[Senate Hearing 112-329]
[From the U.S. Government Publishing Office]
S. Hrg. 112-329
TOURISM IN AMERICA:
MOVING OUR ECONOMY FORWARD
=======================================================================
HEARING
before the
SUBCOMMITTEE ON COMPETITIVENESS, INNOVATION, AND EXPORT PROMOTION
of the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
NOVEMBER 17, 2011
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii KAY BAILEY HUTCHISON, Texas,
JOHN F. KERRY, Massachusetts Ranking
BARBARA BOXER, California OLYMPIA J. SNOWE, Maine
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 ROY BLUNT, Missouri
AMY KLOBUCHAR, Minnesota JOHN BOOZMAN, Arkansas
TOM UDALL, New Mexico PATRICK J. TOOMEY, Pennsylvania
MARK WARNER, Virginia MARCO RUBIO, Florida
MARK BEGICH, Alaska KELLY AYOTTE, New Hampshire
DEAN HELLER, Nevada
Ellen L. Doneski, Staff Director
James Reid, Deputy Staff Director
Bruce H. Andrews, General Counsel
Todd Bertoson, Republican Staff Director
Jarrod Thompson, Republican Deputy Staff Director
Rebecca Seidel, Republican General Counsel and Chief Investigator
------
SUBCOMMITTEE ON COMPETITIVENESS, INNOVATION, AND EXPORT PROMOTION
AMY KLOBUCHAR, Minnesota, Chairman ROY BLUNT, Missouri, Ranking
JOHN F. KERRY, Massachusetts JIM DeMINT, South Carolina
MARIA CANTWELL, Washington JOHN THUNE, South Dakota
MARK PRYOR, Arkansas JOHN BOOZMAN, Arkansas
TOM UDALL, New Mexico KELLY AYOTTE, New Hampshire
MARK WARNER, Virginia DEAN HELLER, Nevada
MARK BEGICH, Alaska
C O N T E N T S
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Page
Hearing held on November 17, 2011................................ 1
Statement of Senator Klobuchar................................... 1
Statement of Senator Blunt....................................... 3
Statement of Senator Begich...................................... 4
Statement of Senator Heller...................................... 5
Prepared statement........................................... 5
Statement of Senator Rockefeller................................. 14
Prepared statement........................................... 15
Statement of Senator Thune....................................... 25
Witnesses
Ken Hyatt, Deputy Assistant Secretary for Services, U.S.
Department of Commerce......................................... 7
Prepared statement........................................... 8
David T. Donahue, Deputy Assistant Secretary for Visa Services,
U.S. Department of State....................................... 10
Prepared statement........................................... 11
James P. Evans, Chief Executive Officer, Brand USA............... 28
Prepared statement........................................... 29
John F. Edman, Director, Explore Minnesota Tourism............... 31
Prepared statement........................................... 33
Jonathan Zuk, President, Amadeo Travel Solutions/Vice Chairman,
Receptive Services Association of America...................... 34
Prepared statement........................................... 36
Jonathan Tisch, Chairman and Chief Executive Officer, Loews
Hotels and Chairman Emeritus, U.S. Travel Association.......... 38
Prepared statement........................................... 40
Appendix
Hon. Tom Udall, U.S. Senator from New Mexico, prepared statement. 51
Starwood Hotels & Resorts Worldwide, Inc., prepared statement.... 51
National Retail Federation, prepared statement................... 53
United States Tour Operator Association, prepared statement...... 55
Response to written questions submitted by Hon. Tom Udall to:
James P. Evans............................................... 56
John F. Edman................................................ 57
Jonathan Zuk................................................. 57
Jonathan Tisch............................................... 58
TOURISM IN AMERICA:
MOVING OUR ECONOMY FORWARD
----------
THURSDAY, NOVEMBER 17, 2011
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 2:34 p.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. Good afternoon. We'll call this hearing
to order.
I want to thank all the witnesses that are here from all
over the country for this important discussion about tourism
and the impact on our economy.
Coming from Minnesota, tourism is the fifth largest
industry in our state. Tourism is about so much more, as we all
know, than hospitality. It's about jobs. I'm reminded of this
every day.
When I'm in my state, I always ask people how much do they
think that visiting fishermen spend on bait and worms in our
state. I bet you don't know, Senator Blunt, every year how much
they spend on worms.
Senator Blunt. I was just hoping they got a lot of their
tackle from Bass Pro in Springfield, Missouri.
[Laughter.]
Senator Klobuchar. No, but they spend $50 million a year on
worms, just to give you a sense of what tourism means in terms
of economic activity in our state. I think we all know that
tourism is an industry where the jobs are right here in
America.
That's why Senator Blunt and I called this hearing today
because we believe there are things we can do to build on the
already strong numbers in the tourism sector and to make sure
that we strengthen the industry even more. There are a lot of
good ideas out there and we want to discuss a few common sense
solutions, simple fixes that can expand our country's tourism
sector at no cost to taxpayers.
We've always had a very bipartisan approach to this
Subcommittee and we'll continue to do that, and that's how
we're producing some results.
One of the things we focused on is international tourism.
Every international foreign visitor to our country spends an
average of $4,000.
Sadly, since 9/11, we've lost 16 percent of the
international tourism business. Every point that we lost was
about 160,000 jobs. Just last year, we've seen some great
improvements which we're excited about and we want that trend
to continue.
One of the things that we've focused on is the visa wait
times. Senator Blunt and I introduced a bill to help with that
and we worked with the State Department on the language to get
that done.
Just to give you a sense, for a person in Rio de Janeiro,
Brazil, it takes 90 days to get an interview for a visa.
If that same tourist wants to go to the United Kingdom, the
entire visa application process takes an average of 12 days. So
when you look at those numbers if you're someone who's planning
a trip with your family to the United States and you want to go
to see the Golden Arches in St. Louis, right--what?
Senator Blunt. Not exactly the Golden Arches.
Senator Klobuchar. What are they called again?
[Laughter.]
Senator Blunt. I'll take the Happy Meal.
Senator Klobuchar. The Arch. OK. Well, it's like golden.
Oh, that would be McDonald's.
Senator Blunt. Yes. That's the Happy Meal.
[Laughter.]
Senator Klobuchar. OK. If you want to see the Arch. I was
trying to make it sound even--OK, just stop it. If you want to
see Mount McKinley in Alaska that would be correct.
Senator Blunt. Mount Denali, yes.
[Laughter.]
Senator Blunt. I'm just harassing her.
Senator Klobuchar. If you want to see the bright lights of
Las Vegas that would be correct, you would be--have to choose
between a very long wait of 90 days or if you want to simply go
to London it takes only 12 days.
And so that's why we are so focused on this idea of
improving the wait times. We've been working with the State
Department and I know they have someone here today so we're
going to be hearing from them.
We also would like to do more things to make it easier to
get those visas done. The bill that we have gives the State
Department an economic incentive for increasing the efficiency.
It allows the Secretary of State to grant a waiver of up to
an additional 3 years, 4 years total, so that foreign tourists
can renew their visas without having to jump through the hoops
of another in-person interview and it would increase
accountability at the State Department, requiring the agency to
provide reports on its use of data from the Commerce
Department.
That way we know the agency is actually looking at the
numbers and thinking about the economic impact of its policies
on tourism and our economy.
Another way to cut back on visa wait times would be to hire
more temporary consular officers. We know that the State
Department is doing that. We also know, are conscious of the
government budget right now, that they're actually a profit
center, not a cost center. Because of the visa fees, they
actually make money for the government.
I also think it's worth considering changes to the visa
waiver program which allows citizens from certain countries to
visit the U.S. without a visa. Those are just a few of the
ideas that you're going to see, some of them in our
legislation, some of them discussed today.
But we're truly excited to have this hearing. I see tourism
as the major export of our country. We have to start viewing it
that way. We know people love to take trips but it's more than
that. It's really about a competitive agenda for this country
where we are supplying the jobs, where we have people visiting
our country instead of our people visiting others.
We like when they visit other countries but the point of it
is there is a lot to gain here with jobs.
I turn it over to my Ranking Member, Senator Blunt.
STATEMENT OF HON. ROY BLUNT,
U.S. SENATOR FROM MISSOURI
Senator Blunt. Well, thank you, Chairman, and Chairman
Klobuchar is a great advocate for these issues and great to
work with, and I am pleased to be able to be doing so many
things with her in this area.
You know, the United States has a lot to offer as a place
to come and we have a lot to see and a lot to do and we need to
take even greater advantage of that. A million jobs, just to
meet the needs of foreign travelers alone. This is a place
where people like to come. They stay longer. They buy more.
Foreign travelers are good for us and at the end of the day
they like us a lot better. And so many of you have heard me say
over and over again this has an international component to it
that's well beyond the economic component but the economic
component is pretty good.
I see Jim Evans here who is heading the newly named Brand
USA, formerly referred to as the Corporation for Travel
Promotion. But Jim is here and is going to be talking about
what they're doing with this new concept where we encourage
travelers and hopefully get back to where we were before 9/11
in terms of our percentage of foreign travelers and then exceed
that number.
We use a lot of different numbers in Washington. The number
somebody gave me the other day was 36. Thirty-six foreign
travelers equal one full-time U.S. job, and both in trade and
travel are the real opportunities, I think, for us to grow jobs
and to grow them in the quickest possible segments if we'll
just do what we need to do there.
We're pleased to have Mr. Donahue with us from the State
Department. We're talking about the delays that the Chairman
has already mentioned and what we can do about those delays.
I was in Beijing earlier this year meeting with people at
the embassy who were dealing with those long lines of people
and came back with a couple of ideas that we've been able to
talk with our friends at State about and they well aware of the
kinds of things we could do.
And so Senator Klobuchar and Mr. Donahue and Mr.--others in
the State Department and I and our staffs have been working
closely together and are going to be working hard to get
legislation passed that allows us to meet the needs of foreign
travelers in a better way.
Mr. Hyatt from Commerce well knows the importance of
foreign travel to our economy and we look forward to his
comments. The Chairman sometimes says that this is not just the
low--the travel's not just--foreign travel is not just the low-
hanging fruit, it's the fruit that we've already let drop to
the ground, and we need to be sure that we're doing a better
job getting people at the moment they're thinking about where
they want to go and being sure they're thinking about coming to
the United States and then doing what we need to to make that a
doable thing that doesn't send them in some other direction
because of the frustration and difficulties that they face if
we can do things about that.
This is an important opportunity. It's an important time
and we're glad that all of the members of both panels are here
and I look forward to--what you have to say and asking some
questions, and again, Chairman, thanks for working with me and
for leading here and putting this hearing together.
Senator Klobuchar. Thank you very much, Senator Blunt.
We have Senator Begich here. I don't know if you want to
say a few words from the beautiful state of Alaska that has
many Minnesotans there. It looks like Minnesota except it has
mountains. And I would also like to note one of the----
Senator Begich. It's 39 below zero.
Senator Klobuchar. Yes, OK. One of the founding--one of the
founding Chairs of our Tourism Caucus, Senator Begich.
STATEMENT OF HON. MARK BEGICH,
U.S. SENATOR FROM ALASKA
Senator Begich. Thank you very much, Madam Chair, and thank
you for the great panels that are--not only the first one but
the second one also. I'm going to be anxious to hear the
conversation how we increase foreign travel. In Alaska, it's 15
percent of our market is foreign travel and we see the huge
economic bang out of it every time a foreign traveler hits our
soils.
For Alaska, it's a $2 billion industry with about 40,000
people employed in it in this last year and I can tell you it's
not only from a broader public policy perspective but a family
that's in the tourism business. We see it from a variety of
ends and we saw 2011 slow growth but growth, which was a good
sign.
I think nationally almost 100,000 jobs this last year in
2011 were added in the tourism industry, which is a good thing.
But the other piece--I'll just end on this and look forward
to the questions and answer period--and that is to me the
tourism industry, especially with our foreign travelers, is not
just about the economic opportunity. People in the tourism
industry are really our ambassadors to the world.
When those foreign travelers hit the soil, they're going to
be at a hotel. They're going to be at restaurant. They're going
to be coming through the airport.
How we treat them, how we work with them, how we give them
an experience that's exciting and rewarding that they want to
come back is powerful for us but also when they go back to
their home country it is a message that they're going to take
back that America, United States, is a great place to visit and
has incredible opportunity.
So thank you, Madam Chair, for putting this hearing
together and I look forward to the conversation and I'm looking
forward especially to this panel on how we increase visa
capacity, and to the second panel some of the questions I'll
have is around what kind of infrastructure are we going to
need, what do we need to support this incredibly growing
industry that really is economic but also international for us.
Senator Klobuchar. Senator Heller?
STATEMENT OF HON. DEAN HELLER,
U.S. SENATOR FROM NEVADA
Senator Heller. Thank you. I have a opening statement that
I'd just like to submit for the record just for a matter of
time.
Senator Klobuchar. It will be submitted. Thank you.
[The prepared statement of Senator Heller follows:]
Prepared Statement of Hon. Dean Heller, U.S. Senator from Nevada
I want to thank my colleagues for holding this important hearing
today which highlights an issue I fight for every day: JOBS. In Nevada,
having a strong tourism industry means more jobs in my state. Las
Vegas, Lake Tahoe and Reno have long been a favorite recreation
destination for millions of visitors both domestically and more
increasingly internationally. The entire Southern Nevada economy is
heavily dependent on the hotel, gaming and convention industry, which
employs over one-quarter of the region's labor force. Plain and simple,
tourism is the lifeblood for businesses and job creation in Nevada.
The viability of the economy in Nevada is dependent upon the volume
of visitors to our state. Last year 37 million visitors came to Las
Vegas alone. With one quarter to go, an estimated 29.5 million people
have visited in 2011, 4.7 percent ahead of the 2010 pace. A large
volume of visitors come because Las Vegas continues its reign as the
number one trade show destination in North America. Las Vegas hosts
thousands in meetings and conventions annually and generates billions
in revenue. Contrary to what some may say, Las Vegas is the preeminent
location for businesses and trade associations to hold their
conventions and shows.
Also important is the fact that foreign travelers are a growing
segment of visitors to Nevada and Las Vegas. In 2006, 13 percent of
travelers were from outside the United States. In 2010 that number has
risen to 18 percent. I appreciate Chairwoman Klobuchar and Ranking
Member Blunt working with me on legislation that would update and
improve the visa application process overseas, especially in China and
Brazil. This effort will help bring more visitors to the United States
and create new employment opportunities immediately.
Right now Nevada leads the Nation in unemployment at 13.4 percent.
It is my hope that we can continue our bipartisan efforts and push for
new initiatives that spur growth in the tourism industry. Fostering
more domestic and international tourism is not a Democrat or Republican
issue, it is an American issue. Thank you Chairwoman Klobuchar and I
look forward to hearing from our witnesses today.
Senator Heller. And if I may also just make a couple of
quick--I'm still trying to get my arms around this $15 million
in worms. If we're----
Senator Klobuchar. That would be $50 million.
Senator Heller. Fifty?
Senator Klobuchar. Well, you have to include bait too,
actually.
Senator Heller. All right. All right.
Some facts, as we talked about facts here, in Las Vegas,
you know, we take in almost $9 billion in gross gaming revenue
every year and the average visitor gambles when they come to
Las Vegas about 3 hours a day, and 80 percent of the visitors
say that when they--that they gambled during their stay.
And, obviously, things changed after 9/11. But it does
appear that there's some improvement. I'm just looking at some
of the recent statistics that southern Nevada tourism has
continued a steady climb. In their--Las Vegas Convention
Visitor Authority announced a 5.5 percent increase in
visitation over September.
So we are making some improvements. Things are moving in
the right direction. Number of passengers getting off the plane
in Las Vegas at the McCarran Airport was up 8.2 percent and
that's good news. The bad news is that the number of cars used
on major highways was down 2.2 percent. That's not your
problem. I'm trying to get more people to get off of planes.
So anyway, we're making movement in the right direction
but, clearly, visitations--I don't have to tell anybody in this
hearing today how important, critically important, tourism is
for the state of Nevada, not just in southern Nevada but also
Reno, Lake Tahoe and some of those areas.
So I just appreciate the Chairman and the Ranking Member
working together on this kind of legislation that's going to be
beneficial not only for the state of Nevada but for the country
as a whole. So thanks for allowing me to be part of it.
Senator Klobuchar. Well, very good. Thank you, and I should
also note Senator Heller is a member of the Tourism Caucus as
well and of this Subcommittee. So thank you very much.
I know that Senator Rockefeller is going to stop by but I
think we'll get started with our witnesses. I'm going to
introduce both of you and they both represent two of the
departments tasked with increasing international tourism still
keeping in mind, of course, the importance of national
security.
Ken Hyatt is the Deputy Assistant Secretary for Services at
the Department of Commerce where he directs the Department's
efforts to enhance the competitiveness of the U.S. services
industries including travel and tourism.
Mr. David Donahue is the Deputy Assistant Secretary for
Visa Services at the Department of State. Mr. Donahue has been
with the State Department for quite some time. He has been on
the front lines as a consular officer in various postings
around the world and is intimately familiar with the challenges
faced by our consular officers overseas.
I would also note that I used the statistic in Brazil but
I'm sure as you'll share with us we have seen some
improvements, especially during the past year in the visa wait
times, particularly in China, and we'd like that trend to
continue and we really thank you for the efforts, about your
effort and Mr. Tom Nides' from the State Department.
I think we'll start with Mr. Hyatt. Thank you.
STATEMENT OF KEN HYATT, DEPUTY ASSISTANT SECRETARY FOR
SERVICES, U.S. DEPARTMENT OF COMMERCE
Mr. Hyatt. Thank you.
Chairwoman Klobuchar, Ranking Member Blunt, distinguished
members of the Subcommittee, thank you for giving me the
opportunity to testify about the importance of travel and
tourism to the U.S. economy and the progress the Commerce
Department is making in implementing the Travel Promotion Act.
The Obama Administration is keenly aware of the critical
importance of travel and tourism to our economy and creating
jobs. Because the infrastructure is already in place, an
increase in travel and tourism exports can lead to additional
jobs more quickly than in many other industries.
In the United States, travel and tourism was a $1.1
trillion sector of the economy in 2010, supporting more than
7.5 million American jobs. We estimate that every additional 65
international visitors to the United States generate enough
travel and tourism exports to support one additional travel-
and tourism-related job. In 2016, we forecast 22 million more
international visitors to the United States than in 2010.
Yet, while the United States is the undisputed global
leader in revenues generated by travel and tourism exports in
absolute terms, our share of the world market has declined from
17.3 percent to 11.2 percent in the last decade.
Therefore, we were encouraged by the passage of the Travel
Promotion Act which received broad bipartisan support and was
signed into law by President Obama last year.
We were encouraged because, unlike our competitors, the
United States has not had an official brand campaign to promote
travel and tourism to our country. The Corporation for Travel
Promotion established by the Act provides a key opportunity to
promote international travel and tourism to the United States
and increase its contribution to our economy.
It will also enable us to compete at a level with the well-
funded and aggressive work carried out by our competitors to
attract international travelers to their countries.
I'm pleased to report that just this month the corporation,
which will be doing business as Brand USA, unveiled its brand
strategy to an international audience at the World Travel
Market in London. This is an important step in the effort to
recapture the lost U.S. share of the global travel market.
As called for in the legislation, Commerce is actively
working with the corporation to attract more international
visitation to the United States but our work under the Act is
not limited to working with the corporation.
As provided in the Act, the Department of Commerce, through
its International Trade Administration, is closely
collaborating with the Departments of State and Homeland
Security to improve the experience of travelers entering the
United States.
The Department is also working with State, DHS and the
White House to identify and more effectively communicate the
progress the Administration is making to address the concerns
of the private sector.
We're working with the Secretary's private-sector Travel
and Tourism Advisory Board to understand industry concerns and
with our interagency partners to develop a culture of
interagency collaboration and continual improvement. The
Department looks forward to continuing our work to achieve the
goals of the Travel Promotion Act.
We will continue to coordinate through the Tourism Policy
Council and with the White House to improve the U.S. entry
process and to communicate U.S. travel requirements more
effectively. This work is a top priority for the Administration
and through the Tourism Policy Council we will ensure it
receives Cabinet-level attention.
The potential of the Act to create new opportunities for
U.S. travel and tourism exports is critical in supporting the
President's National Export Initiative and achieving the
President's job-creation objectives. This is an exciting time
for the United States to engage in the global marketplace.
With the tools provided by the TPA, the United States is
better able to proactively compete for international visitors.
After all, more international visitors means more people eating
in our restaurants, staying in our hotels, visiting our
attractions, shopping in our malls and learning about our
extraordinary culture and values.
Chairwoman Klobuchar, Ranking Member Blunt, distinguished
members of the Subcommittee, thank you again for inviting me to
testify. I'll be happy to answer any questions you have.
Senator Rockefeller?
[Laughter.]
