of America in my 
State.
    In economic terms, international tourism to the U.S. counts 
as an export, and here we actually have a trade surplus. Last 
year, travel and tourism accounted for 8 percent of all U.S. 
exports and 26 percent of all U.S. service exports. In fact, 
tourism is one of the few economic sectors where we enjoy such 
a substantial trade surplus.
    But things aren't going as well as they should. While more 
people around the world are traveling, a smaller percentage of 
them are visiting the United States. Since 2000, the U.S. share 
of the world travel market has decreased by nearly 20 percent. 
This is lost market share, and we must recapture it.
    We are a country that has opened our arms to people around 
the world. So we need to look at new, creative, and compelling 
ways to promote travel to the U.S.
    That is why I am so pleased that Byron Dorgan is here with 
me today. He has worked very hard on the Travel Promotion Act. 
We are co-sponsors up here, and I have to tell you, I think 
that this is the year that we are going to get this done.
    Second, we need to encourage close-to-home trips and make 
sure people know that there are affordable travel deals out 
there for their families. This year, due to the economy, many 
families are rethinking their vacation plans. But they have to 
understand that there are great deals out there--and I am sure 
we are going to hear about that from some of our witnesses--and 
they need to look at those deals and do that research, get on 
the Internet, make the calls, and they can figure out how they 
can make it within their own budget.
    Finally, we need to encourage business travel again. 
Unfortunately, travel is often one of the first things that is 
cut when a company's budget is tight. But most business travel 
is essential to doing business and succeeding at business.
    Companies use travel to seek new customers, to develop 
client relationships, to shop for suppliers, to encourage 
professional development, and to reward and incentivize 
employees for a job well done. For companies, these kinds of 
travel are considered investments in their business.
    Business travel is also important to the rest of the 
economy. Meetings and events make up nearly 15 percent of all 
domestic travel, accounting for more than $100 billion in 
spending.
    Yet, we know that many businesses are canceling their 
travel in the current environment. The U.S. Travel Association 
and the tourism industry lost more than $1 billion from meeting 
and event cancellations, and that was just from the beginning 
of January to the end of February of this year.
    As we know, the highly publicized excesses of a few bad 
actors have discouraged many companies from spending on 
meetings and events, even when they know it is not in their 
best interests. There are ways for businesses to conduct 
meetings and events in a way that is responsible and 
productive. And when they are not, it isn't good for business, 
and it is not good for tourism and the travel industry.
    So we need to do what we can to encourage companies to 
spend on travel again in an ethical, acceptable manner so these 
investments can pay off for individual businesses and for the 
travel industry. These are just some of the things we need to 
get the travel industry moving again and to get the American 
economy moving forward.
    I look forward to hearing from our witnesses, and I will 
now turn it over to Mel Martinez, the ranking member, who knows 
a little something about tourism, being that he is from 
Florida.

                STATEMENT OF HON. MEL MARTINEZ, 
                   U.S. SENATOR FROM FLORIDA

    Senator Martinez. Thank you, Madam Chair.
    I really appreciate you putting this hearing together. It 
is timely, and it is important. And I am delighted to have a 
chance to participate.
    I was also so pleased to see Leader Reid here with us 
today.
    And I want to also welcome Jay Rasulo, who is with Walt 
Disney World Parks and Resorts. Mr. Rasulo, we are so glad to 
have you here. A place where dreams come true, back in Florida. 
We are glad to have you.
    And I believe that it is very timely and also very 
important, Senator Dorgan, that we move forward on the Travel 
Promotion Act. I am a big supporter of it and a co-sponsor with 
you. And I really do believe that at this moment in time and in 
this kind of an economy, it makes it very apparent that we need 
that kind of a shot in the arm to the travel and tourism 
industry.
    There is no question in my mind that for some time, as we 
look at the competitiveness of the world travel dollar, the 
United States is not only falling behind, we are not even in 
the game when it comes to competing for it. We just have so 
much to offer that we need to get our share. But the fact of 
the matter is that the competition around the world is 
promoting themselves in a way that we just don't do.
    So I am looking forward to making sure that we get back in 
the game of international tourism in a way that can really 
continue to promote and help us with job growth and promotion.
    Our Nation's tourism economy is, in fact, in trouble at the 
moment. For the first time in 7 years, the number of visitors 
traveling to Florida last year actually declined by roughly 2.3 
percent. In the fourth quarter of 2008 alone, the number of 
visitors declined by 13.6 percent.
    While these numbers give you an idea of how hard the global 
economic recession has hit Florida's tourism economy, they 
don't tell the story of Floridians personally impacted by this 
crisis.
    When I served as Mayor of Orange County, I saw firsthand 
the impact that tourism had on our economy. As someone who 
lived in Orange County, Florida, when the biggest thing we did 
in Orange County was grow and pick oranges, and then obviously 
saw the transformation from a certain mouse taking residence in 
the county, what a difference it made in the whole environment 
of the place and the economic engine that it has become. It is 
easy for me to understand what a difference tourism can make.
    But anytime fewer visitors come to Florida, it creates 
tremendous uncertainty for the men and women working in the 
hotels, restaurants, theme parks, retail stores, and other 
establishments that have helped make Florida one of the world's 
top tourism destinations.
    But today, the economic recession has had an unwelcome 
impact on the tourism industry. According to the Department of 
Labor, almost 200,000 travel-related jobs were lost in 2008, 
and an estimated 147,000 jobs will be cut this year.
    The downturn impacts all areas of tourism. Orlando 
International Airport reports that passenger traffic fell off 
by 12.8 percent in the first quarter of 2009, compared to the 
same period of time last year. And attendance at the Orange 
County Convention Center was down 21.3 percent year-over-year. 
Demand for hotel rooms, the number of rooms sold was down 14.2 
percent during that same time.
    Making matters worse, there has been an intentional smear 
campaign against companies gathering for their annual retreats. 
Talking heads, policymakers, and others have been denigrating 
the companies holding meetings in places like Las Vegas, 
Orlando, or Miami. While it might make for a popular talking 
point for some, fewer conventions simply means fewer jobs, 
fewer business opportunities, and greater anxiety for many 
hard-working families.
    In March, the Orlando Travel and Visitors Bureau conducted 
a survey among the area's major convention hotels to determine 
the number of meetings canceled since the first of the year due 
to either tighter budgets or, frankly, equally as much, the 
stigma attached to holding meetings in attractive destinations.
    The survey found that in the first 2 months of the year, 
114 events were canceled, which translated into 150,000 hotel 
room cancellations. The Bureau estimated these meetings 
resulted in a loss of about $26 million in revenue for central 
Florida alone, which does not include spending from friends and 
family members traveling with the person who might be attending 
the event.
    Keep in mind these numbers are for only one city in one 
State. According to the U.S. Travel Association, during the 
first 2 months of 2009, the U.S. lodging industry lost more 
than $1 billion in revenue from the cancellation of corporate 
meetings and events.
    If we continue marginalizing those who help generate jobs 
and generate economic activity in places like Florida, the 
climb out of the recession will be much steeper than is 
necessary. So I urge my colleagues to consider the difficulties 
facing Americans working in our Nation's tourism, hospitality, 
and service industries. They play an important role in 
Florida's economy and in our Nation's prosperity.
    I do look forward to hearing from the witnesses today. And 
again, I want to thank you, Madam Chair, for this very, very 
important and timely hearing.
    Senator Klobuchar. Thank you so much.
    Senator Dorgan?

              STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. Well, Senator Klobuchar, thank you. As 
Chair of the Subcommittee and to Senator Martinez, thanks for 
your leadership.
    We are writing over in the Energy Committee a new energy 
bill this morning. So I have to spend my time over there during 
that markup. But I wanted to be here to say thank you for your 
work and your leadership.
    As you know, we have once again reintroduced a bipartisan 
piece of legislation called the Travel Promotion Act of 2009, 
and Senator Ensign joined me as the original co-sponsor. And 
Senator Klobuchar, Senator Martinez, and Senator Begich are all 
co-sponsors. It truly is bipartisan.
    Let me just say quickly that there are a lot of things we 
are grappling with here that are mysteries, that are difficult, 
troublesome to find exactly the right answer--healthcare, cap 
and trade, you know, lots of issues for which there is not an 
obvious, easy answer. This is not one of them.
    This just isn't one of them, this issue of trying to get 
our share of international tourism. We know how to do this.
    Now you can do a couple of things in life. You can let 
things happen to you, or you can make things happen. We 
understand that other countries are out there saying to the 
international tourists, ``Come to Rome. See the beauty of 
Italy.'' ``Visit Paris. See the wonders of France.'' ``Come to 
London.''
    Other countries are actively engaged because they know it 
is a huge job generator. Four thousand dollars apiece 
international tourists spend. They spend it for everything. 
They spend it at the corner market, the gas station, the car 
rental, airlines, hotels. And it creates massive numbers of 
jobs.
    Now we can decide to be disarmed, and we can be in a 
competition in which we are not competing. Or we can decide to 
do it differently, and we can ramp up a competition. And that 
is what the Travel Promotion Act of 2009 is. It creates an 
Office of Travel Promotion, with the Department of Commerce to 
serve as a liaison. But more importantly, it creates a 
nonprofit corporation to create and execute a nationally 
coordinated travel promotion program.
    And part of that is advertising. There are a lot of 
dimensions to it. And you know, advertising works. How else 
would people be able to sell bottled water, which most of us 
can walk out the door and get free, right?
    I mean, we understand advertising works. This country has 
so much to offer international tourists. To come here and 
experience what America is about does two important things. 
One, it creates jobs in our country by competing for that 
tourism dollar. But second, when they leave this country--and 
we know this because we have sampled opinions of people leaving 
this country--the people from around the world who come to this 
country and just get a taste of what America is about leave 
here with an unbelievably positive feeling about what America 
is.
    So in our own selfish interest, we need to be seeking out 
our share of international tourism to say to people around the 
world, ``Come here. America wants you to come here, to visit, 
to see the wonders of our country, to understand what America 
is about.''
    It is long past the time for us to pass this piece of 
legislation. We weren't able to get it completed. We got it out 
of this committee in the last Congress. But this time, we are 
going to roll up our sleeves and get this done in this 
Congress.
    I believe it will be--even as we suffer some significant 
economic weakness in this country--another way to begin to 
shore up this economy, shore up some jobs, create new 
opportunities, and with the unbelievable dividend of giving the 
rest of the world a much better impression of what America is 
all about.
    Senator Klobuchar. Senator Begich?
    Thank you, Senator Dorgan, for your leadership.

                STATEMENT OF HON. MARK BEGICH, 
                    U.S. SENATOR FROM ALASKA

    Senator Begich. Thank you, Madam Chair.
    And again, I want to echo that to Senator Dorgan. Thank you 
for introducing this legislation in a bipartisan way.
    I, like the Chairwoman, am a member of six in our family. 
We didn't have a camper to go around in. We went in a station 
wagon around the country, if you can imagine that, six kids 
traveling the countryside. I think our last count, from when I 
finished being a young person of under 18, was 46 states that 
we had traveled through by station wagon. It was a great 
experience, but it also showed us what a great country this is.
    But this is an area, as a former Mayor of Anchorage, 
Alaska, and as now Senator from Alaska, we understand this 
business. And we understand it from two ends. One, as someone 
who is in the business. My wife operates four retail stores 
predominantly focused on tourism business--three of them in the 
international airport, one in the downtown core.
    And oddly enough, I own a small hot springs resort in 
Carson City, Nevada, in Senator Reid's home area, which I love 
to remind him of that fact on a regular basis. But the business 
of tourism is something that I am personally very familiar 
with.
    But also from an Alaskan perspective, we see the impacts of 
the change that is occurring in the economy. And the danger is 
if we don't continue to do what we can, and this Promotion Act 
is one of the pieces, it will have a multi-year effect if we 
don't do something now.
    An example of that is, as many in the tourism business 
know, by the end of this summer, you are already designing your 
next season's brochures, material, and all the things you need 
to promote your business. So you need to know really by the end 
of this year what you might be doing next year.
    That is a very different model than most businesses, where 
they can advertise for their Christmas sales or their 
Thanksgiving weekend sales as it occurs. But in this business, 
it is a longer view that you have to take.
    The efforts that I am looking for today--and usually, I 
don't get into long speeches. I like to hear what you all have 
to say. But this is one that, again, from Alaska's perspective, 
we see a lot of impact. We estimate that in some areas, we will 
see some 30 percent decline in our tourism business, affecting 
upwards to about 140,000 visitors, 1,800 approximately 
employees, directly and indirectly, in a variety of industry 
related to our tourism business.
    So your ideas, and I have read some of your testimonies, 
and there is some really good stuff in there. And one area that 
I know a couple of you kind of touched on that I would be 
interested in, the biggest chunk of the tourism business is the 
small business community--the mom and pop operators.
    I know Judy is going to do some testimony later, and I have 
heard her present before in Michigan. But how do you get 
capital for those small businesses? Any suggestions or ideas 
that you have, in order to ensure that those small businesses 
have the working capital that they will need, and also the 
expansion capital they need in this very tight market.
    Some of the tourism business is somewhat risky in the minds 
of a banker, but in reality, it is good business. It just 
happens to be seasonal. So I would be interested in expanding 
in any way you can on those comments.
    Also, from the gentleman from Disneyland, I will tell you, 
we could learn a lot from Walt Disney. There is a great 
statistic, and you know it probably better than I do. 
Disneyland was created and built from the idea to the finish in 
1 year, the whole complete operation, which we can learn a lot 
of how that was done. I mean, it is basically a city built in a 
year out of an idea.
    And there is an amazing story around every tourism 
operator, no matter how big they are or how small they are, of 
what they have done with ingenuity.
    So I am excited to have you here. I want to thank the 
Chairwoman for doing this hearing because it really is an 
industry that not only is important for our economy, but 
promotes, as Senator Dorgan said, promotes our country around 
the world.
    I will say one bright spot, and we have already seen it a 
little bit in Alaska. Japan Airlines will now have an 
additional two or three new charters coming into Alaska because 
of the international effort we have done on promotion.
    We see the value. The dollar may be low. When we go 
overseas, we are not very excited by what we spend over there. 
But for the foreign traveler, this country is the best deal and 
in a lot of ways. And so, we did some additional promotion. We 
are going to experience that benefit in this tight economy by 
bringing in foreign travelers.
    So I look forward to your testimony, especially ideas and 
thoughts you have around how we help the small business, mom 
and pop operation to expand the capital base they will need to 
meet this growing economy, and then how you will deal with this 
kind of extended period of planning that you have to do now in 
order to achieve next year's opportunity.
    Thank you, Madam Chairman.
    Senator Klobuchar. Thank you very much, Senator Begich.
    We are going to have a roll call vote, where we are going 
to have to leave for a little bit. So we want to get started, 
and I will introduce each witness as they come up.
    And I also note we are going to have a little movie that 
Mr. Rasulo brought along. So our second panel may have someone 
that will sing a travel jingle. Just want to whet your guys' 
appetites for a good hearing.
    So we are going to start with Mary Saunders. She is the 
Acting Assistant Secretary of the Department of Commerce, and 
her office oversees the Department of Commerce's Office of 
Travel and Tourism.
    Ms. Saunders?

          STATEMENT OF MARY SAUNDERS, ACTING ASSISTANT

           SECRETARY FOR MANUFACTURING AND SERVICES,

              INTERNATIONAL TRADE ADMINISTRATION,

                  U.S. DEPARTMENT OF COMMERCE

    Ms. Saunders. Thank you, Chairman Klobuchar, Ranking Member 
Martinez, and distinguished Members of the Committee.
    Thank you very much for the opportunity to speak with you 
today concerning the state of the U.S. travel and tourism 
industry. I welcome your interest in this topic.
    In the interest of time, I have prepared a short oral 
statement, and I request that my full written statement be 
entered into the record.
    The Department of Commerce's economic accounts data shows 
that the travel and tourism industries generated a record $1.38 
trillion in sales for the economy in 2008. The industry 
directly and indirectly supported more than 8 million jobs. 
From a trade perspective, international travel to the United 
States represents over one-fourth of all U.S. services exports. 
In 2008, this translated to over $142 billion in receipts 
generated from a record 58 million international visitors.
    For the 20th consecutive year, travel and tourism produced 
a travel trade surplus for the United States, a record $29.7 
billion, and directly supported more than 900,000 jobs in the 
United States in 2008.
    Like many other industries, the economic downturn has 
affected the travel and tourism industry significantly. 
Although 2008 produced record visitation levels for 13 of the 
top 25 international markets, visitation showed deepening 
declines during the fourth quarter of 2008. This trend 
continued with a 10 percent drop in visitation levels for the 
first 2 months of 2009, compared to the same time last year. 
This was met by a 13 percent decline in receipts.
    As these numbers underscore, the travel and tourism 
industry is important to our Nation's economy, employment, and 
trade. The Department of Commerce works to support the industry 
through our travel and tourism promotion activities.
    As the Acting Assistant Secretary for Manufacturing and 
Services, I oversee the Department's Office of Travel and 
Tourism Industries. My team and I work to remove barriers to 
the growth of tourism exports, and we support our commercial 
service offices around the world to assist American travel and 
tourism businesses and destinations to market and sell their 
products. We are also the primary Government source for travel 
and tourism statistics.
    Within the Federal Government, we work with the Departments 
of State and Homeland Security and other Federal agencies to 
develop policies and programs that enhance the competitiveness 
of the U.S. travel and tourism industry and ensure that we 
continue to facilitate travel to the United States as we 
provide for our security.
    Interagency deliberation on these issues is undertaken 
through the Tourism Policy Council, comprising 15 members from 
Federal agencies and offices. We are reinvigorating the 
Council's role under Secretary Locke's leadership. We 
anticipate the Secretary calling a meeting of the Tourism 
Policy Council in early fall.
    As you are aware, the Assistant Secretary for Manufacturing 
and Services is also the Executive Director of the U.S. Travel 
and Tourism Advisory Board, an advisory board consisting of 
representatives from companies and organizations in the travel 
and tourism industry appointed by the Secretary.
    The Board advises the Secretary on government policies and 
programs that affect the U.S. travel and tourism industry, 
offers counsel on current and emerging issues, and provides a 
forum for discussing and proposing solutions to industry-
related problems. We are in the process of organizing a meeting 
of the Board. It is scheduled for June 9.
    Secretary Locke personally has taken an active interest in 
the travel and tourism industry. On May 20, he will be in Miami 
to deliver the keynote luncheon address at International Pow 
Wow, the top U.S. industry trade show with 5,000 buyers and 
sellers of international travel to the United States.
    In closing, the U.S. travel and tourism industry continues 
to be a key part of our Nation's economy. The United States 
generates more revenue from travel and tourism than any other 
country in the world. The Department of Commerce has an active 
program dedicated to expanding travel and tourism business 
opportunities for employment and for economic growth.
    We look forward to working with the Congress and with the 
travel and tourism industry on policies and programs that will 
continue to enhance the competitive position of the United 
States.
    I thank the Chairman and the members of the Committee for 
the opportunity to testify, and I look forward to answering any 
questions you might have.
    [The prepared statement of Ms. Saunders follows:]

  Prepared Statement of Mary Saunders, Acting Assistant Secretary for 
    Manufacturing and Services, International Trade Administration, 
                      U.S. Department of Commerce
Introduction
    Chairman Klobuchar, Ranking Member Martinez, and distinguished 
members of the committee, thank you for the opportunity to speak with 
you today concerning the state of the U.S. travel and tourism industry. 
I welcome your interest in this topic.
Overview--Statistics
    The Department of Commerce's economic accounts data show that the 
travel and tourism industry generated a record $1.38 trillion in sales 
for the economy in 2008. The industry directly and indirectly supported 
more than 8.6 million jobs. From a trade perspective, international 
travel to the United States represents over one-fourth (26 percent) of 
all U.S. services exports. In 2008, this translated to $142.1 billion 
in receipts generated from a record 58 million international visitors. 
For the 20th consecutive year, travel and tourism produced a travel 
trade surplus for the United States--a record $29.7 billion--and 
directly supported more than 900,000 jobs in the United States in 2008.
    Canada continues to be the top overall market for international 
visitors to the United States. Canadian visitors pumped nearly $19 
billion into the U.S. economy in 2008, breaking their previous record 
for the fifth consecutive year. U.S. travel and tourism exports account 
for 40 percent of all U.S. services exports to Canada. Spending by 
Mexican visitors also remained strong for the fifth consecutive year. 
Travelers from this second top market spent more in the United States 
on travel and tourism-related goods and services than ever before--$9.8 
billion.
    Expenditures generated from European visitors also increased 
substantially in 2008, up 25 percent. Visitors from the United Kingdom 
rank second overall in terms of dollars spent on U.S. travel, growing 
17 percent to $17.5 billion. Growth in spending from Germany jumped 26 
percent to $6.5 billion, and growth from France and Italy surged by an 
incredible 38 percent, to $4.6 billion and $3.7 billion respectively.
    Elsewhere, we saw strong growth in spending by visitors from India 
and Brazil, increasing by 18 percent and 26 percent respectively over 
2007 tallies.
    Like many other industries, the economic downturn has affected the 
travel and tourism industry significantly. Although 2008 produced 
record visitation levels for 13 of the top 25 international markets, 
visitation showed deepening declines during the fourth quarter of 2008. 
This trend continued with a 10 percent drop in visitation levels for 
the first 2 months of 2009 compared to the same time last year. This 
was met by a 13 percent decline in receipts. The Department's forecast 
to be released later this month indicates a continued decline for the 
rest of the year in this valuable export, with a weak recovery expected 
by the end of 2010.
    Most recently, the spread of the H1N1 virus has affected the 
performance of the industry, compounding the challenges associated with 
the volatile global economic environment. Department officials met with 
representatives of nine travel and tourism associations on May 1 to 
discuss the impact of the situation on the industry. The Secretary's 
office is receiving weekly status reports from Commerce staff. Industry 
reports indicate that the impact on travel to the United States and 
other destinations, with the exception of Mexico, is likely to be 
minor, provided the flu outbreak continues to subside.
Commerce Travel and Tourism Promotion
    As these numbers underscore, the travel and tourism industry is 
important to our Nation's economy, employment, and trade. The 
Department of Commerce works to support the industry through our travel 
and tourism promotion activities.
    As the acting Assistant Secretary for Manufacturing and Services, I 
oversee the Department of Commerce's Office of Travel and Tourism. My 
team and I work to remove barriers to the growth of tourism exports and 
support our Commercial Service offices around the world to assist 
American travel and tourism businesses and destinations to market and 
sell their products. We also are the primary government source for 
travel and tourism statistics.
    Within the Federal Government, we work with the Departments of 
State and Homeland Security and other Federal agencies to develop 
policies and programs that enhance the competitiveness of the U.S. 
travel and tourism industry and ensure that we continue to facilitate 
travel to the United States as we provide for our security. Interagency 
deliberation on these issues is undertaken through the Tourism Policy 
Council (TPC), comprising 15 members from Federal agencies and offices. 
We are reinvigorating the Council's role under Secretary Locke's 
leadership. One of the Council's roles will be to further the 
coordinating work begun under the now defunct Secure Borders and Open 
Doors Committee. This Committee had functioned under the Rice-Chertoff 
Initiative--designed to improve travel procedures for entry to the 
United States while still meeting security requirements. Commerce 
Department staff actively served on this Committee which also included 
private sector representatives. We anticipate the Secretary calling a 
meeting of the Tourism Policy Council in early Fall.
    As you are aware, the Assistant Secretary for Manufacturing & 
Services also is the Executive Director of the U.S. Travel and Tourism 
Advisory Board (TTAB), an advisory board consisting of representatives 
from companies and organizations in the travel and tourism industry 
appointed by the Secretary. The Board advises the Secretary on 
government policies and programs that affect the U.S. travel and 
tourism industry, offers counsel on current and emerging issues, and 
provides a forum for discussing and proposing solutions to industry-
related problems. We are in the process of organizing a meeting of the 
Board for later this spring.
    Secretary Locke has taken an active interest in the travel and 
tourism industry. On May 20, he will be in Miami to deliver the keynote 
luncheon address at International Pow Wow, the top U.S. industry trade 
show with 5000 buyers and sellers of international travel to the United 
States. With over 300 foreign and American members of the press in 
attendance, Pow Wow provides an important opportunity for destinations 
and businesses to showcase the best that America has to offer for 
enticing international travelers to our country. The Secretary will be 
able to relay to all of them the importance of this industry and his 
gratitude for their dedication and interest in spurring economic 
recovery and job growth.
Closing
    The U.S. travel and tourism industry continues to be a key part of 
our Nation's economy. The United States generates more revenue from 
travel and tourism than any other country in the world. The Department 
of Commerce has an active program dedicated to expanding travel and 
tourism business opportunities for employment and economic growth. We 
look forward to working with the Congress and with the travel and 
tourism industry on policies and programs that will continue to enhance 
the competitive position of the United States.
    As Secretary Locke said before members of this Committee at his 
confirmation hearing, ``There's a great deal of interest and 
fascination with America among people all around the world. They think 
of the great cities of America, but they also think of the great 
majestic, natural beauty of America from the Grand Canyon to the 
Badlands and to our incredible, beautiful national parks. And they 
think of America as a place of great pristine environment, a place to 
visit, a place for recreation.''
    I thank the Chairman and the members of the Committee for the 
opportunity to testify, and I look forward to answering any questions 
you may have.

