[Senate Hearing 113-563]
[From the U.S. Government Publishing Office]
S. Hrg. 113-563
THE STATE OF U.S. TRAVEL AND TOURISM:
INDUSTRY EFFORTS TO ATTRACT 100 MILLION VISITORS ANNUALLY
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HEARING
before the
SUBCOMMITTEE ON TOURISM, COMPETITIVENESS, AND INNOVATION
of the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
MAY 8, 2014
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
______
U.S. GOVERNMENT PUBLISHING OFFICE
93-275 PDF WASHINGTON : 2015
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
JOHN D. ROCKEFELLER IV, West Virginia, Chairman
BARBARA BOXER, California JOHN THUNE, South Dakota, Ranking
BILL NELSON, Florida ROGER F. WICKER, Mississippi
MARIA CANTWELL, Washington ROY BLUNT, Missouri
MARK PRYOR, Arkansas MARCO RUBIO, Florida
CLAIRE McCASKILL, Missouri KELLY AYOTTE, New Hampshire
AMY KLOBUCHAR, Minnesota DEAN HELLER, Nevada
MARK BEGICH, Alaska DAN COATS, Indiana
RICHARD BLUMENTHAL, Connecticut TIM SCOTT, South Carolina
BRIAN SCHATZ, Hawaii TED CRUZ, Texas
EDWARD MARKEY, Massachusetts DEB FISCHER, Nebraska
CORY BOOKER, New Jersey RON JOHNSON, Wisconsin
JOHN E. WALSH, Montana
Ellen L. Doneski, Staff Director
John Williams, General Counsel
David Schwietert, Republican Staff Director
Nick Rossi, Republican Deputy Staff Director
Rebecca Seidel, Republican General Counsel and Chief Investigator
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SUBCOMMITTEE ON TOURISM, COMPETITIVENESS, AND INNOVATION
BRIAN SCHATZ, Hawaii, Chairman TIM SCOTT, South Carolina, Ranking
MARK PRYOR, Arkansas Member
AMY KLOBUCHAR, Minnesota ROY BLUNT, Missouri
MARK BEGICH, Alaska DAN COATS, Indiana
EDWARD MARKEY, Massachusetts DEB FISCHER, Nebraska
JOHN E. WALSH, Montana RON JOHNSON, Wisconsin
C O N T E N T S
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Page
Hearing held on May 8, 2014...................................... 1
Statement of Senator Schatz...................................... 1
Prepared statement of Hon. Amy Klobuchar, U.S. Senator from
Minnesota.................................................. 3
Statement of Senator Scott....................................... 4
Statement of Senator Blunt....................................... 28
Statement of Senator Heller...................................... 34
Witnesses
Roger Dow, President and Chief Executive Officer, U.S. Travel
Association.................................................... 5
Prepared statement........................................... 7
Christopher L. Thompson, President and Chief Executive Officer,
Corporation for Travel Promotion (Brand USA)................... 11
Prepared statement........................................... 12
Mike McCartney, President and Chief Executive Officer, Hawaii
Tourism Authority.............................................. 18
Prepared statement........................................... 20
Brad Dean, President and Chief Executive Officer, Myrtle Beach
Area Chamber of Commerce....................................... 23
Prepared statement........................................... 25
Appendix
Letter dated April 7, 2014 to Hon. Amy Klobuchar from the
American Hotel & Lodging Association........................... 43
Letter to Hon. Gus Bilirakis from Clyde J. Hart, Senior Vice
President for Government Affairs and Policy, American Bus
Association.................................................... 44
Letter dated April 17, 2014 to Hon. Gus Bilirakis and Hon. Peter
Welch from Geoff Freeman, President and CEO, American Gaming
Association.................................................... 44
Letter dated May 8, 2014 to Representative Bilirakis from John H.
Graham IV, CAE, President and CEO, ASAE--The Center for
Association Leadership......................................... 45
Letter dated April 11, 2014 to Hon. Amy Klobuchar and Hon. Roy D.
Blunt from Zane Kerby, President and Chief Executive Officer,
American Society of Travel Agents.............................. 46
Letter dated May 16, 2014 to Members of Congress from Kevin
Mitchell, Chairman, Business Travel Coalition.................. 46
Letter dated April 9, 2014 to Hon. Amy Klobuchar from Christine
Duffy, President and CEO, Cruise Lines International
Association (CLIA)............................................. 47
Letter dated April 24, 2014 from Michael Gehrisch, President and
CEO, Destination Marketing Association International........... 48
Letter dated May 8, 2014 to Senator Roy Blunt and Senator Amy
Klobuchar from Kenneth Svendsen, President, Walt Disney Travel
Company and Senior Vice President, Global Sales................ 48
Letter dated May 7, 2014 to Hon. Amy Klobuchar from John F.
Edman, Director, Explore Minnesota Tourism..................... 49
Letter dated May 6, 2014 to Hon. Amy Klobuchar and Hon. Roy Blunt
from Paul Noland, President and CEO, International Association
of Amusement Parks and Attractions............................. 50
Letter dated May 6, 2014 to Hon. Amy Klobuchar from Maureen
Hooley Bausch, Executive Vice President, Mall of America....... 50
Letter to Members of Congress from Wayne Ingram, President and
Chief Executive Officer, National Tourism and Heritage
Association.................................................... 51
Letter dated April 11, 2014 to Hon. Roy Blunt from Tracy
Kimberlin, President/CEO, Springfield Missouri Convention &
Visitors Bureau................................................ 52
Letter dated May 8, 2014 to Hon. Amy Klobuchar and Hon. Roy D.