[The prepared statement of Mr. Hyatt follows:]
Prepared Statement of Ken Hyatt, Deputy Assistant Secretary for
Services, U.S. Department of Commerce
``Travel and Tourism Export Successes: Implementation of the Travel
Promotion Act of 2009''
Chairwoman Klobuchar, Ranking Member Blunt, and distinguished
members of the Subcommittee, thank you for giving me the opportunity to
testify about the importance of travel and tourism to the U.S. economy
and the progress the Department of Commerce is making in implementing
the Travel Promotion Act of 2009.
I am Ken Hyatt, Deputy Assistant Secretary for Services at the
Department of Commerce's International Trade Administration. The news
regarding travel and tourism is good. I am honored to be here to share
this information with you.
Importance of Travel and Tourism to the U.S. Economy
The Obama Administration, and specifically the Department of
Commerce, is keenly aware of the critical importance of travel and
tourism to the U.S. economy and to job creation in our country. Travel
and tourism jobs are found throughout the economy and across the
country, from hotels and restaurants, to rental car companies and tour
operators. Because the infrastructure is already in place, an increase
in travel and tourism exports can lead to additional jobs more quickly
than it does in many other industries. Accordingly, travel and tourism
is a priority sector under the President's National Export Initiative
and plays a critical role in the Department's export promotion
strategy.
In the United States, travel and tourism was a $1.1 trillion sector
of the economy in 2010, supporting more than 7.5 million American jobs.
A record-breaking 60 million international visitors arrived in the
United States in 2010, a 17 percent increase over the number of
visitors in 2000. These international travelers spent more than $134
billion during their visits, a 12 percent increase from 2009.
Expenditures by international travelers are U.S. exports. We
estimate that every additional 65 international visitors to the United
States generate enough travel and tourism exports to support one
additional travel and tourism-related job. In 2016, we expect 22
million more international visitors than this year. We estimate that
these additional visitors will spend tens of billions of dollars,
supporting hundreds of thousands of jobs. In 2010, the United States
had a surplus of nearly $32 billion in travel and tourism receipts, an
increase of 50 percent over the 2009 surplus.
These figures clearly underscore the importance of travel and
tourism to strengthening the U.S. economy. In addition, travel and
tourism is a key vehicle/opportunity to showcase the United States--its
culture, its values, its beauty--to the rest of the world. However,
while the United States is, in absolute terms, the undisputed global
leader in revenues generated by travel and tourism exports, our share
of the world market has declined from 17.3 percent to 11.2 percent in
the last decade.
Implementation of the Travel Promotion Act
Therefore, we were encouraged by the passage of the Travel
Promotion Act (TPA), which received broad bipartisan support and was
signed into law by President Obama on March 4, 2010. We were encouraged
because unlike our competitors, the United States has not had an
official brand campaign to promote travel and tourism to our country.
The Corporation for Travel Promotion (CTP) established by the TPA
provides a key opportunity to promote international travel and tourism
to the United States and increase its contribution to our economy, at a
level that will enable us to compete with the well-funded and
aggressive work carried out by our competitors to attract international
travelers to their countries.
I am pleased to report that just this month, the CTP unveiled its
brand strategy to an international audience at the World Travel Market
in London. This is an important step in the effort to recapture the
lost U.S. share of the global travel market.
DOC Support for the TPA and Corporation for Travel Promotion
The Travel Promotion Act calls for the Department of Commerce to
serve as the liaison to the CTP and outlines the responsibilities of
the Department in this area. I am pleased to report to you and the
Committee that the Department of Commerce has actively supported the
implementation of the TPA and continues to work with the CTP to ensure
that the objectives of the Act can be met.
To date, Commerce has:
Appointed the initial CTP Board of Directors and re-
appointed three Board members whose term expired in September
for a second term;
Approved the CTP's FY2011 objectives, and Commerce is
currently working with the CTP as the CTP revises and resubmits
the FY2012 objectives for approval by the Secretary of
Commerce, in consultation with the Secretaries of State and
Homeland Security;
Worked with the CTP to develop guidelines, benchmarks, and
standard operating procedures for the ``in-kind'' matching
contributions, which the act establishes as a precondition for
receiving Federal funds in FY 2012-2015;
Worked closely with the CTP and the Treasury Department to
put in place administrative processes to facilitate the
disbursement of funds to the CTP from the Travel Promotion Fund
at Treasury; and
Worked with other Federal agencies to ensure that our agency
counterparts are apprised of the CTP's progress and collaborate
on ways that we can all connect to the new international travel
promotion campaign.
Commerce will continue to work with the CTP on a regular basis to
support its efforts and monitor its progress in attracting more
international visitors to the United States and successfully
implementing the TPA.
Travel Facilitation Under the TPA
Our work under the TPA is not limited to working with the CTP. As
provided in the Act, the Department of Commerce, through its
International Trade Administration, is closely collaborating with the
Departments of State and Homeland Security to improve the experience of
travelers entering the United States. Through the interagency, cabinet-
level Tourism Policy Council, chaired by the Secretary of Commerce, we
have partnered with State and DHS to disseminate information regarding
U.S. entry requirements, including the implementation of the Electronic
System for Travel Authorization (ESTA) fee, and to explore ways to
facilitate the entry process for foreign visitors into the United
States. The Tourism Policy Council has responded directly to, and is
actively engaged in, these and other concerns raised by the private
sector Travel and Tourism Advisory Board.
In this context, the Department of Commerce is working with State,
DHS, and the White House to identify and more effectively communicate
the progress that the Administration is making to address concerns of
the private sector. For example, wait times for visa appointments have
been significantly reduced in key markets such as China, as you will
hear from David Donahue, Deputy Assistant Secretary for Visa Services
at State. In addition, the number of travelers enrolled in trusted or
known traveler programs managed by DHS has increased, which we
understand is enabling Customs and Border Protection officers to more
effectively and efficiently process visitors at U.S. ports of entry.
We are also working with the private sector Travel and Tourism
Advisory Board to understand industry concerns, and with our
interagency partners to develop a culture of interagency collaboration
and continual improvement, to support the success of the CTP and to
achieve the objective of promoting international travel to the United
States.
Research
The Department of Commerce provides the official U.S. government
data on travel and tourism. As you know, the TPA significantly
increased the Department's responsibilities for data collection and
research. This is critical to documenting the effect of travel and
tourism on the economy and to job creation, as well as to developing
promotional strategies essential to the success of the TPA. We will
continue to provide essential data on key markets, and our statistical
system will eventually help measure the value of the CTP's efforts to
increase travel and tourism and the resulting effect on the U.S.
economy.
Conclusion
The Department looks forward to continuing our work with the CTP
and key agencies, such as State and DHS, to achieve the goals of the
TPA. We will continue to coordinate through the Tourism Policy Council,
and with the White House, to improve the U.S. entry process and to
communicate U.S. travel requirements more effectively. This work is a
top priority for the Administration and through the Tourism Policy
Council, we will ensure it receives cabinet-level attention.
The potential of the TPA to create new opportunities for U.S.
travel and tourism exports is critical in supporting the President's
National Export Initiative and achieving the President's job creation
objectives. This is an exciting time for the United States to engage in
the global marketplace and, with the tools provided by the TPA, the
United States is better able to proactively compete for international
visitors. After all, more international visitors to the United States
means more people eating in our restaurants, staying in our hotels,
shopping in our malls, visiting our attractions and learning about our
values and culture.
Chairwoman Klobuchar, Ranking Member Blunt, and distinguished
members of the Subcommittee, thank you again for inviting me to testify
today. I will be happy to answer any questions that you have.
Senator Klobuchar. Thank you very much.
Mr. Donahue?
STATEMENT OF DAVID T. DONAHUE, DEPUTY ASSISTANT SECRETARY FOR
VISA SERVICES, U.S. DEPARTMENT OF STATE
Mr. Donahue. Good afternoon, Chairman Klobuchar, Ranking
Member Blunt and distinguished members of the Subcommittee.
Today, my testimony will focus on what the Department of
State has accomplished in the past 7 months since my last
appearance before your Subcommittee. I am pleased to report
that we made significant progress to facilitate legitimate
travel while continuing to protect our borders and the safety
of our fellow citizens. I want to thank you and your staff
members for all the support you've given us in this process.
In Fiscal Year 2011, consular officers issued more than 7.5
million U.S. visas, an increase of 16 percent over the previous
year. The largest growth in travel comes from the world's
fastest emerging economies where we have seen demand for U.S.
visas increase in a dramatic pace.
In Fiscal Year 2011, we processed more than a million visas
in China--that's the first time we've crossed the million mark
there--a 34 percent increase, and more than 800,000 visas in
Brazil, a 42 percent increase over the previous fiscal year.
Visa interview wait times throughout China are under 15 days at
this time.
We are adding 98 visa adjudicators, split evenly between
China and Brazil in the next year. A number of new adjudicators
are being hired through a pilot limited non-career appointment
program that targets applicants who already speak Chinese or
Portuguese. We expect the first group to arrive at post in
China and Brazil in the spring of 2012 with a second group
following in the summer of 2012.
In the meantime, we are sending temporary duty officers to
these posts to keep the wait times as low as possible. Brazil
continues to be a challenge but our recent successes in Brazil
include a 15 percent reduction in appointment backlog in less
than 2 months. Interview wait times, as mentioned, across
Brazil are under 90 days and we are working to keep them
falling.
We achieved a 50 percent increase in the number of
interviews per day in Rio de Janeiro and Sao Paulo through
extended interview hours and other methods. In Rio de Janeiro,
we're now doing 2,000 interviews a day and in Sao Paulo, 3,000
a day.
In October 2011, we adjudicated 67 percent more visas
throughout Brazil compared to October 2010. That was 87,500
visas in Brazil alone during last month.
In China and Brazil, we are committed to increase our
capacity to adjudicate 40 percent more visa applications in
Fiscal Year 2012. We are adding nearly 60 windows across our
China posts.
We are assessing the feasibility of establishing more visa-
issuing locations in both countries. In September, a Department
team conducted a 2-week site survey in Brazil and another team
visited China this month. We are adding 17 new windows in
Mumbai, India, this month.
In conclusion, let me stress that our top priority in visa
adjudication is national security. We are working closely with
the Department of Homeland Security to determine if the
enhanced screening introduced since 9/11 may provide
opportunities to interview fewer applicants in certain very
limited categories without compromising border security
requirements. We hope to brief Congress on the outcome of these
discussions soon.
We believe that U.S. interest in legitimate travel, trade,
promotion and educational exchange do not conflict with our
border security mission. The issuance and refusal of visas has
a direct impact on our foreign relations as well as our
economy.
The Department of State is in a position to anticipate and
weigh those factors working with our Commerce Department while
ensuring border security as our first priority.
We will staff up, build and innovate to ensure that America
continues to be a secure and welcoming country. I have
submitted written testimony for the record and I'm pleased to
answer your questions.
[The prepared statement of Mr. Donahue follows:]
Prepared Statement of David T. Donahue, Deputy Assistant Secretary for
Visa Services, U.S. Department of State
Chairwoman Klobuchar, Ranking Member Blunt, and distinguished
Members of the Subcommittee, it is a distinct honor to appear before
you again to share the accomplishments of my colleagues in the Bureau
of Consular Affairs, and our efforts to facilitate the legitimate
travel of millions of tourists, business people, students, and other
visitors to the United States.
Increasing Worldwide Demand for U.S. Visas
We at the Department of State are dedicated to the protection of
our borders, and have no higher priority than the safety of our fellow
citizens. At the same time, we are committed to facilitating legitimate
travel, and providing prompt and courteous service. For the Bureau of
Consular Affairs, the challenge is to meet the increasing worldwide
demand for U.S. visas without compromising the security of our Nation's
borders. I am pleased to testify that we are meeting this challenge
head on.
Consular officers adjudicated 8.8 million visa applications and
issued more than 7.5 million U.S. visas in Fiscal Year 2011, an
increase in issuances of more than 16 percent over the previous year,
when 6.4 million visas were issued. We have experienced tremendous
increases in demand for visas in some of the world's fastest-growing
economies. We are issuing as many visas as we did in 2000, even though
nine more countries have joined the Visa Waiver Program since then.
According to the Department of Commerce, last year international
visitors contributed $134 billion to the U.S. economy, supporting more
than a million jobs. More international travel means more spending on
airlines, tours, hotels, services, and export purchases, all of which
mean more American jobs. Not only do international tourists, business
visitors, and students boost our economy, but these visitors also leave
our country with a better understanding of American culture and values.
The greatest growth in travel comes from the world's fastest
emerging economies, where we have seen demand for U.S. visas increase
at a dramatic pace. We are taking steps to meet this growing demand. I
would like to update you on the efforts we have undertaken since my
last appearance before the Subcommittee.
The role of security has not diminished
Security remains our primary mission, since every visa decision is
a national security decision. We have an intensive visa screening
process incorporating personal interviews with multiple biographic and
biometric checks, all supported by a sophisticated global information
technology network, which shares data with other government agencies.
We continue to work with the law enforcement and intelligence
communities to ensure that our officers have the latest information on
whether an applicant poses a threat. Around the world, at 222 visa-
issuing embassies and consulates, a highly-trained corps of consular
officers and support staff process millions of visa applications each
year, facilitating legitimate travel while protecting our borders.
We instruct our staff that their highest priority must be to
protect the United States and its citizens. The officers are also
trained to be courteous, respectful, knowledgeable, and efficient. We
ensure that these principles are core tenets of our training regimen
for new consular officers and visa adjudicators. Our visa adjudication
courses feature in-depth interviewing and name-checking technique
training, fraud prevention, and the use of automated systems.
Throughout their careers, consular officers receive continuing
instruction in all of these disciplines, to ensure they integrate the
latest regulations and technologies into their visa adjudication
decisions. Our aim is to keep the visa process efficient, simple and
secure for all those who wish to visit our great nation.
Meeting Demand, Especially in Emerging Economies
The Department of State is keeping pace with growing demand for
visas, and continues to dedicate more personnel and resources to visa
adjudication, focusing on embassies and consulates with the greatest
resource needs. Specifically, we are committed to increasing visa
adjudications by 40 percent in FY 2012 in both China and Brazil, two
countries where we have seen the greatest increase in visa demand.
The Department is adding 98 visa adjudicators this year and
next in China and Brazil. A number of these new adjudicators
are being hired through a pilot program that targets applicants
who already speak Mandarin or Portuguese. We expect the first
group of these special hires to arrive at posts in China and
Brazil in the spring of 2012. A second group will follow in
summer 2012.
Some posts in China and Brazil are operating double shifts
to maximize use of facilities. Working bilaterally with host
governments, the Department is also working to expand and
improve our visa-processing facilities to allow for even more
applicant interviews.
The Department is using many different tools to expand
capacity, including advanced technology to maximize efficiency
and improve security-related screening. By consolidating some
of the non-security-related consular functions, we are
increasing capacity at our embassies and consulates.
While we strive for maximum efficiency, our activity is unique and
cannot be compared fairly with a standard ``business model.'' In Fiscal
Year 2011, we processed more than a million visas in China, and more
than 800,000 visas in Brazil. This represented a 34 percent increase in
China over the previous Fiscal Year, and a 42 percent increase in
Brazil during the same period, an accomplishment that would be hard to
match even in the private sector. We issue visas to almost 90 percent
of Chinese applicants, and to over 96 percent of Brazilian applicants.
Since 2005, consular officer staffing has doubled in Brazil. Since
Fiscal Year 2008, we have sent more than 50 officers to Brazil on
temporary assignments to meet short-term staffing needs, providing an
additional 2,000 days of service. Our Brazil consular team has reduced
the backlog of appointments by 15 percent in less than two months. Our
consulate in Sao Paulo began extended interview hours in August, and
other Brazilian posts are expected to follow. Sao Paulo increased from
2000 interviews per day to 3000 per day. The U.S. Consulate General in
Rio increased from 1000 interviews per day to 2000 interviews per day.
We hosted two ``Super Saturday'' events at consular posts across
Brazil, adjudicating almost 8,000 visa applications in those two days.
In October 2011, our consular offices in Brasilia, Recife, Rio, and Sao
Paulo adjudicated 87,500 visas, an increase of 67 percent over October,
2010.
We are working to expand and remodel our consular facilities as
permitted by the Chinese and Brazilian governments, so that we can
interview more visa applicants on a daily basis. We are expanding our
interviewing capacity by adding 22 new service windows in Guangzhou, 20
new windows in Shanghai, eight new windows in Chengdu and eight new
windows in Beijing. For India, we are adding 17 new windows in Mumbai.
In addition, we are assessing the feasibility of establishing more
visa-issuing locations in Brazil and China. In September, a team from
the Department participated in a two-week site survey to improve and
expand existing consular facilities in Brazil, and another team is in
China this month.
The Department created the Limited Non-career Appointment (LNA)
program to hire visa adjudicators with essential language skills in
Mandarin or Portuguese. LNA hires meet the strict qualifications of
Foreign Service Officers and can speak Mandarin or Portuguese at a
level equivalent to other adjudicators. They are appointed for one-year
periods for no more than five consecutive years, and would have the
same privileges and responsibilities as other consular adjudicators. We
plan to hire over 50 LNAs and Professional Adjudication Specialists
(PAS) over the next two years. Each 10 LNA/PAS represents approximately
150,000 more visas adjudicated per year.
We also prioritize groups of travelers, such as students and
business visitors. Wait times for student visa interview appointments
worldwide are less than 15 days. We prioritize student visa
appointments because of the tremendous intellectual, social, and
economic benefits foreign students provide to the U.S. economy.
According to the Department of Commerce, international students
contributed nearly $20 billion to the U.S. economy during the 2009-2010
academic year. All U.S. embassies and consulates have established
procedures to expedite appointments for business travelers. U.S.
officials work closely with American Chambers of Commerce in more than
100 countries to streamline the visa process for business travelers.
We use advanced technology to maximize efficiency and improve
security-related screening. Our worldwide Global Support Strategy (GSS)
contract, already in place in several countries, moves off-site some
non-security-related consular functions in order to create additional
capacity. GSS makes visa interview appointment scheduling transparent
and consistent, and eliminates the user-pays scheduling programs in
existence in many countries.
We have worked to reduce or eliminate paper from all aspects of
visa processing, winning awards for our green initiatives. Our
nonimmigrant visa application is now completed and submitted online,
and we are piloting a web-based immigrant visa application.
Interviews and Reciprocity
The Immigration and Nationality Act requires our consular officers
to interview in person all first-time visa applicants aged 14 through
79, with interview waivers possible for diplomatic and official
applicants from foreign governments and, in limited circumstances, some
repeat applicants.
We have begun the process of reviewing the criteria for visa
interviews to determine whether efficiencies may be achieved that could
allow us to reduce wait times and better serve visa applicants. We are
working closely with the Department of Homeland Security (DHS) to
identify and evaluate options that remain consistent with our shared
objectives of facilitating legitimate travel while combating fraud and
safeguarding the security of the United States. If we are successful in
developing proposals that meet these goals, we will discuss our
findings with Congress.
The law also requires us to set visa validity based on the validity
of visas issued to U.S. citizens. Right now, the Chinese only issue 12-
month visas, at the most, to Americans. U.S. Ambassador to China Locke
regularly addresses the issue of visa validity with the Chinese
government, with the goal of extending visa validity for American
travelers from 12 months to two or more years, so that we can
reciprocate and issue longer validity visas for Chinese tourists and
business travelers.
The Department does not act alone when it comes to decisions about
visa validity; we must consult with DHS prior to increasing any period
of visa validity.
In addition to granting reciprocal treatment to U.S. citizens
seeking visas to visit China, we would like to see the Chinese
government make significant progress in issuing travel documentation to
thousands of Chinese nationals in the United States under final removal
orders.
Finally, we are working with our U.S. Government partners to assist
DHS as they consider additional countries for membership in the Visa
Waiver Program (VWP). The specific requirements for VWP membership are
set forth in law and are quite strict; these statutory requirements
help to make VWP the secure program that it is.
Conclusion
We believe that U.S. interests in legitimate travel, trade
promotion, and educational exchange are not in conflict with our border
security agenda, but rather further that agenda in the long term.
Visa adjudication requires good judgment, insight into cultural
practices, and knowledge of immigration law. Visa adjudication is not a
mechanized process. It can never become a mechanized process, because
we are protecting the safety of our citizens, legal permanent
residents, and those who visit our country.
Our global presence, foreign policy mission, and personnel
structure give us singular advantages in executing the visa function
throughout the world. Our authorities and responsibilities enable us to
provide a global perspective to the visa process and its impact on U.S.
national interests. The issuance and refusal of visas has a direct
impact on our foreign relations, as well as our economy. The Department
of State is in a position to anticipate and weigh all those factors,
while ensuring border security as our first priority. We will continue
to staff up, build and innovate to ensure that America continues to be
a secure and welcoming country.
This concludes my testimony today. I will be pleased to take your
questions.
Senator Klobuchar. Well, thank you to both of you.
I do want to say that we have had a lot of these hearings
over the years since I took over and this was the most positive
in terms of specific developments. So we're very happy about
that.
And we have been joined by the Chairman of the Commerce
Committee, Senator Rockefeller, and hope to hear a few words
from him before we move on to questions.
The Chairman. Thirty seconds.
Senator Klobuchar. Whatever you need.