    Senator Klobuchar. Thank you, Ms. Saunders.
    Our next witness is Mr. Jay Witzel, who is the President 
and CEO of Carlson Hotels. Carlson is a Minnesota-based company 
with a global hotel, restaurant, and marketing business. The 
hotel division that Mr. Witzel heads includes brands such as 
Radisson, Park Inn, and Country Inn & Suites.
    Mr. Witzel?

        STATEMENT OF JAY S. WITZEL, PRESIDENT AND CEO, 
                         CARLSON HOTELS

    Mr. Witzel. Thank you.
    Chairman Klobuchar, Ranking Member Martinez, and other 
distinguished members of the Committee, Senator Begich, thank 
you for the opportunity and the privilege to appear before you 
on behalf of Carlson Hotels Worldwide and the greater Carlson 
organization.
    I would like to particularly thank Senator Klobuchar for 
your leadership in calling this hearing and your passion and 
support of the travel industry, both in our home State of 
Minnesota and the national arena.
    Carlson is a Minnesota-based company with global hotel, 
travel, restaurant, and marketing businesses that are 
interrelated in and to the travel industry. I lead the Carlson 
Hotels Worldwide, which has 1,020 locations under 5 brands. 
Other parts of the Carlson organization include Carlson 
Wagonlit Travel, TGI Fridays restaurants, Carlson Marketing, 
which is one of the Nation's premier leading meeting, event, 
and incentive companies.
    Globally, Carlson and its brand employ 160,000 people in 
more than 150 countries, with over 50,000 jobs here in the 
United States. The jobs of these individuals and the overall 
vibrancy of our business are reliant on the health of the 
travel industry.
    Specifically, 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. These statistics are 
provided by the U.S. Travel Association, of which Carlson is a 
member.
    This part 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 for 
well-paid executives. Meetings mean business in the American 
economy. There is no substitute for 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 the American economy 
and creating new jobs that we so badly need at this time. But 
the trend is ominous. According to the estimates by Smith 
Travel Research and the U.S. Travel Association, meeting and 
events and incentive cancellations in January and in February 
of 2009 resulted in more than $1.9 billion in lost travel 
spending and cost nearly 20,000 American 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--the 
bellmen, the room attendants, the banquet servers, and our 
cooks.
    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, loss of tax revenues, and 
further stress on this important industry.
    Second, we ask your support for a unified set of meeting 
standards for companies receiving the emergency Government 
assistance funds that have been developed by the hotel, travel, 
meeting, and incentive industries. These guidelines have been 
submitted to the Treasury Department as a policy for 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.
    And finally, you will be hearing this morning about another 
vital initiative to build the vibrancy of America's travel 
industry, the Travel Promotion Act. 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.
    Today, the news is filled with commentary on how to get 
America moving again on all economic fronts to recover from 
this deep recession. For the one in eight Americans who are 
part of the travel industry, getting America moving again 
literally is the solution. Today, we ask for your support in 
making that happen.
    Thank you again, Chairman Klobuchar, Ranking Member 
Martinez, and the Senator from Alaska, for your leadership and 
engagement on these issues.
    Thank you.
    [The prepared statement of Mr. Witzel follows:]

        Prepared Statement of Jay S. Witzel, President and CEO, 
                        Carlson Hotels Worldwide
    Chairman Klobuchar, Ranking Member Martinez and other distinguished 
Members of the Committee: Thank you for the opportunity and privilege 
to appear before you on behalf of Carlson Hotels Worldwide and the 
greater Carlson organization. I would particularly like to thank 
Senator Klobuchar for your leadership in calling this hearing and your 
passionate support of the travel industry both in our home state of 
Minnesota and in the national arena.
    Carlson is a Minnesota-based company with global hotel, travel, 
restaurant and marketing businesses that are inter-related in and to 
the travel industry. I lead Carlson Hotels Worldwide which has over 
1,020 hotel locations under five brands. Other parts of Carlson include 
Carlson Wagonlit Travel, T.G.I. Friday's Restaurants and Carlson 
Marketing which is one of the Nation's leading meeting, event and 
incentive companies. Globally Carlson and its brands employ 160,000 
people in more than 150 countries, with over 50,000 of those jobs here 
in the United States. The jobs of these individuals and the overall 
vibrancy of our businesses are reliant on the health of the travel 
industry.
    Specifically 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. These 
statistics are provided by the U.S. Travel Association of which Carlson 
is a member.
    This part 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 in 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 and cooks.
    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 have been submitted to the Treasury Department 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.
    And finally, you will also be hearing this morning about another 
vital initiative to build the vibrancy of America's travel industry: 
The Travel Promotion Act. 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.
    Today's news is filled with commentary on how to ``get America 
moving again'' on all economic fronts to recover from this deep 
recession. For the one in 10 Americans who are part of the travel 
industry, ``getting America moving again'' literally is the solution. 
Today, we ask for your support in making that happen.
    Thank you again Chairman Klobuchar, Ranking Member Martinez and 
other Members of the Committee for your leadership and engagement on 
these issues.

    Senator Klobuchar. Thank you very much. That was very good 
testimony, and I think the point about business is well taken.
    Mr. Gilliland is next. He is the chairman and CEO of Sabre 
Holdings, a global travel distribution company, which includes 
Travelocity.com--something I have used before--an online travel 
site that allows consumers to compare travel deals and purchase 
rental cars, hotels, and airfares.
    Mr. Gilliland?

           STATEMENT OF SAM GILLILAND, CHAIRMAN AND 
      CHIEF EXECUTIVE OFFICER, SABRE HOLDINGS CORPORATION

    Mr. Gilliland. Chairman Klobuchar, Ranking Member Martinez, 
and Members of the Committee, thank you for the opportunity to 
appear before you here today.
    Sabre Holdings, the world's largest travel distribution 
company, includes the Sabre Global Distribution System that 
powers corporate and leisure travel agencies and airline 
technology business as well as Travelocity.com, a leading 
online company.
    At Sabre, we believe that travel is good, and let me tell 
you what I mean when I wear this button here today. Travel is 
good for businesses and the economy. It is good for jobs. It is 
good for our states and local communities. It is good for 
connecting us with our families, and it is good for 
understanding and enjoying the many diverse cultures of the 
world.
    Travel is good for America, but the state of the travel 
industry is not good. I hope we can leave today dedicated to 
making it better together.
    I have attached to my testimony a listing of some of the 
compelling offers available in 2009, what we are calling ``the 
year of the travel deal.'' When you and your constituents are 
ready to take that vacation to a theme park, a national park, 
or a beach via cruise, air, or car, Travelocity has some of the 
best values on the planet at prices straight from the 1960s. 
All of these deals and many more are offered on 
Travelocity.com.
    That is the good news. But here is the bad. The remarkable 
online consumer deals and prices found in the marketplace today 
must be put in context. Eventually, just as airlines have 
canceled airplane orders and opted to park airplanes in the 
desert, hotels, resorts, and cruise lines will eventually 
reduce their inventory of properties and ships if they cannot 
realize acceptable financial returns on those assets.
    From a legislative perspective, here are some of the key 
initiatives I think will help us out of our economic malaise 
that I respectfully ask you to consider.
    On energy, we must reduce American dependence on foreign 
oil and incentivize alternative energy research and deployment. 
Today, competition to petroleum-based fuels is woefully 
inadequate. It is not that the industry isn't doing its part. 
U.S. commercial airlines improved their fuel efficiency by 110 
percent between 1978 and 2007, which resulted in 2.5 billion 
metric tons of CO2 savings, the equivalent of taking 
18.7 million cars off the road in each one of those years.
    Indeed, there are alternatives to gasoline to power cars, 
including ethanol, methanol, plug-in hybrids, and more. Among 
other things, we need to require carmakers to equip more 
vehicles with flexible fuel converters that will create an 
incentive to those who would bring alternative fuels to market.
    Our objective isn't to eliminate oil as a transportation 
fuel, but to provide incentives for viable competition to it. I 
am supportive of your efforts, Chairman Klobuchar, in promoting 
the Open Fuel Standards Act that would require automobile 
manufacturers to produce more cars that run on flexible fuels.
    Air traffic control (ATC) modernization in our Nation 
cannot wait any longer. It is a bankable way to achieve much-
needed energy, environmental, and transportation policy 
objectives and improvements. Deployment of global positioning 
systems will enable airlines to fly shorter, more direct routes 
to destinations, which will reduce fuel needs. At times of peak 
demand and at many chokepoints in the system, passengers are 
experiencing unacceptable delays and sometimes flight 
cancellations.
    Next generation air traffic control, or ``NextGen,'' must 
become ``NowGen,'' and a national priority not only in words, 
but in action. The inability of the U.S. Government to finalize 
funding and approvals for ATC modernization has prevented the 
use of technologies available today that would bring immediate 
and significant improvements to ATC systems.
    Regarding the environment, we must establish policies that 
reduce greenhouse gases, while insisting that such policy 
burdens take account of the international dimensions of the 
problem and don't fall disproportionately on the travel and 
tourism industry.
    If revenue related to carbon emissions is raised from the 
commercial aviation industry, for example, it should be 
redirected back into aviation-related environmental and 
efficiency improvements.
    Finally, paralyzing confusion abounds in our industry about 
what the Treasury Department considers excessive expenditures 
on business travel. Meetings are proven business tools. 
Unfortunately, given the current state of uncertainty, many 
companies are opting to disengage from all forms of business 
travel. Congress should urge Treasury to endorse the U.S. 
Travel Association guidelines which are widely supported by our 
industry and provide businesses with the peace of mind they 
require.
    Chairman Klobuchar, I would like to commend you for taking 
the time to hear from our industry. Your interest is strong 
validation that travel and tourism is vital to our country and 
its prosperity. As you and your colleagues consider policies 
and legislation, such as the Travel Promotion Act, we encourage 
you to remember that travel is good for America.
    Thank you.
    [The prepared statement of Mr. Gilliland follows:]

           Prepared Statement of Sam Gilliland, Chairman and 
          Chief Executive Officer, Sabre Holdings Corporation
    Chairwoman Klobuchar, Senator Martinez, Members of the Committee, 
my name is Sam Gilliland, and I am Chairman and CEO of Sabre Holdings, 
the world's largest travel distribution company. Among our businesses 
are the Sabre global distribution system, which powers corporate and 
leisure travel agencies, and Travelocity.com, the online travel company 
that gives consumers the opportunity at any time, day or night, to find 
and compare amazing travel bargains in the U.S. and around the world. 
Today, I'll share with you a sampling of these deals that I hope will 
push Americans out of their nests and back into the air to destinations 
both here and abroad.
Travel is Good
    At Sabre, we firmly believe that ``Travel is Good.'' Let me tell 
you what the button I'm wearing means. Travel is good for the economy 
and for business, it's good for our Nation's jobs, it's good for our 
states and our local communities, it's good for connecting us with our 
families and friends, and it's good for understanding and enjoying the 
many diverse cultures and peoples of the world. Travel is good for 
America, Madam Chairwoman. But the state of the travel industry in 
America today is not good. I hope we can leave this hearing today 
dedicated to making it better together.
    For every dollar spent on travel, the U.S. Travel Association (of 
which Sabre is a member) estimates that $2.34 of additional spending 
cascades through the economy. With that sort of multiplier for a sector 
that represents $740 billion in spending each year, travel and tourism 
can provide not just a stimulus, but a jolt, to the U.S. economy if 
Congress and the Administration were to put policies in place that 
help, rather than hinder, its recovery.
    I've attached to my testimony a listing of some of the most 
compelling offers available in 2009--what we're calling ``The Year of 
the Travel Deal.'' When you and your constituents are ready to take 
that vacation, to a theme park, National Park or beach via cruise, air 
or car, Travelocity has some of the best values on the planet at prices 
straight from the 1960s. They include:

   Orlando theme parks from $34 a night with free admission for 
        kids.

   Alaska cruises for $47 a night.

   Hotels near Glacier National Park in Montana at 35 percent 
        off.

   Puerto Rico discounts combining $200 off air+hotel packages 
        and a night free for every three paid nights.

   $400 discounts on Bermuda hotels and packages.

    All of these deals, and many more, are offered on Travelocity.com, 
along with their applicable terms and conditions. That's the good news.
    But here's the bad: The remarkable online consumer deals and prices 
found in the marketplace today must be put in context. They are not 
likely to be around for long. Eventually, just as airlines have opted 
to park airplanes in the desert rather than operate them at a loss, 
hotels and resorts and cruise lines will eventually reduce their 
inventory of properties and ships if they cannot realize an acceptable 
return on these assets; and in fact we're already starting to see that 
occur. Put another way, for our industry to regain its footing and 
stimulate the economy as we know it can, it first has to achieve 
economic sustainability. That's a term that resonates for me, as I 
serve as the Chairman of the Economic Sustainability Subcommittee of 
the U.S. Travel and Tourism Advisory Board, a group of travel industry 
executives appointed by the Secretary of Commerce to provide him with 
policy guidance. Our group will tell Secretary Locke in its final 
report that there is much work to be done to achieve economic 
sustainability in the travel and tourism sector. That's also the 
message I'd like to deliver to you today.
    Here are some of the sobering year on year booking trends we are 
seeing in the travel and tourism industry:

   The volume of domestic air travel and hotel stays made by 
        corporations are both down nearly 20 percent, with airfares and 
        price of hotel stays down 7 percent.

   The volume of domestic air travel for leisure is down almost 
        5 percent and average airfares are down 10 percent.

    Behind these numbers are legions of people--your constituents and 
our industry's employees--whose jobs have either been eliminated or are 
at risk. At one independent Chicago hotel, the front desk staff was 
recently cut in half and the reservation and revenue teams were 
eliminated with the exception of one director. Nearby, a midsize chain 
hotel conducted major layoffs, and for those employees who remain, the 
hotel has eliminated 401K matching and imposed salary cuts. This is 
typical of what is happening around the country.
    Also travelers, whose rear-ends are not in airplane seats and whose 
heads are not in hotel beds, are not bringing their tourism dollars to 
spend on dinners, taxis, theater tickets, tips and more. Taken 
together, these statistics, which feature many double digit declines in 
volume and price, paint a picture of an industry with unsustainable 
economics that is contributing far less than it could to the recovery 
of the U.S. economy.
    Our country and the world are on sale because the travel and 
tourism industry is reeling from a perfect storm of crisis, fear and 
ignorance. In recent months, we've experienced the worst economic 
downturn in 80 years; a swine flu outbreak that is serious and demands 
precaution, but has spawned an ``infodemic'' that has led to unhelpful 
panic; unstable fuel prices that were a major factor in leading 
airlines to park aircraft that would otherwise be productively flying 
people to meetings and conventions in Las Vegas and Orlando; 
corporations that are fearful they will be publicly criticized for 
holding legitimate meetings and conventions, which are proven and 
effective business tools; and a crumbling U.S. aviation infrastructure 
that, as Chairman Rockefeller memorably reminded us, currently ranks 
behind Mongolia's.
    This does not have to be so. From a policy perspective, there are 
several key and often inter-related initiatives that will help us out 
of our malaise and, therefore, require your urgent attention. They 
include energy policy, air traffic control modernization, environmental 
policy, and Treasury travel guidelines.
Energy Policy
    We must reduce American dependence on foreign oil and provide 
incentives for alternative energy research and deployment. Today, there 
simply is insufficient competition to petroleum-based fuels--oil has 
travel and tourism ``over a barrel.'' We're seeing encouraging work in 
developing alternatives to jet fuel for aircraft engines as well as 
alternatives to gasoline for automobiles, but more needs to be done to 
expedite this work for the sake of our Nation's security and 
prosperity.
    The International Air Transport Association (IATA) has established 
a 10 percent target for alternative jet fuels by 2017. Recent tests by 
Continental Airlines, JAL Airlines, Air New Zealand and Virgin Atlantic 
Airlines prove that next generation sustainable biofuels (such as 
algae, camelina and jatropha) work, and there is even a possibility for 
improved fuel efficiency. Certification for some of these fuels by 2010 
or 2011 is a real possibility, but much more work needs to be done to 
bring these fuels into commercial production.
    Currently, there are many viable alternatives to gasoline to power 
automobiles, including ethanol, methanol, plug in hybrids and more. We 
need to require car-makers to equip more vehicles with flexible fuel 
converters, which will create an incentive for those who would bring 
alternative fuels to market.
    Our objective isn't necessarily to eliminate oil as a 
transportation fuel, but to provide incentives for viable competition 
to it. The potential benefits of alternative fuels are enormous, 
including up to an 80 percent reduction in emissions over the fuel's 
life-cycle and increased energy security for our Nation. A biofuel 
industry could also be a major generator of employment and wealth for 
the U.S. and the developing world, and that's why I'm supportive of 
your efforts, Chairwoman Klobuchar, in S. 835 to drive open fuel 
standards for automobile manufacturers.
    The Nation's airlines and airports, in a very real sense, are the 
key parts of a transportation grid that is every bit as vital as the 
power grid to our national economy. When you get right down to it, 
energy and travel and tourism are closely intertwined. Without access 
to sustainable--by which I mean predictable, abundant, affordable and 
environmentally sound--energy to move business and leisure travelers as 
well as goods to their destinations, our industry could not exist. And 
this applies not only to airplanes, but also to cars, buses, trucks, 
ships and trains.
    Last summer, oil prices skyrocketed, reaching a peak of $147 per 
barrel in July 2008 and were the subject of much debate in the Senate. 
These soaring oil prices threatened the U.S. economy, and our Nation's 
airlines and airports were in an especially precarious position. Fuel 
jumped ahead of labor and equipment costs to become the number one 
airline expense. Data showed that if these soaring costs did not abate, 
we would soon see major U.S. airlines fail and many more U.S. airports 
close, and in so doing, threaten our primary means of intercity 
transportation, millions of jobs and our American way of life. To stay 
alive, airlines began cutting capacity in September 2008 to levels that 
were last seen in 2002 when they were trying to recover from 9/11.
    Since then, the price of oil has fallen dramatically--at one point 
to the mid $30s per barrel, and currently hovering just below $60 per 
barrel. However, while the acute crisis of massive energy-related 
failures has temporarily abated (largely because the worldwide demand 
for oil has dropped dramatically in step with the global financial 
crisis and recession), the chronic problem of wildly fluctuating oil 
prices remains unsolved, and in time will once again devastate travel 
and tourism--and jeopardize our national security and broader economic 
well-being--unless we demand and secure a sound energy policy from the 
current Administration and Congress.
    I'm encouraged that energy policy is one of President Obama's 
announced policy priorities, and significant funding for R&D tax 
incentives for alternative fuel figures prominently in his proposed 
budget. I support these initiatives; they must remain a priority. We 
must insist on a comprehensive U.S. energy policy that will, among many 
other benefits, deliver travel and tourism from its current 
unacceptable and unsustainable situation.
Air Traffic Control Modernization
    Lost in the debate about funding the long-overdue ``NextGen'' Air 
Traffic Control (ATC) systems, is the astonishing and sad fact that the 
navigation systems used in cars and mobile phones today are light years 
ahead of the technology used in our Nation's ATC systems. Modernization 
of the U.S. air transportation network cannot wait any longer--it is a 
bankable way to achieve much needed energy, environmental and customer-
service improvements for our Nation's aviation industry. ``NextGen'' 
must become ``NowGen.'' I am pleased that the Senate's Aviation 
Operations, Safety and Security Subcommittee is holding a hearing on 
FAA Reauthorization later this afternoon, in which perspectives on 
industry participants will be heard. I expect ``NowGen'' will be a 
focus.
    We can no longer afford inaction. Even with lower traffic volumes, 
U.S. air space continues to be overcrowded in many places, causing 
costly flight delays and forcing airlines to operate inefficiently. 
This adds unnecessary expense for both airlines and the traveling 
public. Despite significant advances in available modern-day 
technology, our airlines are forced to find their way using ground-
based navigation points, a method that is only a few small steps ahead 
of where we were in the early days of aviation, when railways and bon 
fires were used for air navigation. The radar system used today to 
guide U.S. flights is more than 40 years old, which may help explain 
why nearly one-quarter of all those flights are late. If we do it 
right, ATC modernization will:

   Allow all airplanes to fly more direct, efficient routes, 
        significantly reducing fuel burn and CO2 emissions,

   Reduce congestion and open up access--more flights--in 
        crowded airspace,

   Reduce flight delays and inconvenience to passengers and 
        shippers,

   Create or save 77,000 jobs, and

   Be transformational for the broader economy.