Blunt from Stephen Shur, President, Travel Tech................ 52
Letter dated April 22, 2014 to Hon. Any Klobuchar and Hon. Roy
Blunt from R. Bruce Josten, Executive Vice President,
Government Affairs, U.S. Chamber of Commerce................... 53
Letter dated April 4, 2014 to Hon. Amy Klobuchar and Hon. Roy
Blunt from Roger J. Dow, President and CEO, U.S. Travel
Association.................................................... 53
Letter dated May 23, 2014 to Hon. Amy Klobuchar and Hon. Roy
Blunt from Desiree Filippone, Managing Director, Government
Relations, United States Olympic Committee (USOC).............. 54
Letter dated April 22, 2014 to Senator Amy Klobuchar from Terry
Dale, President and CEO, United States Tour Operators
Association.................................................... 55
Letter dated March 5, 2014 to Congressman Gus M. Bilirakis from
Will Seccombe, President and CEO, VISIT FLORIDA................ 55
Response to written questions submitted to Roger Dow by:
Hon. Brian Schatz............................................ 106
Hon. Bill Nelson............................................. 108
Hon. Amy Klobuchar........................................... 108
Response to written questions submitted to Christopher L.
Thompson by:
Hon. Bill Nelson............................................. 109
Hon. Amy Klobuchar........................................... 110
Hon. Roy Blunt............................................... 112
Response to written question submitted by Hon. Amy Klobuchar to:
Mike McCartney............................................... 114
Brad Dean.................................................... 114
THE STATE OF U.S. TRAVEL AND TOURISM:
INDUSTRY EFFORTS TO ATTRACT
100 MILLION VISITORS ANNUALLY
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THURSDAY, MAY 8, 2014
U.S. Senate,
Subcommittee on Tourism, Competitiveness, and Innovation,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Subcommittee met, pursuant to notice, at 10:02 a.m. in
room SR-253, Russell Senate Office Building, Hon. Brian Schatz,
Chairman of the Subcommittee, presiding.
OPENING STATEMENT OF HON. BRIAN SCHATZ,
U.S. SENATOR FROM HAWAII
Senator Schatz. Good morning. I call this hearing to order.
This is the first hearing of the Subcommittee on Tourism,
Competitiveness, and Innovation. I am glad to be here with
Ranking Member Scott to work together to advance the tourism
industry and create good jobs in every State, including my home
state of Hawaii.
This hearing will examine whether we are reaching our
Nation's goal of attracting 100 million international visitors
annually by 2021. We will hear from key industry stakeholders
and get their perspective on how the Federal Government can
better achieve this goal.
Tourism and hospitality know no ideology. This is an area
where we can work together across party lines to create and
keep jobs in the United States.
The travel and tourism industry is a major economic driver
and job creator in this country. It generates trillions of
dollars in economic output, making it our top services export,
and supports more than 14 million American jobs.
When international travelers come to the United States,
they spend an average of $4,400 on food, lodging,
transportation, and entertainment, which is directly infused
into local economies.
I have a particular interest in this industry. It is the
single largest source of private capital coming into the state
of Hawaii, and 20 percent of our gross state product, creating
the most jobs among the major economic sectors.
As an island state located in the Asia-Pacific region, we
are uniquely positioned to capture the growth in travel and
tourism demand from the region's emerging markets.
Over the past decade, international visitors to the United
States have increased from 40 million to nearly 70 million. The
United States holds the leading global share of international
traveler spending.
We are now seeing double digit growth in the number of
visitors from China and Brazil, the only two countries in
America's top 10 markets that are not members of the Visa
Waiver Program.
However, while international arrivals are increasing, our
overall share of the global market is decreasing. This market
is growing due to the rise of tourism and new emerging
economies, so we must be proactive to grow our leading market
share. The Commerce Committee has a history of taking action to
strengthen our competitiveness in the global travel
marketplace. Although we have seen big gains in international
visitation in the last 5 years, we have to continue to look for
additional ways to increase market share.
Today, we will focus on three critical areas to maintain
America's competitiveness in travel and tourism.
The first is how the United States engages in travel
promotion. Prior to the establishment of Brand USA, the United
States lacked a coordinated international promotion strategy.
We need to creatively and effectively market the United States
as a premier travel destination.
Individual U.S. destinations also market to international
visitors but understanding how their efforts coordinate with
and complement national efforts is key to doing this well.
The second issue is accessibility. In the past,
international visitors have experienced long wait times at our
ports of entry, which did not create a feeling of welcome.
A recent U.S. travel survey showed that international
travelers are less likely to come back because of the long
lines and wait times. More than 40 percent of international
travelers that visited said they would recommend avoiding a
trip to the United States because of the entry process.
This is costing our economy billions of dollars.
Customs and Border Protection has tried to reduce wait
times by establishing the Global Entry program to expedite the
processing of low-risk travelers, and working with the private
sector to implement the model ports program.
We have also had challenges meeting the visa demand,
especially in high demand countries, such as China and Brazil.
The State Department has made significant progress in reducing
the visa interview wait times by adding consular offices and
implementing a pilot program to waive interviews for low-risk
applicants. However, as demand rises, we will need to come up
with innovative methods to maintain low wait times that are
competitive with other countries.
While CBP and the State Department have made some
improvements, we need to be looking at how we can further
streamline the processes, such as by expanding trusted traveler
programs and leveraging new technologies to increase
efficiency.
Last, the Subcommittee will focus on how we can provide a
unique visitor experience to attract new visitors and encourage
repeat visits. We can achieve this by becoming more customer
focused in how we deliver Federal services. We also must help
small businesses to grow and provide high quality products and
services.
As we work to address these areas, a critical component
will be public-private partnerships. The Travel and Tourism
Advisory Board and Brand USA are examples of effective
partnerships between the sectors to coordinate efforts and
advance travel and tourism policy, but we must continue to
build on these successes and find ways to increase
collaboration to address barriers to travel in the tourism
industry.
I look forward to hearing from the witnesses on how we can
continue working together to grow our travel and tourism
industry. I want to thank you all for being here today.