STATEMENT OF JOHN D. ROCKEFELLER, IV,
U.S. SENATOR FROM WEST VIRGINIA
The Chairman. I apologize. I was late. I guess that was
evident.
[Laughter.]
The Chairman. I've always loved tourism, and I was a
Governor of West Virginia for 8 years and that was sort of the
most exciting because a lot of people would say, ``no, we don't
want to come do business there'' back then. It's different now.
But it's partly different because of tourism because for
some reason we've got a lot of Japanese tourists and we had a
lot of people from overseas, and West Virginia is not far from
Washington so they would wander in. They kind of like what they
see and it's paid off in different ways.
But when you think about it, if this is really true, Madam
Chair, that one out of every nine Americans is employed one way
or another by tourism--I mean, it's just absolutely
extraordinary.
Senator Klobuchar. It's true.
The Chairman. It makes health care look trivial. I take
that back. Health care is not trivial.
[Laughter.]
The Chairman. But I mean, 44,000 jobs in our state depend
upon tourism. It brings in over $4 billion a year. That's huge
for us. And what I like about it the most is that people, I
think, discover more who you are and what you're like as a
people through tourism when they don't come with a specific
purpose but when they're traveling, and what we find in West
Virginia is that a lot of, let's say, people from Canada or
people from other places they'll come and they'll keep coming.
They'll come to the same state park. And we want to say
well, why are you coming to the same state park but, of course,
you don't say that because you're glad they're there.
But it's sort of the habit, and I think it's the warmth of
the reception they get, and that's not something which is
automatic, I mean, folks like yourself. I mean, you have to
work at this very, very hard.
People have to get accustomed to it. People who are
starting up restaurants have to know how to work with people
whose language they don't speak perhaps and they need to know
things to put out the welcome mat and make people want to come
back.
I think it's about the healthiest thing that one can do in
the whole business of job creation because it gives people
enjoyment, and in our case it led to an enormous number, in the
case of Japan, of industries that began to come over, and we
have something like 22 or 23 industries from Japan in West
Virginia.
That may not be much in a big state like Minnesota but it's
humongous in a small state like West Virginia. And word
travels. People find out what you're like. If they like it,
that word travels, then it gets mixed up in the whole business
of industrial development, which is important.
So I'm always proud of you, Madam Chair, for what you do
and Minnesota just has a big fat advantage in terms of beauty,
a thousand lakes, and no mosquitoes. That's what I'm told.
Senator Klobuchar. Well, we don't have Harpers Ferry.
That's yours.
The Chairman. Anyway, that's my statement.
[The prepared statement of The Chairman follows:]
Prepared Statement of Hon. John D. Rockefeller IV,
U.S. Senator from West Virginia
Thanks to all our witnesses for participating in this important
discussion about travel and how it affects our economy.
I want to start by complimenting Senator Klobuchar for her focus on
this issue. The timing couldn't be better. With the launch of Brand
USA, a public-private partnership that is marketing travel to America,
our country will finally start aggressively competing for international
travelers.
The goal is to create and support jobs that will boost the U.S.
economy at a time when our country so desperately needs visitors and
the revenue they bring. This will result in more international
travelers coming to places like West Virginia and Minnesota and
everywhere in between.
Everyone here knows firsthand, that travel and tourism are critical
to our economy. Hard-working Americans, whether in hotels, restaurants
and shops, or as our river guides or tour operators, all depend on a
thriving travel industry. Tourists contribute $750 billion a year to
our economy, and provide jobs for approximately one in nine Americans.
That's why we're here today, to continue supporting the travel
industry. In addition to new job opportunities and a stronger economy,
bringing in overseas visitors gives us a chance to showcase our great
nation.
As many people in the DC area know, West Virginia has long been
known as a ``wild and wonderful'' destination. Places like Cooper's
Rock State Forest or Babcock State Park offer breathtaking views of
fall foliage. And, when that first big snow falls, thousands flock to
our ski runs.
West Virginia's economy relies on tourism. 44,000 jobs in our state
depend on it and the industry contributes $4 billion a year to the
state economy.
Part of the reason so many people visit West Virginia is that
they've seen the advertising campaigns: ``Where is Your West Virginia''
and ``Experience West Virginia.'' The Division of Tourism has promoted
West Virginia for years--it's something that I championed as Governor--
and that push continues today. Our advertisements are everywhere from
DC metro stations to social networking sites because we realize how
much is at stake.
This is a good lesson for Brand USA. As it markets America, it
should take note of what works elsewhere. West Virginia's marketing
campaign constantly evolves to reach more people and to make an impact
on them in a meaningful way.
Brand USA will need to evolve as well. Many of our competitor
countries already have sophisticated marketing campaigns in place and
will undoubtedly react to where and how Brand USA chooses to invest.
The competition that goes on between countries is similar to the
competition that goes on between states every day. Before large amounts
of money are spent to reinvent the wheel, I would expect Brand USA to
seek the advice of states with successful tourism promotion experience.
As with any global initiative, the eyes of the world are upon us
and it's important that we succeed in making America an attractive
destination to travelers everywhere. At a time when money is tight for
most people, I hope we are creative and tactical in promoting West
Virginia and America as the wonderfully diverse travel destinations
they are. I look forward to hearing from the witnesses today on this
subject, and I'd like to thank them again for joining today's
discussion.
Senator Klobuchar. All right. Well, very good. Thank you so
much.
I'm going to turn over to Senator Blunt for the first
questions.
Senator Blunt. Good. Good. Chairman, thanks for joining us.
It's good to have you at this hearing and your understanding of
tourism helps our Subcommittee a lot. So thanks for that.
Mr. Donahue, you mentioned Homeland Security and things you
were looking at regarding enhanced screening and I'd be
interested in that, and I'd also be interested in your view of
the continued importance of the individual interview in
countries where people need a visa.
Mr. Donahue. Thank you for the question, Senator.
First of all, I think visa interviews are key to our
national security. We are very proud. We did over 9 million
interviews last year. We think we do a good job of that. It
helps us assess the person.
One of the key things we're doing in an interview is
determining the intention, which is a very difficult thing, as
you can imagine, of the applicant. Are they coming for the
reasons they say they're coming or do they have other reasons
for coming? So we think it's a very valuable tool.
We do believe that there may be categories that we are
discussing with the Department of Homeland Security and we've
discussed with members of Congress that maybe do not need to
have an interview.
A good example: there's a tradition in Brazil where when
you're 15 if you have the means your family sends you and your
friends up to Disney World for a quinceanera celebration. And
so when these groups are coming we have a room full of 15-year-
old girls that we have to interview one by one because the law
requires us to do that.
Those interviews could go to a family, a head of a family
of five who is bringing their family to the United States. They
could go to a businessman wanting to come to buy a tractor, all
kinds of different things.
And while we can expand, keeping up we want more and more
people to come, keeping up the--if we can find areas like that
where we feel that an interview would not necessarily enhance
the security we think there are some opportunities.
Another area is in China. Currently, the reciprocity is 1
year because that's what China gives to Americans and the law
requires that reciprocity be the same for Americans that the
other country, that we would give to the other country's
nationals.
That means that every year a Chinese student or a Chinese
visitor has to reapply for a visa and they have to come in in-
person if it's been more than a year since their last interview
expired.
We think that since most countries have much longer
reciprocity and that this is really a bilateral issue having to
do with China's view of their own national security that this
would be an area that Indians, for instance, receive 10-year
visas.
Brazilians receive ten-year visas. The law requires that we
only give one-year visas but do we need to see them again for
an interview if they come in two and a half years later--if
their application comes in.
We certainly would call them in if there was anything in
their past travel to the United States or anything in their new
application that made us wonder whether they were going to
continue to use that visa correctly. But if they've used the
visa correctly we already have their biometrics. We've already
interviewed them.
We know what their travel pattern was in the United States,
thanks to our colleagues at the Department of Homeland
Security, and we think that there are cases, maybe not all of
them but there are cases where we could not--we could waive the
interview without detracting from national security.
Senator Blunt. And you think that takes legislation?
Mr. Donahue. Legislation would make it clearest. We think
that would be the clearest option.
Senator Blunt. We have that in the bill that Senator
Klobuchar and I----
Mr. Donahue. We know.
Senator Blunt.--are sponsoring. It would give you a four-
year window.
Mr. Donahue. That would be perfect.
Senator Blunt. You wouldn't have to have that interview and
legislation would help. Possibly, you could do that without
legislation? You could do that internally?
Mr. Donahue. It's possible but there is guidance in the
Immigration Nationality Act. So legislation would make it much
clearer and would, of course, make it easier for us.
Senator Blunt. Well, we're trying to give you some guidance
on that.
Mr. Hyatt, on Brazil and China we've had lots of discussion
of those two countries because of the number of people that
want to come. How far in advance can you predict something like
that in the Commerce Department? I know you watch travel
patterns.
Did you see the Brazil and China thing coming and my
question would be what do you--where do you think the next
countries are where there's going to be just a clearly growing
demand?
Mr. Hyatt. We're predicting at least 5 years out into the
future and have a rigorous quantitative model looking at a
variety of economic factors, connecting them to outbound travel
patterns in those markets.
I'm thinking about the five countries that we're predicting
over the next 5 years. China, Brazil, Russia, Venezuela and
Australia are the five countries that we predict will have the
highest growth rates out over the next 5 years.
I could go back and determine how well we predicted the
growth in China but that's at least where we're forecasting the
highest growth.
Senator Blunt. And you share that information with----
Mr. Hyatt. We do. We do.
Senator Blunt. With State. Mm-hmm.
Mr. Hyatt. And they use it to--yes, to predict some of the
capacity that they expect to need.
Senator Blunt. And my last question, Mr. Donahue, are you
looking at those three countries that were not on the Brazil--
the after Brazil and China and thinking about what you need to
do to prepare for that?
Mr. Donahue. We certainly are. We just recently agreed to
longer reciprocity in Russia in preparation for what we hope
will be more Russian visitors. Venezuela offers a very
difficult problem because of our relationships.
We have limited staffing there and so we do have a very
long wait time there that we cannot address and certainly is a
country where we want to interview most of the applicants. The
third one was----
Senator Blunt. The third one was Australia.
Mr. Donahue. Australia, and Australia is a visa waiver
country.
Senator Blunt. Right. Thank you.
Senator Klobuchar. Very good.
Senator Begich?
Senator Begich. Thank you, Madam Chair, and thank you all
very much for being here.
Mr. Donahue, can you just go over one quick--you had two
data points and I just want to make sure I had them right.
Brazil has increased over the last year. What was the percent?
Mr. Donahue. Over the last year it's increased 42 percent.
Senator Begich. And China was----
Mr. Donahue. Thirty-four percent.
Senator Begich. And in volume of travelers, what is that?
Do you know that raw number? And if not, can you get that to
me?
Mr. Donahue. Yes, I think it's--yes, I can get that for
you. We'll get it for you.
Senator Begich. If you can get that just so I can match
those up.
Let me ask you, if I can. I know you have--in your written
testimony you had an initiative that you all are working on
called the limited non-career appointment that--can you tell me
how that's going and that is bringing back--well, you know it
better than I do, helping with backlogs and bringing folks back
for limited times for these appointments.
Can you tell me how that's going and what if any challenges
there are with it?
Mr. Donahue. It's quite challenging. It's progressing well,
though. We put out a offer in the USA Jobs several months ago.
We had a large response to it. But, again, we want these
officers to have the same qualifications as our Foreign Service
officers who are doing visa interviews.
So we had a very strict criteria including the language
requirements for these applicants.
Senator Begich. If I can interrupt you. So when you had the
language requirements you had specific areas you wanted them to
go to and that was how you advertised it?
Mr. Donahue. Right. The first program, it was just for
Portuguese and Mandarin Chinese speakers.
Senator Begich. Got you. OK.
Mr. Donahue. So we tested them and we've tested a number of
them. We were hoping to have 20 out of--I think there was 800
that actually responded to that USA Jobs posting and we think
we'll net about 20 or 30 out of that number.
We hope to open a class of 20 in January. Because they
don't need language, they will have the training including all
of the consular law requirements and we hope to have them out
in the field in March. And then another group--we did another
USA Jobs right after that.
And we can use the same program for other speakers. For
instance, if Russia is the next tourist group that will be
coming and we need extra officers in Russia that would--we
would be able to do the--use the same pattern now that we put
together the administrative part of this program.
Senator Begich. Is there any--I'm assuming there are some
cost savings because of the way you're utilizing them or is it
pretty much the same cost as what you would----
Mr. Donahue. The costs are very similar because they
received the same benefits that our officers would receive. We
save, of course, on the language training. That's the biggest
savings that we have, and they will only be employed for 5
years maximum, 1-year appointments for 5 years.
Senator Begich. Is there anything in the budget end of your
work that's limiting how many you can put online or is it just
the fact that it's finding the qualified people that's limiting
the amount of people you can put online?
Mr. Donahue. For this particular program, it is funded from
visa fees. Obviously, the more people you put out there the
more administrative support people you need which are not paid
out of visa fees.
So the General Services staff at the embassy, the overall
infrastructure, that's in the field. So we do--it's very
important that we, the State Department, receive its full
budget.
Senator Begich. Should the support services be paid by the
visa fees?
Mr. Donahue. We pay some of them but some of them are not
within--for instance, some of the support services are outside
of the exact requirements or they're universal for the entire
mission.
Senator Begich. Very good. Thank you very much.
Let me--Mr. Hyatt, if I can ask you just a couple of
questions. You know, the Travel Promotion Act, one of the
responsibilities was for the Office of Travel and Tourism
Industries within the Department of Commerce to do research in
connection with international travel and so forth.
Can you give me a sense of what the Commerce Department is
doing in that arena? And you've indicated, obviously, areas
that you are already kind of projecting out but what more are
you doing to help promote international travel and research?
Mr. Hyatt. The Act provides that the sample size for the
research needs to increase from .2 or so percent to 1 percent,
the basic reasoning being we need larger sample sizes to be
able to get state-by-state data, and the Act is very clear that
the benefits of the Travel Promotion Act need to benefit all
states.
So the primary focus of our research group now is figuring
out exactly how to do that. We are looking at alternative ways
to increase the sample size, how do we use technology to do
that.
We are looking at different ways to manage the sample size
itself but we continue to work to try to find ways to meet the
requirements of the Act which are to increase the sample size
so we have more state-by-state data.
Senator Begich. And I'm assuming with that process you're
engaging state visitor industry folks and so will try to figure
out how to accomplish that or is it more internally now?
Mr. Hyatt. Both. We are both working internally. There is
also a research committee within the Corporation for Travel
Promotion with whom we're working. That committee includes
research experts, members of the research team at the
corporation and also our folks.
Another area that we're exploring is different sources of
funding for that--are there creative ways we might get the
resources to execute the mandate of the Act.
Senator Begich. Thank you very much. And as you progress
would you mind keeping our office informed? It would be great
to understand how you're achieving that.
Mr. Hyatt. Be delighted to.
Senator Begich. Great. Thank you very much.
Senator Klobuchar. Very good.
Senator Rockefeller?
The Chairman. Thank you.
I'm interested in the categories of people that come, let's
say, now at a time of enormous international economic we're-
all-one-world type of exchanges, professional groups, and what
I would refer to as just plain tourists.
For example, when I was younger I spent 4 summers and for 4
years working for the American Friends Service Committee and I
spent two summers in Russia and two summers in Japan, and it
was a lot of hard work and debate and all kinds of things. But
I wouldn't have counted myself as a tourist.
I would have counted myself as a person who was there
either as a student or a graduate student or something of that
sort. Because a lot of people now come over because of the
business of business and they're trying to find out.
Some come to try to learn more about our business so they
can take that back and do better there, and then a lot but
probably a smaller percentage come simply because they want to
find out what Americans are like.
But within that question, there are two parts. One is that
people want to go see the Statue of Liberty. They want to see
the Minnesota Vikings. They want to see San Francisco.
Senator Klobuchar. No matter what happens on Monday night
games, they want to see them.
The Chairman. They do and they should. But they come
because of famous symbols and those famous symbols come to
represent America like the Empire State Building or the large
buildings all over the place, or they come because they're
looking for a chance to travel around, talk with Americans,
find out what they're like.
Now, that was sort of the more old-fashioned tourist. Does
that still exist and to what extent, if you can put any kind of
a percentage between the various categories, come for business,
government-to-government contacts, professional meetings,
things of that sort--one category--and another is the tourist
who comes for various reasons? Can you expand?
Mr. Hyatt. Why don't you start?
Mr. Donahue. I'll start but I'm going to disappoint you.
What we like to do is we like to document people so that they
can wake up in the morning and see a good ad and come for a
vacation and then come the next week and buy a tractor or buy a
turkey or whatever it is that their business is.
So what we like to do, for instance, with Brazilians is
give them a 10-year B-1, B-2 visa which is a business visa and
a tourist visa. So we don't separate it by how they're coming.
Department of Homeland Security may have those statistics and
maybe some of the private industry.
The Chairman. But there's a catch. People decide to come
for a reason.
Mr. Donahue. Right.
The Chairman. And that reason may evolve and multiply----
Mr. Donahue. That's right.
The Chairman. When they get over here. But they come for a
purpose.
Mr. Donahue. Certainly in China tourism is a growing--we
have a group leisure travel which is a growing phenomenon
there--where large groups of Chinese are coming over on planned
travel and they're trying--we're trying to expand that with
China.
It was a breakthrough by the Department of Commerce a
couple of years ago when they signed the agreement and that
is--that is helping. But it's in every area. We just--we're
celebrating--this week we're celebrating national--
International Education Week and we had, again, record number
of students coming to the United States for student and
exchange, as student and exchange visitors. So it's every
category.
The Chairman. They count. If you----
Mr. Donahue. They don't--they count--they count as visas.
They get visas, yes.
The Chairman. Yes, but I understand the visa part. That
gets them in. But the motivation is that they come here because
they want to do something.
Maybe they want to study, you know, physics and they stay
here for several years to do so. I would count that as a
tourist, I suppose. But do you understand what I'm trying to
say?
Mr. Donahue. No, I understand. We don't track it that way.
The Chairman. Because they want to learn more about our
country as opposed to a more professional ``I want to know more
about this widget,'' I want to know more about what they do
with defense or----
Mr. Donahue. Right.
The Chairman. I want to go see famous parks.
Mr. Donahue. And we see the wide variety. I don't know if
you have any statistics on that.
Mr. Hyatt. Well, I don't have them offhand but in our
airlines survey we do gather that kind of information--what was
the purpose of the visit, what did you do during the trip--and
I think we could--I'd be happy to go back and see what
information we have on purpose of trip, how those individuals
are being segmented.
The Chairman. I would like to know that.
Mr. Hyatt. Yes.
The Chairman. Thank you.
[The information requested follows:]
[U.S. Department of Commerce Response to Chairman Rockefeller
Inquiry]
The Office of Travel & Tourism Industries has been surveying
international air travelers to the United States since 1983. Within the
survey we ask over 30 pieces of information on the international
visitors. One of them is purpose of trip. We ask the purpose of trip
question two ways. One is to ask their main purpose of trip and then we
ask if they had any others.
In 2010, of the 34,000 plus overseas travelers surveyed, 54 percent
stated their main purpose of trip was leisure/recreation/holiday; 20
percent stated they were here to visit friends and relatives; 18
percent were here for business/professional reasons; four percent
visited for a convention/conference; three percent were here for study/
teaching, and there were three other purposes asked in the question
although all were under one percent. To see the actual survey
instrument, go to: http://www.tinet.ita.doc.gov/pdf/
SIAT_Questionnaire.pdf.
Another useful document is the overseas profile: http://
www.tinet.ita.doc.gov/out
reachpages/download_data_table/2010_Overseas_Visitor_Profile.pdf. The
purpose of trip response is on page 5.
In addition to providing purpose of trip for overseas travelers, we
also have it for 11 regions and 22 countries. We report them on the
OTTI website at: http://www.tinet.ita.doc.gov/outreachpages/
inbound.general_information.inbound_overview
.html.
Once on the above page, if you scroll down to any of the countries
or regions and click on the link on page 3 of the profiles, we have the
purpose of trip breakouts.
Senator Klobuchar. Very good. I have a few questions. Then
we'll turn it over to Senator Thune from the great state of
South Dakota, home of the Black Hills, the one place I got to
go on vacation every single year.
I've read about the success that the consulate in Brazil
has had with the use of the extended weekend times, the weekend
hours to process the visa applications, and I want to know how
that's working.
I think you call them super Saturday hours to help cut back
on the backlog. What difference has that made and could it be
utilized in other places? Mr. Donahue?
Mr. Donahue. There's a long history of having super
Saturdays around the world whenever we find that for whatever
reason--it could be just that there's a couple of 4-day
weekends in a row that get you a little bit behind in your
schedule, and we've had several of them in Brazil.
They are, as you can imagine, if you work your same staff
seven--six days a week on a regular basis they have families,
they have lives and they become tired of that. It's very
grueling work doing interviews 5 days a week. You're doing 120,
130 a day.