    ``NowGen'' MUST become a national priority, not only in words, but 
in action. There are enormous benefits that flow from timely action, 
including an improved transportation infrastructure and economic 
stimulus as well as positive impacts on the environment and, of course, 
on travelers. It will also encourage, rather than impede, sustainable 
growth in the airline industry.
    In these troubled times for the tourism industry, all industry 
participants should be committed to working with Congress, the 
Administration and, most importantly, each other to ensure ATC 
modernization will be done early, right and in a way that transforms 
air travel in this country and keeps the U.S. competitive on the world 
stage.
Environmental Policy
    We must establish policies to reduce greenhouse gasses that 
threaten our environment, and insist that the burdens of such policies 
take into account the international dimensions of the problem, and be 
fairly shared so they don't fall disproportionately on the travel and 
tourism industry.
    In particular, we must not unfairly scapegoat the airline industry, 
which has done much to make itself more energy efficient as a matter of 
economic necessity. U.S. airlines have a longstanding commitment to 
improving fuel efficiency and, therefore, reducing their carbon 
footprint. Since 1978, the Air Transport Association reports that its 
member airlines have improved fuel efficiency by 110 percent, which has 
resulted in significant reductions of CO2 emissions. The 
airlines' impact on the environment is relatively small: airlines today 
account for between two and 3 percent of the world's man-made carbon 
emissions.
    As legislation concerning carbon emissions is considered, it's 
important to simultaneously pursue global approaches to aviation 
emissions to ensure fairness and equity to all participants. If revenue 
related to carbon emissions is raised from the commercial aviation 
industry, it should be re-directed back into aviation-related 
environmental and efficiency improvements. Further financial burdens on 
our economically challenged industry must be weighed with extreme care 
to avoid negative impacts, not only to the airlines, but also to the 
cities and communities they serve and the jobs they generate.
Treasury Travel Guidelines
    Paralyzing confusion abounds in our industry, and in corporations, 
about what the Treasury Department considers ``luxury'' and 
``excessive'' expenditures in the area of business travel. Meetings, 
conventions and incentive travel are proven business tools that allow 
companies to establish valuable relationships, solicit feedback and 
reward employees. Of course, these tools must be used responsibly by 
all corporations. Unfortunately, given the state of uncertainty, many 
companies are opting not to engage in any form of business travel, even 
when that means forfeiting large deposits and foregoing important 
business opportunities. This makes no sense at all. Many of these 
companies are customers of our company, and because we provide travel 
policy automation solutions to them, many have asked us for guidance.
    Sabre's GetThere division is in the process of developing a formal 
education and consulting solution for corporations, which will focus on 
managing corporate governance and compliance, reducing unnecessary 
travel and driving accountability. We intend to be part of the solution 
that will help all companies make wise travel decisions. However, the 
Treasury Department needs to do its part in giving clear, specific 
guidance to our industry. I understand that Treasury is expected to 
weigh in soon in this area, but it is not clear how detailed and 
satisfactory this guidance will be.
    I urge this Committee to watch these developments carefully and 
encourage Treasury to stem the continuing confusion in the marketplace 
about which travel policies are acceptable and which are not. Travel 
and tourism cannot absorb further paralysis and retrenchment based on 
fear of criticism and negative publicity. Treasury should provide a 
framework, and with it peace of mind, so all businesses can confidently 
conduct legitimate meetings, events and incentive travel.
    The U.S. Travel Association has developed such a framework that has 
been widely supported by our industry. A timely endorsement of these 
model guidelines by the Treasury Department would provide businesses 
with the peace of mind they require.
Conclusion
    Our troubled industry has a number of pressing problems that demand 
urgent action in Washington. Energy, infrastructure and environmental 
reforms should be included at the top of the priority list. These 
issues are intertwined and therefore making a positive difference on 
one will lead to positive differences on the others. Glenn Tilton, CEO 
of United Airlines, put it best when he said that these reforms create 
and complete a ``virtuous circle.'' Moving forward with ATC 
modernization reduces demand for fuel and, thus, the carbon footprint 
of our industry. If we can move forward on finding solutions to these 
problems, we will take a giant leap toward economic sustainability.
    We must also give corporations the confidence that they can once 
again hold business meetings and conventions in order to achieve their 
corporate objectives. Timely guidance from the Treasury Department, in 
the form of an endorsement of the U.S. Travel Association's model 
guidelines is urgently needed.
    The storm clouds that have been hanging over our industry do have a 
silver lining. They provide an unprecedented opportunity for our 
industry's participants--airlines, hotels and resorts, car rental 
companies, cruise lines, technology providers, travel agents, tour 
operators, convention and visitor bureaus (CVBs), union groups and 
corporate and leisure travelers--to come together to look for ways we 
can cooperate and make a difference on major policy issues that impact 
not just some of us, but all of us. As the largest industry in the 
world, we are an inherently powerful, but historically fragmented, 
industry. But I believe we are realizing that we can have an impact 
that befits our importance when we work more closely together and with 
policymakers who understand our role and want to help us succeed.
    It is an honor to be invited here today to speak to you about 
tourism in troubled times, although I am looking forward to the day 
when I can come back and speak about tourism in stable, if not booming, 
times. I hope this hearing proves to be one of the watershed events 
that helps put our industry back on the flight path toward a better 
future. Chairwoman Klobuchar, I commend you for taking the time to hear 
from our industry. Your interest is strong validation that travel and 
tourism is vital to our country and its prosperity.
    The impact that Congress and the Administration can have on the 
health of travel and tourism is profound, not just in the legislation 
you pass, but also in the signals you send, particularly now. Words do 
matter, especially when they come from our leaders in Washington. As 
you speak about this industry and consider policy matters that impact 
our recovery and well-being, I encourage you to act deliberately and 
remember that ``Travel is Good'' for America. Thank you again for the 
opportunity to testify today.

    Senator Martinez [presiding]. Thank you very much, Mr. 
Gilliland.
    As you know, Senator Klobuchar had to run to vote, and she 
is going to come back, hopefully, within 15 minutes so that I 
can get there within 15 minutes. And so, if we can make all 
that happen.
    Mr. Rasulo, I am so pleased to have you here today. We 
thank you for coming.
    Mr. Rasulo, Jay Rasulo is the Chairman of Walt Disney Parks 
and Resorts, which, obviously, I am well aware of the fact that 
they are a huge employer. Over 90,000 people are employed by 
them, and they operate 11 theme parks on 3 continents. And Mr. 
Rasulo is also the former Chairman of the U.S. Travel 
Association.
    Jay?

              STATEMENT OF JAY RASULO, CHAIRMAN, 
                 WALT DISNEY PARKS AND RESORTS

    Mr. Rasulo. Thank you.
    Good morning, Madam Chairman, Senator Martinez, and other 
Members of the Subcommittee. I appreciate the opportunity to be 
here this morning to discuss America's competitive position in 
travel and tourism and to explain how increasing foreign travel 
to the United States can play a vital role in our Nation's 
economic recovery.
    I come wearing two hats, both as immediate past Chairman of 
the U.S. Travel Association, which represents $740 billion of 
industry spending, employing 7.7 million Americans, and as 
Chairman of Walt Disney Parks and Resorts, which employs, as 
the Senator said, 90,000 people. We operate 11 theme parks on 3 
continents, a top-rated cruise line, a major tour wholesaler, 
and more than 34,000 hotel rooms.
    The travel industry is vital to our Nation's economic 
health. It generates $2 billion of spending every day, and 
provides $115 billion in tax revenue to Federal, State, and 
local governments. But along with the rest of the economy, the 
travel industry has suffered during this recession, incurring 
its share of lost revenues and jobs.
    Ladies and gentlemen, there is a way we can stem these 
losses, improve the Nation's competitive edge, and advance 
America's public diplomacy, by forging a partnership between 
government and industry to promote international travel to the 
U.S. And the time to act is now.
    Two years ago, I had the honor of testifying before you to 
present a document called ``A Blueprint To Discover America,'' 
which looked at how we can regain our Nation's once-dominant 
position in the market for international travel. After 9/11, 
overseas travel to the U.S. dropped significantly and has never 
fully recovered.
    Competition from foreign travel destinations has increased 
significantly, and that is something we can't change. In 
addition, many overseas visitors stopped coming to America 
because they perceived that they were no longer welcome here. 
That is something we can change.
    Back in 2007, we had the luxury of talking about the 
Blueprint as a way to gain jobs and revenue. But now, in the 
midst of this recession, it is painfully clear how much we have 
lost by not fully implementing the Blueprint.
    Overseas visitors spend an estimated $4,500 per person when 
they come here. And if arrivals had kept pace with global 
trends since 2001, that would have totaled $182 billion in 
spending. That is enough to support 245,000 jobs. Moreover, the 
added revenue generated by those visits would have yielded $27 
billion in tax receipts.
    The ``Blueprint To Discover America'' recommended 
improvements in three critical areas to attracting 
international visitors, and thanks to the efforts of Congress, 
we have had some important achievements on those. But much more 
work remains.
    First, we need a secure but user-friendly visa process. We 
applaud Congress for expanding the Visa Waiver program. But for 
those travelers requiring a visa, the system needs to be more 
efficient and easier to navigate while continuing to put 
America's security first.
    Second, we need to continue making the entry process a more 
positive experience, something that is already starting to 
happen thanks to the Model Ports program to improve our 
Nation's busiest airports.
    Third, we need to promote the United States abroad, and 
that is where the most work remains. We need to tell the world 
about improvements that we have made to the entry process. We 
need to invite international travelers to visit the United 
States, and we need to tell them they are welcome here.
    The Travel Promotion Act, introduced yesterday by Senators 
Dorgan and Ensign and co-sponsored by Chairman Klobuchar and 
Ranking Member Martinez, among others, would create a public-
private entity that could speak with the authority of the U.S. 
Government to the world, telling the world, ``We want you to 
visit.''
    It would work to reverse widespread negative perceptions 
that the U.S. is an unwelcoming country to overseas travelers. 
And it would complement and augment our Nation's public 
diplomacy efforts. We know from research that those who have 
visited the U.S. are 74 percent more likely to have an 
extremely favorable opinion of America than those who haven't 
traveled here.
    This new entity would combine the expertise of the private 
sector with the oversight and coordination of the Federal 
Government. It would serve as the primary voice for all travel-
related policies. It would coordinate our national strategies 
to maximize the benefits of travel to America.
    And it would ensure that international travel benefits all 
50 States and the District of Columbia, including areas not 
traditionally visited by foreigners. We are only asking the 
United States to establish what nearly every major foreign 
market already has, a nationally coordinated and well-funded 
travel promotion campaign.
    To give you an idea of just how competitive the overseas 
travel market has become, Greece and Mexico each spend $150 
million a year on promotion campaigns to attract tourists. 
China spends $60 million. France, Germany, Italy, and the UK 
spend a combined $250 million.
    It is important to point out that in these times, when 
Congress is understandably wary of new spending, the Travel 
Promotion Act would use no taxpayer dollars. Instead, it would 
be funded through a small fee collected from overseas visitors, 
combined with matching funds from the travel industry. This 
isn't a free ride for the industry. We will be contributing our 
fair share to make it work.
    Indeed, we are already contributing. Recently, Walt Disney 
Parks and Resorts funded and produced a $2.5 million video to 
welcome overseas travelers to the United States, which we 
donated to the U.S. Government. You can now see that video at 
several of the Nation's busiest airports, at 105 American 
consular and embassy offices around the world, and even on some 
airlines just before arriving to the U.S.
    And thanks to the interest of this subcommittee, you will 
see it here today. The idea behind this video was that if you 
make the entry process a more welcoming experience, more 
international travelers will visit our shores.
    The starting point for this project was to decide what 
story to tell. Creating compelling stories is, after all, what 
Disney does best. As we considered the options, we realized 
that America's greatest story is her people--their 
friendliness, their openness, their hospitality. That is what 
visitors find the most remarkable thing when they come to the 
United States, and that is why we chose to showcase the people 
of America in this welcome video.
    From the time visitors apply for a visa in a consulate 
overseas to their arrival at an airport here in the U.S., they 
will be greeted by ordinary people who make this Nation 
extraordinary. And through every step of the entry process, the 
message to these visitors will be expressed in a single word 
with universal meaning, ``Welcome.''
    I thank you again for the opportunity to speak here today, 
and I look forward to addressing your questions.
    [The prepared statement of Mr. Rasulo follows:]

              Prepared Statement of Jay Rasulo, Chairman, 
                     Walt Disney Parks and Resorts
    Good morning Madame Chairman, Senator Martinez, and other members 
of the Subcommittee.
    I appreciate the opportunity to be here today to discuss America's 
competitive position in travel and tourism--and to explain how 
increasing foreign travel to the United States can play a vital role in 
our Nation's economic recovery.
    I come wearing two hats, both as immediate past Chairman of the 
U.S. Travel Association--which represents a $740 billion industry 
employing 7.7 million Americans--and as Chairman of Walt Disney Parks 
and Resorts, which employs 90,000 people and operates 11 theme parks on 
three continents, a top-rated cruise line, a major tour wholesaler and 
more than 34,000 hotel rooms.
    The travel industry is vital to our Nation's economic health. It 
generates $2 billion in spending every day, and provides $115 billion 
in tax revenue to the Federal, state and local governments. But along 
with the rest of the economy, the travel industry has suffered during 
this recession, incurring its share of lost revenue and jobs.
    Ladies and gentlemen, there is a way we can stem these losses, 
improve the Nation's competitive edge and advance America's public 
diplomacy--by forging a partnership between government and industry to 
promote international travel to the U.S. And the time to act is now.
    Two years ago, I had the honor of testifying before you to present 
a document called ``A Blueprint to Discover America,'' which looked at 
how we can regain our Nation's once-dominant position in the market for 
international travel. After 9/11, overseas travel to the U.S. dropped 
significantly and has never fully recovered. Competition from foreign 
travel destinations increased significantly, and that is something we 
can't change. In addition many overseas visitors stopped coming to 
America because they perceived they were no longer welcome here. That 
is something we can change.
    Back in 2007, we had the luxury of talking about the ``Blueprint'' 
as a way to gain jobs and revenue. But now, in the midst of recession, 
it's painfully clear how much we've lost by not fully implementing the 
Blueprint. Overseas visitors spend an estimated $4,500 per person when 
they come here, and if arrivals had kept pace with global trends since 
2001, that would have totaled $182 billion in spending. That's enough 
to support 245,000 jobs. Moreover, the added revenue generated by those 
visits would have yielded $27 billion in tax receipts.
    The ``Blueprint to Discover America'' recommended improvements in 
three areas critical to attracting new international visitors. And 
thanks to the efforts of Congress, we have had some important 
achievements. But much more work remains.
    First, we need a secure, but user-friendly, visa process. We 
applaud Congress for expanding the Visa Waiver program, but for those 
travelers requiring a visa, the system needs to be more efficient and 
easier to navigate--while continuing to put America's security first.
    Second, we need to continue making the entry process a more 
positive experience--something that is already starting to happen 
thanks to the Model Ports program to improve our Nation's busiest 
airports.
    Third, we need to promote the United States abroad--and that is 
where the most work remains. We need to tell the world about the 
improvements we have made to the entry process. We need to invite 
international travelers to visit the United States. We need to tell 
them that they are welcome here.
    The Travel Promotion Act--introduced yesterday by Senators Dorgan 
and Ensign, and co-sponsored by Chairman Klobuchar and Ranking Member 
Martinez, among others--would create a public-private entity that could 
speak with the authority of the U.S. Government to tell the world, ``We 
want you to visit.'' It would work to reverse widespread negative 
perceptions that the U.S. is unwelcoming to overseas travelers. And it 
would complement and augment our Nation's public diplomacy efforts: We 
know from research that those who have visited the U.S. are 74 percent 
more likely to have an extremely favorable opinion of America than 
those who haven't traveled here.
    This new entity would combine the expertise of the private sector 
with the oversight and coordination of the Federal Government. It would 
serve as the primary voice for all travel-related policies. It would 
coordinate our national strategies to maximize the benefits of travel 
to America. And it would ensure that international travel benefits all 
50 states and the District of Columbia, including areas not 
traditionally visited by foreigners.
    We are only asking the United States to establish what nearly every 
other major foreign market already has: a nationally coordinated and 
well-funded travel promotion campaign. To give you an idea of just how 
competitive the overseas travel market has become: Greece and Mexico 
each spend $150 million a year on promotion campaigns to attract 
travelers; China spends $60 million; France, Germany, Italy and the 
U.K. spend a combined $250 million.
    It is important to point out that in these times when the Congress 
is understandably wary of new spending, the Travel Promotion Act would 
use NO taxpayer dollars. Instead, it would be funded through a small 
fee collected from overseas visitors, combined with matching funds from 
the travel industry. This isn't a free ride for industry. We will be 
contributing our fair share to make it work.
    Indeed, we are already contributing. Recently, Walt Disney Parks 
and Resorts funded and produced a $2.5 million video to welcome 
overseas travelers to the United States, which we donated to the U.S. 
Government. You can now see that video at several of the Nation's 
busiest airports, at 105 American consulate and embassy offices around 
the world, and even on some airlines just before arriving in the U.S. 
And, thanks to the interest of this Subcommittee, you will see it here 
today.
    The idea behind the video was that if you make the entry process a 
more welcoming experience, more international travelers will visit our 
shores.
    The starting point for this project was to decide what story to 
tell (creating compelling stories, after all, is what Disney does 
best). As we considered the options, we realized that America's 
greatest story is her people . . . their friendliness, their openness, 
their hospitality. That's what visitors find most remarkable when they 
come to the United States. And that is why we chose to showcase the 
people of America in this Welcome Video.
    From the time visitors apply for a visa in a consulate overseas, to 
their arrival at an airport here in the States, they will be greeted by 
the ordinary people who make this Nation extraordinary. And through 
every step of the entry process, the message to these visitors will be 
expressed in a single word, with universal meaning.
    Welcome.
    I thank you again for the opportunity to speak here today, and I 
look forward to addressing your questions.
    May we please show the video.