I would also like to mention that Senator Klobuchar wanted
to be here today but was unable to attend because she is
attending Congressman Oberstar's funeral. She has been a strong
leader on tourism issues as the co-chair of the Tourism Caucus
and on Brand USA reauthorization.
She will be submitting a statement and some questions for
the record.
[The prepared statement of Senator Klobuchar follows:]
Prepared Statement of Hon. Amy Klobuchar, U.S. Senator from Minnesota
Thank you, Chairman Schatz and Ranking Member Scott for holding
this important hearing on strategies to bring more tourists to the
United States.
As the former Chair of this Subcommittee, I know the importance of
the tourism industry to our Nation's economy. In fact, tourism is
America's seventh largest private sector industry, and it is America's
number one service export. That is why as co-chair of the bipartisan
Senate Tourism Caucus with Senators Blunt, Begich and Kirk, and as a
member of the President's Export Council, I've been working on policies
to encourage more international tourists to visit our states.
The typical international tourist visiting the United States spends
an average of $4,500. Multiply that by several million and you're
looking at some really significant numbers. In 2012, international
tourists added nearly $130 billion to the U.S. economy and generated
more than $19 billion in federal, state and local tax revenue. Last
year we set a new record with 70 million international tourists
visiting the United States. For every 33 foreign tourists who come to
the United States, one new American job is created and these are jobs
that cannot be outsourced.
One way to increase visitation to the United States is by making
sure people around the world know all the great places they can see and
activities they can do here. I supported the bipartisan Travel
Promotion Act and the creation of Brand USA in 2010 as a marketing
resource for destinations around the country and as a way for the
United States to better compete for market share in the rapidly growing
international travel market.
We're starting to see that Brand USA is making a difference. A
recent report found that in 2013, just a few years into operation,
Brand USA's marketing campaigns increased visitation to the United
States by 1.1 million people--or a boost of 2.3 percent over where it
would have been without the marketing campaigns. These additional
visitors spent $3.4 billion in the United States, supporting 53,000 new
jobs.
Now Senator Blunt and I are leading the effort in the Senate to get
Brand USA reauthorized so it can expand to even more markets. We
introduced S. 2250, a bill to reauthorize Brand USA, a couple of weeks
ago and already have 24 bipartisan cosponsors on the bill including
many members of this Committee. The overwhelming bipartisan support for
the bill demonstrates how important tourism is for each of our states
and to our local economies.
With news about our reauthorization effort continuing to grow, we
are earning new endorsement letters from national associations like
U.S. Travel Association, the American Hotel and Lodging Association,
the U.S. Chamber of Commerce, the Cruise Line Industry Association, and
more. Additionally, state and local businesses and visitors bureaus are
sending in their support. From my home state I have received letters of
support from Explore Minnesota and the Mall of America, both of whom
have partnerships with Brand USA and have been able to expand their
marketing capabilities to bring foreign visitors to the Land of 10,000
Lakes.
We also need to make sure that our policies at other agencies keep
up with the demand that Brand USA's efforts will create on our visa,
ports of entry, and transportation systems. Earlier this week I sent a
letter to Secretaries Pritzker and Jewell, the co-chairs of the
President's Task Force on Travel Competitiveness, asking them to review
and renew the Administration's commitment to the National Travel and
Tourism Strategy, especially in light of the approaching 100th
anniversary of our National Park System.
I'd like to thank the witnesses for being here today and for your
dedication to promoting U.S. tourism so that we can reach the
President's goal of attracting 100 million visitors annually by 2021.
Senator Schatz. Before I recognize Ranking Member Scott for
his remarks, I would like to say that I appreciate his
willingness and his leadership in working on these issues in a
bipartisan manner. We have been working on a bill to facilitate
more international visitors in the country.
Senator Scott and I both come from places that know tourism
well. He is from Charleston, South Carolina, a great tourism
city on the East Coast. I expect an invitation shortly.
We have seen how tourism helps small businesses and is a
major driver of local economies and creating jobs. I look
forward to partnering with Ranking Member Scott.
Ranking Member Scott?
STATEMENT OF HON. TIM SCOTT,
U.S. SENATOR FROM SOUTH CAROLINA
Senator Scott. Thank you, Chairman Schatz. I will tell you
that your invitation is now present. Here you are, sir.
Senator Schatz. Thank you very much.
Senator Scott. I look forward to seeing you in South
Carolina and in Charleston, specifically, as well.
Chairman Schatz, thank you for putting this subcommittee
hearing together. I look forward to hearing from our panelists.
There is no doubt, without any question, that one of the most
important issues that we can discuss today is tourism, and the
impact of tourism is fantastic. When we look at the economic
output that is derived through tourism, we should be very
excited about this conversation.
Looking for ways to get us to the place where, by 2021, we
have more than 100 million tourists, international tourists,
coming to America is a laudable goal. Looking at the success
that we have seen last year with the 4.7 percent growth to 70
million tourists, we are excited that the goal may soon be
within our reach.
I am excited to have on the panel Brad Dean. Mr. Dean is
the CEO and president of the Chamber of Commerce in the Myrtle
Beach area. And there is no doubt that when you get to know Mr.
Dean, you will understand why I am so excited to have what I
consider a force of nature before us.
Here is a fellow who has gone the extra mile so
consistently for the communities near Myrtle Beach, but also
for South Carolina. When we think about the challenges of
tourism, we think about the challenge of infrastructure when we
think about Myrtle Beach.
In fact, I think Myrtle Beach is perhaps the largest
tourist destination without a major interstate taking folks
there. I hope that you have an opportunity to talk about the
necessity of further infrastructure investment.
In South Carolina, one out of every 10 jobs are connected
to tourism, much to the credit of folks like Mr. Dean and
others throughout South Carolina that make their primary focus
tourism.
I know we are not here simply to talk about South Carolina
tourism, but I thought I would go ahead and entice you all to
do what Chairman Schatz said and come to South Carolina real
soon. Our success really has happened because of the ability of
travel promotion to be prioritized in our country. That focus
and that objective has been very successful.