So what you need to do that is you need more staff so that
you can maybe split your week and so that you don't depend week
after week for people working that extra day and that's
something we are certainly looking at is the possibility as we
get--as we bring in the L and A's, as we also are shifting
people.
We just opened a class November 1 with 50 students. All of
those students from the--this is a regular Foreign Service
class--all 50 of those students are going out to take up
consular assignments as soon as they finish their training.
So as we move more people in if, as we get excess capacity,
we'll be able to do more of that. But we do it from time to
time but it is very difficult with the same people.
Senator Klobuchar. And have you been able to project out as
you add those people, say, in Brazil? I was just remembering at
the last hearing we showed the ``Good Morning, America''
version in Brazil of the people laying on the sidewalks waiting
to get their visas.
Mr. Donahue. Right.
Senator Klobuchar. Have you projected how--where you'd like
to be in terms of the wait time? You know, what did you say
about China, you're down to 15 days? Was that it?
Mr. Donahue. Fifteen days is the longest wait. I think
that's in Beijing and I think it's 8 days in Shanghai. So we're
very proud.
Senator Klobuchar. I think it was like 90 in June or
something, I read.
Mr. Donahue. The most it was this summer was 60 days so it
got a little bit longer. We have a confluence of both the
summer and the students at the same time. We have the same--
that's a problem worldwide. But yes, we would like to see those
days as low as possible.
What we want is that someone who wants to go can go when
they want to go. I think, you know, we--under 15 days, under 10
days, we want them as short as possible. Lots of things come
in--holidays, other things that you don't expect.
But the idea is to have the capacity so that people can
call up, make an appointment, come in at their convenience,
make that trip.
And, again, the longer reciprocity makes a big difference
for multiple travels because, as I say, in Brazil you come
once, that visa is good for 10 years and then you can even
renew that by courier. You don't have to come in after that
ever again.
Senator Klobuchar. OK. You know, you talked with Senator
Blunt about the current requirements for the in-person
interview. I just wanted to go through that again. Aren't there
classes of visitors who don't have in-person interviews today?
Mr. Donahue. The only classes of applicants who don't have
in-person interviews today are diplomats and also people whose
visa has expired within a year and are applying in the same
category at the same posting.
Senator Klobuchar. So that's it. Everyone else has an
interview?
Mr. Donahue. Everyone else gets an interview and that's--
that was put in after 9/11.
Senator Klobuchar. And where are the areas where you think
that in-person interviews are most important?
Mr. Donahue. I think, first of all, first-time applicants,
I think. Not all first-time applicants but for many first-time
applicants I think that's really important.
First of all, we need to see them because we also observe--
we have an American--a cleared American always observes the
collection of the biometrics and that's the real identification
of our travelers. And so we think it's very important than an
American watch that biometric be collected the very first time,
and we do that every time.
Then, I think, the other--certainly, if there's anything in
the application that is--makes us wonder well, why is this
person going, a lot has to do with what's this person--does it
makes sense, does the travel that the person's pursuing make
sense.
And then, of course, we do--before the person ever comes in
we do extensive background check against U.S. databases and if
anything comes up that draws attention to that person we have
that person come in for an interview regardless of whether
they're eligible for a waiver or not.
Senator Klobuchar. And do you think there's ways to more
strategically target consular resources at the high-risk visa
applicants who we really want to be screened through an in-
person interview?
Mr. Donahue. Yes. I think that's--I think there is. I think
I mentioned a couple of categories that we think would be--that
are obvious right now. There may be other categories of
applicants who we can determine from either their past travel,
from the information we already have on them, from our
knowledge of that country that this particular individual or
this--these groups of individuals could be considered.
In every case, we would do it--we would target those
interviews so that we would not say that this whole group
doesn't need an interview but that that group, the officer
could look at the paperwork and say no, this is a person--they
had been a student, they're going to be a student, they're in
good standing, they're going to the University of Minnesota and
they've been at a--you know, have been a great student there
and we can tell this from SEVIS now.
So that we know a lot about these applicants and do we
really need to be interviewing this person a second time right
in the middle of their 4 years education at the University of
Minnesota.
Senator Klobuchar. OK. Very good. Well, thank you. I have a
few questions I'll put in writing about the agencies, Mr.
Hyatt--how you're working with other agencies.
But I know we want to get on to our second panel and also
Senator Thune has some questions here. Thank you.
STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
Senator Thune. Thank you, Madam Chairman, and thank you for
visiting the Black Hills of South Dakota.
Senator Klobuchar. Harney Peak.
Senator Thune. I hope you will continue to do that, yes.
Senator Klobuchar. Thanks.
[Laughter.]
Senator Thune. Let me direct this question to Mr. Hyatt, if
I might.
I grew up in the tourism business. My town in South Dakota
now has about 500 people. I think it had about 800 when I was
growing up except between June and August every summer in which
it filled up--motels, restaurants, filling stations.
I spent seven summers working in a restaurant mostly as a
short-order cook. I had two brothers that worked at filling
stations, another one that worked at the big Pioneer Auto Show
which is our attraction in town, and my parents managed a motel
for about 12 years.
So I know how important tourism is to a state like South
Dakota and increasingly international tourism too.
You get more and more visitors who are coming, not just
from the region and the country but around the world, and I'm
sort of curious to know how much certain things impact. You
know, there tends to be--it sort of follows the economic cycle.
If you have good economies, bad economies people travel. In
bad economies they don't, and this summer because of all the--
and some of it's dictated by weather. We had a lot of flooding
this summer so that really impacted the travel business in my
state.
But I'm curious to know to what degree fuel prices do that.
Yesterday, AAA reported the national average cost for regular
gasoline was $3.40 a gallon.
Last year at this time it was $2.89 a gallon, and with this
instability we're seeing in the Middle East and North Africa
oil prices are continuing to remain high, which in turn is
going to affect everybody's pocketbooks and when they spend
more at the gas pump they tend to spend less on other things.
With regard to transportation costs for airlines, vehicles,
trains, et cetera, could you speculate on the effect that
higher fuel prices have on tourism in the United States and is
there a direct correlation between price at the pump and the
amount of travel that we see in this country?
Mr. Hyatt. Thank you, Senator.
Our tourism travel--our Tourism and Travel Advisory Board
are private--our advisory board filled with private-sector
members actually have prepared a document, a paper, on that
very topic, on the relationship between fuel prices, energy
costs and travel and tourism.
So yes, there is that direct relation and I'd be happy to
forward the report which is a very, very detailed, very
analytically-based look at the connection between energy cost
and travel.
Senator Thune. Is it broken down geographically? I mean, do
you have a--when they did this and----
Mr. Hyatt. You know, I don't know the answer to that. I
don't remember the report, whether it goes to that level of
detail. Obviously, certain states with greater distances to
drive would be more--the thinking would be it would be more
impacted. I don't remember if the report does that.
Senator Thune. OK. And did it kind of do like some
sensitivity analysis with regard to how much when a price a
gallon, let's say, of gas goes up 50 cents----
Mr. Hyatt. There is some of that.
Senator Thune. That percentage then of decline that you
might see in a----
Mr. Hyatt. There is some of that analysis in the report.
Senator Thune. OK. I'd be very interested in seeing that.
And that second question I guess I have, skipping on to a
different issue but--and maybe this has been touched on. If it
hasn't--if it has, forgive me.
But, Mr. Donahue, this discussion about the visa waiver
program and its success in promoting travel in the United
States, I'm told that the countries participating in that are
the largest source of international visitors, comprising about
65 percent of all inbound travel to the United States, and I
understand that DHS administers the program.
I'm a little interested about what State's role is in that
and what we are doing as a nation to actively encourage more
countries to participate in the visa waiver program.
Mr. Donahue. Thank you very much for the question, Senator.
The State Department works very closely with the Department
of Homeland Security on the visa waiver program and we're
involved in one of the visa sharing agreements. We work with
other agencies in negotiating one of the agreements that's
required for those who want to enter.
We also provide the statistics that help determine whether
a country is eligible for the program. They have to have,
according to the law, under 3 percent refusal rate and, of
course, the refusal rate is our visa refusal rate. So we're
involved from that point of view.
And then the Secretary of State is responsible for
nominating countries for consideration once they meet the
threshold, the 3 percent threshold, and begin the process of
meeting the other five or six requirements that are in law for
the visa waiver program.
So we're involved in doing that. We certainly provide a lot
of information through our embassies to the countries on how to
meet the requirements of the visa waiver program.
We work very closely with the teams that come out from the
different agencies, including the Department of Homeland
Security, to negotiate these agreements and help the countries
understand why signing these agreements and working with us on
information sharing is in the mutual interest to both countries
in securing our borders and ensuring that terrorist travel or
criminal travel is inhibited throughout the world.
So we think it's a very great program and, as you say, 65
percent of people travel on that program. We saw a big increase
in Korea when they went on the visa waiver program, although
that's now leveled off. But it was a--the first year was a huge
bump in Korean tourists.
Senator Thune. Thank you, Madam Chair. Thank you.
Senator Klobuchar. OK. Very good. Thank you, Senator Thune.
And I'm going to put Senator Rockefeller's statement in the
record.
I want to thank our witnesses and thank also the Commerce
Secretary as well as the Secretary of State for the work that's
being done here and everyone that's doing the work on the front
line. We know there's more to do. We really appreciate your
efforts.
Mr. Donahue. Thank you for your support.
Mr. Hyatt. Thank you.
Senator Klobuchar. Thank you, and while we bring the second
panel up we're going to show a video actually from the
Corporation for Travel Promotion, which is now doing business
as Brand USA.
This is the travel promotion campaign. It's not yet a
commercial but it gives you a sense of some of what we're going
to see. So if we could start with the video right now.
[VIDEO PRESENTATION.]
Senator Klobuchar. Very good. Oh, there we are. Good.
[APPLAUSE.]
Senator Klobuchar. We don't always have applause at a
hearing so that's very exciting for us.
Senator Blunt. I think almost never.
Senator Klobuchar. Yes, never. I'll introduce all four of
our witnesses in the next panel.
First, Mr. Jim Evans, who is the CEO of Brand USA. We look
forward to hearing from you. Mr. John Edman is the Director of
Explore Minnesota Tourism, the official state tourism agency
for Minnesota.
I would note that he was appointed by Governor Jesse
Ventura, then reappointed by Governor Pawlenty, then
reappointed by Governor Dayton. So just like the people in the
travel industry he is a true survivor. So thank you for that
and all your good work.
Mr. Jonathan Zuk--is it Zuk? Did I say it right?
Mr. Zuk. Zuk is correct.
Senator Klobuchar. Is the Vice Chairman of the Receptive
Services Association of America as well as the President of
Amadeo----
Mr. Zuk. Amadeo.
Senator Klobuchar. Amadeo. Amadeo Travel Solutions. And
then finally, Mr. Jonathan Tisch is the Chairman and CEO of
Loews Hotels and Chairman of the U.S. Travel Association
forever. He founded it. So thank you very much.
We will first start with Mr. Evans.
STATEMENT OF JAMES P. EVANS, CHIEF EXECUTIVE OFFICER,
BRAND USA
Mr. Evans. Thank you, Madam Chair, Senator Blunt, esteemed
members of the Subcommittee. It's a pleasure to meet with you
today and to report on the progress of the Corporation for
Travel Promotion, now doing business as Brand USA.
Increasing international visitation to the United States is
critical because it provides a stimulus without taxpayer
burden. In 2010, travel and tourism exports totaled $134
billion, which was 7 percent of U.S. exports.
Travel and tourism industry supports 7.5 million American
jobs of which 1.1 million are supported by international
travelers. And with every 65 international travelers to the
United States supporting one job, international visitation is a
vital part of each of this nation's 435 Congressional
districts.
Yet, due in part to our lack of a coordinated international
marketing program, the United States' share of international
arrivals declined from 17 percent of the world travel market in
2000 to 12 percent today.
Oxford Analytica estimates the cost to this country of lost
potential global market share as 78 million visitors and 6.6--
excuse me, $606 billion in revenue. Brand USA was established
to reverse this decline and to capitalize on the growth in the
international travel market. The World Travel Organization
forecasts global travel spending to double to $2.1 trillion by
2020 and to increase by 10 percent as a share of global travel
GDP.
Further, the U.S. Department of Commerce forecasts that by
2016 the United States will welcome 81 million visitors, which
is 22 million additional visitors above 2010 and will support
338,000 more jobs.
Last week, we unveiled Brand USA to the global tourism
community at World Travel Market in London. Brand USA is truly
a brand for Americans to be proud of. Our brand captures the
indomitable spirit of inclusivity and possibility as the
greatest destination in the world.
Brand USA is committed to developing innovative cooperating
marketing programs that will create and add value for the U.S.
travel and tourism industry. And while in London we met with
Visit USA representatives of the United Kingdom and Europe.
Through our relationships with these kinds of industry
partners, Brand USA will develop customized initiatives
targeted to key international markets. At home, we've met with
iconic destinations and brands as well as smaller destinations.
In the coming days and weeks, we will continue to meet with
an inclusive cross-section of the industry such as Visit
Wyoming, the South Dakota Department of Tourism, and our
National Park Service.
Since I joined Brand USA as CEO in late May, I'm pleased to
report great progress. We have recruited some of the most
talented minds in tourism marketing to develop a strategy to
recapture the world's imagination. Our team is a diverse and
international group. We speak seven languages and have lived
all over the world.
We have been proactive in ensuring transparency in our
operations. Each month we hold an open board meeting that any
member of the public is welcome to listen in on. We post the
minutes of these meetings on our corporate website,
thebrandusa.com, which I encourage everyone to visit.
Our focus between now and the launch of our first
international advertising campaign in March is essentially
three-fold.
First, we are highly committed to raising monies from the
travel and tourism industry and beyond. Brand USA has cash
commitments in excess of $4 million and in kind commitments at
over $12 million.
We believe in delivering to the Department of Commerce--we
plan on delivering to the Department of Commerce--our first
request for a drawdown of matching funds as soon as next week.
Second, we are swiftly developing marketing communications
for all key markets. Our logo and brand strategy give you a
sense of the innovative direction in which we are headed. In
March, we plan to launch our global advertising campaign.
We're selecting our target markets based on a robust
analysis of factors--such as volume of the international
travel, the value or spend of the travelers from that location,
the growth potential, ease of entry into the United States,
seasonality, and more.
And finally, we are engaged in frequent communications with
industry and the government. Since October 1, our team has
participated in 24 conferences and meetings to bring Brand USA
to our stakeholders and seek their input.
Brand USA must be an inclusive model that promotes not only
traditional attractions and destinations but also cultural
tourism and outdoor spaces that attract increasing numbers of
return visitors.
We maintain a cooperative and collaborative relationship
with Congress and the executive branch. There is great mutual
interest to promote the Brand USA message and to ensure that
visa and entry/exit policies allow the United States to take
full advantage of our efforts.
You'll be hearing more from us as we progress on Brand USA
activities and promotional efforts.
I thank you for your time this afternoon and look forward
to answering your questions.
[The prepared statement of Mr. Evans follows:]
Prepared Statement of James P. Evans, Chief Executive Officer, Brand
USA
Introduction
Esteemed members of the Subcommittee, it is a pleasure to meet with
you today and report on our progress at the Corporation for Travel
Promotion now doing business as Brand USA. Thanks to the vision and
continued support of Congress and the administration, the United States
is now in a much-improved position to compete for international
visitors. This is good news for business owners across the country in
tourism-related industries.
Travel and Tourism: A Growing Global Opportunity
We are eager to continue our collaboration with the government to
achieve the National Export Initiative. In 2010, travel and tourism
exports totaled $134 billion, which was 7 percent of total U.S. exports
and 25 percent of U.S. services exports. Travel and tourism industries
support 7.5 million jobs, of which 1.1 million are supported by
international travelers. Increasing international visitation to the
United States is now more important than ever because it provides a
stimulus without taxpayer burden. With every 65 international travelers
to the United States supporting 1 U.S. job, international visitation is
vital part of each of this Nation's 435 congressional districts.
Until now, the United States has been one of few industrialized
nations without a coordinated international visitation program. Since
2000, our share of international arrivals declined by 37 percent--from
17 percent of the world market in 2000 to 11 percent today. Between
2000 and 2010, global travel market grew by more than 60 million
travelers annually, yet U.S. visitation stayed virtually flat.
According to Oxford Analytica, the cost to this country of lost
potential global market share is 78 million visitors and $606 billion
in lost spending. Brand USA was established precisely to reverse the
decline in international visitation to the United States and return
this country to its pre-2001 trajectory.
Currently, the travel market is one of the few booming sectors
globally. The World Travel Organization forecasts global travel
spending to double to $2.1 trillion by 2020 and increase by 10 percent
as a share of global GDP. Further, according to the U.S. Department of
Commerce, visitor volume is expected to increase 6 percent in 2011.
Going forward, the United States is forecast to see a 5 percent annual
growth rate in visitor volume from 2012 to 2016. By 2016 we are
forecast to welcome 81 million visitors, which is an additional 22
million visitors and support for 338,000 jobs over 2010.
Brand USA
This month, we unveiled Brand USA to the global tourism industry at
the World Travel Market in London and we were extremely well received
(earned media value from the brand unveiling is estimated in the
hundreds of thousands). Brand USA is truly a brand for Americans to be
proud of. Our brand captures the indomitable spirit of inclusivity and
possibility as the greatest destination in the world.
Brand USA is committed to developing innovative, cooperative
marketing programs that will create and add value for the U.S. travel
and tourism industry. While in London, we met with Visit USA
representatives of the UK and Europe. Through our relationships with
these kinds of industry partners, Brand USA will develop customized
initiatives targeted to key international markets. At home, we've met
with iconic destinations and brands as well as smaller destinations. In
the coming days and weeks, we will continue to meet with an inclusive
cross-section of the industry such as Visit Wyoming, the South Dakota
Department of Tourism, and the National Parks Service.
Progress at Brand USA
Since I joined Brand USA as CEO in late May, I am pleased to report
robust progress. We have recruited some of the best minds in the
marketing world to develop a strategy to recapture the world's
imagination and inspire millions of international travelers to visit
U.S. destinations from coast to coast. Our team is a diverse and
international group: we speak seven languages and have lived everywhere
from the Netherlands to Japan to Brazil, and beyond.
In just a few short months we have set up our offices near Farragut
West, taken on two beautiful websites, and unveiled this country's new
brand to a feted industry reception in London.
We have been proactive in assuring transparency in our operations.
Each month we have held an open board meeting that any member of the
public is able to dial into. We post the minutes of these meetings on
our corporate website, thebrandusa.com, which I encourage you to visit.
Our focus between now and the launch of our first international
marketing campaigns in March is essentially three-fold. First, we are
highly committed to raising monies from the travel and tourism industry
to fund Brand USA's operations and marketing campaigns. Brand USA has
cash commitments in excess of $4 million and ``in-kind'' commitments of
over $12 million. We will be delivering to the Department of Commerce
our first request for a drawdown of matching funds as soon as next
week.
Second, we are swiftly developing marketing communications for our
key markets. Our logo and brand strategy give you a sense of the
innovative direction in which we are headed. In March we plan to launch
our global advertising campaign. We are selecting our target markets
based on a robust analysis of factors such as volume of international
travel, value, growth, prominence of target market, ease of entry,
seasonality, and more.
Finally, we are engaged in frequent communication with industry and
government stakeholders to inform Brand USA activities, messaging and
policies so that they reflect the state of industry and government
stakeholders. Since October 1, our team has participated in 24
conferences and meetings to bring Brand USA to our stakeholders. Brand
USA must be an inclusive model that promotes not only traditional
attractions and destinations, but also cultural tourism and outdoors
spaces that will attract increasing numbers of return visitors.
Constant exchange with brands in all sectors of the travel industry--
including lodging, transportation, attractions, retail, distribution,
tour operation, rental cars, food and beverage, financial services, and
more--in all areas of the country is critical to ensuring that we
accurately embody all they have to offer and that we demonstrate to
them the return on their investment in Brand USA. We are also preparing
to meet with the Chief Marketing Officers of the leading CVBs and
DMOs--small and large--across the country to ensure that we incorporate
their ideas into our marketing.
Stakeholder communication also means maintaining a cooperative and
collaborative relationship with the Congress and with the Executive
Branch. We all share the national goal of increasing international
visitation and creating jobs. There is a great convergence of interest
to promote the Brand USA message and ensure that visa and entry/exit
policies allow our country to take full advantage of our efforts.
Increased demand for visas from emerging markets like Brazil, China,
and India require appropriate response from responsible U.S. government
agencies. According to the Department of Commerce, last year we had 1.2
million visitors from Brazil (a 34 percent increase over 2009); 802,000
visitors from China (a 53 percent increase over 2009); and 651,000 from
India (an 18 percent increase over 2009).
You will be hearing from us as we progress on Brand USA activities,
messaging, and policies to ensure you are aware of the state of the
industry and our promotion efforts. Thank you for your time, and I look
forward to answering any questions you might have.
Senator Klobuchar. Thank you very much, Mr. Evans.
Mr. Edman?