    Mr. Rasulo. May we please show the video?
    [Video presentation.]
    Senator Klobuchar [presiding]. All right. Thank you so 
much, Mr. Rasulo, for bringing that. And just tell me what you 
would really like to see that video used for in the best-case 
scenario. I know it is being used at a few airports and places, 
but what is your vision for this?
    Mr. Rasulo. It is. Thank you, Senator.
    It is being shown today at a number of major points of 
arrival, but we know that about 85 percent of travelers to the 
U.S. arrive within 20 airports that have been part of the model 
airport program. And we would love to see the use of that video 
more broadly to these 20 airports and continue to extend that 
into the consulates around the world. About a little less than 
half of the consulates today show the video to folks as they 
are queuing and processing through the visa experience, and we 
would love to see that.
    We would also like to see additional collateral that has 
been used by the different agencies that are part of the entry 
process to our country as they show information about the many 
details and requirements for entry into the country, that this 
be kind of packaged up with that.
    And of course, we would like to see it expanded not in the 
role of this committee or the Government, but expanded for more 
use on international carriers into the U.S. It is on some 
carriers today, but we continue to encourage more and more to 
show this, as many of them also show entry information as 
people approach the U.S.
    So I think there has been very good progress. We know that 
about 600,000 people have viewed this on the 
Discoveramerica.com website, a website that is run as the 
official U.S. tour and travel website by the U.S. Travel 
Association on behalf of the Government. And while the progress 
is good, we would like it seen by as many people as possible.
    Senator Klobuchar. Thank you.
    Could you, maybe Mr. Witzel, do you want to try this one? 
It is just the Travel Promotion Act, and Mr. Rasulo was talking 
about making our country more welcoming, like some other 
countries.
    And we are clearly losing part of this international market 
share, some because of the economy, but some because other 
countries have been promoting their countries for tourism. And 
could you talk a little bit about how you think this act would 
help?
    Mr. Witzel. Today, we don't compete on a level playing 
field with other competitive countries. We as an industry, and 
individually as corporations, do the best we can to promote our 
industry and to promote America and travel globally, I might 
add. So we not only don't play on a level playing field, we 
actually help other people just by promoting our own assets in 
other places.
    The Travel Promotion Act will provide a funding vehicle 
that is not at the expense of the taxpayers. It will give a 
common pool of money to promote America. We, as an industry, 
will support it.
    Senator Klobuchar. And you explain that is because it is, 
what, $10 for visitors from other countries on the visa?
    Mr. Witzel. Yes, right. And we would take a piece of that.
    Those of us in the industry believe we still have the best 
country to come visit. Certainly from all your stories this 
morning, as children, I was in the ``back, back'' of the 
station wagon, unfortunately. That was my place. So every time 
my father stopped short, I banged into the seat.
    But it did bring on a love of travel and certainly a love 
of the industry. And so, we would like other families from 
around the world to experience the same thing.
    Thank you.
    Senator Klobuchar. Very good.
    You talked about the best practices for business travel. Do 
you want to give us some examples of the industry standards for 
best practices?
    Mr. Witzel. Yes, I do. As a general policy statement, the 
CEO shall be responsible for implementing adequate controls to 
assure the company-sponsored meetings, events, and incentive 
recognition travel serve legitimate business purposes and are 
cost justified.
    All proposed meetings, events, and incentive recognition 
travel sponsored by the company must serve one or more specific 
legitimate purposes.
    Each proposed meeting, event, or incentive recognition 
travel with a cost exceeding $75,000 must be supported by a 
written business case, identifying a specific business purpose. 
Total annual expense for meetings, events, and incentive 
recognition travel should not exceed 15 percent of the 
company's total sales and marketing spend.
    The amount spent for an employee performance incentive 
recognition event shall not exceed 2 percent of the total 
compensation of the eligible participants, or 10 percent of the 
total award earner's compensation.
    The process for approving meetings, events, and incentive 
recognition travel and the procedures for assuring adherence to 
this policy will be subject to independent audit to confirm 
policy adherence.
    At least 90 percent of incentive program attendees shall be 
other than senior executives, as defined by applicable Treasury 
Department guidelines, from the host organization.
    Performance incentives shall not promote excessive or 
unnecessary risk taking or manipulation of financial results.
    And the CEO of the company shall certify to the Board at 
least annually the foregoing travel policies are followed and 
are sufficient to provide reasonable assurance that the 
company's expenditures for such purposes are not excessive.
    We put this forward as a guideline, and we seek the 
Treasury's endorsement of that guideline. We don't propose to 
say that that should be the practices for every company. But it 
is a good standard list of common-sense practices.
    Senator Klobuchar. OK. Mr. Rasulo, do you want to comment 
just a little bit about how you see this business travel 
fitting in?
    Mr. Rasulo. Yes, absolutely. I think that the perception 
that business travel is not an essential part of conducting 
commerce has really had a very deleterious effect on business 
travel, particularly, as Senator Dorgan said earlier in his 
opening statement, that if business travel comes to a place 
like Las Vegas, Miami, Walt Disney World, for that matter, or 
any other attractive destination, it suddenly becomes demonized 
as being a meeting of less worth than, I don't know, 
unattractive locations. And I won't list those at the risk of 
offending someone.
    [Laughter.]
    Mr. Rasulo. But I think that being a practitioner, as many 
of the folks testifying with me here today, of business, we 
don't hold meetings that don't have a return to our company. 
Auto companies don't send dealers to Hawaii out of the goodness 
of their heart. They send them as a powerful incentive to 
increase commerce in their business.
    We know that incentives that involve travel, particularly 
if they involve travel for spouses along with them, are 
incredibly motivating goals for salespeople, are motivating 
goals to push business performance, and are not frivolous 
rewards used by companies. Otherwise, we simply wouldn't do 
them.
    So I think that the notion that somehow travel should be 
equated with the soft or a frivolous side of business is 
erroneous in its very nature and is something to what Jay 
Witzel said that we just need to stop talking about. And since 
folks listen to all of you a lot more than they listen to all 
of us----
    Senator Klobuchar. Oh, dream on.
    [Laughter.]
    Mr. Rasulo.--I encourage the members to remember that, that 
sometimes things that sound smart in a given circumstance are 
often misused later and create an impression that was unwanted 
even by the person who said it. And I think that is what has 
happened on this issue of business travel.
    Senator Klobuchar. OK. Thank you.
    I am going to turn it over to Senator Begich. We also have 
some deals that Travelocity has which we have passed out here, 
for those interested.
    And I also have about 14 letters with more to come. Twenty 
letters from various states around the country, talking about 
how much the tourism industry means to their State that we will 
put in the record for the public record as well.
    [The information is contained in the Appendix.]
    Senator Klobuchar. Senator Begich, I turn this over knowing 
that the last witness just referred to travel in Hawaii and not 
Alaska. So you are at your own risk.
    Senator Begich. Actually, during the month of December, 
probably one out of five in Hawaii are Alaskans. Matter of 
fact, Alaska has right now----
    Mr. Rasulo. No comment.
    [Laughter.]
    Senator Begich.--two direct flights from Alaska to Maui and 
Honolulu. So we understand the value, and I have already booked 
my timeshare in December. So, saying that, Travelocity, I know, 
has a good deal on cruises--$47 a night to Alaska.
    Mr. Gilliland. That is right. It is cheaper than staying at 
home.
    Senator Begich. That is right. But these are incredible----
    Senator Klobuchar. Forty-seven dollars a night?
    Senator Begich. Forty-seven dollars a night on a cruise to 
Alaska, and that is--not that I am doing some promotion here--
but that is the way it works. That is what we are talking about 
today.
    But this is great. I mean, and this information, I think it 
is very unique right now for a lot of people to travel and I 
think for folks to travel within this country themselves, but 
also from foreign travel. And I don't know, Scott, if you want 
to add a little bit to that, but when you just look at these on 
the surface, they are fantastic.
    And tell me, give me a little comment on how you are seeing 
this.
    Mr. Gilliland. We have, and particularly here in the first 
6 months of this year, seen fantastic promotions and discounts 
from my colleagues here, and from many in the travel industry. 
That is what you see in my written statement, a representation 
of some of those travel deals.
    It is reflective of the American people and their desire to 
travel, and while it has become a way of life to travel and to 
travel to the destinations you talked about--in campers and in 
station wagons--many people have gotten used to air travel and 
deals that include air travel. And certainly, we are very 
passionate about these types of deals.
    One of the things I would say is that if the core economics 
of the industry change, which we saw happen mid last year when 
oil prices went up to $147 a barrel, we won't see those types 
of deals anymore. In fact, we won't see some of those airlines 
in existence if we are seeing oil at those levels.
    And that is why, as I think about these deals, as I think 
about the passion that we have at Travelocity for bringing 
people to destinations that they will remember for a lifetime, 
we really must focus in on what we should be doing to improve 
the core economics. What can we do in terms of oil prices and 
fuel prices to ensure that people are traveling, that they have 
the benefit of these deals, and that we can continue to offer 
up deals like this in the future?
    So the other thing I would say--and this is something I 
think that Jay Rasulo said, certainly that Jay Witzel commented 
on--our companies spend a lot of money promoting America, but 
we do need help, and we need help from the Travel Promotion Act 
to bring people to America. And it is important that we not 
only have great travel deals, but that people know about them 
and that we communicate well with international travelers that 
America is open for business and we want them here.
    Senator Begich. Thank you very much.
    I have two other quick questions, and I apologize, I am 
going to have to slip out because I have the Mayor from Kenai, 
Alaska, here. And they are gearing up for their summer season, 
and I have a feeling they are going to talk to me about what it 
is looking like.
    But two pieces. One, and I agree with your comment and 
others who made comments regarding the role we have in 
discussing the importance of travel and convention business. I 
can speak to this as a mayor who constructed, built, completed 
a $100 million convention center in our community in about a 
2.5-year spread because it is good business, but it is also a 
way we introduce Alaska to the people who come back later, 
independent travelers, cruise travelers, and so forth.
    So I just want to echo that my efforts will continue to be 
pushing out there why it is good to travel for these 
conferences. It is good education for the people who go there. 
It is an exchange of ideas. It is an opportunity to meet other 
business people.
    But I do think there were some that made some mistakes in 
what they said, to be very frank with you. And it is our job 
to, even though sometimes--I think the gentlewoman is correct. 
Sometimes we think people are listening, but they are really 
not. This was one time they probably were listening, and it had 
a ripple effect in the wrong direction. But it is our job to 
really promote the value of convention business.
    In regards to the standards that you laid down, you have 
submitted that to the Treasury?
    Mr. Witzel. We have. Yes, we have.
    Senator Begich. Can I just ask how long ago that was?
    Mr. Witzel. Actually, would somebody like to help me on 
that?
    Senator Begich. About a month ago?
    Mr. Witzel. About a month ago.
    Senator Begich. And have you engaged in any conversation 
about it since then or just kind of waiting to hear a response?
    Mr. Witzel. I believe we are waiting to hear a response.
    Senator Begich. The second question is, from any one of 
you, what do you think the amount of money should be spent for 
promotion? And I know that is a tricky question, depending on 
how you do it. But can you give us kind of a feel of what you 
think is the appropriate amount on an annualized basis that 
should be spent on promotion, not only international, but I 
would also suggest domestic?
    Because there are people who want to travel domestically, 
but they are a little nervous right now. Give me your thoughts, 
whoever can answer that.
    Mr. Rasulo. Well, I could take a crack at it because we 
have been working on this at the U.S. Travel Association for a 
few years.
    We thought that on an international basis to be 
competitive, given the size of the market we are trying to 
attract and the regaining of share from 9 percent of 
international travel that it was not so many years ago to only 
a little over 6 percent that it is today, that about $200 
million was the right level to think about, given the markets 
that that money would probably be spent in, the cost of media 
in those markets, and the amount of media weight you need just 
to wake anybody up and have them see your promotion and your 
ads.
    Now that, of course, we, as private practitioners, continue 
to market in the countries where we think are most attractive 
to have people come to our own destinations. But there is a 
level of voice that has to come from the authority of the U.S. 
Government, and that level of voice has to do with improved 
policies for entry that people around the world know are 
controlled by the Government, and private companies speaking 
about them has almost no weight.
    And second, a certain amount of coordination and authority 
in saying that we do, as a country and as a Government, welcome 
international travelers. And it is very hard for private 
companies to do that.
    Domestically, many destinations market domestically freely. 
And whether it is Las Vegas or Walt Disney World or Miami or 
Alaska or Hawaii or wherever, and we really haven't studied 
that as a problem. We don't expect the Government really to--at 
this point to help us with that.
    Senator Begich. What about $200 million? Do you kind of all 
agree with that kind of number?
    Mr. Gilliland. Yes, and just to put that into context, I 
think there is a view that the $200 million would be really 
helpful, I think, for a company our size. And we are a 
relatively small business in the whole scale of things, as I 
think about some of the folks that are represented at this 
table. We spend globally for Travelocity.com more than $200 
million on advertising, both online and offline.
    So I think, as we think about the number, it sounds like--
to us, it sounds like a lot in the context of what has been 
spent historically. On the other hand, as you think about what 
we have to spend to promote brands on a global basis and what 
we need to do to communicate with a very large global audience, 
it is a very reasonable amount.
    Senator Begich. Very good. Thank you very much.
    Senator Klobuchar. OK. Thank you.
    Thank you, Senator Begich.
    Senator Martinez?
    Senator Martinez. Mr. Rasulo, I wanted you to know that I 
saw the film. I think you may have shown it to me yourself when 
we first acquired it and you first put it together. And I want 
to tell you that about 2 or 3 weeks ago, I was returning to the 
U.S. through Miami, and it was there playing for all to see, 
and it is wonderful.
    And I find that that is a very positive and needed thing 
because I have seen studies or polls that would suggest that 
about 54 percent of foreign travelers to the U.S. feel that 
U.S. immigration officials were rude to them when they come 
through. And we understand that. That is not a good thing.
    And there ought to be some things we can do about that, 
shouldn't there? I mean, maybe they ought to go through the 
Disney college for a little bit of friendly environment, 
management training, or something.
    So anyway, I want to commend you for the film. I think it 
is terrific. It really shows the best of America in a very 
compelling way.
    And I also want to just, before I ask a question or two, 
make a comment that some years ago, when I was mayor of Orange 
County, because of our expanded convention center, the fact 
that it was really an international destination in many 
respects, they urged me to attend a travel show in Berlin. And 
it is a big annual travel show there. I am sure all of you are 
familiar with it.
    Mr. Rasulo. It is called ITB.
    Senator Martinez. Exactly. And it was there that I really 
had my eyes opened to what world competition in this business 
really was because there is one exhibit after the other, after 
the other showing the best of countries around the world. When 
it came to us, there was a Disney booth. I remember there was a 
Texas display, and there might be a random number of things, 
but there was no cohesion. There was no coordination.
    And when it came to marketing themselves, I promise you, 
people from all over the world were there. So the competition 
for travel dollars is keen, is tremendous, and all that we can 
do to improve the travel experience, as well as promote it, I 
think, is necessary. So I am a strong supporter of the bill, 
and I hope we can get it done this year because this is a year 
where the industry absolutely needs it.
    Along those lines, I wanted to ask each of you to comment, 
if you have any knowledge on this, as to whether you felt we 
had made progress in facilitating travel to the U.S. for 
foreign visitors in a post-9/11 world?
    I know we had a lot of problems, and I know I have worked 
with the Disney folks and others about our Brazilian travelers, 
for instance, who have such difficulties just to get a visa in 
a very, very large country. And have we made enough headway in 
that direction?
    Mr. Rasulo. I will start. I am sure my colleagues have 
things to add. We have made some headway.
    I think that the expansion of the Visa Waiver Program has 
been an absolutely terrific first step. There has been some 
additional customs officers that were hired, recommended and 
hired. And I think the number was about 200. And that, just 
speeding people through the borders.
    There is remaining work that needs to be done in using more 
technology to do interviews for visas in countries like Brazil, 
where people sometimes have to travel 500 miles to get to a 
consular office to just start the process of maybe coming to 
the U.S. because they may, of course, be denied.
    So they have to take a trip out of their own home, stay 
overnight----
    Senator Martinez. And bring the kids.
    Mr. Rasulo.--and you have to bring every member of the 
family who is traveling. So they have to--we say they have to 
take a trip to make a trip. And with expensive and uncertain 
outcome.
    So we encourage the State Department to continue the use of 
whatever available technologies can be done, videoconferenced 
interviews and so on and so forth, to make that a little 
easier. It still remains the most difficult aspect of acquiring 
a visa.
    Senator Martinez. Any other comments?
    Mr. Witzel. I would mirror what Jay said and add one last 
thing to your point. We have a lot of colleagues from around 
the globe who come to Minneapolis, come to Minnesota. And we, 
too, have a problem with how they are greeted. And that does 
leave an impression that we are not as welcoming as we should 
be.
    Senator Martinez. May I ask one other question?
    I have recently learned of the staggering drop in tourism 
to a good friend and neighboring country, Mexico, as a result 
of the H1N1 problem. And I know, Mr. Rasulo, that your very 
fine cruise line also travels to Mexico from time to time. 
Apparently, the World Health Organization suggested that there 
was no rational basis for travel restrictions to Mexico.
    I was wondering has that eased now? Are we back to 
traveling to Mexico? We are talking about a drop in our 
tourism. Can you imagine what they are going through when you 
are talking about drops in the 80 percent numbers?
    Mr. Rasulo. Well, I think most cruise lines, including our 
own, did restrict travel to Mexico, mostly because of concerns 
of travelers who were basically going to cancel their cruise if 
the cruise ship went to Mexico. So it was very much a response 
to the public reaction to travel to Mexico.
    And I think you will continue to see those itineraries 
being changed through the month of June. I don't think any 
cruise lines have announced beyond the month of June continuing 
to avoid ports of call in Mexico.
    Mr. Gilliland. We have a lot of data on travel to and from 
Mexico, both through travel agencies and through our own travel 
agency, Travelocity.com. We saw, as you would imagine, a 
dramatic drop-off in volumes to Mexico during that period of 
about a week. Corporations did not put in place specific 
policies broadly saying that they wouldn't allow their 
employees to go to Mexico. But because the country was, in 
essence, closed for a week, there was no reason really to go 
there or be there.
    It is back open again. We are seeing volumes begin to pick 
up a bit. But the other thing that we will need to change, as 
itineraries change and travelers start to go back to Mexico 
again, airlines will need to restore capacity and schedules 
back to Mexico, too, because, as I think you are aware, many 
canceled their schedules into Mexico.
    So we will look for that to occur over probably about the 
next month as well.
    Senator Martinez. Well, I thank all of you, and I think, 
for sure, what we need to do is avoid doing more harm to the 
industry by rhetoric. Whether it made good politics, it 
certainly doesn't make for good business, and that translates 
to jobs. People's livelihood depends on the travel industry in 
places like Florida and Minnesota and around the country, Vegas 
and other places.
    And so, we need to be rational about how we talk about this 
situation and encourage the type of responsible business travel 
that is the part of American business that it has been in the 
past, as well as family travel as we start into the summer 
vacation season.
    Thank you all very much.
    Senator Klobuchar. Well, thank you very much, Senator 
Martinez.
    Ms. Saunders, I just had one last question. You have been 
sitting there, so patient. And I know that the Administration, 
because the Travel Promotion Act was just introduced this week, 
you have to go through the process to give an endorsement of 
the bill. But I believe that President, then-Senator Obama was 
the co-sponsor of the bill. Is that correct, Ms. Saunders?
    Ms. Saunders. Yes, that is my understanding.
    Senator Klobuchar. Well, that is good news, I think. I just 
thought I would get that on the record there, and that is 
really all you need to say, Ms. Saunders.
    [Laughter.]
    Senator Klobuchar. OK, I wanted to thank all of you. You 
were wonderful witnesses. We are going to have our second panel 
come up right now. And thank you so much. If you can stick 
around, do. Otherwise, safe travels.
    Thank you.
    [Pause.]
    Senator Klobuchar. OK. We are going to start with our 
second panel here. We have, first of all, Rossi Ralenkotter. 
Did I say your name right, your first----
    Mr. Ralenkotter. Yes, you did.
    Senator Klobuchar. Excellent. And this panel, by the way, 
we are going to promise a song at the end, right, Ms. Keller, 
if we are lucky?
    Ms. Keller. Sure.
    Senator Klobuchar. All right. Good.
    Rossi Ralenkotter is the President and CEO of the Las Vegas 
Convention and Visitors Authority. Travel and tourism employs 
around 30 percent of the workers in Las Vegas. So we are very 
interested, Mr. Ralenkotter, in what you have to say about the 
state of the industry.
    I think I will just go through and introduce all three of 
you here. Chad Prosser, who is the Director of South Carolina 
Department of Parks, Recreation, and Tourism. Mr. Prosser has 
testified before this Committee. Senator Graham said good 
things about you. Thank you.
    And then Judy Zehnder Keller, who is the Owner and Operator 
of the Bavarian Inn Lodge in Frankenmuth, Michigan. And I 
should point out that the website to Ms. Keller's lodge tells 
visitors that the Bavarian Inn Lodge is ``a place to step into 
the heart of Germany with your feet planted firmly in 
Michigan.''
    And we felt it was very important to have one of our 
smaller lodges or hotels represented here, compared to some of 
the large-scale businesses that we have been talking about. And 
the focus of this panel is some of the regional problems we 
have seen with the downturn in the travel industry and how to 
improve that.
    Mr. Ralenkotter?

        STATEMENT OF ROSSI RALENKOTTER, PRESIDENT/CEO, 
          LAS VEGAS CONVENTION AND VISITORS AUTHORITY

    Mr. Ralenkotter. Thank you.
    Good morning, Madam Chairman and Senator Martinez and 
distinguished members of the Committee. Thank you for allowing 
us to participate in the hearing today.
    I think it is significant that we are having this testimony 
since this is the celebration of National Travel and Tourism 
Week throughout the United States. In fact, yesterday, 
throughout the country, there were over 42 rallies held by 
employees in our industry to talk about the significance of 
tourism and travel and what it means to their lives and jobs.
    And in Las Vegas, we had a rally in front of the Las Vegas 
Convention Center, and we had over 500 employees from our 
resort industry. In fact, I have a photo of the entire crew 
that happened to be there.
    You will notice that the color blue is significant because 
it was ``wear blue on Tuesday'' because blue is one of the 
primary colors of the State of Nevada. And if you look very 
closely, there are three members of the Blue Man Group that are 
there.
    Senator Klobuchar. Pretty cool.
    Mr. Ralenkotter. So we even brought them in from the 
Venetian Hotel.
    Senator Klobuchar. We should have had them here.
    Mr. Ralenkotter. Well, if we had known, we would have 
brought them in.
    Senator Klobuchar. All right. Next time.
    Mr. Ralenkotter. But I think it is significant that we are 
celebrating National Tourism Week as we talk to you about the 
value of travel, conventions, and tourism. I am going to give 
you a little perspective from a destination standpoint, then 
kind of go into some thoughts about the Travel Promotion Act 
and some of the impacts and effect on conventions and meetings 
in Las Vegas.
    But I had to go back to Wayne Newton, years ago, when 
asked, ``What is the difference between Las Vegas and other 
destinations?'' He said that we truly are the only city that 
evolved to host people. And that is what we do.
    And so, today, over 250,000 people in Las Vegas are 
employed because of tourism. Three out of every four jobs in 
Las Vegas are directly related to travel. The industry 
generates more than $30 billion for the local economy every 
year. The Las Vegas Convention and Visitors Authority last 
month celebrated its 50th anniversary. We have been in 
existence since 1959, and we are funded by room tax revenue.
    And in that 50-year period, just the room tax generated by 
the visitors to our hotels with our resort partners has 
generated over $2 billion of tax money that has gone back to 
our community for schools, for parks, and for recreation. In 
fact, in the last 10 years, one out of every four schools built 
in Las Vegas in Clark County has been built with room tax.
    So it is a true partnership with the community. So as the 
industry grows for Las Vegas and the State of Nevada, all of us 
who live there have a better quality of life because of travel 
and tourism.
    Over the last two decades, Las Vegas has truly evolved into 
more than just a gaming destination. We offer world-class 
entertainment, exquisite dining, fabulous shopping, in addition 
to the finest resorts anywhere in the world. We currently have 
over 140,000 rooms in our inventory, and within the next 12 
months, we will add another 13,000 rooms, which will give us 
150,000 rooms to fill each day.
    And traditionally, Las Vegas runs about 25 percentage 
points above the national average when it comes to occupancy. 
So you can see it is a tremendously large industry for Las 
Vegas. It truly is the engine that drives our economic train.
    We host about 38 million visitors annually. Eighty-five 
percent of our visitors are leisure visitors. The other 15 
percent come for conventions and business travel.
    Last year, we hosted over 22,000 meetings, conventions, and 
trade shows. Fortune 500 companies are in Las Vegas on an 
annual basis, having their shows, having corporate meetings. 
And for the last 15 years, Las Vegas has been the number-one 
trade show destination in North America, according to the Trade 
Show Week 200, in hosting the top 200 trade shows, the largest 
200 trade shows, in North America.
    Now we didn't get there overnight. It took us about 35 
years to become number one, and we are dedicated to maintaining 
that position. But that commerce is good not only for Las 
Vegas, but for the country as a whole because people do conduct 
business when they are at the meetings and the trade shows.
    This week, as an example, we have RECon, which is the 
global retail real estate convention, which was formerly known 
as the International Council of Shopping Centers, meeting in 
our city to exhibit, to conduct commerce, to talk about 
industry issues that they have. So you can see we are a part of 
the entire fabric of America when it comes to business.
    As we analyze the current trends in data for Las Vegas, I 
can absolutely say the current recession has had the most 
severe impact on our industry than ever before. I have been at 
the LVCVA for a little over 36 years. I have seen a variety of 
impacts on our industry, but this is the greatest that I have 
seen in that timeframe.
    I have been calling it ``the imperfect storm'' because 
there are so many variables that have contributed to the 
downturn--fluctuating gas prices, housing foreclosures, 
unemployment, the banking system collapse, volatility in the 
stock market, airline cutbacks, unemployment, and now the 
challenges to the meetings and convention market.
    We began to see a softening in our market last spring, the 
middle of the year. For 2008, our visitation was down 4.4 
percent. Our convention attendance was off 5 percent, and our 
passengers coming into McCarran International Airport off 
almost 8 percent.
    But that trend continued, and it has become more severe in 
the first quarter of 2009. Visitor volume is off 9 percent for 
the first 3 months. Our convention attendance is down 29 
percent.
    So you can see that we have seen that in a very short 
period of time. Unemployment is at the highest rate in more 
than 25 years in the State of Nevada at 10.4 percent. 
Approximately 16,000 people have lost their jobs in the State 
of Nevada that were directly employed in the tourism industry.
    And when you look at the national projections--that is, the 
number of potential job losses in our industry for 2008-2009--
that number could reach 450,000 across the country. So this is 
about jobs. The stimulus to bring people to Las Vegas, to bring 
people to the United States, to travel between States does 
equate to jobs.
    Las Vegas truly is a microcosm of the entire tourism 
industry. And while many of the challenges are because of the 
recession, there are long-term issues we must address. Foremost 
is the tremendous disadvantage the travel and tourism industry 
faces when competing with other countries. Travel and tourism 
is one of America's most successful industries, generating a 
trade surplus that helps offset the Nation's trade deficit.
    While international travel has boomed over the past several 
years with 48 million more overseas trips booked in 2008 than 
in 2000, America actually lost visitors, welcoming 633,000 
fewer overseas travelers last year. If the United States had 
simply kept pace with the growth in global sales overseas, 58 
more million overseas travelers would have visited the United 
States in that period, and approximately 245,000 new jobs would 
have been created.
    If you look at this chart here, it gives you an example of 
that. And I will talk just specifically about Las Vegas. In the 
year 2000, our market share of international arrivals was 18 
percent. Today, it is 12 percent. So we have seen an erosion of 
our market share in that period of time from 18 to 12.