The notion of accessibility, we will have a chance to talk
about the success that we have had in Myrtle Beach and
throughout South Carolina with our Canadian friends, and what
that means to tourism and what that means to the bottom line.
And let me talk about the bottom line for just a few
seconds here. With a $2.1 trillion economic output--$2.1
trillion economic output--nearly 15 million domestic jobs
supported by tourism, I think the goal of reaching 100 million
international visitors by 2021 will take those numbers up by
another 30 percent to 40 percent, which means we could see
another 3 million or 4 million jobs connected to the tourism
industry, if in fact we are able to achieve our goals.
2021 sounds like a long way away, but really, it is only 7
years from today. And if we are going to be successful, we are
going to have to take on some critical areas, including two I
would like to focus on, travel promotion and accessibility, in
order for us to achieve that goal.
I look forward to the comments from all the panelists, of
course. And thank you, Chairman Schatz, for putting together
this hearing. I look forward to your successful visit to South
Carolina in the next few months.
Senator Schatz. Thank you very much, Senator Scott.
It gives me great pleasure to introduce our witnesses.
Today, we have Roger Dow, President and CEO of the U.S. Travel
Association; Chris Thompson, President and CEO of Brand USA;
Mike McCartney, President and CEO of the Hawaii Tourism
Authority; and Brad Dean, President and CEO of the Myrtle Beach
Area Chamber of Commerce.
Before we start, I want you to know that your full written
statements will be made part of the record, and I would also
like to remind you to please limit your oral remarks to 5
minutes.
Mr. Dow, please proceed with your statement.
STATEMENT OF ROGER DOW, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
U.S. TRAVEL ASSOCIATION
Mr. Dow. Thank you very much, Chairman Schatz and Ranking
Member Scott. You both understand this travel and tourism
business as well as any of us at this table, so we appreciate
all your support.
You both did an eloquent job of giving the stats, the
numbers, so I am not going to repeat what you said. It is big.
It is big business. It is jobs.
When you really look at it, the travel industry really was
hit by the economic downturn like everyone else, but it is a
resilient industry. We are already back. Since 2010, we have
added 700,000 jobs. We are back at record levels of employment.
And it is really an opportunity. We are adding jobs 49
percent faster than any other sector ofthe U.S. economy. And
the nice thing about these jobs is they can't be outsourced.
When someone works in Myrtle Beach, South Carolina, or Hawaii,
we can't send them to another country to do their job. They
have to be there in this industry. And it is a very labor-
intensive industry.
It is also an industry that provides great upward mobility.
Everyone at this table is an example of that and how you can
move up in this industry.
If you look at 2000, we had 17 percent of the market share
of the global international market. The rest of the world has
discovered that travel and tourism it is a front door to
economic development. And if you look recently, we have gone
down in global marketshare to 13 percent. When you really look
at that, there is a tremendous opportunity for growth.
We have to promote. We have to increase facilitation. We
have to improve infrastructure, as you said.
There is a lot of good news with regard to Brand USA, which
passed in 2010. Brand USA passed by a monstrous margin, 3 to 1
in the Senate and 3 to 1 in the House. In fact, it passed
several times. It passed by those big margins, because it made
so much sense.
The Travel Promotion Act (TPA) created Brand USA, which you
will hear about from Chris Thompson, so I will not take his
thunder. TPA created an opportunity for a public-private
partnership. It gave an opportunity to level the playing field.
Now small destinations can promote themselves, not just the
large destinations with big budgets. These destinations can
promote where they want to.
The most important thing is by promoting the U.S., they are
also able to explain our security policies and how to come to
the U.S.
Brand USA is really helping to restore our competitive
advantage in travel and tourism, so we can get to that goal of
100 million visitors by 2021.
Brand USA authorization goes through September of next
year, and it is very important that it be reauthorized. Brand
USA was a startup 2 years ago, now it is hitting full steam,
and you will hear about some of their great success.
The great thing about Brand USA is that not one penny comes
from U.S. taxpayers. It is unlocking funds from international
visitors, a small amount of funds, and from the private sector.
This all supports American jobs and economic growth.
If we get it reauthorized, as they say, it is quite a no-
brainer. Senator Klobuchar and Senator Blunt have introduced
legislation in the Senate to reauthorize it, and identical
legislation has been introduced in the House.
So my first ask is let's attract 100 million visitors by
reauthorizing Brand USA. Let's move S. 2250 through this
committee and get it to the floor to be passed.
We have big developments in regards to our visa process.
The State Department has reduced visa wait times for interviews
by as much as 90 percent. We have reduced wait times from 120
days in places like China and Brazil down to 2 days. These
improvements contributed to a 66 percent increase in arrivals
from China and a 38 percent increase in arrivals to the U.S.
from Brazil.
We have added 11 Visa Waiver countries since 2008, which
makes a huge difference in increasing travel to the U.S. The
name ``Visa Waiver'' can be a misnomer because it sounds like
we are looking the other way on security. In fact, we are
looking the right way, because the program increases security
protocols between the two nations. To get into the Visa Waiver
Program, you have to adopt strict security guidelines and
information-sharing agreements.
Since 2008, when South Korea joined the Visa Waiver
Program, arrivals increased by 65 percent. So expanding the
Visa Waiver Program should be a priority for Congress.
You stated that travelers are frustrated when going through
Customs. We must provide the resources to properly manage the
entry process with more Customs and Border Protection officers.
The 2,000 Congress funded are great, but now we have to quickly
identify where these officers are most needed and dispatching
them to the most important ports of entry.
The frustrations that global travelers have are the same as
domestic travelers. I think the most important thing we can do
is focus on really improving our infrastructure. Brad will tell
you how he competes with congestion on the interstate highway
system, not with other destinations. Travel to and within the
United States has grown, and we must modernize and improve our
aviation infrastructure.