STATEMENT OF JOHN F. EDMAN, DIRECTOR,
EXPLORE MINNESOTA TOURISM
Mr. Edman. Well, thank you, Madam Chair, and thank you for
everyone on the Committee for giving the travel industry the
attention that it deserves and I really do appreciate the
opportunity to speak from the perspective of a smaller state
like Minnesota, although I have observed, Madam Chair, due to
your efforts the stature of our state looms large in the eyes
of this Committee.
It's worth repeating but travel and tourism does work for--
--
Senator Klobuchar. That's why you survived three Governors,
I see that. OK.
[Laughter.]
Mr. Edman. As Mr. Evans mentioned, our industry generates
$1.7 trillion and one in nine jobs, and that affects all
states, including states like Minnesota. As you know, Minnesota
is the north central part of the country.
We're well known for our outdoors and our natural
resources. That's why people originally came to our state.
But we also are home to many large cities and small towns.
Our largest area, Minneapolis-St. Paul, is home to over 20
Fortune 500 companies and a great place for business to
prosper. The area is also a major tourism destination, drawing
visitors for arts and museums and sports.
Now, in Minnesota tourism is an $11 billion industry, and
just to put that in perspective, the economic impact is
comparable to agriculture in terms of its importance in our
state. Travel and tourism generates over 17 percent of all
sales tax in Minnesota. That's over $700 million.
And our industry generates over 240,000 jobs. That's
roughly 11 percent of all the private-sector jobs in our state.
Each year, 39 million travelers come to Minnesota for
leisure and for business and these people stay in hotels,
resorts, but they also have secondary impacts on businesses
from financial services to printing and everything in between.
Half of the economic impact is in the Minneapolis-St. Paul
area.
The travel spending reaches every other part of our state
as well and there are many rural counties in our state that the
leisure and hospitality industry is the primary employer. As
you would have guessed, summer is our primary season for travel
but the economic impact is felt year round.
We draw people mostly from the north central region for
leisure and for business, and we've affected--we felt the same
impact of travel trends as the rest of the country and that
includes travel closer to home, more last-minute travel, higher
demand for value or bargains in travel spending.
But this last year we've seen a gradual increase in
occupancy and hotel revenue and we're starting to see longer-
haul travel to our state, an increased interest from abroad.
Internationally, we draw people to our state for business and
education.
We are--draw people because of our well-known attractions--
the Mississippi River, the Great Lakes and Minneapolis-St.
Paul, of course, the Mall of America, which brings in over 3
million international visitors annually. But our most important
international market is Canada and we've seen significant
growth--43 percent in Canadian traveler spending in 2010.
Other markets include the U.K., Scandinavian countries,
Germany, Japan and Mexico, and we're also showing some
increased interest in the opportunities in China as well.
International travel can certainly help the hospitality
industry recover from the impacts of the recession and, indeed,
the entire country needs to be ready to compete effectively in
the marketplace.
As we strive to attract visitors from abroad, it's
important that we make it easier for visitors to come to our
country.
America's burdensome visa process drives millions of
visitors to other countries, which imposes an enormous cost for
all of our states.
Key to economic growth and job creation is a smarter visa
policy and we need to reduce visa wait times and make travel to
the U.S. easier, and I am very pleased, Madam Chair and members
of the Committee, with your efforts on the provisions in the
International Travel Facilitation Act, which helps alleviate
long wait times at embassies and gives the State Department the
tools and incentives it needs.
And then, finally, facilitating the visa process is
important but it's not the only thing we can do and I'm very
pleased that Congress last year passed into the law the
Corporation for Travel Promotion to give a strong brand, as Mr.
Evans was talking about, in the international marketplace, and
this public and private effort is exactly the kind of tool we
should be making.
We should have been doing this years ago, to speak with one
voice as we seek to increase market share of travelers to this
incredible collection of 50 states.
Travel and tourism is a huge driver for employment and
economic development and I greatly appreciate the work of this
Committee in support of travel and tourism and jobs. Travel and
tourism--it works for Minnesota, it works for America and it
works for us all.
Thank you very much.
[The prepared statement of Mr. Edman follows:]
Prepared Statement of John F. Edman, Director, Explore Minnesota
Tourism
Madam Chair and members of the Subcommittee: My name is John Edman
and I am Director of Explore Minnesota Tourism, the official state
tourism agency for the state of Minnesota. I want to thank you for all
you have done to address the issues travel and tourism in the U. S.,
and thank you for giving me the opportunity to talk about the economic
impact of travel and tourism in my home state of Minnesota.
I am very pleased to have the opportunity to comment on the travel
industry's impact on the economy from the perspective of a smaller
state like Minnesota. Travel and Tourism Works for America, and this
industry is crucial to our country's overall economy. The leisure and
hospitality sector generates $1.7 trillion in gross sales and supports
one in nine jobs nationwide. Domestic and international travelers
purchase a diverse range of goods and services, which impacts the
economies of each of the fifty states.
Minnesota is located in the north-central part of the country and
is well-known for its abundance natural resources, including our
10,000-plus lakes. For well over a century, our lakes and woods have
drawn visitors for outstanding outdoor recreation. Minnesota is also
home to vibrant large cities and small towns. Our largest metropolitan
area, Minneapolis-St. Paul, is headquarters to more than twenty Fortune
500 companies, drawing business travelers from around the world. The
Twin Cities area is also a major tourism destination, drawing visitors
for its top-notch arts and museums, sports, and shopping.
Travel and tourism in Minnesota is an $11 billion industry, a vital
part of our diverse economy. It impacts every county in our state, and
is comparable to agriculture in its contributions to the gross state
product. Travel and tourism also generate more than 17 percent of
Minnesota's annual sales tax revenues, almost $700 million. What's
more, our leisure and hospitality sector accounts for more than 238,000
jobs, or roughly 11 percent of all private-sector jobs in our state.
Each year, 39 million travelers come to Minnesota to enjoy our
natural resources and cultural attractions, attend conventions and do
business. These visitors spend money at businesses throughout the
state, including hotels, resorts, restaurants, shops, museums, gas
stations, car rentals and more. But these direct expenditures also
generate a wide variety of secondary impacts across Minnesota. From
financial services to printing, a wide variety of Main Street
businesses benefit from spending by the leisure and hospitality sector.
Travel and tourism generates business in every region of our state,
from large metropolitan areas to small towns and villages, from our
north woods and lakes to our rural areas. More than half of the
economic impact of travel and tourism in Minnesota is in the
Minneapolis-St. Paul metropolitan area. But travel and tourism are
important to local economies throughout the state. There are many areas
where the hospitality industry is a primary business and lead employer.
Although summer is Minnesota's primary season for leisure travel, the
economic impact of travel and tourism in our state is felt year-round.
Minnesota's primary travel market is the North Central U.S.,
although we attract leisure and business travelers from across the
country. Minnesota has felt the impact of several trends in domestic
travel in recent years, responses to the public's concern about the
economy. These trends include travel closer to home, more last-minute
travel planning, and higher demand for good values in travel spending.
In addition to domestic leisure and business travelers, Minnesota
draws visitors from around the world for business, education, cultural
exchanges and vacation travel. Among our draws for international
leisure travelers are the Mississippi River, our great Lake Superior,
the cosmopolitan Minneapolis-St. Paul area and Mall of America, the
largest shopping and entertainment mall in the U.S. The Mall of America
alone attracts more than 3 million international visitors annually.
Our most important international market is Canada; we have seen
significant growth in the number of Canadian visitors in the past year.
Other target markets include the United Kingdom, the Scandinavian
countries, Germany, Japan, and Mexico. Minnesota sees tremendous growth
opportunities for new markets such as China. For cost-effective
international marketing, Explore Minnesota works with coalitions of
other states, such as Great Lakes USA and Mississippi River Country.
These partnerships allow us to expand our reach by working with other
states on common goals.
Minnesota's travel and tourism industry is showing signs of gradual
improvement compared to our industry's health just a few years ago.
This reflects the slow recovery U.S. travel is undergoing following the
significant toll the recession took on this industry. In Minnesota, we
have seen a gradual increase in hotel occupancy and revenues as leisure
travel rebounds and businesses begin to spend more on travel again. We
are also starting to see longer haul travel and an increase interest in
travel from abroad. International travel can significantly help the
hospitality industry Minnesota and other states recover from the
impacts of the recession. In addition, the United States needs to be
ready to compete effectively in the international travel market as the
global economy expands in years to come.
As Minnesota and other states strive to attract new visitors from
abroad, it is important that the U.S. is welcoming and makes it easier
for visitors to come to our country. America's burdensome visa process
drives millions of international visitors to other countries, which
imposes an enormous cost for Minnesota and all of our fifty states. Key
to economic growth and job creation in the travel sector is a smarter
visa policy to reduce wait times and increase ease of travel. As
director of the state of Minnesota's official tourism agency, I
strongly support the International Travel Facilitation Act.
Facilitating the visa process is important, but it is not the only
thing that we can do. I am very pleased that Congress last year
authorized the Corporation for Travel Promotion to create a strong
brand for the U.S.A. in the international travel market. This public
and private program is exactly the kind of effort we should be making
as a country to speak with one voice, cut through the clutter, and
increase the market share of travelers to this incredible collection of
fifty diverse states. Efforts such as these promote the entire country
and bring jobs and growth for us all.
Travel and tourism is a huge economic driver for jobs, economic
development and state revenue for all fifty states. I greatly
appreciate all the efforts this committee has made to support travel
promotion and travel-related jobs in the U.S. and the attention that
you are giving our industry through hearings such as this. Travel and
tourism works for Minnesota, works for America, and works for us all.
Thank you, Madam Chair and committee members, for giving travel and
tourism the attention that it deserves.
Senator Klobuchar. Thank you very much, Mr. Edman.
Mr. Zuk?
STATEMENT OF JONATHAN ZUK, PRESIDENT,
AMADEO TRAVEL SOLUTIONS/VICE CHAIRMAN,
RECEPTIVE SERVICES ASSOCIATION OF AMERICA
Mr. Zuk. Madam Chair Klobuchar, Senator Blunt and members
of the Committee, it's indeed an honor to appear before you
today.
The Receptive Services Association of America, RSAA, is a
national nonprofit trade association whose primary mission is
to facilitate international travel to and within the United
States.
The Association's members include resident United States
inbound tour operators and destination management companies,
tourist service suppliers such as hotels, transportation
companies, attractions, as well as a host of other U.S. tourism
product suppliers. A significant portion of our members would
be called small businesses.
Acting as facilitators, the Receptive tour operators
provide a commercially viable opportunity for small and often
financially challenged destinations, attractions and tourism
suppliers to market themselves on a worldwide basis through a
direct pipeline to the international traveler.
This enables these small businesses to expand their global
reach and benefit from our extensive expertise and
partnerships.
Our members' main function is as a bridge between the
international traveler and the tourism service provider in the
United States. We achieve this goal by working closely with
tour companies around the world who specialize in selling the
United States as a travel destination. These overseas
colleagues will call on our members to organize all the
components or many of them of a guest's visit.
RSAA members specialize in developing memorable experience
for international travelers by contracting hotels, tours,
excursions and many more. These products are marketed and sold
internationally through our tour company clients.
Foreign tour companies that sell the USA as a tourist
destination generally belong to a marketing organization called
Visit USA. Visit USA committees are nonprofit organizations
that have been established in most of the countries which
comprise the main source of visitors to the United States,
typically the visa waiver countries, and whose sole purpose is
to promote travel to the USA.
These tour companies are specialists in selling and
promoting tourism in various destinations around the world
including but not limited to the United States.
In the absence of any nationally or federally funded
program, RSAA members, together with Visit USA members, have
traditionally shouldered the burden of marketing and promoting
and selling the United States as a tourist destination.
For example, Visit USA Europe represents more than 13
countries within Europe and includes most of the top ten source
markets for the USA. RSAA and Visit USA Europe work in a
strategic partnership whose purpose is to facilitate and
increase travel to the United States.
RSAA members are the only link in the entire tourism chain
that depends solely on the international traveler for their
livelihood and are acutely and instantly aware of any changes
or trends in their source markets.
This role has resulted in a wealth of knowledge and
expertise unparalleled in any sector of the travel industry.
RSAA members are responsible for driving approximately 6
billion export dollars in annual spending by overseas visitors
in the United States and hundreds of thousands of jobs
nationwide benefit from this expenditure.
Department of Commerce estimates the total number of
leisure visitors to the United States at 14.6 million visitors
of which 8 million arrive from our partners in Europe.
Our members are intimately involved with over 30 percent of
that total and are a major factor in other sectors such as
business travel, meeting and conventions. Increased travel to
the United States immediately results in new jobs and economic
growth.
On the other hand, you must recognize that reduced travel
to the United States costs our country jobs and leads to the
loss of many small tourism-oriented businesses across the
country.
It is paramount that our nation's efforts are correctly
focused and creative, and in a collaborative atmosphere with
our tourism partners around the world.
We caution that an international marketing approach must
involve our foreign partners who already have the knowledge and
expertise to send tourists to the United States, and failure to
do so would create a backlash that would create the opposite
effect.
Since the Travel Promotion Act was first proposed, we have
enthusiastically supported any and all efforts to promote
visits to the United States and we fully support the creation
of the CTP, now Brand USA Inc.
And RSAA and Visit USA Europe are experts in promoting and
marketing the USA as a tourist destination, and although we
have yet to collaborate we look forward to building and working
with Brand USA in building an unsurpassed worldwide marketing
program.
The competition to attract the international long-haul
traveler is fierce, and even though we have not had an
international federal program, international demand for the
United States has maintained strong levels and competing
destinations have suffered from political and natural disasters
which have an immediate effect on travel.
The cloud on the horizon is the international economic
situation and the loss of disposable income to the middle class
around the world. These are the people who make up the bulk of
our international visitors.
The good news is that in turbulent times the world seeks
out the stability and comfort of the United States and its
strong currency.
However, in the arena of international competition for the
world traveler, the United States does suffer from a
disadvantage due to visa rules and we urge you to add to and
expand the list of the visa waiver countries and encourage a
faster, cheaper and less cumbersome way to process the visa
applications.
It is our belief that by working together to use all our
advantages and capabilities we will be able to succeed and
thrive to make the United States this nation of choice for
tourists worldwide.
Thank you for having us here today and I'm free to answer
any questions.
[The prepared statement of Mr. Zuk follows:]
Prepared Statement of Jonathan Zuk, President, Amadeo Travel Solutions/
Vice Chairman, Receptive Services Association of America
Chairwoman Klobuchar, Senator Blunt and members of the Committee,
it is indeed an honor to appear before you today. My name is Jonathan
Zuk, and I am the Vice Chairman of the Receptive Services Association
of America.
The Receptive Services Association of America (RSAA) is a national
non-profit trade association whose primary mission is to facilitate
international travel to and within the United States.
The Association's members include resident United States inbound
tour operators and destination management companies, tour service
suppliers such as hotels, transportation companies, attractions,
destinations as well as a host of other U.S. tourism product suppliers.
A significant portion of our members would be classified as ``Small
Businesses''.
Acting as facilitator's receptive tour operators provide a
commercially viable opportunity for small, and often financially
challenged destinations, attractions, and other tourism suppliers to
market themselves on a worldwide basis through our direct pipeline to
the international traveler. This enables these small businesses to
expand their global reach and to benefit from our extensive expertise
and partnerships. Our member's main function is as a ``bridge'' between
the international traveler and the tourism service provider in the
United States. We achieve this goal by working closely with tour
companies around the world who specialize in selling the United States
as a travel destination. These overseas colleagues will call on our
members to organize many, if not all the components of a guests visit.
We provide one stop shopping.
To facilitate these services our member's contract with and
purchase tourism products from providers throughout the 50 states and
Puerto Rico. These products cover a comprehensive range, from popular
destinations, and attractions to the rural, extraordinary and off the
beaten path, areas.
RSAA members specialize in providing memorable experiences for
international travelers, including hotels, tours, excursions, dude
ranches, sailing adventures, bike tours, off road vehicles, back
country visits, helicopter rides, restaurant reservations, tickets to
attractions and theater and many more.
These products are marketed and sold internationally through our
tour company clients.
Foreign tour companies that sell the USA, as a tourist destination
generally belong to a marketing organization called Visit USA. Visit
USA committees are non-profit organizations that have been established
in most of the countries which comprise the main source of visitors to
the United States (typically the visa waiver countries) and whose sole
purpose is to promote travel to the USA. These tour companies are
specialists in selling and promoting tourism in various destinations
around the world, including, but not limited to, the United States.
In the absence of any ``national or federally funded program'',
RSAA members together with Visit USA members have traditionally
shouldered the burden of marketing, promoting and selling the United
States as a tourist destination worldwide. For Example, Visit USA
Europe represents more than 13 countries within Europe and includes
most of the top 10 source markets for the USA, such as the United
Kingdom, Germany, France, Italy, Spain while also representing
important growth markets such as Russia.
RSAA and VISIT USA Europe work in a strategic partnership whose
purpose is to facilitate and increase travel to the United States.
RSAA members are the only link in the entire tourism chain that
depends solely on the international traveler for their livelihood and
are acutely and instantly aware of any changes or trends in their
source markets. This unique role has resulted in a wealth of knowledge
and expertise unparalleled in any sector of the travel industry. This
knowledge serves as the foundation for the world traveler visiting the
United States and its influence is substantial, especially in the
perennial top ten visitor countries for the USA.
RSAA members are responsible for driving approximately 6 Billion
export dollars in annual spending by overseas visitors in the United
States, and hundreds of thousands of jobs nationwide that benefit from
this expenditure. The Department of Commerce estimates the total number
of leisure visitors to the United States per year at 14.6 million
visitors, of which 8 million arrive from our partners in Europe. Our
members are intimately involved in facilitating and organizing over 30
percent of that total, and are a major factor in other sectors such as
business travel, meeting and conventions, education programs summer
camps and many more. If they come here we will facilitate it.
Increased travel to the United States immediately results in new
jobs and economic growth, on the other hand we must also recognize that
reduced travel to the United States costs our country jobs and leads to
the loss of many small tourism oriented businesses across the country.
It is therefore paramount that our Nation's efforts are correctly
focused and create a collaborative atmosphere with our tourism partners
around the world.
RSAA cautions that an international marketing approach must involve
our foreign partners who already have the knowledge and expertise to
send tourists to the United States. Failure to utilize existing
partners may cause a backlash that would create the opposite effect on
our overall numbers as a country.
Since the Travel Promotion Act was first proposed we have
enthusiastically supported any and all efforts to promote visits to the
United States. We fully support the creation of the CTP, now Brand USA
Inc, and look forward to participating in any and all of their
marketing efforts.
We stand ready to lend our expertise and unique knowledge to the
Brand USA Inc management team and will be delighted to contribute our
unsurpassed ``local'' knowledge. Brand USA Inc has a huge task ahead of
it and many different segments of the market are poised to participate
in the effort and programs. Satisfying everyone is not an enviable
task. However as I have indicated our segment of the industry is the
only sector that encompasses all of the other sectors and offers
unparalleled expertise.
The competition to attract the International ``Long Haul'' Traveler
is fierce and the budgets that are spent by rival countries such as
Australia, the United Kingdom, Turkey and others are always
significant, even though we have not had a national or Federal program,
international demand for travel to the United States has maintained
very strong levels. Competing destinations have suffered from political
economic turmoil and natural disasters which have an immediate effect
on travel. Within this context the United States is seen as a safe
destination with world class services, facilities, attractions and
activities. The cloud on the horizon is the international economic
situation and the loss of disposable income to the middle class around
the world. These are the people who make up the bulk of our
international visitors. We feel that in turbulent times, the world
seeks out the stability and comfort of the United States and its strong
currency.
In the arena of international competition for the world traveler,
the United States does suffer from a disadvantage due to the Visa
rules, the processing cost and time.
While we understand and support any and all efforts to maintain a
high level of security, throughout the country, we urge you to explore
the option of adding to the visa Waiver countries. To seek a faster
cheaper and less cumbersome way to process visa applications. We are
confident that this will help grow the number of visitors to the United
States.
Through all of this, the demand for travel to the United States is
still growing and there is an opportunity for Brand USA and the
industry to capitalize on this momentum. It is our belief that by
working together to use all our advantages and capabilities, we will be
able to succeed and thrive to make the United States the destination of
choice for tourists worldwide.
Thank you.
Senator Klobuchar. Thank you very much.
Mr. Tisch?
STATEMENT OF JONATHAN TISCH, CO-CHAIR OF THE BOARD, LOEWS
CORPORATION, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, LOEWS HOTELS
Mr. Tisch. Chairwoman Klobuchar, Ranking Member Blunt and
members of the Committee, thank you for inviting me to speak
today on an issue that is of critical importance to America's
economy, specifically, the need to boost our competitiveness
when it comes to attracting international travelers.
Under your joint direction, this Subcommittee has been
reenergized and our industry welcomes and appreciates your
leadership. As you've heard, America's travel industry
generates nearly $1.7, $1.8 trillion of economic output
annually and directly employs 7.5 million Americans.