    And I will give you another statistic, which kind of drives 
what my office does every single day, is that for every 1,000 
rooms that are built in Las Vegas, we need to have 200,000 
additional visitors to maintain the same levels of business. 
And if you equate that to the international side, to be able to 
get back to the market share we need, we need to drive a 
million more international visitors just to Las Vegas.
    So the scope of what we need to do is something that is a 
competitive issue. We need to get our brand out, but we also 
need to get the brand of the United States out.
    As Jay had mentioned, Jay Rasulo had mentioned, every 
developed nation except for the United States is doing national 
travel programs. This chart over here kind of gives you a 
synopsis of that. In this country, we are being outspent 
collectively 100-to-1 when it comes to travel promotion.
    We talk about what we need to do to get in the game. I 
don't even think we are in the game. And so, the Travel 
Promotion Act is going to allow us to compete across the 
country.
    And I am going to use the example of the Las Vegas 
Convention and Visitors Authority as kind of the template of 
how we can do this. Because it is a public-private partnership, 
the way we market Las Vegas is very easily transferred as to 
how we would do this for the United States.
    We are the brand marketers for our destination. We talk 
about the essence of our brand. We reach out and create demand 
for Las Vegas as a brand. And then within that, the individual 
hotel properties, whether it is the Venetian or the Bellagio or 
Caesar's Palace, they market with us.
    And so, the amenities that they have, the services that 
they provide, the types of convention facilities they have come 
under our umbrella of our brand. And that is exactly the way 
the national--the Travel Promotion Act should work. So it is 
brand USA, and within that, all of us can promote the greatest 
travel destination on Earth.
    If you look at all the diversity, all the things that the 
United States has to offer for travelers and conventions and 
meetings, no one can beat us. But we collectively are not 
positioning our brand. And so, that is what the Act would do. 
All of us would work very closely with the branding of the USA, 
and then we will go and sell our individual products as we go 
forward.
    And there is enough activity, there are enough markets out 
there, there is enough demand for the United States that all of 
us can profit, whether it is a small city, large city, resort 
destination, such as Las Vegas.
    The other long-term issue that we need to address is the 
perception that business travel is not a worthwhile investment. 
Actually, it is a necessary investment, and I will just give 
you an example.
    The National Association of Broadcasters, which held their 
convention in Las Vegas in 2008, indicated to us that they 
conducted over $68 billion worth of commerce when their 
convention was in Las Vegas. Having conventions, corporate 
meetings are part of the fabric of the United States economy. 
We need to go out and promote that.
    Anything that deters people from making the decision to 
have a corporate meeting or to travel to a trade show or 
convention hurts everyone. But more importantly, it impacts 
jobs. And so, we need to make sure that Congress and everyone 
in our industry are promoting the value of meetings and 
conventions, the fact that we do need to meet face-to-face, and 
so those are very important things for us.
    And so, as we go forward, we need to be able to promote and 
make it easy for corporations to make a decision to have a 
meeting someplace else. Even if it is an incentive meeting 
because, as has been indicated earlier, incentives are the core 
of what makes the economy go, too. And so, it is important for 
us there.
    So just kind of talking about that, Las Vegas, just in the 
period of the last 4 months, I will tell you how much business 
we lost. We had 402 meetings canceled, with an impact of $166 
million in lost business. And that impacted, directly impacted 
over 46,000 employees in our destination.
    And so, we need to be able to have some accountability for 
the companies that received the TARP funds, but we also need to 
be able to encourage travel and corporate meetings. And so, 
therefore, we need to look at some of these guidelines so that 
people continue to travel. And we have to be concerned about 
business into the future because all of us survive on these 
corporate meetings.
    So, again, just two things I want to leave the Committee 
with. Number one is the fact that we need to encourage business 
travel, corporate travel, and incentive travel collectively. It 
is good for the country. And then the Travel Promotion Act, 
which will allow us, as a country, to promote brand USA and to 
allow all of us to be part of that marketing.
    Thank you for your time. And if there are any questions, I 
am sure we will have those at the end.
    Thank you.
    [The prepared statement of Mr. Ralenkotter follows:]

        Prepared Statement of Rossi Ralenkotter, President/CEO, 
              Las Vegas Convention and Visitors Authority
    Good morning Senators and thank you for the invitation to 
participate in today's hearing. As you are aware, May 9-17 is National 
Travel and Tourism Week. Yesterday in Las Vegas, hundreds of 
individuals rallied at the Las Vegas Convention Center in a show of 
unity and pride for what travel and tourism provides to Southern 
Nevada. It is the number one industry for Las Vegas. In fact, the 
travel and tourism industry is the number one economic stimulus for the 
entire State of Nevada.
    Approximately 250,000 people in Las Vegas are employed because of 
tourism. Three of every 10 jobs in Las Vegas are directly related to 
travel and tourism. The industry generates more than $30 billion for 
the local economy ever year. Over the past 50 years, room tax revenue 
generated by leisure tourists and conventions and meetings delegates 
has contributed approximately $2 billion to help fund the construction 
of schools, roads, parks and other local government services.
    Over the last two decades, Las Vegas has evolved into more than a 
gaming destination. We offer world-class entertainment, exquisite 
dining and fabulous shopping, in addition to the finest resorts 
anywhere in the world. Las Vegas has over 140,000 hotel rooms, more 
than any other destination and we are scheduled to add an additional 
13,000 rooms to our inventory this year. Hotel occupancy is 
traditionally 25 percent points higher than the national average.
    Las Vegas hosts approximately 38 million visitors annually. Eight-
five percent of our visitors are leisure travelers, and 15 percent are 
business travelers. Las Vegas hosts more than 22,000 meetings, 
conventions and trade shows every year. Fortune 500 companies routinely 
meet in Las Vegas and conduct business. For 15 consecutive years, Las 
Vegas has been the number one trade show destination in North America, 
according to the Tradeshow Week 200, a trade media publication that 
analyzes data from all destinations. In fact, this week we have RECON--
the Global Retail Real Estate Convention--formerly known as the 
International Council of Shopping Centers Show--in Las Vegas.
    As we analyze the current trends and data for Las Vegas, I can 
absolutely say the current recession has had the most severe impact on 
the industry than ever before. I refer to it as the ``imperfect storm'' 
because there are so many variables that have contributed to the 
downturn: gas prices, housing foreclosures, the banking system 
collapse, volatility in the stock market, airline cutbacks, 
unemployment and challenges for the meetings and conventions market. We 
began to see a softening of the Las Vegas market around the middle of 
last year and all indicators began to drop dramatically when fall 
arrived. For 2008, visitation was down 4.4 percent, attendance at 
meetings and conventions decreased 5 percent and the number of airline 
passengers coming into and leaving McCarran International Airport was 
down almost 8 percent.
    Through the first 3 months of 2009, visitor volume is down almost 9 
percent, passenger traffic and McCarran is off 14 percent, and 
convention attendance is down 29 percent, a reflection of the economy 
but also because of the regular industry practice of some shows 
rotating cities for their event. Unemployment is at its highest rate in 
more than 25 years and is at 10.4 percent. Approximately 16,000 people 
in the travel and tourism industry in the State of Nevada have lost 
their job within the last year because of the recession.
    Las Vegas is a microcosm of the entire tourism industry. And while 
many of the challenges are because of the recession, there are long-
term issues we also must address. Foremost, is the tremendous 
disadvantage the travel and tourism industry faces when competing with 
other countries. Travel and tourism is one of America's most successful 
industries, generating a trade surplus that helps offset the Nation's 
trade deficit. While international travel has boomed over the past 
several years, with 49 million more overseas trips booked in 2008 than 
in 2000, America actually lost visitors, welcoming 633,000 fewer 
overseas travelers last year. If the Unites States had simply kept pace 
with the growth in global overseas travel, 58 million more overseas 
travelers would have visited the United States in that period and 
245,000 new jobs would be been created in 2008 alone.
    Every developed nation--except for the United States--operates a 
nationally coordinated travel promotion campaign. Other countries 
outspend the United States by enormous amounts when promoting travel 
and tourism. According to the World Travel Organization, Greece spends 
more than $151 million to promote the travel industry. Spain sends 
nearly $120 million, Australia over $113 million and the United Kingdom 
more than $89 million. Canada spends $58 million and that will probably 
increase with the 2010 Winter Olympics in Vancouver. The United States 
spends approximately $6 million.
    The Travel Promotion Act would address this issue and help create 
new jobs. It would provide a national platform--brand U.S.A.--for the 
country and states could leverage the brand with their own marketing 
efforts. It would be similar to what Las Vegas has done. The Las Vegas 
Convention and Visitors Authority provides the brand marketing platform 
for the destination, and private industry resorts develop marketing 
campaigns to attract visitors to their specific properties and 
attractions. The Travel Promotion Act will help address the tremendous 
disadvantage the United States has when competing for travelers with 
other countries. We appreciate the leadership of Senator Byron Dorgan 
and Nevada's own Senator John Ensign, Majority Leader Harry Reid and 
the United States Travel Association on this proposed legislation.
    The other long-term issue we need to address is the mindset or 
perception of some that business travel is not a worthwhile investment. 
On the contrary, it is a necessary investment. The National Association 
of Broadcasters holds its annual trade show in Las Vegas and the 
organization reported that more than $68 billion of business was 
secured from the 2008 event because of the face-to-face meetings on the 
trade show floor. The industry trade organization Meetings Professional 
International released a study this spring that showed face-to-face 
meetings is still the most valuable sales tool for organizations. Even 
with all the technology today, a face-to-face meeting is still required 
to lay the foundation or finalize a business agreement.
    Recently, the meetings and convention industry has received a lot 
of attention, especially the incentive-based travel programs. It caused 
many corporations--both those receiving TARP funds--and those who did 
not receive TARP funds--to postpone, reschedule or cancel their 
business travel. In Las Vegas, the impact was 402 canceled meetings and 
more than $166 million in lost business. This directly impacted the 
46,000 individuals who work in this particular industry segment in Las 
Vegas. We certainly understand the need for accountability for those 
companies receiving TARP funds. However, the concept of Federal 
meetings guidelines for those organizations receiving Federal aid may 
be a solution to address accountability while not harming an industry 
that contributes nearly $16 billion in tax revenue to Federal, state 
and local levels. When the meetings and convention industry is harmed, 
individual jobs, small businesses, corporations and the national 
economy are impacted.
    In these trying economic times, we are all looking for ways to 
stimulate the economy. The Travel and Tourism Industry is one of the 
answers. We need to encourage people to travel for leisure and to 
attend trade shows and meetings--both domestically and internationally. 
Travel and tourism is the number one, two or three economic stimulus in 
most states. For Las Vegas, and Nevada, it is the number one industry. 
Long-term, the future of Las Vegas is bright and our brand is strong.

    Senator Klobuchar. Mr. Prosser?

              STATEMENT OF CHAD PROSSER, DIRECTOR,

         SOUTH CAROLINA DEPARTMENT OF PARKS, RECREATION

           AND TOURISM AND CHAIRMAN, TRAVEL SOUTH USA

    Mr. Prosser. Good morning, Madam Chairman, Ranking Member 
Martinez. I appreciate the opportunity to be here again with 
you and to talk about what the Federal Government can do to 
assist the States in growing U.S. tourism.
    Tourism for South Carolina generates over $17 billion a 
year. It is our largest export. It employs nearly 12 percent of 
the State's work force.
    And unlike other mature export industries, there is still a 
lot of opportunity for growth in tourism in South Carolina and 
nationally. I say ``potential'' because it is not a given. The 
trends are very positive in tourism, but recent declines in 
consumer spending and corporate travel are quick reminders of 
the threats to our industry.
    While tourism has always had a great capacity to rebound, 
like we did after 9/11, we can't afford to have a critical 
sector of our economy underperforming at a time when our Nation 
is grasping for economic recovery. From 2002 to 2007, South 
Carolina's tourism grew by over 30 percent. Beginning in the 
summer of 2008, however, growth began to slow and eventually 
turned negative.
    In the first quarter of 2009, hotel occupancy statewide 
dropped 12.3 percent, with decreases in all of our major 
tourist markets. Furthermore, business travel and meetings are 
down dramatically more than leisure travel.
    For instance, in Greenville, one of our business hubs, 
hotel revenue fell by 20 percent in the first quarter, and 
meeting facility bookings were down by 35 percent. Two of our 
best-known sporting events, the Family Circle Cup in Charleston 
and the Verizon Heritage PGA tournament on Hilton Head Island, 
both reported a significant loss of ticket sales and corporate 
sponsorship this year.
    And I think both of those events, which take place in the 
spring, are good examples of what we are seeing in the downturn 
in leisure travel and the downturn in corporate travel due to 
both the economy and pressure that is being put on 
corporations. We appreciate your continued focus on these 
issues.
    There are basically three areas where the Federal 
Government can help us in returning tourism to the engine of 
growth industry that it has historically been. One is improved 
facilitation of the travel process; second, coordination of a 
public-private partnership to promote U.S. tourism abroad; and 
public leadership to encourage both leisure and appropriate 
corporate travel.
    Two years ago when I testified here to talk about some of 
the obstacles international travelers were facing in coming to 
the United States, we were talking about the Model Ports of 
Entry program. That program has since passed, and some 
improvements have been seen. And we have discussed some of 
those this morning.
    I would encourage Congress to continue to push the Federal 
agencies to fully and completely implement that program. We are 
seeing positive things happen, but we need to see them happen 
more quickly, particularly in the current environment.
    Additionally, improvement of the air travel experience, 
from TSA screenings to flight delays, should be a top priority 
as we try to return our tourism market to a competitive status.
    Now, as Rossi mentioned, marketing travel is really the 
same as marketing any consumer product. Just as most successful 
international franchises promote themselves through coordinated 
marketing, they begin with an overall brand identity and then 
move down to an individual point of sale, the travel industry 
does much the same thing.
    We compete in the global market for travelers. Our 
competitors are organized by national governments, and as we 
have discussed this morning, they are well-funded. Even 
collectively, the States do not have the resources to 
substitute for the Federal Government in promoting our country 
to visitors abroad.
    Many of us are facing budget cuts. My own organization has 
had its advertising budget cut this year by half due to severe 
State revenue shortfalls. And so, what we are having to use our 
revenue for is to defend against the erosion in the domestic 
market. So we are seeing less money spent on international 
travel, and certainly that makes it tougher even for the States 
to continue to carry this burden without Federal Government 
assistance.
    Now, we are different from most export industries in that 
tourism is comprised mainly of small businesses, over 90 
percent according to the U.S. Chamber of Commerce. Given the 
fragmented nature of the industry, no single association can 
really represent us abroad, and that is why I would encourage 
you to pass the Travel Promotion Act that was just reintroduced 
this year.
    Now, lastly, a simple, but powerful way that you can help 
us is to use your influence over public perception to promote 
leisure and appropriate business travel. Simply restoring the 
spousal travel deduction, as proposed by Senator Graham, would 
be a great message to send as part of that process. This costs 
nothing, but the financial dividends are real and immediate.
    With hotel rates reduced by as much as 40 percent in 
destinations such as Myrtle Beach, there has really never been 
a better time for Americans to travel. Consumers simply need a 
nudge of confidence to get them traveling again.
    Ultimately, the solution is not found in discounting, but 
in deliberate action to improve the travel process and let our 
visitors know that we are open for business.
    Thank you.
    [The prepared statement of Mr. Prosser follows:]

Prepared Statement of Chad Prosser, Director, South Carolina Department 
    of Parks, Recreation and Tourism and Chairman, Travel South USA
    Good Morning Madam Chair and Members of the Committee. I am the 
Director of the South Carolina Department of Parks, Recreation and 
Tourism and I also serve as Chairman of Travel South USA, a regional 
marketing organization that represents the 12 Southeastern states. I 
appreciate the opportunity to appear before you today to discuss the 
importance of tourism to South Carolina and what the Federal Government 
can do to assist state tourism organizations in growing our national 
economy through tourism.
    Tourism generates over $17 billion annually in economic activity 
for South Carolina. It is our state's largest export and accounts for 
more than 12 percent of total employment. And, unlike many other mature 
export industries, tourism in our state is still growing with potential 
for future expansion. I use the word ``potential'' deliberately because 
continued growth is not a given. While long-term growth trends in 
tourism are positive, recent declines in consumer spending and 
corporate meetings travel are quick reminders of the near-term 
volatility of our industry. And while our industry has always had great 
capacity to rebound, just as we did following 9/11, we can ill afford 
for such a critical sector of our economy to be underperforming just as 
the Nation is fighting recession and grasping for recovery.
    From 2002 to 2007, South Carolina's gross tourism product grew by 
over 30 percent, surpassing the state's overall Gross State Product 
growth of 23 percent. Beginning in the summer of 2008, however, growth 
began to slow and eventually turn negative. The dramatic fall in 
consumer confidence levels has significantly affected hotel bookings 
and attraction visits, as well as, many small businesses that rely on 
tourism. In the first 3 months of 2009, hotel occupancy statewide 
dropped 12.3 percent, with decreases being experienced in all of our 
major tourist destinations. Furthermore, business travel and the 
corporate meetings business is down more dramatically than leisure 
travel. For instance, one of our business hubs, Greenville, has seen 
hotel revenue fall by 20 percent in the first quarter and bookings at 
meeting facilities down by 35 percent.
    Two of South Carolina's best-known sporting events--the Family 
Circle Cup women's tennis tournament in Charleston and the Verizon 
Heritage PGA Golf Tournament on Hilton Head Island--both reported a 
significant decrease in ticket sales and corporate sponsorship this 
year. These spring events clearly demonstrate both the decline in 
leisure travel due to the economy and the severe drop in corporate 
travel due to economic strain and public pressure on corporations.
    We appreciate the Senate's continued focus on improving tourism 
within the United States. There are three areas where the Federal 
Government can have a positive impact in returning tourism to the 
engine of growth it has historically been. These are: Improved 
facilitation of the travel process; Coordination of a national public/
private partnership to promote U.S. tourism abroad, and Public 
leadership to encourage both leisure and appropriate corporate travel.
    Two years ago, I testified here regarding the obstacles faced by 
many international travelers to the United States. Since that time, the 
Model Ports of Entry program and the expansion of the Visa Waiver 
Program have led to some improvements for our international visitors. 
However, Congress should continue to push Federal agencies to fully and 
quickly implement these initiatives. Additionally, improvement of the 
air travel experience, from TSA screening to flight delays, should be a 
top priority. A survey released last May showed that air travelers 
avoided 41 million trips in the prior year due to frustration with the 
air travel process. These unnecessary obstacles hinder our ability to 
compete.
    Marketing travel is the same as marketing any international 
consumer product. Just as the most successful international franchises 
promote themselves through coordinated marketing that begins with an 
umbrella brand identity and follows through to each local point of 
sale, the travel industry must do the same to be successful. States and 
our tourist destinations compete in a global market for travelers. Our 
competitors are organized by national governments and well-funded. Even 
collectively, the states do not have the resources to substitute for 
the Federal Government in promoting our country to international 
visitors. Over the last year, most state tourism organizations have 
been hit hard by budget cuts. My organization's advertising budget has 
been cut in half this year due to severe shortfalls in state revenue. 
Thus, while real opportunities exist to grow U.S. market share in 
tourism, fewer dollars are being spent on this task as states and 
destinations use their limited funds to defend against further erosion 
in the domestic travel market.
    Tourism is distinctly different from most large export industries 
because it is comprised mostly of small to medium-sized businesses, 
over 90 percent according to the U.S. Chamber of Commerce. Given the 
fragmented and diverse nature of the industry, no single group or trade 
association can effectively represent the entire industry abroad 
without the coordination of the Federal Government. That is why I 
encourage you to pass the Travel Promotion Act when it is reintroduced 
this year to establish a public/private partnership to promote U.S. 
tourism. This legislation will enable the U.S. tourism industry to 
compete internationally on a level playing field.
    Lastly, a simple but powerful way for you to help U.S. tourism is 
by using your influence over public perception to promote leisure 
travel and encourage appropriate business travel. This action cost 
nothing but the financial dividends are real and immediate. With hotel 
rates reduced by as much as 40 percent in Myrtle Beach, Charleston and 
Hilton Head Island and gasoline costs this summer projected to be 42 
percent lower than last year, there has never been a better time to 
travel. Consumers simply need a nudge of confidence to get them 
traveling again.
    Your leadership on this issue is crucial. The travel industry is 
doing everything it can to promote recovery. But ultimately the 
solution is found not in discounting but in deliberate action to 
improve the travel process and let visitors know that we are open for 
business.
    Madam Chair and Members of the Committee thank you again for 
focusing on this issue.