We have a passenger facility charge, which is $4.50, which
hasn't gone up since 2000. In order to fund critical
modernization projects and increase capacity at our airports,
we are asking to increase the fee to $8.50 to keep up with
inflation.
This is important stuff. I certainly appreciate all of your
support and look forward to reauthorization of Brand USA. Thank
you for your time.
[The prepared statement of Mr. Dow follows:]
Prepared Statement of Roger Dow, President and Chief Executive Officer,
U.S. Travel Association
Chairman Schatz, Ranking Member Scott and members of the
Subcommittee: I am pleased to offer testimony on behalf of the U.S.
Travel Association (U.S. Travel), the national non-profit organization
representing all sectors of America's travel community. I had the
opportunity to testify before this Subcommittee three years ago about
the ``lost decade'' from 2000 to 2010, which saw America's share of the
booming international travel market slip away. I return with good
news--and with a prescription to spur even more growth and job
creation.
To address the topic of today's hearing, the state of travel and
tourism is very good. In 2011, I testified about the enormous untapped
potential for economic growth if we made it a national imperative to
increase travel to and within the United States. Today I can report
remarkable progress toward the National Travel & Tourism Strategy goal
of attracting 100 million international visitors by 2021.
Last year, the U.S. welcomed a record-breaking 70 million
international visitors, up 4.7 percent from 2012. This week, nearly 200
communities celebrated the economic impact these travelers have on
local communities across America as part as part of National Travel and
Tourism Week. This grassroots activity coupled with today's hearing
sends the right signal to millions of travel-related workers across
America: that the White House and Congress agree that the United States
will actively compete in the global travel marketplace.
In all 50 states, travel provides good domestic jobs that cannot be
outsourced. In 2013, direct travel spending in the United States
totaled $888 billion, which generated a total of $2.1 trillion in
economic output and $134 billion in tax revenue. Travel also directly
employed nearly 8 million Americans and was among the top 10 employers
in 49 states and the District of Columbia. For example, in 2012 travel
spending in Hawaii generated $18.6 billion in spending and $2.8 billion
in tax receipts, while supporting 175,700 jobs. Similarly, travel
employs 118,100 in South Carolina, generating $11.8 billion in spending
and $1.7 billion in tax revenues.
The travel industry was not spared by the economic downturn, but we
are a resilient industry. Since 2010 we have added 697,000 jobs,
restoring employment to pre-recession levels. We helped lead the
recovery by expanding employment at a 49 percent faster pace than the
rest of the economy. And these are jobs with significant opportunity
for upward mobility, compounding the benefits of this surge in job
growth over time.
Today, travel is the Nation's number one industry export and is
growing fast. Last year, travel exports grew 9.1 percent over 2012 to a
record $180.7 billion (including traveler spending and international
passenger fare payments to U.S. carriers), yielding a record $57.1
billion travel trade surplus. According to the first-ever government
estimates of GDP growth by industry, travel was the second-fastest-
growing industry in the Nation last year.
The most lucrative segment of this sector is ``long-haul'' or
overseas travel to the United States. Last year, nearly 32 million
overseas travelers visited the U.S. For every 34 of these visitors, an
additional American job is created.
The overseas traveler stays longer and spends more while here--an
average of 17 nights and nearly $4,500 per visitor per trip. Overseas
visitors come to our cities and states to spend money and add few
demands on public services. The turnstiles at our theme parks or
national parks already exist; it's just a question of how many more
people we can attract to them.
The potential for further growth is enormous. In 2000, the U.S. had
a 17 percent share of the worldwide travel market. Last year, even as
we competed better in the booming global travel market, with four years
of sustained growth, our share was only 13.2 percent. If the U.S. could
regain the 17 percent of global long-haul travel market share by 2020,
we would add 49.8 million visitors, $222 billion in spending and
452,000 more jobs over that period. Our progress to date proves there
remains tremendous room for further growth.
Many of the obstacles to restoring our market share are self-
imposed and thus can be overcome. The keys are to promote expanded
international travel to the United States and to facilitate border
entry for legitimate travelers--without in any way compromising
security.
I promised some good news and here's the first piece: the
performance of Brand USA. With strong bipartisan support, the Congress
in 2010 enacted the Travel Promotion Act. That legislation created the
public-private partnership now known as Brand USA. By promoting the
United States as a destination and clearly explaining our security
policies, Brand USA is helping to restore our competitive advantage in
the world travel market. In four short years, Brand USA has become a
powerful force for American job growth, leveraging partnerships with
local travel and tourism entities in all 50 states for its global
marketing campaign--all without a penny of U.S. taxpayer funds. This
model of unlocking private sector funds without Federal taxpayers
footing the bill is one that should be attractive across the political
spectrum.
The results are impressive. With an overwhelming return on
investment, Brand USA last year attracted 1.1 million additional
visitors to the United States--not only to gateway cities, but
throughout our heartland. Now that Brand USA has hit its full stride,
those numbers will continue to grow--but only if its authorization is
extended. Last month, Senators Klobuchar and Blunt, joined by two dozen
bipartisan cosponsors, introduced S. 2250 to reauthorize Brand USA for
five years--identical legislation has also been introduced on a
bipartisan basis in the House.
So here's my first ask to get us to 100 million visitors: please
move S. 2250 through this Committee and pass it on the Senate floor
this year.
The success of Brand USA in turn increases demand on our visa
process. In this area, I can report on three important developments
since my last testimony.
First, as part of its implementation of the National Travel and
Tourism Strategy, the State Department made remarkable progress in
reducing wait times for visa interviews in China, India, Brazil and
other high-demand nations. By deploying consular personnel more nimbly
and with a focus on customer relations, State has reduced delays in
many countries by as much as 90 percent.