The hotels and the accommodations segment in which my
company, Loews Hotels, operates accounts for nearly $131
billion in economic output and 1.7 million Americans make a
living in this segment of travel and tourism, and we operate
more than 53,000 places of business nationwide.
Nearly one-fifth of those jobs depend on international
travel. More importantly, international travel is where the
jobs of the future should be created. Between 2000 and 2010,
the world experienced an international travel boom or at least
some of it did.
During that decade, long-haul travel to China and India
grew by more than 120 percent. Italy was up 48 percent and
Japan 32 percent.
How did we perform? The U.S. was up just 2 percent.
Globally, our market share fell from 17 percent in 2000 to, as
you've heard, 12.4 percent in 2010. The economic stakes here
are enormous.
Our government should establish a national goal of
reclaiming our share of the overseas travel market. Regaining
our 17 percent market share would attract an additional 98
million visitors to the U.S., generating more than 1 million
new jobs and $859 billion in economic output, according to the
U.S. Travel Association. Now, how do we reach that goal?
First, Congress should continue to support the Corporation
for Travel Promotion or, as we now know it, Brand USA. Just
this year alone, the U.K., South Korea and Mexico all rolled
out campaigns to promote their countries to international
travelers. If the U.S. is going to compete, Brand USA has a
critical role to play.
Second, we must reform America's burdensome and
bureaucratic visa system. While other countries are winning
more global travel business, our visa system operates like a
giant ``not welcome'' sign.
In China, there are only five U.S. visa-processing centers
to serve a country of 1.3 billion people. Many potential
Chinese visitors must travel hundreds of miles to apply for a
visa only to confront long lines, cramped facilities and hard-
working but overstretched consular officers.
The travel industry is working closely with the State
Department, particularly with Deputy Secretary Tom Nides, to
implement reforms and improve the process.
One area where Congress can make a substantial impact is,
as you've heard, expanding the visa waiver program. Adding
countries like Brazil, Poland and Chile could quickly double
the number of arrivals from these three countries, generating
an additional $7 billion in spending and creating another
50,000 American jobs.
I would like to thank Chairwoman Klobuchar and Subcommittee
members Blunt, Heller and Warner, and Senators Mikulski and
Kirk for championing legislation to make the visa process more
efficient and more effective. Senators Schumer and Lee have
also demonstrated strong leadership by introducing the Visit
USA Act.
These bills and others recently introduced in the Senate
and the House represent important steps toward improving our
visa process and making the U.S. a more welcoming destination.
And third, another strategic priority must be addressed
when we look at America's inadequate infrastructure and,
specifically, our aviation infrastructure.
One visit to a U.S. airport is usually enough to persuade
visitors that our aviation infrastructure is antiquated,
inefficient and unwelcoming. U.S. aviation infrastructure ranks
32nd in the world behind countries like Panama, Chile and
Malaysia.
The American Society of Civil Engineers gave U.S. aviation
infrastructure a D grade. Modernizing and upgrading our
aviation infrastructure requires significant investment but
consider the costs that are already imposed on our economy.
Flight delays at New York's three major airports cost the
regional economy $2.6 billion in 2008 and the estimates are by
2025 that number will be $79 billion. Unfortunately, plans to
modernize America's infrastructure are as gridlocked as our
nation's airports.
The Surface Transportation Act expired in 2009. It is now
on its eighth temporary extension. Legislation to fund the
next-generation air transportation system is mired in
controversy. This needs to change and needs to change quickly.
We should also pursue innovative public-private
partnerships to leverage our resources. The main point that I
would like to impress upon you is the huge potential of the
global travel market. Tapping into this potential starts by
establishing a national goal of reclaiming America's 17 percent
of that market share and enacting the policies to get us there.
In my industry alone, restoring the U.S. share to 2000
levels would create more than 400,000 new jobs by 2015.
As Chairman Emeritus of the U.S. Travel Association, I can
tell you that our members stand united and ready to work with
you to help America compete and win in this very competitive
market.
Thank you, and I look forward to your questions.
[The prepared statement of Mr. Tisch follows:]
Prepared Statement of Jonathan Tisch, Chairman and Chief Executive
Officer, Loews Hotels and Chairman Emeritus, U.S. Travel Association
Chairwoman Klobuchar, Ranking Member Blunt, members of the
Committee: Thank you for inviting me to speak today about an issue of
critical importance to America's economy--specifically, the U.S. travel
industry and the need to boost our competitiveness when it comes to
attracting international travelers. Under your joint direction, this
subcommittee has been re-energized--and our industry welcomes and
appreciates your leadership.
For the first time in several years, the travel industry is finally
seeing evidence that the recovery is taking hold. Hotel demand and
occupancy are both up over the last year.\1\ Our baseline economic
metric--``revenue per available room''--is up 8.3 percent industry-
wide.\2\ That's a positive sign for both our industry and the overall
economy.
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\1\ ``Outlook for the U.S. Lodging Industry,'' Smith Travel
Research, October 27, 2011.
\2\ Ibid.
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America's travel industry is responsible for generating nearly $1.8
trillion of economic output annually and directly employing 7.5 million
Americans.\3\ The hotels and accommodations segment in which my
company, Loews Hotels, operates accounts for nearly $131 billion in
economic output and 1.75 million American jobs at more than 53,000
places of business nationwide.\4\
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\3\ U.S. Travel Association.
\4\ Ibid.
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Nearly one-fifth of those jobs are dependent on international
travel.\5\ More importantly, international travel is where the jobs of
the future could be--should be--created. The most lucrative segment of
the travel market--international long-haul travel--grew by 40 percent
over the last 10 years and is projected to grow another 40 percent over
the next ten.\6\
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\5\ Ibid.
\6\ U.S. Travel Association, based on Oxford Economics data.
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Between 2000 and 2010, the world experienced an international
travel boom--or at least most of it did. During that decade, long-haul
travel to China grew by 126 percent; travel to India shot up 124
percent. Italy was up 48 percent, Japan 32 percent and Australia 23
percent.\7\
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\7\ Office of Travel & Tourism Industries; Oxford Economics, as
cited in Ready for Takeoff, U.S. Travel Association.
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And how did the U.S. perform during this global travel ``gold
rush?'' Long-haul travel to the U.S. was up a paltry 2 percent.
Globally, our share of this critical market fell from 17 percent in
2000 to just 12.4 percent in 2010.\8\
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\8\ Department of Commerce, as cited in Ready for Takeoff, U.S.
Travel Association.
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The economic stakes here are truly enormous. Our government should
establish a national goal of reclaiming our share of the international
travel market.
Consider this fact: Each overseas traveler to the U.S. spends an
average of $4,000 during a visit.\9\ Simply regaining our 17 percent
market share would attract an additional 98 million visitors to the
U.S.--generating more than one million new jobs and $859 billion in
economic output, according to the U.S. Travel Association.
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\9\ Ready for Takeoff, U.S. Travel Association.
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So now the critical question: How do we reach that national goal?
Today, I'd like to briefly outline three strategic policy
priorities that will enhance America's competitiveness in attracting
international visitors and create a new stream of growth in our
economy.
First, Congress should continue to support the Corporation for
Travel Promotion--now known as Brand USA--established under the Travel
Promotion Act, a landmark piece of legislation which was made possible
due to the strong support of members like Chairwoman Klobuchar, Senator
Begich and then-Representative Blunt. Jim Evans, CEO of Brand USA is
here today to update you on the exciting work of this innovative,
public-private partnership, the first-ever advertising and promotion
campaign aimed at bringing more overseas travelers to the U.S.
In today's difficult fiscal environment, every program must justify
its budget--and Brand USA is no exception. That's why I believe it is
critical to underscore that not one single taxpayer dollar goes to
support this organization.
While Congress and the Administration should be applauded for their
leadership in enacting this legislation, it's important to recognize
that the U.S. is really playing catch up when it comes to competing in
the market for international travelers. Right now, Western Europe
currently captures 37 percent of outbound travelers from China, Brazil
and India compared to just 16 percent for the U.S.\10\ But our European
competitors are working to gain even more market share--at our expense.
This year, the U.K. announced a goal of bringing four million more
overseas visitors to the country over the next four years--and is
dedicating the resources to make it happen.\11\
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\10\ U.S. Travel Association based on data from Office of Travel &
Tourism Industries and Oxford Economics, as cited in Ready for Takeoff,
U.S. Travel Association.
\11\ Ready for Takeoff, U.S. Travel Association.
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The U.S. is also facing competition outside Western Europe. South
Korea recently launched the Visit Korea campaign aimed at attracting
8.5 million additional travelers. Just to our south, the Mexican
government has labeled 2011 ``the year of tourism'' as part of its
effort to make Mexico one of the world's top five tourist
destinations.\12\
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\12\ Ibid.
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The second policy priority centers on reforming America's
burdensome, bureaucratic, costly visa system. At a time when other
countries are actively competing to win more global travel business,
our visa system operates like a giant ``Not Welcome'' sign.
Reform starts by increasing visa access for the millions of people
seeking to travel to the U.S.
There are twenty-seven cities in China with populations greater
than two million people--and no U.S. visa processing center for
prospective travelers.\13\ In the entire country, only five U.S. visa
processing centers serve China's 1.3 billion people.\14\ Many potential
Chinese visitors to the U.S. must travel hundreds of miles to apply for
a visa. Once they arrive, they often confront long lines, cramped
facilities and hard-working but over-stretched consular officers.
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\13\ Ready for Takeoff, U.S. Travel Association.
\14\ Ibid.
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To be fair, the U.S. State Department, which administers our visa
system, has recently taken steps to make America's visa process more
efficient and more user-friendly in select countries. The travel
industry has been working closely with the State Department to identify
opportunities for improvement and to implement the necessary reforms.
I'd especially like to commend Deputy Secretary Tom Nides for his
commitment to this effort.
As a result of reforms already undertaken, wait times for Chinese
citizens who wish to obtain a visa have decreased from more than 60
days in the past year to just 12 days in October.\15\ This is progress,
but more work remains to be done. As of this week, travelers from
Brazil's capital city are still waiting more than 100 days for their
visas to be processed.\16\
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\15\ U.S. Travel Association.
\16\ Ibid.
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Rapidly-growing countries like China, Brazil and India represent
the future of the global travel industry. Over the next decade, long-
haul travel from these three countries is expected to grow by more than
100 percent \17\--a potential market of millions of additional
travelers that is literally up for grabs. But to seize this
opportunity, we must be prepared to meet the increased demand for U.S.
visas.
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\17\ Ready for Takeoff, U.S. Travel Association.
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Fixing our visa system requires action on two fronts. Where the
State Department can act alone, it should do so--and make it a high
priority. But Congress also has a critical role to play.
One area where Congress can have a substantial impact is expanding
the Visa Waiver Program. Countries participating in this program work
with the State Department to allow their citizens to visit the U.S. for
up to 90 days without a visa. In 2010, 65 percent of the 26 million
overseas travelers to the U.S. came from the 36 countries in the Visa
Waiver Program.\18\ Adding countries such as Brazil, Poland and Chile
could quickly double arrivals from these three countries, generating an
additional $7 billion in spending in the U.S. and creating more than
50,000 American jobs.\19\
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\18\ Ibid.
\19\ U.S. Travel Association.
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I would like to thank Chairwoman Klobuchar and Senator Begich for
co-sponsoring S. 497--a bill introduced by Senators Mikulski and Kirk
which would expand the Visa Waiver Program.
But boosting the number of countries in the Visa Waiver Program is
not enough. That is why I also applaud Chairwoman Klobuchar and
Subcommittee Members Blunt, Heller and Warner for championing
legislation that would incentivize the State Department to make the
visa process more efficient and effective. This bill would give the
State Department the ability to reinvest visa fees to hire more
consular officers. It also allows the Department to waive visa
interviews for three years for travelers who previously held a visa.
Senators Schumer and Lee have also demonstrated strong leadership
by introducing the VISIT U.S.A. Act. This bill would make it easier for
Chinese citizens to visit the U.S.; expedite the visa process for
travelers willing to pay a premium; and create new guidelines that
would make it easier for the Departments of State and Homeland Security
to designate new countries for the Visa Waiver Program.
The third and final strategic priority I would like to address is
America's inadequate infrastructure, specifically our aviation
infrastructure: the runways, terminals, security checkpoints and air
traffic control systems that serve as a gateway to our Nation for
international travelers.
One visit to a U.S. airport is usually enough to persuade visitors
that our aviation infrastructure is antiquated, inefficient and
unwelcoming, but here are a few facts to back up the case:
According to the Building America's Future Education
Foundation, the U.S. aviation infrastructure ranks 32nd in the
world behind countries like Panama, Chile and Malaysia.
Five of the world's 10 busiest airports are in the
U.S.\20\--but not a single U.S. airport made the list of the
world's 10 best.\21\
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\20\ Airports Council International, as cited in, ``World's Busiest
Airports, as Listed by the Airports Council International,'' Huffington
Post, March 16, 2011, http://www.huffingtonpost.com/2011/03/16/worlds-
busiest-airports-a_n_836220.html#s254206&title=1_Atlanta_89331622.
\21\ ``The 10 Best Airports in the World,'' Business Insider, March
30, 2011, http://www.
businessinsider.com/best-airports-in-the-world-2011-3?op=1.
The American Society of Civil Engineers gave U.S. aviation
infrastructure a ``D''--and they were grading on a curve.\22\
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\22\ ``Report Card for America's Infrastructure,'' American Society
of Civil Engineers, 2009 http://www.infrastructurereportcard.org/.
The simple fact is, our runways cannot keep up with demand; our
aging terminals were not designed to handle modern security needs; and
our air traffic control system relies on ground-based radar technology
that is more than a half-century old. A new car equipped with GPS has a
more sophisticated navigation system than the average commercial
airliner. The result: Flight delays, long waits on the tarmac and
security chokepoints that frustrate and deter both international and
domestic travelers.
No wonder New York Times columnist Tom Friedman recently wrote that
landing at Kennedy airport after a trip from Hong Kong was like ``going
from the Jetsons to the Flintstones.'' \23\
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\23\ New York Times, Dec. 24, 2008.
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Modernizing and upgrading our aviation infrastructure will require
a significant investment, but consider the costs already being imposed
on our economy. Flight delays at New York's three major airports cost
the regional economy $2.6 billion in 2008, according to a study by the
Partnership for New York City. By 2025, the costs due to expensive
delays, lost productivity, wasted fuel and harmful pollution could
reach a cumulative $79 billion.\24\
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\24\ ``Grounded: The High Cost of Air Traffic Congestion,''
Partnership for New York City, February 2009 http://www.pfnyc.org/
reports/2009_0225_airport_congestion.pdf.
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Unfortunately, when it comes to implementing long-term plans to
modernize and upgrade America's infrastructure, Washington's
legislative process is almost as gridlocked as our Nation's airports.
The Surface Transportation Act expired in 2009 and is currently on its
eighth temporary extension.\25\ Legislation to fully fund the
transition to the Next Generation Air Transportation System is mired in
controversy.
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\25\ U.S. Senate and Transportation and Infrastructure Committee,
http://republicans.
transportation.house.gov/singlepages.aspx/911.
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Meeting these challenges will require bipartisan leadership.
Perhaps it will require new thinking, as well. I, for one, believe we
should also be pursuing innovative public-private partnerships to
leverage increasingly scarce resources. One interesting idea is Los
Angeles County's ``30/10 initiative''--a proposal to use local revenues
and Federal loans to fast-track construction on vital infrastructure
with the goal of completing 30 years' worth of projects in just 10
years.\26\
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\26\ http://www.metro.net/projects/30-10/.
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The main point I would like to impress upon you is the huge
potential of the global travel market. Tapping into this potential
promises to generate U.S. economic growth, promote job creation and
spur small business expansion. The process starts by establishing a
national goal of reclaiming America's 17 percent share of the global
travel market.
In my industry alone, simply restoring the U.S. share to 2000
levels would create more than 400,000 new jobs by 2015.\27\ Working
together--Democrats and Republicans, Congress and Administration,
government and industry--we can compete and win in this fiercely
competitive market. As Chairman Emeritus of the U.S. Travel
Association, I can tell you that our members stand united and ready to
work with you to accomplish our common goals.
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\27\ U.S. Travel Association.
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Given this industry's presence in 50 states and 435 congressional
districts; primacy as an economic force in both rural and urban
America; and the capacity for near instantaneous job creation through
expansion and new business start-ups--surely these issues should earn
the bipartisan support that they deserve.
I thank you again for inviting me and look forward to answering any
questions from the Committee.
# # #
Senator Klobuchar. Thank you very much.
Senator Begich has agreed to take over my presiding time at
4 so he is going first.
Senator Begich. Thank you very much, Madam Chair. I have to
make it to the floor by 4 o'clock so I'm just going to ask one
quick question. I have some for the record. But Mr. Tisch--
Jonathan, thank you for your comments on the infrastructure.
The FAA bill, as you know, with next-gen could make a huge
impact. I think you made it very clear, and it's interesting
because usually we hear from the aviation industry about the
importance of the FAA bill.
So your voice and other industry out there is an important
part of this equation.
So I thank you for that. And the more you can generate that
interest, especially the way you played it here wasn't about
just improving safety, which is an important part, it's about
the impact of travelers to and from communities outside of the
United States coming here and what that means for job creation.
So thank you for putting that on the record.
Let me ask you, in your written testimony you do go into a
lot about the infrastructure. Here's one piece of
infrastructure and tell me your thoughts on this and that is
visitors from around the world come to the United States not
only to visit great cities and great communities but they come
to our national parks and our park systems and our natural
environments.
Alaska, obviously, that's a huge part of our equation and
how we attract so much. Give me your thoughts there because you
talked about water, roads and airports but what about that
piece of the infrastructure? How does that play into the
industry and do we do enough?
Mr. Tisch. Well, Senator, as you know, the United States is
blessed with so many demand generators. There are reasons why
people want to come here, and now with Brand USA, with other
marketing campaigns, we are articulating a vision for how we in
the industry feel we can handle them once they get here.
But if our infrastructure is broken, if it is like a third-
world nation, then they are going to leave with a bad
impression, and their comments to their neighbors and their
family members are so important. When you talk about our
national parks, clearly, they are a major reason why people
want to come here.
It's not just the big cities. It's not just New York, in my
case, or Las Vegas or you as a former mayor understand that,
coming from Anchorage. You understand why people travel.
But there is so much for them to do once they get here and
that's why the international traveler stays longer in a
destination than the domestic traveler. They move around the
country. They come in through--certainly, through the gateway
cities but then once they're here they move on.
And it's important for all of our infrastructure to be
looked at in a way that we can keep it vibrant, we can keep it
strong and we can stay competitive. And the reason I started
talking about these issues is that I took my family to
Australia and Hong Kong in March, and I will quote Tom
Friedman, who made a similar trip like I made, ``flying from
Hong Kong to JFK is like going from the Jetsons to the
Flintstones.''
[Laughter.]
And I landed at Kennedy after leaving Hong Kong some 14
hours earlier and I was appalled, and I think we have to keep
the competition of countries that want travelers coming to them
in mind as we look at all these issues but infrastructure plays
out in so many areas and, certainly, your comment about
America's great parks are an important aspect of that.
Senator Begich. Thank you very much.
I apologize I have to leave. But as you travel quite a bit,
I have to travel a lot to get back home, to say the least.
But one trip I took recently was through San Francisco's
Airport and there was a segment that was renovated. I think it
was Virgin Air was utilizing it and I have to tell you it was
an interesting experience. TSA, very customer oriented at that
one location. Going into it you could tell it was all
renovated, very pleasing when you walk through there.
It was a very interesting environment than some of the
airports that I'm sure you've traveled through and I've
traveled through. I know in our airport in Anchorage it's an
incredible renovation we've done there.
But it was interesting on the lower 48 going through that
airport. That segment was very interesting and impressive and
the couple pieces I took some notes on what we could do to
improve.
So thank you very much. Thank you to all of you and Brand
USA, fantastic. Thank you.
Senator Klobuchar. Thank you very much, Senator Begich.
I'd also note as you listed the people involved with the
visa legislation Senator Begich is also one of the co-authors.
Senator Blunt, your questions?
Senator Blunt. I thank the Chairman.
Mr. Tisch, thanks again for all your help with the Travel
Promotion Act and the Travel Promotion Corporation, and I've
heard and share your frustration with infrastructure within the
existing system. I mean, you've run a hotel chain that, you
know, caters to families and pets and what--you try to be what
people want you to be.
What could we do within the existing system to try to make
that more welcoming? And obviously, I think everybody on this
Committee is for--are infrastructure believers and we know we
need to do that but what could we do in the shorter term to
make some of those facilities more welcoming, do you think?
Mr. Tisch. Well, Senator, when you look at the various
entities that make up our country's travel and tourism
industry, you see segments that, obviously, as you've
mentioned, deal with people individually.
They deal with them in crowds. They deal with families.
They deal with business travelers. I'm thinking of the
airlines. I'm thinking of hotels. I'm thinking of the
attractions. And over the years, the industry has offered to
work with Homeland Security and the State Department to discuss
ideas, best practices, for how we do things.