    Senator Klobuchar. Thank you very much.
    Ms. Keller?

STATEMENT OF JUDY ZEHNDER KELLER, PRESIDENT, BAVARIAN INN LODGE

    Ms. Keller. Good morning, Senators.
    Thank you for the opportunity to join in this discussion 
regarding the current challenges facing the tourism industry in 
our country.
    My family has been in the hospitality business in the small 
town of Frankenmuth, Michigan, population 5,000, since 1927. I 
am part of a fourth-generation family business known as 
Bavarian Inn Restaurant and Lodge.
    Our restaurant seats 1,200 guests in 11 dining rooms. Our 
adjacent lodging property has 360 guest rooms, with 5 indoor 
pools and a family fun center, indoor 18-hole miniature golf 
course, and over 100 video games. The lodge also caters to the 
meeting and conference market, accommodating 500 delegates in 
one area and 300 delegates in another.
    On the national scene, we would be considered a small 
business. However, in our town of 5,000, we are considered big 
business as we employ about 1,000 people locally. Our 2008 
payroll was $11.4 million. This is 7 percent less than 2007.
    We have eliminated hundreds of positions as our monthly 
sales have declined anywhere from 7 to 20 percent. It is hard 
to make payroll every week and even harder to make our interest 
and monthly principal payments.
    Of course, in the State of Michigan, we can certainly point 
to the crumbling auto manufacturing industry as the most 
significant reason for our situation. The workers of the auto 
companies, their vendors, and suppliers are our customers.
    Like so many other private family businesses, we feel 
helpless as our customers lose their jobs. People out of work 
do not even travel locally, not in their backyards, when they 
don't know how they are going to make their house payments or 
pay their electric bills.
    So what have we been doing to try and survive in this 
downturn? Private sector tourism businesses in our small 
community have not cut back on advertising. Four million 
dollars per year in paid advertising is substantial but has not 
brought about the desired results. For decades, we experienced 
3 million visitors annually to our small town of 5,000. That 
sure is not the case now.
    This year, Frankenmuth, along with 23 other travel 
destinations in our State, began partnering with the State of 
Michigan and its tourism promotional efforts. Total dollars 
being spent on promoting Michigan as a travel destination has 
now increased to an all-time high of $30 million.
    Ten million dollars has been devoted to the first-ever 
national campaign to promote the four seasons enjoyed in 
Michigan. Hopefully, you have seen some of our Pure Michigan 
ads. I saw two of them last night on CNN.
    You might ask how the State of Michigan can justify 
spending tax dollars on tourism promotion given the huge 
deficit we are experiencing with the auto industry meltdown? 
Visitors spend over $18 billion annually in Michigan, 
generating $874 million in State taxes, accounting for 192,000 
jobs.
    The latest research found that each advertising dollar 
Michigan spent in out-of-state markets over the past 4 years 
generated $2.86 in new additional State tax revenues. To 
repeat, $1 gets you $2.86 in return. For the most part, those 
tax dollars came back to Michigan in the same year the 
advertising dollars were spent.
    As we diversify our industry base in Michigan for the long 
term, we are very mindful that tourism is the only industry 
that does not require huge amounts of infrastructure funding to 
bring about new facilities and job opportunities. Our natural 
attractions are already in place, and we couldn't expand on 
them if we wanted to.
    We can't build any more Great Lakes, sand dunes, rivers, 
forests, or inland lakes. Every State in this great Nation has 
similar natural tourism attractions. The great cities and 
manmade attractions are simply a big plus for Americans and 
foreign visitors to enjoy on their way to and from our natural 
wonders.
    It seems rather strange that over 50 years ago, we had 
major campaigns in this country asking our citizens to visit 
America first. A bittersweet memory for people over 60 like me 
would be Dinah Shore, singing that famous General Motors 
commercial in the 1950s, which started out with--and you have 
to excuse me, my voice is not as good, but----
    Senator Klobuchar. You are better than we could do. Go 
ahead.
    Ms. Keller. All right. ``See the USA in your Chevrolet. 
America is asking you to call. Drive your Chevrolet through the 
USA. America is the greatest land of all.''
    Now what can we do as a Nation to encourage our citizens to 
stay in the USA for their recreation and vacationing? Seeing 
America first would help retain millions of jobs for our 
citizens and would create new jobs for our millions of 
unemployed.
    At the same time, our message to all parts of the world 
should be ``come visit the USA now.'' The natural wonders and 
the vibrant cities of America have not changed at all during 
the worldwide economic slump and may never be as affordable to 
visit as right now.
    Our Pure Michigan campaign has been the most successful 
tourism campaign in our State's history. I feel all 50 States 
need an opportunity to partner in a similar way with the 
Federal Government to attract the international visitor as no 
individual State can accomplish this on their own.
    Ladies and gentlemen, I appreciate the opportunity to be 
with you today. I invite you all to visit my hometown of 
Frankenmuth and experience firsthand Pure Michigan.
    Danke schoen.
    [The prepared statement of Ms. Keller follows:]

  Prepared Statement of Judy Zehnder Keller, President, Bavarian Inn 
                                 Lodge
    Thank you for the opportunity to join in this discussion regarding 
the current challenges facing the tourism industry in our country. My 
family has been in the hospitality business in the small town of 
Frankenmuth, Michigan, population 5,000, since 1927. I am part of a 
fourth generation family business known as the Bavarian Inn Restaurant 
and Lodge.
    Our Restaurant seats 1,200 guests in 11 dining rooms. Our adjacent 
lodging property has 360 guest rooms with five indoor pools and a 
family fun center with an indoor 18 hole miniature golf course and over 
100 video games. The Lodge also caters to the meetings and conference 
market accommodating 500 delegates in one area and 300 delegates in 
another.
    On the national scene we would be considered a small business; 
however, in our town of 5,000 we are considered a big business as we 
employ about 1,000 people locally.
    Our 2008 payroll was $11.4 million. This is 7 percent less than 
2007. We have eliminated hundreds of positions as our monthly sales 
have declined anywhere from 7-20 percent. It is hard to make payroll 
every week and even harder to make our interest and principal payments 
monthly.
    Of course, in the State of Michigan, we can certainly point to the 
crumbling auto manufacturing industry as the most significant reason 
for our situation. The workers of the auto companies, their vendors and 
suppliers are our customers. Like so many other private family 
businesses we feel helpless as our customers lose their jobs. People 
out of work do not even travel in their own backyards when they can't 
make their house payments or electric bills. So what have we been doing 
to survive in this downturn? Private sector tourism businesses in our 
small community have not cut back on advertising. $4 million per year 
in paid advertising is substantial but has not brought about the 
desired results. For decades we experienced 3 million visitors annually 
to our small town of 5,000. That sure is not the case now.
    This year, Frankenmuth, along with 23 other travel destinations in 
our state began partnering with the State of Michigan and their Tourism 
Promotional efforts. Total dollars being spent on promoting Michigan as 
a travel destination has now increased to an all time high of $30 
million. $10 million has been devoted to the first ever national 
campaign to promote the four seasons enjoyed in Michigan. Hopefully you 
have seen some of the ``Pure Michigan'' ads.
    You might ask how the state of Michigan can justify spending tax 
dollars on tourism promotion given the huge deficit we are experiencing 
with the auto industry meltdown.
    Visitors spend over $18 billion annually in Michigan, generating 
$874 million in state taxes and accounting for 192,000 jobs.
    The latest research found that each advertising dollar Michigan 
spent in out-of-state markets over the past 4 years generated $2.86 in 
new additional state tax revenues. To repeat, $1 gets you $2.86 in 
return. For the most part, those tax dollars came back to Michigan in 
the same year the advertising dollars were spent.
    As we diversify our industry base in Michigan for the long term, we 
are very mindful that tourism is the only industry that does not 
require huge amounts of infrastructure funding to bring about new 
facilities and job opportunities. Our natural attractions are already 
in place and we couldn't expand on them if we wanted to. We can't build 
more Great Lakes, sand dunes, rivers, forests or inland lakes.
    Every state in this great nation has similar natural tourism 
attractions. The great cities and man-made attractions are simply a big 
plus for Americans and foreign visitors to enjoy on their way to and 
from our natural wonders.
    It seems rather strange that over 50 years ago we had major 
campaigns in this country asking our citizens to: ``Visit America 
First".
    A bittersweet memory for people over 60, like me, would be Dinah 
Shore singing that famous General Motors commercial in the 1950s which 
started out with:

        ``See the U.S.A. in your Chevrolet.
        America is asking you to call.
        Drive your Chevrolet through the U.S.A.
        America's the greatest land of all.''

    Now, what can we do as a Nation to encourage our citizens to stay 
in the U.S.A. for their recreation and vacationing?
    Seeing America First would help retain millions of jobs for our 
citizens and would create new jobs for our millions of unemployed.
    At the same time, our message to all parts of the world should be: 
``Come Visit the U.S.A. Now!'' The natural wonders and vibrant cities 
of America have not changed at all during the worldwide economic slump 
and may never be as affordable to visit as right now.
    Our Pure Michigan Campaign has been the most successful tourism 
campaign in our state's history.
    I feel all 50 states need an opportunity to partner in a similar 
way with the Federal Government to attract the international visitor as 
no individual state can accomplish that on its own.
    Ladies and gentlemen, I appreciate the opportunity to be with you 
today. I invite you all to visit my hometown of Frankenmuth and 
experience first hand, ``Pure Michigan.''
    Danke Schoen and Auf Wiedersehen!

    Senator Klobuchar. There you go, Mr. Ralenkotter.
    Mr. Ralenkotter. There we go.
    Senator Klobuchar. Thank you very much, Ms. Keller.
    Senator Martinez?
    Senator Martinez. Ms. Keller, I was really hoping you were 
going to sing that jingle.
    Ms. Keller. I would have tried, but as you can see, I am a 
little hoarse today.
    Senator Martinez. I can remember Dinah Shore doing that. I 
think it was----
    Ms. Keller. Maybe you would like to sing it.
    Senator Martinez. Well, I am about dying to, actually.
    [Laughter.]
    Senator Martinez. I didn't think I would be asked. 
Otherwise, I would have rehearsed and be prepared. But I 
wouldn't do that to the rest of you, for sure.
    Where are you located, by the way? Let us do a little 
promotion here.
    Ms. Keller. Well, if you are from Michigan, everybody does 
this.
    Senator Martinez. OK.
    Ms. Keller. They show you the hand. And we are here. We are 
about an hour and a half north of Detroit right off of I-75.
    Senator Martinez. On the lake?
    Ms. Keller. No.
    Senator Martinez. Oh, no?
    Ms. Keller. We are right in the middle. We have only 
manmade attractions. We are a German community that has 
developed into a shopping mecca. And we have over 100 and some 
different mom-and-pops shops.
    Senator Martinez. Wow.
    Ms. Keller. And we specialize--we have one store 
specializing in Christmas, 7 acres under one roof. We have 
these big restaurants of which my family are part of, and we 
are listed in the National Restaurant Association as a top 100, 
I think we are 2 and 3 top independent restaurants in the 
United States due to the volume of people we serve.
    Senator Martinez. Fantastic. And you have 3 million 
visitors a year? That is an incredible number.
    Ms. Keller. We used to, yes.
    Senator Martinez. And are they local, or were they coming 
from all over?
    Ms. Keller. Well, they are from Michigan, Ohio, Indiana. We 
have a lot of regional conferences, a lot of national. I am 
just now finishing the Newfoundland National Dog Show in my 
hotel. We had every--50 states represented and 8 countries.
    Canada has, in the past, been a very good market for us. It 
is not as good as it used to be.
    Senator Martinez. Well, Mr. Ralenkotter, we share 
communities that are very similar. Las Vegas and Orlando 
probably compete but, at the same time, have the same sort of 
vibrant convention and visitors opportunities that I think are 
unparalleled anywhere in the world really. And I realize that 
in this current situation, business travel has been hampered 
obviously by the economic conditions.
    But I wondered if you could tell me whether you feel that 
the rhetoric and the atmosphere that has been created has had 
an impact, independent and above that which comes from the 
economic downturn we are facing today?
    Mr. Ralenkotter. It most definitely has. And the numbers 
that I gave to the Committee on the direct impact of 
cancellations that we saw in the first few months when the 
rhetoric did heat up and talk about corporate meetings as well 
as incentive.
    The other unknown is how much of this is going to impact 
future bookings because we are now, especially on the corporate 
meeting side, which is short term, some of those are 30 days, 
60 days out, of companies that may make a decision not to have 
their meeting or to change location because they are concerned 
of being criticized for going to a resort destination such as 
Orlando or Las Vegas or Hawaii, New Orleans. And so, we have to 
be concerned about that.
    And it is not only the companies that received the TARP 
funds, but it is just corporations in general concerned of the 
impression that they may give to their stockholders or to the 
general public or to the media.
    So we need to be able to go out and talk about the 
importance of meetings and conventions. In fact, I am a member 
of the United States Travel Association. And with the meetings 
industry, we have collectively gotten together to talk about 
the value of meetings. I have got here----
    Senator Martinez. Is there a game plan? I mean, is there 
any--what can you, what can we do to try to change that 
perception, which is clearly there? And I know, Mr. Prosser, 
you have seen it, too.
    Mr. Ralenkotter. I think that it is a matter of us all 
collectively, together, giving the same message that 
conventions, trade shows, corporate meetings are good for 
America. It is important for us to keep those meetings going 
forward. Incentive travel is critical to the vibrancy of sales 
organizations in the country.
    And so, all of us need to stay on message and not be 
critical because it impacts every single State, every single 
Congressional district because all of us have convention 
facilities of some sort, all of us have meetings within our 
areas. And so, we need to be positive and promote that.
    In fact, as I was mentioning, we did do some things with 
the meeting industry. Here is a petition that is signed by over 
22,000 employees in the resort industry and the meetings 
industry, talking about the impact cancellations have had on 
their jobs. And so, the biggest stimulus, I mentioned it 
before, for this economy, which doesn't cost us anything, is to 
promote travel, both the leisure side as well as the corporate 
meeting side.
    So we are all collectively moving forward with some 
campaigns.
    Senator Martinez. I am all for you, and I hope if I can in 
any way be of help, you will let me know.
    Mr. Ralenkotter. Thank you.
    Senator Martinez. Because I think it is very, very 
important, certainly to your community and my home community as 
well, and not only the State of Florida, but very specifically 
the convention and visitors.
    But you know, by the way, the ironic thing about what we 
have done to ourselves here with this kind of rhetoric is that 
I know we always thought of the convention and trade show 
business to be almost recession proof. It seemed like it went 
on, even though the family traveler may not travel to Disney, 
say, with a family because of the economic circumstances of the 
moment.
    But with this sort of atmosphere that has been created, 
then the visitors coming to trade shows and conventions seems 
to have also been impacted. Would you agree with that?
    Mr. Ralenkotter. Yes, in fact, we have seen a 29 percent 
decline. All of our major trade shows are seeing declines, and 
most of them are seeing declines in both exhibitors as well as 
delegates coming to the convention. Some of the spousal travel 
has been impacted. So this recession, along with the rhetoric, 
has had that direct impact.
    The other thing that is critical for a destination is that, 
many times, someone's first visit to your city is for a 
convention or a trade show, and they get exposed to your city 
and then later on decide they are going to take a vacation 
there. So it has some long-term impact as well as the short 
term. And so, we need to encourage that commerce.
    Senator Martinez. Thank you all very much.
    Senator Klobuchar. Thank you, Senator Martinez.
    I was listening to Mr. Ralenkotter talk about the big trade 
shows and the business conventions they would have in Las Vegas 
or in Orlando. I think it is very important for people to know 
that smaller resorts and areas that aren't in the top four 
tourist destinations have also seen a decrease because you have 
businesses and trade shows that come to your States.
    And so, could you talk a little bit about the kind of 
businesses that you have come in, the kind of trade shows, and 
what you have seen as the change?
    Mr. Prosser. Right. Absolutely. We obviously don't see the 
large conventions that an Orlando or Las Vegas would. But we 
see a lot of corporate travel, a lot of what we call incentive 
travel for smaller groups, corporate boards. That is very 
prevalent at many of our resorts, and we have seen a dramatic 
impact on bookings and cancellations, and even cancellations 
where the fees paid by business to cancel are greater than what 
they would have paid to have the actual event take place.
    And they are doing it with no business purpose.
    Senator Klobuchar. I have heard stories about that from 
businesses. And they are not financial companies, right? They 
may or may not be, but I have heard stories of nonfinancial 
companies.
    Mr. Prosser. We have seen it with both. I think the 
corporations, particularly public companies and CEOs, are very 
gun shy about any type of travel or being criticized for 
travel. So we see it across the spectrum, not just with banks.
    Senator Klobuchar. The international travel issue, we are 
talking about this Travel Promotion Act, and I know in our 
State of Minnesota, we actually have international travelers 
come in to see the Mall of America, and then they go to some of 
our other places. They see the State.
    What do you see coming out of that? I think immediately 
people think, ``Oh, it won't help our States because they are 
just going to go to New York,'' or something like that. What do 
you see the potential, and how can we best try to promote other 
areas of our country?
    Mr. Prosser. Well, for instance, a State like South 
Carolina, we consider ourselves to be very competitive in that 
what we call second tier. Once a visitor has been to the United 
States once--they have visited New York or California or other 
States, some of the larger States--then they want to come back 
and find out a little more about the product here in America, 
particularly the South.
    All of our areas within the Southern States tend to get 
those repeat visitors as they come back, seeking a slightly 
different experience. So we do have international travel. We 
benefit from it. It is a very high-spend visitor, and so it is 
something that we want to attract.
    It is difficult, however, because we have to go out and 
take the place individually as States of the Federal Government 
without any coordination or economies of scale that would come 
from having that Federal level of coordination. And we just 
simply don't have the funding to do that. But we do have 
competitive product once people discover us.
    Senator Klobuchar. So an argument could be made that if we 
had this kind of national promotion, it would actually be of 
great benefit to some of the what you call second-tier tourism?
    Mr. Prosser. Absolutely.
    Senator Klobuchar. Now who brought this board right here 
with the USA?
    Mr. Ralenkotter. That is from the United States Travel 
Association. It just kind of gives you an idea of how we are 
being outspent and the fact that, as I indicated, we are being 
outspent by more than 100-to-1 in the marketplace. So we really 
don't have----
    Senator Klobuchar. By what? Which countries or just 
overall?
    Mr. Ralenkotter. Right. Collectively. But that is just a 
representative sample of that, the $100 million plus that 
Australia spends on promoting Australia.
    Going back to your question on how can it benefit all of 
the other locations, if we truly get this brand platform and we 
market brand USA, then all the other areas in the country--
regions, cities--large, medium, and small--can target 
particular market shares, market areas that have been 
productive for them as well as some potential ones and then be 
a part of that because collectively we are going to be selling 
the destination. And so, there is a way for everyone to get 
involved once this Act is passed.
    Senator Klobuchar. Well, I think that that video, which 
didn't say the word ``Disney'' and had little of California, a 
little----
    Mr. Ralenkotter. A little Las Vegas, too.
    Senator Klobuchar. But I think a little Las Vegas. But 
mostly, it was about the entire country, and I think that was 
the message that was trying to be sent there, that there is a 
lot of beautiful places to visit and that we need to do that.
    Ms. Keller, maybe we will just end with you. You were 
talking about the jobs that have been lost at the Bavarian Inn 
because of this downturn in the economy, and I know you also 
have some business groups that come from and meet in your 
place, as you described, this convention center.
    Could you maybe talk a little bit about those kinds of 
losses, the kinds of jobs of the people that have lost their 
jobs? What types of jobs they are, so people understand this 
isn't about some CEOs, that this is about people who are on the 
front line doing their work.
    Ms. Keller. Unfortunately, most people think that if you 
are in the tourism industry that you are not well paid. And 
when we are young and we are 16 and 17, and we take these 
minimum wage jobs, and it is usually our first job and could be 
at a camp ground or running a restaurant, working as a----
    Senator Klobuchar. That was when I was little. My dream was 
at the Jackson Lake Lodge in Wyoming. They would have their 
name and what they were----
    Ms. Keller. Sure.
    Senator Klobuchar. But I never got there. But anyway, but I 
did OK.
    [Laughter.]
    Ms. Keller. Well, there is always retirement jobs.
    But what has happened is you still need these entry-level 
positions, but what you do is you just structure it different. 
So in the last year, we have eliminated 28 percent of our full-
time management positions. Those are the biggest dollars.
    And those are not the jobs we want to eliminate as a 
country because those are the ones where everybody has 
hospitalization, and those are the ones we have eliminated. So 
with the conferences that are coming, they are coming short or 
there is that stigma. They are just not booking.
    Actually, the bookings just kind of have stopped. And as we 
make all our cold calls--we have about 10 people in our sales 
staff. So we are continually calling, and everyone is saying, 
``We haven't forgotten you, but right now is not the right 
time.''
    So pretty soon, that will change. But how quickly that 
changes and to what extent, I don't know. I think what may 
happen is that some of the areas will go closer to home.
    But using the Las Vegas as an example, I go there four 
times a year for trade shows. I have to. I go to gift shows, 
and I go to the clothing show.
    How am I going to sell my merchandise if I don't go to your 
community? So I have to go. So it is accepted for me to go 
because I am buying, but----
    Senator Klobuchar. And so, what are you selling? You are 
showing the inn, and you are showing----
    Ms. Keller. Well, I have clothing stores. So we have 
dresses----
    Senator Klobuchar. So these trade shows give smaller 
businesses a big opportunity----
    Ms. Keller. Oh, I would say the majority of his attendees 
at these gift shows that I go to are all small people.
    Senator Klobuchar. So without these trade shows, it would 
be very hard for smaller businesses to make their sales----
    Ms. Keller. You can't.
    Senator Klobuchar.--because you are not a huge chain that 
can just, everyone knows your name and so you----
    Ms. Keller. I have to go to these trade shows where I am 
exposed to hundreds of vendors, so I can then make a 
determination of what I want to be. You can't buy things out of 
a catalogue when you want to sell it. You want to see the 
product.
    Senator Klobuchar. And then these jobs, just last, Mr. 
Prosser, I have talked to people that have lost their jobs like 
this. It is not just the hotel workers and the people that make 
the beds and make the meals. They have lost some jobs, too. But 
it is also people, florists and cab drivers and people that are 
ancillary to this business and you don't always think about it.
    Mr. Prosser. Well, it is all of those small businesses that 
come into the mix. It is the florist. It is the AV companies 
that support the conventions and the meetings. In the hotels, 
most of those services are outsourced, and they are all very 
small businesses and vendors who are providing those services.
    And when the meetings are not there, they get no business. 
And so, it has really impacted many of those types of 
businesses.
    Senator Klobuchar. OK. Well, I think that is a good way to 
end. And just to summarize what we have learned in this 
hearing, Senator Martinez and I and our other members, is that, 
first of all, there are good deals out there for the summer. I 
know I am going to look at some of them now.
    We are going to spend Fourth of July week in Minnesota, up 
north, our family. I think people have to look at their own 
budget, see if they can afford anything. But there are things 
to do from campgrounds to, what did he say, a cruise in Alaska 
for $49-a-night on Travelocity. So people, families should look 
for the deals.
    The second thing is that we need to get business travel 
going again, and people need to be careful. There are a few bad 
actors out there. It is OK to talk about that, but overall, 
business travel is a big part of the tourism industry. It is 
important for small businesses to come together in order to 
promote their own goods, and that means travel. And that means 
staying in hotels and going out to eat and things like that.
    And then the third thing is that we should pass the Travel 
Promotion Act, which will market our country in a way that so 
many other countries have done for so long. And I think these 
figures that--I don't think people have focused on it because 
they have been talking a lot about the economy hurting the 
tourism industry. We all know that, and we know it really hurt 
it after 9/11.
    But what we have found is that our market share has been 
declining in our country, having really even before the time of 
the economic downturn. Is that right, Mr. Ralenkotter?
    Mr. Ralenkotter. That is correct. Yes.
    Senator Klobuchar. And so, what is the percentage you used 
for Las Vegas?
    Mr. Ralenkotter. We went from 18 percent market share to 
12.
    Senator Klobuchar. Eighteen to 12 percent of this 
international travel market share, which we are seeing 
nationally as well. This isn't just about Las Vegas.
    So, this idea of promoting our country. We have found a 
cost-effective way to do this that won't cost our taxpayers 
money, and we will be pushing the Administration, through the 
Commerce Department, to get this done. I know that long before 
I took over this Subcommittee, Senator Dorgan had been working 
on this for years and had been frustrated. We haven't been able 
to get this bill passed.
    I hope that this is the year to do it. I think it is--the 
silver lining is, what does Rahm Emanuel say, ``You don't want 
to let a good crisis go to waste?'' The silver lining is that 
this has focused attention on the travel industry, the 
importance of it, and the importance of doing what a lot of 
these other countries learned a long time ago, that tourism is 
a booming business for our country.
    We have got a trade surplus. Let us keep it that way, and 
let us make it even bigger.
    So thank you for your time.
    Thank you.
    [Whereupon, at 12:09 p.m., the hearing was adjourned.]
                            A P P E N D I X