Second, Taiwan and Chile became the 37th and 38th nations admitted
to our Visa Waiver Program (VWP) allowing for reciprocal visa-free
travel in return for stricter security protocols between our two
nations. More than 19 million travelers, 60 percent of all overseas
visitors to the United States, arrived last year through the VWP. While
here, they spend $79 billion and support more than a half-million jobs.
Already, travel demand has risen sharply from Taiwan and Chile. This is
no surprise, given the example of the staggering increase in visitors
from South Korea since its inclusion in VWP in late 2008. Within five
years, a record 1.3 million visitors arrived in the U.S.; and the pace
of increase since has only picked up steam, growing by 65 percent since
2008. In 2012, South Koreans traveler spending was $4.2 billion--52
percent higher than in 2008. Travel is now the fifth-largest U.S.
export to South Korea, constituting seven percent of total U.S. exports
to Korea. Most importantly, Korea's travel spending in the U.S. in 2012
supported 36,200 American jobs.
Third, as part of the comprehensive immigration reform package
passed last year, the Senate endorsed the ``Jobs Originating through
Launching Travel'' (JOLT) Act, bipartisan legislation to accelerate
progress further. The counterpart House bill (H.R. 1354), now pending
with 150 cosponsors, would likewise expand the VWP and Global Entry
program, reduce visa processing delays, enhance travel to the U.S.
during low peak seasons, provide accelerated visa processing for a fee
and test the use of secure videoconference technology for visa
interviews.
All these changes would address problems first identified in a
comprehensive 2011 U.S. Travel report. Our analysis showed that delay,
cost, access and unpredictability in the visa process served as a
barrier for potential visitors and contributed to our lost market
share. Progress has been made on these fronts, and the bill would
codify standards and practices which will become only more critical as
demand continues to rise.
We commend the Senate for including the JOLT Act in the
comprehensive immigration package passed last year by this chamber and
urge your continued work to enact these travel facilitation provisions
into law. Combined with other visa-related reforms--from extending the
term of U.S. visas for Chinese travelers to permitting sub-national
territories to enter the VWP--this legislation would vault us to the
100 million-visitor mark.
But all our work to promote the U.S. brand and to ease
inefficiencies in the visa process will be ineffective unless we also
improve the entry experience at our borders. Last year, a U.S. Travel-
commissioned survey of 1,200 overseas travelers from six top travel
markets yielded these extremely disappointing results:
Forty-three percent of those who visited the U.S. said they
would recommend avoiding a trip because of entry process
hassles;
One in seven travelers said they missed a connection because
of entry process delays;
Visitors report they would share their entry experience with
an average of eight other people; and
Among potential business travelers, 44 percent said they
will not visit the U.S. in the next five years because of the
inefficient entry process.
As discouraging as those reactions were, here's the one most
important takeaway: almost two-thirds said that eliminating long lines
and wait times would make the U.S. a more attractive destination. In
other words: if we fix it, they will come.
When they do, there must also be greater accountability. Just as
our Nation set a goal for attracting 100 million visitors to the U.S.,
we need to process each arriving passenger within 30 minutes under
normal operating conditions. Among survey respondents who had never
come to the U.S., 40 percent said they would consider a visit if they
knew they could count on timely entry processing.
That means we must provide the resources to properly manage the
entry process--and the Congress has recently taken giant steps in that
direction, with funding for 2000 new U.S. Customs and Border Protection
(CBP) officers. CBP should be commended to working quickly to identify
where these officers are most needed and dispatching them by October
2015 at 44 ports of entry in 18 states. In addition to new officer
staffing, CBP has worked to identify innovative ways to address the
growth in traveler volumes. For example, CBP has continued to promote
the use of Global Entry, a trusted traveler program that now has 1
million participants. Furthermore, they have partnered with America's
gateway airports in developing new kiosks that make the processing
experience more efficient.
This is all great news that should help CBP to meet a 30-minute
passenger processing goal at our air ports of entry and drive tens of
billions of dollars in new visitor spending--as long as the new
officers are accompanied by transparent metrics to demonstrate
improvement in the actual passenger experience.
Domestic travelers face some of the same travel-related
frustrations, starting with the aviation security system. Many of the
problems in this area stem from a refusal to accept any risk in the
system. In the past, continual layers of security were added to address
almost every conceivable threat. Even worse, few efforts were made to
scale back, eliminate or tailor these layers for fear of being
perceived as ``weak'' on security. As a result, travelers were stuck
with an inefficient, one-size-fits-all screening process that hurt our
economy and burdened American taxpayers.
U.S. Travel agrees with TSA that these trends can only be reversed
by using a risk-based approach with three critical elements. First, TSA
and Congress must clearly identify the types of threats TSA is
responsible for preventing. Second, relying on the latest intelligence,
TSA must apply its limited resources to the highest priority threats.
And third, TSA should always strive to provide the greatest level of
efficiency in passenger screening, while maintaining security.
With support from Congress and the private sector, TSA is now using
a more risk-based approach. Specifically, U.S. Travel applauds TSA for
creating and rapidly expanding PreCheck. This program increases
security and efficiency and could eventually also reduce budget costs--
just as Global Entry does for international travelers.
One additional priority that often gets overlooked is the need for
baseline travel data on international visitors. The most important--and
seemingly vulnerable--is the monthly Survey of International Air
Travelers (SIAT). Initiated by the Commerce Department in 1983, the
SIAT provides information on visitors' length of stay, level of
spending and activities during their stay.
These data help determine policies which, in turn, have helped
drive industry jobs growth and we urge approval of the modest funding
to grow and improve the SIAT.
As critical as are promotion, visa reform, the entry experience and
data collection, all are dependent on the safety and efficiency of
fundamental transportation infrastructure. The United States simply
cannot meet its goals to increase domestic and international travel
without greater investments in our aviation and surface transportation
networks. Within the next five years, 24 of the top 30 U.S. airports
will experience Thanksgiving-like congestion at least one day per week.