How do you keep a crowd at Disney or Universal happy when
they're walking up to a line and it says 1-hour wait? What are
the ways that we can look at to break down the inherent
frustration with travel?
Things are going to happen. It's just the nature of the
beast. There's going to be bad weather. There are going to be
delays. But what can we do as an industry working with certain
government agencies to talk about what's been successful for
us?
And a couple of years ago, Disney put together a film when
Jay Rasulo was then chair of the U.S. Travel Association. Jay
is now CFO at Disney but he was head of Resorts, and actually
Jay and I testified in this very room to talk about the Travel
Promotion Act and to look at the way we can do things.
And just as Disney put together this film that's played at
a couple U.S. airports I think that's an example of what we can
do in terms of industry helping government agencies, using some
of our experience to really tackle some of the challenges that
travelers feel.
Senator Blunt. Thank you.
Mr. Evans, we've talked a lot about the visa countries that
require visas and how we need to be sure that process works
correctly.
But there are lots of countries that don't require visas
and how does that figure into your strategy for Brand USA--
where you are spending your money, who are some of your
partners. What's your plan for the next couple of years as it
relates to targeting?
Mr. Evans. Our key target markets will be identified
through extensive research, through working with the Commerce
Department, really looking at the population, their current
travel, the potential of their travel, the average spend of
their travel to make sure that we're investing where the best
opportunities are.
So we'll begin with--more than likely we'll begin with
traditional market places like the U.K., Canada, Mexico, Japan.
But as we get our footing and our funds raised and our
expenditures at the levels we need then we will expand our
marketing into, you know, India, China, Brazil and that,
obviously, is going to happen in this first year, we believe.
Senator Blunt. And in terms of raising money from partners,
what's happening there?
Mr. Evans. We've done well, I believe. We've raised $4.3
million in cash and we've raised over $12 million in in-kind
and we will be taking our first tranche to Commerce next week
for approval so that we can draw down from the ESTA funds, and
the ESTA funds right now are $123 million.
Senator Blunt. One hundred and twenty three right now?
Mr. Evans. Hundred and twenty-three.
Senator Blunt. And the reception in London to your rollout
of Brand USA?
Mr. Evans. I'm probably a bit prejudiced but I think that
all the comments I received were very, very positive. I think
as much as anything people enjoyed the logo. I think they
enjoyed our presentation.
I think as much as anything friends like the Receptive
Service Operators and others just saw it was great that America
truly is in the game now and we're going to compete. And as
John pointed out, we're going to take back our fair share and
then some.
Senator Blunt. Mr. Zuk, do you believe that this marketing
overseas will make a difference in people traveling and working
through your organization?
Mr. Zuk. Thank you, Senator. Yes, we--I was at the launch
in London as well and from the press release on Monday morning
through the party on Tuesday, the general feeling from all our
clients, which are the people who facilitate the travel to the
U.S., especially in the visa waiver countries, is that finally
the USA has a brand and has an overseeing, let's say national
body that will facilitate travel, and definitely everybody's
looking forward to working with Brand USA to create even more
of our share.
It's an easy sale because people want to come to America,
thanks to Hollywood, thanks to publicity, thanks to many
different things and our obviously natural attractions that we
have throughout the country, and this will only serve to
enhance as long as we work together and make it much better
than it's been before.
Senator Blunt. Thank you. Thank you, Chairman.
Senator Klobuchar. Thank you very much.
Mr. Evans, you spoke with Senator Blunt about some of the
work that's being done. What do you see as the challenges to
get the advertising campaign rolling and what steps are you
taking to make sure the launch is a success?
Mr. Evans. We're, obviously, in a very beginning stages of
our preparation for our marketing. Our targeted launch for
advertising campaign is March 7 at ITB, the world's largest
travel industry show.
Between now and then, I think the challenges are making
sure that the team that we add--or the folks we add to our
team--are the right folks.
I think the challenges are making sure that we identify the
right partners to begin to work on our cooperative efforts, and
we're working on that right now.
Obviously, we need to continue on our business development
activities to make sure we get the full $50 million raised this
year as we have the two-for-one match.
So I think we're doing well. JWT is off to a great start
with us. We've actually seen story boards of our campaign
already. We're meeting with a variety of small and large
destination management organizations.
We're meeting with several large and small travel industry
brands. We're communicating, as Mr. Zuk said. We met last week
with Visit USA Europe and the United Kingdom to begin that
dialogue and to listen to them.
And so I think we're putting all the pieces in place. The
challenge is making sure we stay organized and focused, raise
the funds we need, and deliver on time.
Senator Klobuchar. Very good.
Mr. Edman, you talked about how the target markets in
Minnesota include the United Kingdom, Scandinavian countries,
Germany, Japan, Mexico.
How do you see yourself partnering as this launches with
Brand USA and how do you reach those markets now as a state
with a limited budget for your tourism?
Mr. Edman. Well, Madam Chair, right now with our limited
budget we don't have the opportunity to do any consumer
advertising. A lot of what we do is working with tour operators
and the media so we can really only scratch the surface.
The thing that makes me very excited about the launch of
Brand USA is it gets all diverse 50 states working together as
one. As a relatively small state, we have 108 convention
visitors bureaus in our state and a very diverse state, and my
job is get them to work together.
Jim has even a bigger job in working with 50 states and up
until this point all states were kind of--it was a free for
all. Every state was doing their own international marketing on
their own and there wasn't any cohesive brand for the United
States.
So I think this is going to help a state like Minnesota
give a stronger presence, do things that we cannot do on our
own and do things in cooperation with other states.
Senator Klobuchar. I will say you've done some great ad
campaigns in our own state, though, and could you talk about
how--you mentioned how, because of the economic downturn with
some improvements this year but people have been making
decisions at the last minute of where to travel.
How have you incorporated any of that and how we have
handled advertising and how you've handled trying to work with
the industry on some of these things that have come about
because of the downturn?
Mr. Edman. I think that's a challenge that every state has
had over the last three or 4 years, that people are cautious
about their travel spending dollars. They're not going as far
from home in their travel. But now they are starting to branch
out a little bit.
What we've learned in all of our states is that people
still want to travel despite the concerns of the economy,
despite the concerns about gas prices or whatever. People want
to get out and travel. That's a freedom. That's something that
they all enjoy do, they need to relieve stress and to explore
our incredible country.
So we've kind of responded in some of our advertising.
We've done some changes in terms of what our targets are, who
we're targeting a little closer in. But right now, we're kind
of at the point where the country wants to take off in terms of
growth in travel and tourism.
There are concerns about travel confidence and the overall
economy and unemployment that's holding people back a little
bit. But we feel we're moving in the right direction and
efforts such as the Brand USA will certainly help get us there.
Senator Klobuchar. And you've seen over the years increased
interest in international tourism in our state and what do you
attribute that to? This is where you're supposed to say it's
not the weather.
Mr. Edman. Well, earlier I think a question was about what
can you, as members of the Senate and Congress, do and that's
invest in the natural resources, the infrastructure, the
bridges, the roads that we sometimes take for granted.
In a state like Minnesota, we may not be on folks' radar
but they know about the natural--they know about the
Mississippi River. They know about the Great Lakes. In fact, we
partner with other states, the Great Lakes states and states
along the Mississippi River, to use those common geographies.
And so I think to sort of answer your question why is there
an interest, because people are now starting to discover the
United States and they're starting to look at what they know.
Every country is different in terms of what they seek.
Japanese are very interested in shopping. Germans are very
interested in outdoor and recreation. Scandinavians are very
interested in visiting friends and relatives and things like
that in a state like Minnesota.
But we're seeing some real growth potential and it's a
market that we want to get involved in much more as a state.
Senator Klobuchar. Very good.
Mr. Zuk, Mr. Edman was talking about some of the trends
we're seeing and in your testimony you talk about rural tourism
as well and how people are interested at times in going to some
of the out-of-the-ordinary attractions that you might not
expect, like this world's second largest ball of twine, which
is in our state, right, Mr. Edman?
Mr. Edman. That's correct.
Senator Klobuchar. And so I was curious about that. I
remember visiting Denmark once with my family where they have
those farm visits and we actually went to a farm that was
advertised. I thought, my daughter was 4 years old, she would
like that it had cows, horses and pigs. It had three cows, one
horse and 3,000 pigs.
But it was actually--we had a great time and I was thinking
about that in terms of as we roll this out just the rural areas
of our country beyond the great City of New York and other
things and what you see as the trends there and the potential
as we market our country as a whole to get people to these
kinds of destinations.
Mr. Zuk. Thank you, Madam Chair.
The United States is viewed as a long-haul destination,
which means in simple terms that you have to travel far to get
there, and if we look at Europe as a target market we compete
with Australia or Brazil or South Africa or the Indian Ocean,
which are considered long-haul destinations.
It's difficult to get people to travel all the way to the
U.S. to see a rural destination without one of the significant
draws. It may not be fair but that's the reality of it.
If we combine things like that with New York or Las Vegas
or the traditional visitor destinations like Florida or
California, yes, there are definitely many markets that are
interested in that.
The Italians, for example, are crazy about dude ranches.
Don't know why but they all see themselves as cowboys and they
want to go to dude ranches.
So they, do, in Minnesota and in Arizona they go to dude
ranches all the time. It's something that they do but they do
it in conjunction with. They'll do it in conjunction with New
York or Las Vegas or California. They won't come only for that.
Rural areas, it's a little bit more difficult to convince
somebody to spend the money involved in a long-haul destination
for only that. That's why the partnerships and one brand which
encompasses the entire country can utilize and we can bring
tourists to maybe destinations that won't see tourists unless
we do it all together.
Senator Klobuchar. Very good.
Mr. Tisch, one last question here. You talked about with
Senator Begich about the infrastructure issues and as you know
the FAA expects the number of passengers on U.S. commercial
carriers to exceed an astounding 1 billion people by 2015. That
level of air traffic is going to mean a lot of airplanes in the
sky.
Do predictions like these mean that we need to accelerate
the transition to next-gen and could you talk about that
aviation infrastructure?
I'm sort of getting at the importance of getting the FAA
bill done. Not to be a leading question, but with the home of
three major airports--well, Newark's in New Jersey but in your
area there, could you talk about the importance of aviation
improvements in our country?
Mr. Tisch. Senator, the passage of next-gen is essential if
we're going to handle the expected capacity that hopefully will
come to this country over the next few years, the next decade,
the next two decades.
Our system is broken and, once again, the competition. When
you look at China where they're building something like 15 new
airports from scratch and not only the airports but the roads
that lead up to the airports, and not only the roads but
subways and trains that get you from downtown areas to the
airports, that's the competitive nature of travel in today's
world and we have to as a country have the focus and the
discipline to do something about it.
These infrastructure improvements and next-gen are very
expensive. There's no doubt about it.
But we can create public-private partnerships to deal with
these challenges. If you look what's happening in Los Angeles
County now with the program called 30/10 where they're trying
to do 30 years of infrastructure improvements in the next 10
years and they're using tax dollars as down payments on
government loans.
If you look at the Infrastructure Bank supported by the
AFL-CIO and the U.S. Chamber of Commerce, issues and areas that
we can agree on publicly, privately, public-private
partnerships, use offshore investment, use sovereign wealth
funds who want to invest in this country, this is the focus
that we need as a country with the private-sector support, and
next-gen is an essential part of this to make sure that we have
an air traffic system that can support the expected travel.
Senator Klobuchar. Thank you very much. Well said.
Senator Blunt, do you want to add anything here at the end?
Senator Blunt. It was good hearing, Chairman. Thank you for
putting--helping put both of these panels together and holding
the hearing, and I think we need to move forward and we look
forward to our partners working with us as we do that.
Senator Klobuchar. Well, thank you very much. This was, as
I said, one of the best news hearings we've had in a while,
just generally, but also because we are making changes and we
know we have a lot more work to do and I wanted to say the
record will remain open for a week.
We have eight Senators here. Senator Boozman was also here
and was here to hear some of the witness testimony, and wanted
to thank all of you, thank our staff, Senator Blunt's staff, my
staff, Margaret McCarthy, her first hearing with me. She used
to work for Senator Dorgan and was involved in the Travel
Promotion Act so we're glad to have her here, as well as the
Commerce Committee staff for all their work on this hearing.
Thank you to all our witnesses and everyone here that wants
to move forward with Brand USA.
The hearing is adjourned.
[Whereupon, at 4:14 p.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of the Hon. Tom Udall, U.S. Senator from New Mexico
New Mexico describes itself as the ``Land of Enchantment,'' and
each year my state welcomes 12 million visitors. This is six times the
number of people who call New Mexico home.
Visitors travel from around the world to attend New Mexico's many
festivals and cultural events, such as the annual Albuquerque
International Balloon Fiesta and Santa Fe Indian Market. With its
unique local art community and stunning landscapes from Shiprock to the
White Sands dunes, New Mexico has a lot to offer to visitors.
Tourism and travel contribute $5.5 billion to my state's economy,
and represent New Mexico's largest private sector employer. Many of
these jobs are in rural areas with high rates of unemployment.
Yet tourism in New Mexico and other parts of the United States
provides more than an economic boost. Tourism is a form of public
diplomacy that fosters good will for our country around the world.
I am pleased to learn today about implementation of the Travel
Promotion Act, a bill that I was proud to cosponsor. I also
particularly look forward to hearing about Brand USA and its progress
on a new campaign to showcase our Nation's travel destinations and
experiences.
I am hopeful about projections that estimate the tourism industry
will improve in the next five years. But America must continue to
compete for its share of the international tourism market in a tough
economic climate.
In conclusion, I want to extend my thanks to Senator Klobuchar for
calling this hearing today and thank our witnesses for sharing their
input and insights into how tourism can thrive again here in the United
States.
______
Prepared Statement of Starwood Hotels & Resorts Worldwide, Inc.
The following statement is submitted on behalf of Starwood Hotels &
Resorts Worldwide, Inc., and we are very pleased to begin by commending
Chair Klobuchar and the Members of the Subcommittee on Competitiveness,
Innovation, and Export Promotion for the work they have done and for
their tireless dedication to the promotion of inbound U.S. travel and
tourism. We are pleased that you understand the potential for economic
growth in restoring, and eventually even exceeding, the U.S. inbound
travel levels that existed pre-9/11. You have focused on some of the
legal and regulatory issues that need to be addressed if these levels
are to be achieved, and we look forward to working with you to reach
these goals.
Starwood is well positioned to address the myriad issues that
adversely affect inbound U.S. tourism, including those issues that were
discussed in your hearing. Starwood is one of the world's largest hotel
companies, operating or managing close to one thousand properties
throughout the world, and employing close to 150,000 people, in hotels
operated under our nine hotel brands. Starwood's operations reach all
corners of the globe. We are in a unique position to evaluate and
compare the policies of the United States with respect to foreign
visitors and foreign investment with those of U.S. trading partners and
competitors.
We agree that delays in visa processing in key markets, including
China, India, Brazil and Chile, are having an extremely negative impact
on U.S. tourism and applaud the incremental steps that have been taken
so far by the State Department to address these problems. We applaud as
well the creation of Brand USA, Inc. and the renewed effort as a result
to promote inbound U.S. tourism.
As to the visa issue itself we recognize that there are limitations
on what changes can be made administratively, and that budget
reductions will also impact the ability to improve the visa system.
While Starwood is supportive of the efforts now underway to expand the
number of visa windows in key markets, especially China, and to hire
additional via processing officials, even on a non-career basis, we
also urge the Congress to seriously consider pending legislative
changes to the visa process. In their VISIT-USA Act, Senators Schumer
and Lee have made several proposals to provide long term visas to
Chinese tourists and for longer term visits by Canadian citizens, and
to potentially facilitate the visa interview function through
teleconferencing technology, sparing potential visitors the expense and
time needed to travel to U.S. Embassies and Consulates, a growing
problem in countries such as China in which there are already very
limited processing facilities. These proposals should be given very
serious consideration.
There is no question that U.S. national security must be protected,
but it is telling that the wait time for obtaining a visa in Brazil to
visit Britain is twelve days, while a U.S. visa still takes up to
ninety days. Britain has serious national security concerns as well but
has somehow managed to understand the concept that it can protect
itself from terrorists while opening up its tourism sector.
The fact is that while much more work needs to be done to address
the demand for visas, the downturn in U.S. travel and tourism is the
result of a much larger problem, namely the unfortunate development
over time of a set of fundamental policies that have made the United
States an increasingly less attractive place to which to travel, both
for tourism and for business, which will not be fully resolved through
visa reform. While the drop off in inbound tourism is generally
traceable to 9/11, the deterioration in policy goes much further back.
Simply put, America will not reach the levels of tourism that it
had prior to 9/11 until it changes a set of policies that discourage
not only leisure travel, but business travel and investment as well.
Adding more visa windows in China will certainly help, but will not in
and of itself create the attitude that once existed overseas that the
United States is both the primary place to visit and to do business.
There are several places to go to bring about these greater changes
only some of which are in this Committee's jurisdiction.
The United States should start be renewing its commitment to the
notion that travel and tourism is a key export market, and adopt
policies that advance this concept. While there has been a great deal
of debate recently over the role of exports in growing the U.S.
economy, too many policymakers neglect to mention that in bound tourism
should also be considered a vital U.S. export and promoted as such. The
U.S. benefits both from exporting goods overseas and from increasing
the number of foreign visitors to the U.S. Visitors to the U.S. on
average spend $4,000 per trip--all of which contributes favorably to
our international balance of payments. U.S. products and services are
consumed, and in both cases, greater demand for American goods and
services will lead to an expansion of the job market and economic
growth.
Few exports create jobs as effectively as travel and tourism. On a
micro level, economists estimate that one new job is created in the
United States for every thirty-six foreign visitors. In the aggregate,
it is estimated that the restoration of America's pre-2001 historic
levels of inbound foreign travel would create an additional 1.3 million
U.S. jobs over a decade, and produce an additional $859 billion in new
economic output.
The impact of these statistics is clear; it is equally important to
promote tourism as a means to grow the economy as it is to promote
manufacturing. And, while there has been a great deal of debate over
the deteriorating U.S. manufacturing infrastructure, there must also be
a focus on the travel and tourism infrastructure.
There is no question that travel facilities, including airports,
overseas are in many instances far more modern and attractive than
similar facilities in the U.S., and that foreign travel authorities
have done a far better job in reducing travel wait times or in finding
ways to make wait times more bearable. Stories about passengers being
trapped on airplanes at U.S. airports for multiple hours, or about
massive wait times and missed flights help to paint a negative picture
of the U.S. to foreign visitors.
The creation of Brand USA is certainly a symbol that this is not
the image that the U.S. wishes to project overseas, and a commitment to
remind the world of the many attractions that are worth seeing in the
United States. Brand USA, Inc., however, has no power to put together
the capital needed to improve the travel infrastructure of the United
States. And, the focus on the debt crisis in the U.S. likely will mean
that the Federal Government will have less, not more, to spend on the
larger costs of improving our travel infrastructure. Any effort to
truly rebuild America's preeminent position as a travel destination
must focus on the private sector, and yet current U.S. fiscal policies
make it difficult to raise the private sector capital needed to
encourage the investments that will once again make America's travel
facilities the best in the world.
Current Federal tax policy, for example, has the unfortunate effect
of discouraging investment in the U.S. by failing to keep up with
developments in many foreign nations, including all of our major
trading partners, which facilitate capital formation. Earlier this year
when Japan reduced its corporate tax rate, the U.S. became the OECD
nation with the highest corporate tax rate (35 percent), and one of the
few that continues to adhere to a policy of taxing U.S. companies on
their worldwide incomes. Moreover, current U.S. tax policies encourage
American companies to keep their foreign profits overseas, reducing the
amount of capital available in the U.S. for investment and economic
growth. Estimates suggest that U.S. companies are holding in excess of
$1.5 trillion in foreign earnings overseas, and absent a change in tax
policy, are likely to keep and invest these earnings overseas rather
than in the US. Simply put, instead of investing these funds to build
new travel facilities in the U.S., they are being used to expand the
travel infrastructure in China, India, and Europe.
Changes in tax policy that encourage investment in the United
States are a good start, and should be considered in conjunction with a
renewed focus on facilitating the easing of credit for the construction
in the United States of new hotel and resort properties as well as the
larger travel infrastructure. The United States went to great lengths
to stabilize the financial services sector during the past three years,
but so far, credit, including business credit, remains very tight.
There are literally hundreds of shovel ready hotel projects throughout
the United States simply waiting for credit to ease so that
construction can start.
It is very comforting to find that the Members of the Committee on
Commerce understand and are passionate about the need to elevate travel
and tourism as a key to economic growth and prosperity, and Starwood is
grateful for their dedication to these issues.
But given that some of the issues that have depressed the travel
and tourism sector as well as foreign investment in the U.S. since well
before 9/11 are in the jurisdiction of other committees, we urge the
Commerce Committee Members to reach out to their colleagues on other
committees, notably Finance, Banking, Homeland Security, and
Appropriations, to let them know that travel and tourism is a key to
restoring economic growth and prosperity in the U.S. and to ask that
they be a part as well of what should be a national conversation and
commitment to the travel sector.