    Prepared Statement of Hon. John Ensign, U.S. Senator from Nevada
    Thank you, Mrs. Chairman and Sen. Martinez for calling this hearing 
today on an issue that is very important to me and my home state of 
Nevada. As you know, tourism is an indispensable part of our economy 
and a vital part of our society. Tourism fuels commercial activity, 
creates jobs, and provides Americans with much needed physical and 
mental relief from the stresses of their lives. Travel and tourism 
account for about $1.7 trillion in economic activity each year and 
employs almost 8 million people in the United States. Unfortunately, 
this important industry is suffering greatly from our current 
recession.
    This is a very difficult time for America. Much attention is 
rightly being paid to struggling industries like the banking and 
automobile sectors. I am glad, however, that Chairwoman Klobuchar 
called this hearing to focus attention on the travel and tourism 
industries that have been hit so hard by the economic downturn. The 
Department of Labor estimates that nearly half a million jobs in 
travel-related industries will be lost in 2008 and 2009 combined. These 
job losses will be felt in big cities and small cities throughout the 
country, and we cannot lose sight of them.
    Few states benefit from and rely upon tourism more than my state. 
Travel and tourism is the number one industry in Nevada. In just a few 
decades, tourism has turned Las Vegas from a sleepy desert town into an 
international city with world-class entertainment and hospitality 
options. (Thanks, by the way, to my colleagues' constituents and to our 
foreign visitors who made that transformation possible.) Nevada also 
has boundless outdoor attractions to offer visitors, from the pristine 
solitude of the high desert to the magnificence of Hoover Dam to the 
dramatic beauty of Lake Tahoe.
    We will be hearing later this morning from Rossi Ralenkotter, 
President and CEO of the Las Vegas Convention and Visitors Authority. 
He is an excellent advocate for the city and the travel industry as a 
whole. I expect he will tell us exactly the sort of challenges facing 
the tourism industry today, especially in the business travel sector.
    From an economic standpoint, the travel and tourism industries arc 
faced with their biggest challenge since the tragedy of September 11. 
During these trying times, I hope our Nation's leaders will step forth 
and encourage Americans to continue traveling. Words matter and 
Americans often heed the suggestions made by their political and 
business leaders. One way to ensure a prolonged and painful recession 
is for Americans to stop traveling, to stop going to conventions, and 
to stop taking vacations. I hope my colleagues will join me in 
promoting tourism and business travel, particularly as a means to 
stimulate our sluggish economy.
    I also believe that foreign tourists can be part of our economic 
recovery. Overseas visitors and business travelers bring an influx of 
money to the United States, bolstering the economies of our local 
communities. We can do more, however, to encourage people to visit our 
country. In fact, according to the World Travel Organization, the 
United States only spends about $6 million a year to promote travel and 
tourism. Canada spends about ten times as much. Greece, a country of 
less than 11 million people, spends more than $150 million a year. Sen. 
Dorgan and I yesterday introduced the Travel Promotion Act of 2009. If 
enacted, our bill would leverage public and private dollars to promote 
the United States overseas as a tourist destination. Our bill would 
help make the United States much more competitive at attracting foreign 
tourists without placing a heavy burden on the American taxpayer.
    Thank you again, Mrs. Chairman, for holding this hearing today. 
This hearing will inform people about the importance of the travel and 
tourism industries. Even as we grapple with the huge issues faced by 
the country, I encourage my colleagues to take every opportunity they 
can to promote tourism. It will lift the spirits and fortunes of our 
constituents, and lift our economy as well. I look forward to the 
testimony of our distinguished panel of witnesses.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                             Mary Saunders
    Question 1. My understanding is that many foreign governments have 
ministries of tourism or other high profile positions dedicated to 
promoting their countries as tourist destinations. In comparison, our 
Federal Government does much less to promote the United States as a 
tourist destination for foreign visitors.
    I would appreciate hearing the panel's views on whether 
establishing an Under Secretary for Tourism within the Department of 
Commerce would help the United States capture a greater share of 
international tourism. How else might the Federal Government elevate 
the profile and importance of tourism in order to attract more visitors 
to the United States?
    Answer. To my knowledge, the Administration has no plans to create 
an Under Secretary for Tourism in the Department of Commerce. We are 
working actively within the existing structure to support the 
visibility and promotional needs of the travel and tourism industry. 
All levels of management from the Secretary, to the Under Secretary for 
International Trade Administration, to the Deputy Assistant Secretary 
for Services, are fully engaged in addressing industry needs and 
concerns.
    The Secretary of Commerce leads a Travel and Tourism Advisory 
Board, comprising 15 private sector travel and tourism CEOs, and a 
Tourism Policy Council, an interagency group comprising 15-plus Federal 
agencies that are involved in travel and tourism. This ensures cabinet 
level access and advocacy for the industry. The Department of Commerce 
also has a travel and tourism team that encompasses over 100 Commercial 
Services offices within the United States and offices in over 80 
countries globally for export promotion activities. The Office of 
Travel and Tourism Industries (OTTI) within Manufacturing and Services 
is a key member of this team. In addition, OTTI serves as Chair of the 
Tourism Committees in the OECD and APEC, which provides top level U.S. 
Government influence and leadership internationally.

    Question 2. How can Congress or the Federal Government help support 
and promote tourism in rural areas of the United States?
    Answer. The Department of Commerce and other Federal agencies 
already work closely with rural communities to enhance their economies 
through tourism promotion. The Department is actively engaged with the 
Western States Tourism Policy Council and the Southeast Tourism Policy 
Council to address rural community needs for travel and tourism. This 
year, both Councils will host an annual Gateways conference that 
focuses on educating small- and medium-sized travel and tourism 
businesses about the opportunities that exist for economic development 
in rural areas through tourism.

    Question 3. Do you support increased funding for state tourism 
offices through the Department of Commerce's Market Development 
Cooperator Program?
    Answer. The Market Development Cooperator Program (MDCP) is a 
competitive grant program that is available to all nonprofit 
organizations in all sectors of the U.S. economy. The Office of Travel 
and Tourism Industries, and the Commercial Service Travel and Tourism 
team work with the industry and state governments to encourage them to 
submit proposals to the MDCP program.

    Question 4. Several witnesses note that the public backlash against 
corporate travel and lavish conventions for bailed out Wall Street 
firms has actually discouraged many firms from traveling for even 
legitimate business reasons. How should public leaders and Congress 
respond to this situation?
    Answer. Travel industry representatives have informed the Secretary 
that it is paramount for public leaders and Congress to clearly convey 
the benefits of reasonable corporate travel to business health and 
economic recovery. The Secretary has encouraged business and his 
counterparts within the government to support reasonable corporate 
travel. He has also made business-related visas a priority for the 
Commerce Department and is working with the State Department and 
Homeland Security to ensure international business and convention 
travelers have appropriate access to the U.S. market.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                             Sam Gilliland
    Question 1. My understanding is that many foreign governments have 
ministries of tourism or other high profile positions dedicated to 
promoting their countries as tourist destinations. In comparison, our 
Federal Government does much less to promote the United States as a 
tourist destination for foreign visitors. I would appreciate hearing 
the panel's views on whether establishing an Undersecretary for Tourism 
within the Department of Commerce would help the U.S. capture a greater 
share of international tourism.
    Answer. There's no question that the Federal Government needs to 
take a more active role in the promotion of our Nation to foreign 
visitors as a tourist destination. The Travel Promotion Act will 
accomplish exactly that by establishing a non-profit corporation to 
promote travel to the U.S. These goals will be accomplished through 
better communication of entry policies and a more comprehensive 
marketing effort to all types of international travelers.
    We should see what the Office of Travel Promotion, which is also 
established under this broadly-supported legislation, is able to 
accomplish in restoring the health of the beleaguered U.S. travel and 
tourism industry before we take further action.

    Question 1a. How else might the Federal Government elevate the 
profile and importance of tourism in order to attract more visitors to 
the U.S.?
    Answer. The Administration and Congress need to take great care not 
to use rhetoric that undermines business travel and face-to-face 
meetings. As I mentioned in my testimony, the U.S. Travel Association 
has published a list of clear guidelines to help businesses spend 
responsibly when it comes to business travel, and I encourage Congress 
to urge the endorsement of those sound principles.
    I also am convinced that modernizing our air traffic control system 
will go a long way toward improving transportation across the country 
and minimizing the delays and cancellations that make air travel 
challenging. NextGen must become NowGen.
    And finally, the Travel and Tourism Advisory Board (TTAB) on which 
I serve should be empowered to make policy recommendations not only to 
the Department of Commerce but to the Departments of State and Homeland 
Security. This group of executives and travel industry experts that has 
been convened by the Commerce Department can be an important resource 
for the government on a number of levels. Increasing the profile of 
TTAB will help insure better tourism policy and better communication of 
that policy in the U.S. and around the world.

    Question 2. How can Congress or the Federal Government help support 
and promote tourism in rural areas of the United States?
    Answer. There isn't a state in the country that doesn't depend in 
part on tourism. The Travel Promotion Act specifically requires that 
all 50 states, rural states like New Hampshire and Nebraska alongside 
popular tourist destinations like Nevada and Florida, be promoted under 
that legislation. The passage of TPA would be an enormous help to the 
economies of rural states that aren't necessarily known primarily as 
tourism destinations, but have much to offer international travelers.

    Question 3. Do you support increased funding for state tourism 
offices through the Dept. of Commerce's Market Development Cooperator 
Program?
    Answer. Sabre supports increased Federal funding for state tourism 
offices. Tourism promotion facilitates interstate commerce and provides 
much needed stimulus to the national economy. Travelocity, a unit of 
Sabre Holdings, partners with many state and local tourism authorities 
throughout the country.
    State and local tourism offices are often funded through taxes on 
tourism. This often results in an unfair tax burden being shouldered by 
travelers, who not only pay for promotional activities, but for other 
state and local services. This model also means there is insufficient 
funding for promotional activities during economic downturns when 
travel promotion is needed most. This situation can lead to even 
greater pressures to apply new debilitating taxes, including increased 
hotel occupancy and rental car taxes, on the travel and tourism 
industry.
    A more sustainable source of funding, or even a contribution to 
this funding, from the Department of Commerce would help ease these 
burdens.

    Question 4. Several witnesses note that the public backlash against 
corporate travel and lavish conventions for bailed out Wall Street 
firms has actually discouraged many firms from traveling for even 
legitimate business reasons. How should public leaders and Congress 
respond to this situation?
    Answer. It should be noted, that while there were some 
extraordinary examples of corporations acting irresponsibly, the vast 
majority of corporations are incredibly disciplined with their travel 
spending. They recognize it as an essential element of conducting 
business--negotiating and closing business deals, networking with 
potential business partners, training for employees--to name a few.
    Unfortunately, those companies receiving government assistance 
today are reluctant to travel or hold meetings at all, impeding their 
ability to conduct business and thereby slowing economic recovery.
    Therefore, businesses receiving government assistance need guidance 
from the U.S. Government about what constitutes responsible spending 
when it comes to business travel. The U.S. Travel Association has come 
up with a set of guidelines to this end and I strongly encourage 
Treasury's endorsement and adoption of these rules which provide for 
responsible, accountable travel by these companies.
    Sabre's GetThere unit provides business travel automation and 
consulting services to TARP and non-TARP receiving companies alike, and 
we can be a very helpful partner with the government in educating the 
business community about responsible business travel practices. 
However, we need greater clarity on what the government expects of our 
customers. The U.S. Travel guidelines are the best way to give that 
clear guidance.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                               Jay Rasulo
    Question 1. My understanding is that many foreign governments have 
ministries of tourism or other high profile positions dedicated to 
promoting their countries as tourist destinations. In comparison, our 
Federal Government does much less to promote the United States as a 
tourist destination for foreign visitors. I would appreciate hearing 
the panel's views on whether establishing an Undersecretary for Tourism 
within the Department of Commerce would help the U.S. capture a greater 
share of international tourism. How else might the Federal Government 
elevate the profile and importance of tourism in order to attract more 
visitors to the U.S.?
    Answer. I certainly believe the U.S. Government should make it a 
priority to attract international travelers to the U.S., both because 
it benefits our Nation economically and because it promotes our public 
diplomacy efforts. We need a more user-friendly entry process that is 
both efficient and secure, and we need a nationally coordinated travel 
promotion effort, which most countries already have. A high-level focus 
on travel interests at the Federal level would allow us to achieve the 
goal of boosting overseas travel to the U.S.

    Question 2. How can Congress or the Federal Government help support 
and promote tourism in rural areas of the United States?
    Answer. The Travel Promotion Act is designed to promote tourism to 
rural areas and other regions not usually visited by overseas 
travelers, as well as to major American cities and popular vacation 
spots. At present, our Nation's rural destinations have no ability to 
promote themselves abroad, and so by passing the Travel Promotion Act, 
Congress would be taking a huge step forward in promoting and 
supporting tourism in our Nation's rural areas. In addition, I would 
suggest additional government funding for the National Scenic Byways 
Program, which would help draw more visitors to rural locations.

    Question 3. Do you support increased funding for state tourism 
offices through the Depart of Commerce's Market Development Cooperator 
Program?
    Answer. Given that the directive of the Market Development 
Cooperator Program is to support projects that enhance global 
competitiveness of U.S. service and manufacturing industries, I think 
Congress should make funding from this program available to state 
tourism offices.

    Question 4. Mr. Rasulo, I come from a border state and am sensitive 
to the need to ensure security and safety at our border crossings. Yet 
we certainly do not want the first impression of America for legitimate 
tourists to be a security screening that is so onerous that it 
discourages repeat visits to the U.S. I am impressed by the video 
Disney produced to help U.S. passport and customs control areas at 
airports appear more inviting. Are there any lessons learned from this 
effort that could apply to Canadian and Mexican border crossings where 
travelers arrive by car?
    Answer. Right now there is no coordinated effort by the U.S. 
Government to effectively communicate to prospective travelers the 
details of the many new security programs being developed and piloted 
in certain locations along our borders. And the end result is confusion 
among travelers from Mexico and Canada, many of whom perceive that they 
are not welcome here. The reason we partnered with the U.S. State 
Department to create the ``Welcome'' video is that we wanted to let 
travelers know that America does indeed want them to visit. Before 
visiting the U.S., travelers from Canada and Mexico can view the video 
at www.DiscoverAmerica.com, but I think the video should also be shown 
in waiting areas at land border crossings to help create a more 
welcoming environment. The increased use of signage and banners at land 
crossings could also help make the entry process more efficient and 
welcoming.
    I think the video exemplifies exactly why the government and 
private sector must be partners in any successful travel promotion 
program. Government and private sector officials each bring unique 
skill sets to the table. The private sector provides some of the 
world's greatest marketing expertise and is best positioned to design 
and execute communications campaigns and promotional efforts. Public 
officials can ensure that messages best represent the whole of the 
United States, accountability measures are met, and viewpoints of 
different Federal agencies are coordinated. We believe that S. 1023, 
the Travel Promotion Act, fits the right mold.

    Question 5. Several witnesses note that the public backlash against 
corporate travel and lavish conventions for bailed out Wall Street 
firms has actually discouraged many firms from traveling for even 
legitimate business reasons. How should public leaders and Congress 
respond to this situation?
    Answer. The public backlash against corporate travel has had 
serious unintended consequences on the travel industry and its workers. 
Companies and Federal agencies have been canceling business meetings 
because they think the media or lawmakers will single them out for 
public ridicule. I don't think it's wise or fair to punish the many for 
the errors of the few, and this backlash has certainly been a 
punishment to both the travel/tourism industry and American industry at 
large. Corporate travel is a necessity, and for government to restrict 
it, either overtly or through suggestion, simply impedes business from 
getting done. I also think it's unfair to blacklist certain convention-
travel markets like Las Vegas, New York or Hawaii simply because they 
are perceived to be more desirable destinations than others. Just 
because a convention is held in a more desirable location doesn't mean 
the participants aren't working hard. As an example, at Walt Disney 
World, many convention-goers never even get a chance to see our parks 
unless they stay extra days on their own dollar.
    The Walt Disney Company appreciates President Obama's commitment to 
a strong travel and tourism industry in the U.S., and the support of 
many Members of Congress for business travel. We urge public leaders 
and Congress to promote business meetings and events in their local 
communities as a cost-effective way to help stimulate recovery and 
growth. Additionally, I would encourage the government to support a 
model policy for responsible meetings and events, built on existing 
corporate best practices, to provide clarity on what is acceptable 
business travel.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                           Rossi Ralenkotter
    Question 1. I would appreciate hearing the panel's views on whether 
establishing an Undersecretary for Tourism within the Department of 
Commerce would help the U.S. capture a greater share of international 
tourism.
    Answer. We believe creating an Undersecretary position would 
increase the profile of travel and tourism and reinforce the commitment 
to the industry. The travel and tourism industry is a great stimulus to 
the national economy, providing jobs for 7.5 million Americans and 
generating $110 billion in tax revenue for local, state and national 
governments. An Undersecretary position would provide a platform to 
ensure the issues impacting the industry and its stimulus to the 
forefront.

    Question 1a. How else might the Federal Government elevate the 
profile and importance of tourism in order to attract more visitors to 
the U.S.?
    Answer. Passing the Travel Promotion Act would give the United 
States more opportunities to compete with other countries that are 
currently diluting our market share. In addition, it is important that 
the United States improve the entry process to make it more efficient 
and welcoming to international visitors. Research has indicated that 
overseas visitors enjoy the United States once they are in the country; 
however, the entry process causes a great deal of stress and may deter 
international visitors.

    Question 2. How can Congress or the Federal Government help support 
and promote tourism in rural areas of the United States?
    Answer. Creating grant opportunities will give rural destinations a 
greater opportunity to promote their travel and tourism amenities. This 
is another area that the approval of the Travel Promotion Act would 
provide assistance. Rural areas with limited promotion budgets could 
work with the Federal program to promote visitation to international 
visitors. Increased support of the National Scenic Byways program will 
also help assist rural areas to promote visitation.

    Question 3. Do you support increased funding for the state tourism 
offices through the Department of Commerce's Market Development 
Cooperator Program?
    Answer. The Market Development Cooperator Program provides 
increased ability for states to market travel and tourism and should 
continue to be supported by Congress. This will allow states to 
individually market their destinations to both domestic and 
international travelers and continue to support the travel and tourism 
industry.

    Question 4. Several witnesses note that the public backlash against 
corporate travel and lavish conventions for bailed out Wall Street 
firms has actually discouraged many firms from traveling for even 
legitimate business reasons. How should public leaders and Congress 
respond to this situation?
    Answer. It is important that all elected officials and other 
leaders understand the importance of the meetings industry and the 
economic stimulus and job creation that results from meetings. Those 
leaders need to refrain from making broad-sweeping comments that 
mischaracterize the industry and inhibit companies from committing 
resources and staff to business travel. In Las Vegas, the 22,000 
meetings and conventions we host each year provide 46,000 jobs and an 
$8.5 billion boost to the economy. When unemployment is at 10 percent 
and the economy needs a stimulus to growth, we need to support 
industries, such as meetings and conventions, which create jobs and 
stimulate the economy.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                              Chad Prosser
    Question 1. My understanding is that many foreign governments have 
ministries of tourism or other high profile positions dedicated to 
promoting their countries as tourist destinations. In comparison, our 
Federal Government does much less to promote the United States as a 
tourist destination for foreign visitors. I would appreciate hearing 
the panel's views on whether establishing an Undersecretary for Tourism 
within the Department of Commerce would help the U.S. capture a greater 
share of international tourism.
    Answer. The issue of whether or not to establish an Under Secretary 
for Tourism within the Department of Commerce is secondary to the 
overall importance of establishing an entity to market U.S. tourism in 
a coordinated manner as contained in the current version of the Travel 
Promotion Act. An Under Secretary, or similar high-level position 
within the U.S. Government, would benefit the tourism industry by 
giving the industry a voice within Federal Government that is 
commensurate with tourism's economic impact and global reach. I would 
ultimately encourage the Federal Government to create this high-level 
position for tourism. But this issue is not as urgent and critical as 
the need for a well-funded, coordinated marketing effort at the 
national level.