And the FAA predicts that 27 airports located in 15 cities won't have
enough capacity to meet demand by 2025. At JFK and EWR alone, an
inability to meet air travel demand will cost the U.S. economy $6
billion annually by 2016.
In order to ensure a vibrant and globally competitive travel
industry, Congress must act to modernize and improve U.S. aviation
infrastructure. This committee can help to lead this effort by
accelerating deployment of the Next Generation Air Transportation
System (NextGen) and allowing U.S. airports to raise their Passenger
Facility Charges by up to $8.50, in order to fund critical
modernization projects.
Studies by U.S. Travel also show that within 10 years, major
interstate corridors will experience daily congestion equal to Labor
Day levels of traffic--and that air travel will grow from 800 million
enplanements per year to almost a billion. If our infrastructure is
inadequate today, it is completely unprepared for tomorrow. According
to the 2013 survey, 38 percent of travelers would avoid between one and
five trips annually if congestion continues to worsen--which will moot
all the rest of our work toward attracting 100 million visitors.
As travel to and within the United States has grown, our
transportation network has failed to keep pace. While maintenance and
modernization are expensive, failure to act will cost more.
Finally, I would like to add a few words about two related
concerns. First, while the word ``travel'' frequently connotes tourism,
it is about much more than fun in the sun. Business travel accounts for
30 percent of all travel spending. In 2013, business travel generated
an estimated $267 billion in direct spending--three percent higher than
the previous year. Totaling the deals done, products sold and
opportunities created at industry conferences and trade shows that also
employed scores of hospitality workers, business travel directly
supports 2.3 million American workers.
I also wish to address the specific question of travel by Federal
employees. A key reason business travel is a strong economic driver is
that face-to-face interaction leads to greater productivity, a fact
that Members of Congress know well. Tele-townhalls are not as effective
as personal meetings with constituents, and traveling to Washington to
work directly with congressional colleagues can't be replaced by a
``virtual'' Congress. To do their work, other Federal employees also
need to attend occasional meetings and conferences. When conducted
responsibly, Federal travel yields important returns on investment--
from safety inspections to disaster relief assistance to professional
training. In 2012, government travel generated $33 billion for the U.S.
economy and directly supported 296,000 American jobs.
We agree there is no place for waste or excess in government
conferences or meetings. And we support strict compliance with best-
practice guidelines established by the Office of Management and Budget,
together with individual agencies. But we also know the dangers of
across-the-board reductions that don't distinguish meritorious travel
that achieves important public missions--and urge you to keep that
distinction in mind as these issues arise.
Again, thank you Chairman Schatz, Ranking Member Scott and all
members of the subcommittee for inviting me to testify today. I look
forward to answering your questions.
Senator Schatz. Thank you very much, Mr. Dow.
Mr. Thompson?
STATEMENT OF CHRISTOPHER L. THOMPSON,
PRESIDENT AND CHIEF EXECUTIVE OFFICER,
CORPORATION FOR TRAVEL PROMOTION (BRAND USA)
Mr. Thompson. Good morning, Chairman Schatz, Ranking Member
Scott. Thank you for the opportunity to be here and talk about
the Corporation for Travel Promotion, which is doing business
as Brand USA. Thank you also for your appreciation for our
industry and your comments on the frontend, as it relates to
the impacts that it provides in each of your states.
Brand USA is the national not-for-profit public-private
partnership that was created by the Travel Promotion Act. Its
main function is to promote the United States around the world
as a premier travel destination and also to communicate visa
and entry policy.
Brand USA's global efforts play a substantial role in
reaching the goal established by the national travel and
tourism strategy to attract 100 million annual international
visitors that will contribute to $250 billion.
By executing the first-ever integrated marketing
communications plan, Brand USA is attracting new international
visitors to and through and beyond our gateways. I think that
is a point that Roger brought up, and it is something really
critical to what we do on a regular basis.
I also would like to emphasize one of the facts that Roger
brought up, that is this is done with the zero taxpayer
dollars. It is visitors paying to grow the visitor industry.
Our marketing plan consists of three main buckets. It is
direct to consumer in the markets that we promote in around the
world, which we are now in 30 different markets around the
world. It is a cooperative marketing platform and programs that
we do in partnership with our partner states and our partner
cities. And it is also our trade outreach. Much of travel is
facilitated by the travel trade, still in our emerging markets
and, certainly, in our existing markets.
The consumer campaign is a fully integrated campaign that
consists of broadcast television, billboards, out of home
advertising, and we are very active in social and digital
platforms.
We also market through a global and growing network of
representation firms that help us navigate the cultures and
mediums in all the markets that we are involved in around the
world.
Our marketing campaign invites the world to discover this
land like never before. It not only encourages travelers to see
it for the first time, but to see it for the first time again
by those who have come in the past.
By 2014, our consumer campaign will now be in 10 markets.
Those 10 markets account for 75 percent of all the travel to
the United States. We now have over 100 cooperative marketing
platforms that provide over 200 different marketing
opportunities for our partners to be engaged and be involved
with us.
Our partners highlight and reach all sorts of sectors. We
have platforms that promote the great outdoors, that promote
culture, that promote indulgence through spas and whatnot, and
through urban excitement.
Our business-to-business platforms, we work obviously with
our supplier partners here in the United States that represent
the destinations and the hospitality brands, and then we work
with our buyer partners all over the world as they help
facilitate travel and help us tell our story.
Our partners represent all sectors of industry, and it
represents, more importantly, large and small. A majority of
businesses that are involved with us now, 400 partners,
actually represent small businesses that make up the backbone
of the community.
And probably the most important partner we have is the
Federal Government. Without the Federal Government's commitment
to travel and tourism, and providing the funds that are
attributed to our marketing program, we could not lay the
foundation of the marketing efforts that we put out there. And
it would not attract, last year, the $134 million that the
private sector brought to the table to complement what the
Federal Government put in place.