By bringing the level of passion and dedication to travel and
tourism that has driven the Commerce Committee to those other
Committees, there is a far greater likelihood that the tax, financial
services, and trade issues that stand in the way of restoring American
tourism will also be addressed, and in so doing, the U.S. could be well
on its way to becoming once again the world's primary destination for
travel and investment.
______
Prepared Statement of the National Retail Federation
The National Retail Federation (NRF) respectfully submits this
statement for the record for the November 17, 2011 hearing entitled
``Tourism in America: Moving Our Economy Forward.'' NRF would like to
thank Chairman Klobuchar, Ranking Member Blunt and the members of the
Subcommittee for holding this important hearing. NRF fully believes
that the quickest way to stimulate the U.S. economy is to improve the
current visa process to allow more foreign travelers, especially those
from growing economies, to gain access to the U.S. market. These
improvements can be accomplished without any adverse impacts on U.S.
security.
Because of the burdensome U.S. visa policy, the travel sector,
including the retail sector, is losing access to a broad array of
consumers who can help improve economic performance in these key
sectors. While the U.S. retail sector has performed better than the
overall U.S. economy over the past year, growth in the retail sector
could have been even stronger had more international travelers had the
opportunity to visit the U.S. and U.S. retail stores. Accelerating the
visa process to regain the pre-9/11 travel market share could bring in
nearly 100 million more visitors a year, create more than one million
new jobs and pump more than $800 billion into the U.S. economy.
As the world's largest retail trade association and the voice of
retail worldwide, NRF represents retailers of all types and sizes,
including chain restaurants and industry partners, from the United
States and more than 45 countries abroad. Retailers operate more than
3.6 million U.S. establishments that support one in four U.S. jobs--42
million working Americans. Contributing $2.5 trillion to annual GDP,
retail is a daily barometer for the Nation's economy. NRF's Retail
Means Jobs campaign emphasizes the economic importance of retail and
encourages policymakers to support a Jobs, Innovation and Consumer
Value Agenda aimed at boosting economic growth and job creation.
Tourism and the Retail Sector
With rapidly growing economies creating a new breed of affluent
shoppers in countries such as Brazil, China and India, U.S. retailers
have grown to highly value foreign tourists as shoppers in their
stores. Unfortunately, tourists from these countries face lengthy
delays in obtaining a U.S. visa because of security requirements
implemented after 9/11. These delays have led these legitimate
travelers to visit other countries instead of the U.S., resulting in a
significant drop in the U.S. share of the international travel
marketplace.
There are several key barriers currently in place which are
preventing increases in overseas travel to America. These include: (1)
a highly inefficient and unpredictable visa application approval
process; (2) a lack of personnel to process and interview visa
applicants as well as a lack of access to a U.S. consular facility; and
(3) poor planning and communication to applicants. The U.S. visa
application process can take as long as 145 days in Brazil and 120 days
in China, two of the fastest-growing markets for outbound overseas
travel. While the U.S. State Department has improved performance in
these markets, we are concerned that these improvements may only be
temporary. The State Department needs to dedicate resources to plan
appropriately for future growth.
The delays in the U.S. visa approval process inevitably encourage
foreign tourists and consumers to go elsewhere. Last year alone, 38
percent of Chinese tourists went to Europe while only 13 percent came
to the U.S. As a result, U.S. merchants are missing out on billions of
dollars in potential sales. The U.S. Commerce Department estimates that
that 88 percent of overseas visitors shop while traveling in the U.S.,
and goods made by well-known U.S. brands like Nike, Levis and Gap top
their shopping lists. The most popular destinations for travel and
shopping are ports-of-entry like New York and Los Angeles along with
tourism centers like Las Vegas and Orlando. Many U.S. retailers cater
to these foreign shoppers at their flagship stores in major tourist
destinations, and retailers often have special programs geared towards
international travelers which include providing multi-lingual sales
associates in the stores to help with their shopping experience as well
as offering special discount cards to these international shoppers.
Recommendations
Because of the importance of this issue to U.S. retailers, NRF has
joined the Discover America Partnership. This Partnership unites a
diverse group of stakeholders behind a set of recommendations contained
in the ``Ready for Takeoff '' \1\ report issued by the U.S. Travel
Association. The report outlines common-sense visa reforms that will be
relatively easy to implement and which could create 1.3 million more
U.S. jobs and add $859 billion to the U.S. economy by 2020. The
report's comprehensive, four-step plan will help the United States
achieve its goal of becoming more competitive in the global travel
market, which in turn will expand U.S. exports (purchases by tourists
of products sold by retailers are considered ``services exports''),
create new jobs and drive economic growth.
---------------------------------------------------------------------------
\1\ http://www.smartervisapolicy.org/site/documents/VisaReport.pdf.
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The report recommends four solutions to improve U.S. visa policy.
These include:
Align U.S. State Department resources with market demands;
Reduce visa interview wait times to 10 days or fewer;
Improve visa planning, measurement and transparency; and
Expand the Visa Waiver Program.
In addition to this private sector report, the President's Council
on Jobs and Competitiveness identified travel and tourism as a way to
spur job growth. In the Council's October Interim report titled
``Taking Action, Building Confidence: Five Common Sense Initiatives to
Boost Jobs and Competitiveness,'' \2\ the Council noted that they were
focusing on two key areas to improve travel and tourism: promoting
travel to the U.S. and accelerating visa processing. The report notes
that the State Department has accelerated visa processing in China and
Brazil, but they continue to work with the State Department to identify
other opportunities to improve visa processing.
---------------------------------------------------------------------------
\2\ http://files.jobs-council.com/jobscouncil/files/2011/10/
JobsCouncil_InterimReport_Oct11.
pdf.
---------------------------------------------------------------------------
Congressional Action
In light of the recommendations from the Discover America
Partnership and the focus by the President's Council on Jobs and
Competitiveness, there have been several bills introduced in Congress
to address the visa processing issues. NRF calls upon Congress to act
quickly upon this important legislation in order to provide a
meaningful boost to the U.S. economy.
We commend the leaders of the Subcommittee, Chairman Klobuchar and
Ranking Member Blunt, for introducing the ``International Tourism
Facilitation Act'' (S. 1653). The bill would give the State Department
incentives to improve the visa process and enable the Secretary of
State to grant waivers in appropriate circumstances for additional
years without requiring additional in-person interviews. We believe
these important steps; along with other provisions within the bill will
help the Department improve the visa process.
In the House, Representative Joe Heck has introduced the
``Welcoming Business Travelers and Tourists to America Act of 2011''
(H.R. 3039), which would set a standard that requires the State
Department to process visas within 12 days instead of their stated goal
of 30 days. The bill would also implement a program that utilizes
videoconferencing technology for conducting visa interviews to help
alleviate the current backlog.
Finally, NRF strongly supports language included in visa reform
provisions included in the Fiscal Year 2012 Department of State,
Foreign Operations, and Related Programs Appropriations bill (S. 1601)
that would address visa reform. The provision directs the State
Department to hire enough consular officers to meet their 30 day
standard for processing visas; requires the agency to develop a plan to
meet demand for nonimmigrant visas in Brazil, China and India over the
next five years; and gives the agency discretion to establish a pilot
program to use videoconferencing rather than requiring that visa
interviews take place in person.
NRF believes that these bills in combination with the current steps
taken by the State Department will help remove the barriers currently
in place that discourage international travelers from visiting the U.S.
Conclusion
We thank you for your attention to this important matter. NRF will
continue to work with the State Department, business allies and
supporters on Capitol Hill to ensure that more foreign visitors who are
eager to visit America can safely enter the U.S. and enjoy all that we
have to offer--creating jobs for Americans in the process. NRF supports
strong national security measures and does not advocate lower standards
for entry to improve the visa process. The State Department, however,
needs to provide adequate personnel, technology and other resources so
visa applications can be processed in a timely manner. If you have any
questions or need additional information, please contact Jonathan Gold
( [email protected]), Vice President Supply Chain and Customs Policy for
NRF.
______
Prepared Statement of the United States Tour Operator Association
Mr. Chairman, Ms. Ranking Member, and members of the Subcommittee
on Competitiveness, Innovation, and Export Promotion, I am Terry Dale
and I am proud to serve as President of the United States Tour Operator
Association (USTOA). USTOA is a professional association representing
the tour operator industry, which is composed of companies whose tours
and packages encompass the entire globe. USTOA was founded in 1972 by a
group of operators who recognized the need for a unified voice to
protect the traveling public, as well as representing the interests of
tour operators. In 1975, USTOA became a national organization with
headquarters in New York. Members of USTOA number among the top names
in travel and represent the entire spectrum of vacation packages and
tours available today. USTOA companies move more than 11 million
passengers and account for a sales volume of more than $9 billion
annually.
On behalf of USTOA, I am submitting this statement for the record
regarding the travel industry's impact on the U.S. economy. I want to
start by thanking this Committee for their continued focus on tourism
as a key economic driver. With the economy still struggling and
unemployment remaining high, it is critical that the private sector,
Congress, and the Federal Government work together to support travel
and tourism and encourage increased foreign tourism to the United
States. USTOA is available to assist in any way to advance tourism
opportunities at home and abroad.
First, let me begin by pointing out the significant impact travel
and tourism has had on the American economy just this year. The
Department of Commerce's International Trade Administration (ITC)
recently released some figures for this year worth highlighting.
According to the ITC:
Annually, the travel and tourism sector supports 7.8 million
American jobs and contributes $1.3 trillion to the U.S.
economy.
Under the current 2011 projections, 64 million international
travelers will have spent $152 billion during their stay in the
United States. This is a 13% increase from 2010.
The U.S. is set to have a 2011 travel and tourism trade
surplus of $41 billion.
International visits to the United States are expected to
grow 5% annually throughout the next five years.
As these figures point out, attracting and encouraging foreign
visitation to the U.S. is critical to many of the businesses that USTOA
members operate, and critical to the U.S. economy as a whole.
Unfortunately, some impediments within the visa processing system exist
that result in long wait times and thus discourage visitors from
travelling to our great nation. Many of our members see the potential
for additional business opportunities if our visa application process
were made more efficient and the long wait times shortened. Although it
is not before this Committee, the USTOA would like to go on record
supporting S. 1653, the International Tourism Facilitation Act, in
order to increase U.S. tourism by shortening the excessively long wait
times foreign visitors face when applying for a U.S. tourist visa. We
want to encourage increased travel to the U.S. in a way that creates a
more user-friendly process for international visitors. Such actions
will go a long way in improving the nation's economy.
Ensuring that visitors have a pleasant experience upon arrival in
the U.S. is vital for maintaining and increasing foreign visits to the
United States. It is essential that we have secure borders in a post-9/
11 environment while simultaneously having security processes and
programs that facilitate legitimate and efficient travel. The USTOA
champions an open border policy and has worked with the U.S. State
Department and other government entities to facilitate tourism
worldwide. The USTOA will continue to be available as a resource to the
State Department, the federal government and Congress as they work to
identify various tools and programs to improve traveler satisfaction.
Mr. Chairman, thank you for the opportunity to submit this
statement for the record. The Committee's consideration of USTOA's
views is greatly appreciated. The USTOA values the leadership and
efforts of Subcommittee on Competitiveness, Innovation, and Export
Promotion in support of travel and tourism which is essential to the
U.S. economy. We look forward to working with the Subcommittee on these
important issues.
______
Response to Written Questions Submitted by Hon. Tom Udall to
James P. Evans
Question 1. I am pleased to hear about Brand USA's marketing
campaign and to see such a range of travel destinations represented on
the Discover America website. I look forward to seeing the new
advertisements this spring. Could you speak about Brand USA's plans to
promote travel in rural areas?
Answer. We are currently in the process of meeting with Convention
and Visitors Bureaus (CVBs) and Destination Marketing Organizations
(DMOs) from all across the country. In fact, on December 7-8, we are
hosting a marketing outreach session to learn from state and city
tourism directors. Among many others, marketing officers from states
with many rural tourist destinations such as Michigan, Minnesota, and
North Carolina are attending. Also, we have established Advisory Groups
to assist our Marketing and Business Development teams develop ideas
and strategies as we go forward. Members for these Advisory Groups will
represent both urban and rural areas.
We continue to develop our campaign creative and content for online
initiatives. Our plan is to blanket the United States over time and
provide in all markets interesting perspectives and information
regarding iconic destinations, national parks, and areas not
traditionally visited by international travelers.
Question 2. How else can we help support and promote tourism in
rural areas? Is marketing ``adventure'' tourism, such as ski and
rafting packages, the best strategy or are there other promising ways
to promote rural destinations?
Answer. Our marketing strategy is built on capturing the United
States under four marketing pillars: Urban Excitement, Culture, the
Great Outdoors and Indulgence. Adventure tourism will be an important
aspect of our Great Outdoors and Indulgence efforts. It is our intent
to showcase rural outdoor spaces, national parks, and other active
experiences available to international travelers.
Question 3. I am pleased to hear that outdoor tourism is one of
Brand USA's campaign focuses. Outdoor recreation is especially
important to my state, which is home to 17 units of the National Park
Service, including parks, monuments, and historic trails. These
destinations attract tourists from around the world, contribute $3.8
billion annually to my state's economy, and support 47,000 jobs. What
is Brand USA doing to encourage outdoor tourism in the U.S.? How else
might states and the Federal Government help support and promote
outdoor tourism?
Answer. With Great Outdoors as a major marketing strategic pillar
we will certainly be promoting and providing information and booking
opportunities for outdoor recreation. We have held discussions with
Jonathan Jarvis, Director of the U.S. National Park Service; Neil
Mulholland, President and CEO of the National Park Foundation; and
Derrick Crandall, President and CEO of the American Recreation
Coalition on the ways in which we can collaborate to promote outdoor
tourism. We are looking at strategic partnerships and co-operative
marketing efforts with these and other relevant organizations. In the
coming months we will continue to meet with groups like these and with
state tourism offices to flesh out projects of mutual interest.
Question 4. New Mexico is home to unique Native American sites and
traditions, such as Bandelier National Monument, Chaco Canyon, the Gila
Cliff Dwellings, and nineteen Pueblos. The American Indian Alaska
Native Tourism Association, which is based in Albuquerque, participated
earlier this year in ITB Berlin, one of the world's leading travel
trade shows. The organization is also working with the Bureau of Indian
Affairs on tribal tourism initiatives. What could Congress and the
Federal Government do to help support these efforts and other cultural
tourism initiatives?
Answer. It is Brand USA's intention to exemplify all cultures of
the country in its marketing and partnership efforts. In fact, one of
our initial advertisement concepts showcases Native American culture.
Brand USA would certainly welcome any advice in accessing significant
Native American sites and populations for purposes of telling their
story and enticing international travelers to visit and learn more.
______
Response to Written Question Submitted by Hon. Tom Udall to
John F. Edman
Question. New Mexico is home to unique Native American sites and
traditions, such as Bandelier National Monument, Chaco Canyon, the Gila
Cliff Dwellings, and nineteen Pueblos. The American Indian Alaska
Native Tourism Association, which is based in Albuquerque, participated
earlier this year in ITB Berlin, one of the world's leading travel
trade shows. The organization is also working with the Bureau of Indian
Affairs on tribal tourism initiatives. What could Congress and the
Federal Government do to help support these efforts and other cultural
tourism initiatives?
Answer. My answer would be that those American Indian events and
sites that wish to promote tourism should be an area of focus within
the CTP international marketing efforts. From an overall Cultural
Tourism Promotion standpoint, Congress should include in their funding
mandates for all cultural programs that a part of their mission needs
to be to connect their cultural assets to people and that marketing
needs to be a function of their organization if they are to receive
funding.
______
Response to Written Question Submitted by Hon. Tom Udall to
Jonathan Zuk
Question. New Mexico is home to unique Native American sites and
traditions, such as Bandelier National Monument, Chaco Canyon, the Gila
Cliff Dwellings, and nineteen Pueblos. The American Indian Alaska
Native Tourism Association, which is based in Albuquerque, participated
earlier this year in ITB Berlin, one of the world's leading travel
trade shows. The organization is also working with the Bureau of Indian
Affairs on tribal tourism initiatives. What could Congress and the
Federal Government do to help support these efforts and other cultural
tourism initiatives?
Answer. Thank you for your question. We appreciate your interest at
such a very important and fundamental time for the tourism industry.
Within the broad picture, information about all of these sites and
traditions should fall under the umbrella of ``The Brand USA'' and
should be included in their promotions, specifically on their website
``Discoveramerica.com''. Although The Brand USA has not yet announced
its intentions, or the structure for this website, the concept
preferred by the Receptive Services industry (RSAA) is that as visitors
tunnel down into the individual States, or groupings on the site, all
of these wonderful destinations should appear and allow international
travelers to obtain (initial) information, which would encourage them
to visit. We are optimistic that The Brand USA will concur with this
vision and we will continue to monitor the development of their
marketing campaigns and website.
It is the belief of RSAA that the intention of the Travel Promotion
Act is to promote the United States as a whole; not only its great
cities and tourism icons, but also our less prominent destinations. We
strongly affirm that our rural heritage is one of the keys to increased
export tourism dollars. International visitors are mesmerized by the
cultures of our native people, their history and their traditions. We
will endeavor to help The Brand USA understand this and encourage
Congress, the Federal Government and, in particular, the Bureau of
Indian Affairs, to suggest such organizations as the American Indian
Alaska Native Tourism Association work jointly with RSAA to create
programs that can excite our international visitors, and benefit our
native economies.
On a more specific basis, several of the destinations you mention
are already working through the distribution channels of the
international tourism industry and attract many international visitors.
You will know that the more prominent places in New Mexico such as
Santa Fe, Taos and Albuquerque have being doing so for many years and
each in their turn has hosted gatherings of international tourism
specialists, including members of our organization, the Receptive
Services Association. These meetings always feature small, local tour
companies who can take advantage of such exposure.
As the key link between such destinations and the international
tourism distribution system overseas, many receptive tour companies
already have close working relationships with not only the Federal and
State organizations, but also such individual tour companies and
suppliers at the grass-roots level. Indeed, it is exactly these
partners that we are continually seeking out, so that our international
guests can visit and be informed by the very guardians of these
traditions and cultures. Our greatest difficulty is in finding each
other and then developing a working partnership that will meet the
specific requirements of each. Sometimes this is easier said than done.
Again, we encourage the Bureau of Indian Affairs to inform any
interested parties to contact us at RSAA so that we may help them find
a voice within The Brand USA and beyond.
We applaud the effort by Congress in developing and ratifying the
Travel Promotion Act. We encourage Congress and the Federal Government
to be vigilant in ensuring that The Brand USA, through its marketing
efforts, protects and supports the interests of the less publicized
attractions and points of interest throughout our great country. We ask
that you urge The Brand USA to work closely with RSAA and its members
who have the unique knowledge and expertise to ensure the success of
well-balanced promotional efforts.
______
Response to Written Question Submitted by Hon. Tom Udall to
Jonathan Tisch
Question. New Mexico is home to unique Native American sites and
traditions, such as Bandelier National Monument, Chaco Canyon, the Gila
Cliff Dwellings, and nineteen Pueblos. The American Indian Alaska
Native Tourism Association, which is based in Albuquerque, participated
earlier this year in ITB Berlin, one of the world's leading travel
trade shows. The organization is also working with the Bureau of Indian
Affairs on tribal tourism initiatives. What could Congress and the
Federal Government do to help support these efforts and other cultural
tourism initiatives?
Answer. The United States is blessed with many world-class
destinations, important historical sites, and vital cultural heritage
attractions that both stimulate domestic tourism and encourage
international travelers to come and visit. While it is true that many
international tourists enter our country through major coastal or
gateway cities, there are numerous draws within the Nation that lure
them to all of our states. New Mexico and the surrounding regional
Southwest is certainly no exception, and there is significant
opportunity to attract tourists there from all over the world.
To do so, however, both the state and the region need visitors to
have a first class travel experience. That experience often begins well
before visitors even step foot in our country--for many, it starts when
visitors are applying for a visa to visit the U.S. Right now, that
process is burdensome and bureaucratic. Congress should implement
needed reforms so that the State Department can ensure that
international travelers experience minimal delay and hassle when
applying for a visa.
Once here, international travelers must experience travel that is
easy, efficient and enjoyable in order to keep them coming back. If a
visitor is greeted by cancelled flights, lengthy delays on an airport
tarmac, airports that are antiquated and unable to accommodate today's
modern security equipment--odds are they will be reluctant to travel
from gateway cities into the country, let alone book a return trip. But
if travelers can move easily from Los Angeles to Albuquerque they will
be more likely to venture on to Chaco Canyon or the Gila Cliff
Dwellings.
To make this a reality, Congress and the Federal Government need to
prioritize upgrades to our Nation's travel infrastructure--particularly
our aviation infrastructure--to help domestic and international
tourists have an enjoyable experience traveling to and around the
American Southwest. Modernizing our air traffic control system,
expanding our runway capacity, bringing our airports and terminals up-
to-date--all will contribute to improving the travel experience and
bring more international and domestic visitors to New Mexico.