    Question 1a. How else might the Federal Government elevate the 
profile and importance of tourism in order to attract more visitors to 
the U.S.?
    Answer. Since 9/11, international visitors to the U.S. have been 
met with increasingly long lines at immigration checkpoints, and have 
been subject to more rigorous, often abrasive, interviews by 
immigration and security officials. While the events of 9/11 have 
necessitated the need for heightened security measures, changes in 
screening and security procedures over the last 8 years have had a 
noticeable negative impact on international tourism to the U.S.
    In addition to passing the Travel Promotion Act, it is also 
important that the United States communicate a welcome message to 
international visitors and implement security and screening procedures 
that will facilitate an easier entry process for these visitors.
    We must continue efforts to expand the Visa Waiver Program and to 
fully and effectively implement the improvements begun under the Model 
Ports of Entry Program to better facilitate international travel. In a 
global market for tourists, prospective visitors have a world of 
choices. Any progress to eliminate the friction involved when 
international visitors come to the United States will benefit our 
country in regaining market share in the global market.

    Question 2. How can Congress or the Federal Government help support 
and promote tourism in rural areas of the United States?
    Answer. Some of our most-treasured historical, cultural and natural 
assets can be found in our Nation's rural areas. However, many of these 
communities lack the resources to effectively promote these assets, 
particularly to the international market.
    Considering the fragmented nature of our current tourism market, it 
is especially difficult for rural destinations to establish a 
significant presence through their own marketing efforts. The Travel 
Promotion Act provides a mechanism to close the missing link and bring 
fragmented local, state and regional marketing campaigns into a 
coordinated program to better reach the international visitor. Doing so 
will provide greater exposure to many secondary destinations and 
attractions allowing them to benefit from the growing international 
tourism market.

    Question 3. Do you support increased funding for state tourism 
offices through the Department of Commerce's Market Development 
Cooperator Program?
    Answer. Increased funding for state tourism offices through the 
Dept. of Commerce's Market Development Cooperator Program would allow 
states to establish marketing programs for emerging feeder markets. 
China is a good example of a feeder market with vast undeveloped 
potential. Outbound visitation numbers from the Chinese market reached 
25 million in 2006, a 350 percent increase since 1997. This is 
particularly important as visitation from traditional international 
markets have shown signs of decline over the last few years.
    This year, Travel South, USA--a cooperative marketing organization 
comprised of 12 Southeastern states--has applied for a grant through 
the Market Development Cooperator Program to promote the Southeastern 
U.S. in mainland China. If this grant is awarded, it will allow many of 
these states, most of whom have seen significant budget reductions 
since last year, to maintain a presence in the Chinese market at a 
cost-effective rate.
    While this program creates opportunities for this type of regional 
promotion, increased funding will only produce significant results as a 
supplement to the Travel Promotion Act. While the MDCP generates 
greater opportunities for new marketing initiatives, it cannot create 
the type of sustainable program necessary for the U.S. to achieve 
significantly greater market share in the international tourism market.

    Question 4. Several witnesses note that the public backlash against 
corporate travel and lavish conventions for bailed out Wall Street 
firms has actually discouraged many firms from traveling for even 
legitimate business reasons. How should public leaders and Congress 
respond to this situation?
    Answer. In order to counter-act the recent public backlash against 
corporate travel, the public must be made aware of the benefits of 
corporate travel to cities, towns and communities across the U.S. 
Accounting for 15 percent of all domestic travel nationwide, corporate 
travel generates significant amounts of revenue for businesses in both 
traditional and non-traditional tourism destinations.
    However, this public backlash, in combination with our current 
recession, has had a devastating effect on corporate travel. For 
example, a significant portion of travel to South Carolina's major 
inland cities, Columbia and Greenville, is business-related. In the 
first half of 2009, following the public outcry against business 
travel, both cities have seen double digit decreases in hotel room 
occupancy and meeting space reservations. This translates to millions 
of dollars in lost business for these two cities over the last 6 
months.
    Given the difficult economic times that many of our cities 
currently face, it is important that Congress and other public leaders 
acknowledge the benefits of corporate travel to our Nation's business 
and industry hubs and the many businesses in those areas that heavily 
rely on corporate travel.
    Appropriate corporate meetings and incentive travel also benefits 
productivity and revenue growth for companies. In the current 
environment, corporations are canceling business travel that is 
completely justified by a business case. Absent the overreaction among 
the public and media, these companies would be traveling. We must 
encourage companies to travel when it makes sense for their business, 
their shareholders and their customers.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                          Judy Zehnder Keller
    Question 1. My understanding is that many foreign governments have 
ministries of tourism or other high profile positions dedicated to 
promoting their countries as tourist destinations. In comparison, our 
Federal Government does much less to promote the United States as a 
tourist destination for foreign visitors. I would appreciate hearing 
the panel's views on whether establishing an Undersecretary for Tourism 
within the Department of Commerce would help the U.S. capture a greater 
share of international tourism.
    Answer. Having an Undersecretary of Tourism in the Department of 
Commerce, while helpful, is not the primary activity needed to increase 
the U.S. marketshare of international tourism. America needs to do what 
most developed countries do to attract international visitors--it must 
market to them via advertising and public relations.

    Question 1a. How else might the Federal Government elevate the 
profile and importance of tourism in order to attract more visitors to 
the U.S.?
    Answer. The most important thing Congress can do is to pass the 
Tourism Promotion Act, which will provide the first significant tourism 
marketing budget in U.S. history. This funding will allow the U.S. to 
market itself to potential international visitors around the world.

    Question 2. How can Congress or the Federal Government help support 
and promote tourism in rural areas of the United States?
    Answer. In most states, promotion of both rural and urban tourism 
is intertwined, We do not need separate rural tourism promotion, just 
more promotion of tourism in general, both domestically and overseas.

    Question 3. Do you support increased funding for state tourism 
offices through the Department of Commerce's Market Development 
Cooperator Program?
    Answer. The states have historically funding state tourism 
promotion efforts. Federal dollars and activities should be focused on 
international tourism promotion, to attract more international visitors 
to the U.S.

    Question 4. Several witnesses note that the public backlash against 
corporate travel and lavish conventions for bailed out Well Street 
firms has actually discouraged many firms from traveling for even 
legitimate business reasons. How should public leaders and Congress 
respond to this situation?
    Answer. Congress should refrain from general anti-travel and anti-
meetings travel messaging. The issue of how companies should or should 
not use Federal bail out funds should not be allowed to be generalized 
to a ``all business meetings and travel is bad'' message.
                                 ______
                                 
                         Tourism, Arts and Heritage Cabinet
                                         Frankfort, KY, May 8, 2009
Dear Commerce Subcommittee:

    It is a pleasure to share with you some of the positive things that 
are happening in Kentucky. As the Secretary of the Kentucky Tourism, 
Arts and Heritage Cabinet, I have the privilege of seeing the hard work 
and determination of our tourism industry and how we all work together 
to overcome these tough times.
    I am delighted to report that tourism is alive and well in 
Kentucky. In fact, we are well positioned to take on the current 
economic situation. Research indicates that families will continue to 
travel but will be taking shorter trips to closer destinations. They 
are also seeking cost savings and packaged travel. This presents great 
opportunities for Kentucky because of its central location and great 
travel value for the dollar spent.
    Our recent focus on Adventure Tourism is aimed at drawing visitors 
with excitement and value. Kentucky's scenic landscape creates the 
perfect backdrop for hiking, biking, camping, and boating activities. 
This initiative encourages visitors to explore our rural regions, 
bringing dollars to the often underserved areas of the state.
    Last year, our state travel department initiated the Discover Your 
Own Backyard marketing campaign as a response to high fuel cost and 
flagging economy. First planned as a month-long event, this promotion 
garnered such a huge response that it was extended and continues this 
summer. Since the campaign began in May of 2008, the dedicated website 
has had 85,000 visitors from 56 nations and all 50 states.
    The Kentucky tourism industry also has much reason to be optimistic 
as we prepare to host the 2010 Alltech FEI World Equestrian Games at 
the Kentucky Horse Park. The Kentucky Experience, part of the village 
staged for the Games, will showcase Kentucky's culture, attractions, 
and locally produced products at the sixteen-day event. Spectators from 
across the globe are expected to travel throughout our Commonwealth 
during their visit, and we will be ready to show the world all the 
great attractions Kentucky has to offer!
    Again, I appreciate the opportunity to share our success with all 
of you.
            Sincerely,
                                          Marcheta Sparrow,
                                                         Secretary.
                                 ______
                                 
                            Wisconsin Department of Tourism
                                                       May 12, 2009
Hon. Mel Martinez,
U.S. Senate,
Washington, DC.

Dear Senator Martinez:

    On behalf of Wisconsin's tourism industry, let me be the first to 
offer my sincere appreciation for your support of the Nation's travel 
and hospitality industry and for holding a hearing this week to discuss 
the importance of tourism in our country today.
    Travel is critical to the Nation's economy. When measured against 
comparable industries, travel is the fifth largest employer in the 
nation--generating one out of every eight American jobs. Businesses 
across many sectors rely on tourism and that is definitely the case 
here in Wisconsin, where tourism is one of the state's top three 
industries. May I provide just a few statistics to plead our case?

   Tourism in Wisconsin generated over $13 billion in traveler 
        spending in 2008.

   Traveler spending in Wisconsin supports 310,330 jobs and 
        $7.3 billion in income for our residents. The travel industry 
        is the main employer in many communities and in other areas 
        serves to provide stability and diversity, complementing 
        manufacturing, agriculture and our knowledge-based sectors.

   While jobs disappeared in other industries and economic 
        sectors in 2008, that was not the case for tourism in 
        Wisconsin, showing the industry's resilience during challenging 
        economic times.

   Traveler spending also generated $1.5 billion in state 
        government revenues and $664 million in local government 
        revenues.

    These are just a few examples that demonstrate the power of travel 
and its impact on the economy here in our state.
    As we continue to work hard here to grow our state's tourism 
industry, efforts on the national level will go a long way to attract 
visitors to our country and inject vitality into our economy at a time 
when we need it most.
    Again, we very much appreciate the time and attention you've given 
us.
            Warm regards,
                                          Kelli A. Trumble,
                                                         Secretary.
                                 ______
                                 
                                              Travel Oregon
                                                       May 12, 2009
Hon. Amy Klobuchar,
U.S. Senate,
Washington, DC.

Hon. Mel Martinez,
U.S. Senate,
Washington, DC.

Dear Senator Martinez:

    On behalf of the Oregon Tourism Commission, dba Travel Oregon, I am 
writing to thank you for scheduling a hearing on May 13, 2009, to 
discuss the importance of tourism and travel in our country today. 
Thank you for your support of this industry. Travel and tourism are 
critical to both the Oregon and U.S. economies, providing good jobs for 
93,000 workers in Oregon. We will continue to work hard to grow the 
tourism industry in Oregon and appreciate your efforts to attract 
visitors to our country and to our state.
    Tourism is Vital Oregon's economy today and a key component of our 
economic health for tomorrow. Investments in marketing in Oregon have 
generated immediate economic stimulus: Expenditures from visitors have 
grown 29 percent since 2003 to $8.4 billion; tourism-related employment 
is up 9 percent to over 93,000 jobs; and state and local tax revenues 
generated by visitors are up 30 percent and exceed $320 million 
annually. Tourism is also a gateway industry, pointing visitors to a 
variety of agricultural products as well as our ever-increasing wine 
industry.
    A continued commitment to the tourism and hospitality industry will 
ensure that this powerful economic engine endures, running strong in 
support of Oregon and communities nationwide.
            Sincerely,
                                             Todd Davidson,
                                                               CEO.
                                 ______
                                 
                                    Delaware Tourism Office
                                          Dover, DE, April 24, 2009
U.S. Senate Commerce Committee,
U.S. Senate,
Washington, DC.

Dear Commerce Committee Members:

    It is with pleasure I write to you about Tourism in Delaware. 
Tourism is Delaware's fifth largest industry representing over $ 1.5 
billion in GDP to Delaware's economy--surpassing agriculture and the 
automotive sectors. We employ over 38,000 people in Delaware's tourism 
industry. In 2007 over 8 million visitors came to Delaware to enjoy all 
that our fine state has to offer.
    Even though our industry is feeling the effects of the economic 
downturn we are positioning the industry for the future with 
initiatives our current Push Button to Escape Campaign will run through 
the summer with wonderful opportunities and bargains for the traveler 
to experience in Delaware.
            Sincerely,
                                        Linda M. Parkowski,
                                               Director of Tourism.
                                 ______
                                 
                      Myrtle Beach Area Chamber of Commerce
                                     Myrtle Beach, SC, May 12, 2009
Hon. Amy Klobuchar,
Chairman,
Washington, DC.

Hon. Mel Martinez,
Ranking Member,
Washington, DC.

Dear Chairman Klobuchar and Senator Martinez:

    I am writing you on behalf of the Myrtle Beach Area Chamber of 
Commerce, an organization that serves as the primary tourism promoter 
for the Myrtle Beach area of South Carolina. We represent nearly 2,700 
members and 50,000+ employees, most of whom are tied directly or 
indirectly to the tourism industry. I ask that my letter be added to 
the record of discussion in the upcoming hearing ``Tourism in Troubled 
Times'' held by the U.S. Senate Commerce Subcommittee on 
Competitiveness. Innovation and Export Promotion.
    Tourism is one of America's largest industries, generating an 
economic impact of $700+ Billion, taxes of $100+ Billion, and nearly 8 
million jobs. In Myrtle Beach, SC and the surrounding communities, 
tourism is our economic engine. It accounts for nearly 2/3 of our 
workforce and a large portion of our local economy. Tourism feeds other 
industries, including transportation, healthcare and real estate/
development.
    Tourism also delivers many unseen benefits that often go unnoticed. 
Tourism revenues and the taxes collected upon tourism revenues pay for 
education, law enforcement, infrastructure and other important public 
services. In the City of Myrtle Beach, nearly 90 percent of the city's 
operating budget is derived from tourism taxes and business taxes, 
affording the local residents a high level of service at a relatively 
low cost.
    While our Nation faces serious economic challenges, recent surveys 
reveal that most Americans will continue to travel. In fact, for many 
Americans, the summer vacation is almost a birthright. Travelers in 
2009 may reduce the number of trips, the length of stay and/or the 
amount of discretionary expenditures, but they will continue to travel 
where possible. Tourism is one industry that will never be exported. 
Rather, tourism offers unique growth opportunities that can create jobs 
and spur economic recovery almost immediately.
    One serious problem we have recently encountered in our industry is 
the tendency of companies and associations to cancel meetings and group 
events for fear of a backlash about travel budgets. It is unfortunate 
that a few misguided corporations did not pay more attention to where 
they were spending their money, as the criticism over conventions, 
meetings and other group travel activities has negatively impacted 
travel and tourism. Often, these trips educate employees, spur 
productivity and help foster economic expansion.
    A second problem we clearly recognize is the status of the Nation's 
infrastructure. For Americans to travel freely and efficiently, we must 
invest in our infrastructure. In Myrtle Beach, the expansion of our 
airport, expansion of the convention center and the completion of 
Interstate 73 will help to sustain the level of growth we have 
targeted. Without sufficient investment in our infrastructure, our 
tourism industry will struggle to maintain market share.
    This is an ideal time to travel to Myrtle Beach, South Carolina. 
Today, we offer unprecedented values and bargains. Competition has 
increased but the level of business activity has declined somewhat, 
making it an increasingly competitive environment. This situation 
benefits the consumer, as there has never been a more opportune time to 
enjoy a Myrtle Beach vacation. In addition to 60 miles of gorgeous 
sandy beaches, we offer 100-plus championship golf courses; 1700-plus 
restaurants and six live entertainment venues. In addition to being 
value-oriented, we truly offer a diverse vacation experience that will 
be fun and very memorable for the entire family.
    While it is true that our Nation faces serious economic challenges, 
tourism can be part of the Nation's budget solution, not part of the 
budget problem. Few industries can deliver the quick economic impact 
that tourism can deliver. Now is the time to invest in tourism, one of 
our Nation's most important industries.
    I thank you for scheduling this hearing and applaud you for taking 
the initiative to invite public comment on this most important topic. 
Tourism is a key industry and your leadership in protecting this 
industry is essential.
    With great admiration, I am,
            Sincerely,
                                                 Brad Dean,
                                                 President and CEO.
                                 ______
                                 
            Hilton Head Island-Bluffton Chamber of Commerce
                                                       May 13, 2009
Hon. Amy Klobuchar,
Chairman,
Senate Committee on Commerce,
Subcommittee on Competitiveness, Innovation, and Export Promotion
Washington, DC 20510

Hon. Mel Martinez,
Ranking Member,
Senate Committee on Commerce,
Subcommittee on Competitiveness, Innovation, and Export Promotion,
Washington, DC.

Dear Chairman Klobuchar and Ranking Member Martinez:

    The Hilton Head Island-Bluffton region is the third largest travel 
and tourism destination in the state, garnering over 2.1 million 
visitors that generate an estimated $1.5 billion in economic impact.
    Over twenty thousand jobs in our region, and thousands of small 
businesses depend on the travel and tourism industry and its vitality 
for their livelihood. Every business in the region, from real estate 
and construction to retail and restaurants is tied to the tourism 
economy that brings $16 million in economic impact as the engine that 
drives the South Carolina economy.
    Just as it is for the state of South Carolina, the lifeblood of our 
economy is tourism and our industry continues to suffer significantly 
due to the current economic downturn. We have experienced a 10 percent 
reduction in lodging occupancy since January 2009, as well as, a 
significant decline in lodging rates.
    We've looked toward new marketing approaches and initiatives to 
meet the market where it is. The Town utilized a small portion of its 
disaster recovery funds for this purpose publicly stating regarding the 
economy and tourism: ``if this isn't a disaster, we don't know what 
is.''
    The business community has rallied around the Chamber's subsequent 
drive-market campaign. It has helped us lessen the loss and mitigate 
potentially stronger economic damage in leisure and family travel where 
we are down, but not yet out.
    Where we are experiencing the most critical level of loss is in 
business and group travel, which impacts not just large resorts and 
hotels, but the tour companies, restaurants and retailers that serve 
them, and in some cases, shutting the doors of businesses that have 
been part of the fabric of our destination for decades.
    A survey this month of Hilton Head Island convention properties 
shows a loss of over 10,000 room nights and $2.4 million in lost 
revenue from corporations and groups that have canceled their bookings. 
These cancellations will effect this industry, not just for today, but 
long-term through 2012.
    This loss is not just about revenue and occupancy, it's about 
lives, jobs and the security of those in our community to provide for 
their families and their future. From Earl ``Happy'' Mitchell, a 41+ 
year veteran of the Sea Pines Resort to Patricia Owen, owner of Faces 
DaySpa and a U.S. Chamber national Blue-Ribbon Award-winning business, 
these are hard-working Individuals earning a living in an industry near 
and dear to them and to our economy at the local, state and national 
level.
    These are just a few of the hard working individuals who deserve 
the full support of their Federal Government in viewing travel and 
tourism for what it is: one of the Nation's top economic producers and 
a critical part of the health and vitality of our Nation's economy.
            Sincerely,
                                William G. Miles, IOM, CCE,
                                                 President and CEO.
                                 ______
                                 
                                         City of Charleston
                                       Charleston, SC, May 12, 2009
Hon. Amy Klobuchar,
Chairman,

Hon. Mel Martinez,
Ranking Member,
U. S. Committee on Commerce, Science, and Transportation,
Subcommittee on Competitiveness, Innovation, and Export Production,

Dear Senators Klobuchar and Martinez:

    I so much appreciate the opportunity to be able to submit comments 
to you for the Senate Committee on Commerce, Science, and 
Transportation subcommittee hearing on Tourism in Troubled Times.
    Charleston is certainly a fortunate city when it comes to the 
beauty that the city was given by our creator, but also by our 
forbearers who built one of the world's most beautiful cities. 
Consequently, tourism has become the major driver of our economy and 
provided opportunities for economic prosperity for a wide range of our 
citizens. While our Nation's economic situation has certainly had an 
impact on our tourism economy, Charleston has weathered the economic 
downturn better than some of the other East Coast destinations. We are 
optimistic that Charleston's position as one of the Nation's premiere 
visitor destinations will keep tourist coming to our city.
    Through March of this year the number of hotel rooms sold in the 
peninsula of Charleston, or the historic downtown, was down only about 
three and one-half percent. Hotels are offering packages and more 
attractive rates in order to encourage people to make the decision to 
visit. We are trying to work and market our city smarter so that 
Charleston stays at the top of destinations list when they make the 
decision to travel. This summer we are concentrating our marketing 
efforts on the drive market; that is, people living within a four to 6 
hour drive of Charleston and are launching a marketing campaign to 
encourage family vacations this summer. We have seen some positive 
results from our marketing campaigns as our arts, culture, sporting 
events and culinary festivals have all seen good attendance numbers 
only off slightly from previous years.
    Despite tourism numbers only down a small amount from previous 
years, our tourism economy has been affected by the economic downturn. 
There are two major areas of concern. First is the fact that tourism 
offers many people their first jobs, which lead them to careers in 
tourism and hospitality or to careers in other fields. We have seen 
that of those people affected by the downturn, it is these entry level 
positions that have been most drastically affected. Likewise, tourism 
in Charleston is primarily a small to medium-size enterprise. While 
there are some major players in Charleston, it is the small businesses 
that primarily benefit from our tourism economy, and it is the small 
businesses that have been most severely affected by the economic 
downturn. It is the restaurateur, the bed and breakfast, the small 
hotel, the small retail shop and tour guide operator who have taken the 
brunt of this recession.
    I thank you again for the opportunity to submit this letter to you 
about the state of tourism in Charleston and welcome any future 
opportunities to share what lessons we have learned here with the U.S. 
Senate.
            Most sincerely yours,
                                      Joseph P. Riley, Jr.,
                                         Mayor, City of Charleston.

                                  