One of the most recent things that we are very proud of is
Oxford Economics, a recognized expert in our space, put out a
study that suggested that what we are doing in cooperation with
our partners, our supplier partners here in the United States,
our buyer partners from around the world, accounted for last
year, in 2013, 1.1 million incremental visitors that spent $3.4
billion.
When you churn that through the economy, it meant $7.4
billion in overall economic impact. It supported 53,000 jobs.
It generated over $1 billion of sales tax at the Federal,
State, and local levels. And again, that was with zero taxpayer
dollars.
That return on investment of what we put in and what was
returned was a 47 to 1 return. So we are obviously very proud
that.
In conclusion, as Roger said, our work has only just begun.
We are in our fourth year of existence, third year of
operation. But we are really now just hitting on all gears.
We look forward to our partnership with the Federal
Government. We are fully engaged through the Department of
Commerce with the Tourism Policy Council that now has nine
Federal agencies fully recognizing the contributions that the
Nation's number one service export provides to the United
States.
And also, it provides one of the most positive balances of
trade. So we feel very fortunate to be able to be partnering
with the Federal Government. We feel indebted to our partners
who recognize the value that we bring to the equation, and we
look forward to doing more great things in the years ahead.
Thank you for the opportunity to be here, and I look
forward to answering any questions you may have.
[The prepared statement of Mr. Thompson follows:]
Prepared Statement of Christopher L. Thompson, President and Chief
Executive Officer, Corporation For Travel Promotion (Brand USA)
Introduction
Chairman Schatz, Ranking Member Scott and Members of the
Subcommittee: I am pleased to offer testimony on behalf of the
Corporation For Travel Promotion, which does business as Brand USA.
Brand USA is the national, non-profit, public-private partnership
established by the Travel Promotion Act to promote the United States as
the world's premier international travel destination and communicate
visa and entry policy. Our mission is to increase international
visitation to and spend in the United States in order to create jobs,
grow exports and fuel the U.S. economy. As one of the best levers for
driving economic growth, international travel to the United States
currently supports 1.8 million American jobs and benefits virtually
ever sector of the U.S. economy.
I thank you for the opportunity to testify today and discuss how
Brand USA's global efforts play a substantial role in reaching the goal
established in the National Travel and Tourism Strategy of 100 million
annual international visitors generating $250 billion in spend by 2021.
International visitation contributes to the U.S. economy as the
leading services export and one of the few areas in which the U.S. has
a trade surplus. According to statistics from the U.S. Travel
Association, international visitors spend on average $4500 per person
during their trip and every 33 overseas visitors creates one new
American job.
By executing the United States' first-ever integrated marketing
communications plan promoting the entirety of the United States, Brand
USA is attracting new international travelers to, through and beyond
the gateways.
Our 400 partners represent private industries within and outside
the travel industry from around the world and the United States. Many
of these partners are destination marketing organizations, travel
agents, tour operators, hotel and lodging companies, leading car-hire
organizations and airlines. Our partners also include Major League
Baseball, ESPN, the National Football League as well as leaders in the
retail sector like Macys, Mall of America, and America's Premier
Shopping Places.
One of our most critical partners is the Federal Government,
without whose support through the Travel Promotion fund and coordinated
effort toward the goal of welcoming 100 million international visitors
in one year, would make our ability to achieve our mission very
difficult. The public-private partnership that is at the core of Brand
USA's business model enables both gateway destinations and destinations
well beyond the gateways to participate effectively in the
international tourism marketing effort.
Our partners, large and small, have seen the value of working with
Brand USA in increasing international visitation to their states,
cities, attractions and destinations. As a result, we have been able to
earn a 97 percent core partner retention rate and significantly expand
our partnership base to include smaller destinations and
organizations--many of which are the backbone of local economies.
It is particularly notable that $0 taxpayer dollars are used to
fund the marketing effort.
Background
Since the passage of the Travel Promotion Act in 2010, Brand USA
has created a full-scale marketing campaign consisting of consumer, co-
operative marketing and trade outreach in 10 markets with trade
outreach or marketing initiatives in more than 30 markets all at no
cost to the U.S. taxpayer.
The Travel Promotion Act was signed into law in 2010, creating
Brand USA. In the fall of 2010, the U.S. Department of Commerce
selected a Board of Directors. As required by the Travel Promotion Act,
applicants across several sectors of the travel industry, including
representation from the hotel and lodging, restaurant, small business
or retail, travel distribution, attractions, city convention and
visitor bureau, passenger air, intercity passenger railroad sectors as
well as a member who has immigration law and policy expertise were
selected. Brand USA hired its first employees in the spring of 2011.
Those initial employees established what was a true start-up: there had
not been an organization to ever market the USA as a whole. Research
was conducted in 17 countries to guide our initial marketing campaign,
partnerships were developed and established and policies and programs
were put in place.
Brand USA launched its marketing efforts in May of 2012 in the
United Kingdom, Japan and Canada. The campaign encouraged visitors to
``discover this land like never before'' and showcased to these
markets, a United States that is not only welcoming, but is a country
full of vast experiences and endless travel possibilities.
In our first year we received contributions from the travel
industry in order to receive the full Federal match of $100 million, as
allowed by the Travel Promotion Act. Without first receiving private
sector contributions, Brand USA is not eligible to receive any Federal
funds. The Federal funds that supply the Travel Promotion Fund are
collected from a portion of the fees paid by international travelers
from visa waiver countries, known as the Electronic System For Travel
Authorization (ESTA) fee. Applicants pay a fee of $14 that is valid for
travel within a two-year period or when a traveler's passport expires--
whichever comes first. The fee is split between Customs and Border
Protection and the Travel Promotion Fund with $4 going to Customs and
Border Protection to run a security check and $10 going into the Travel
Promotion Fund. As a result, all of our marketing efforts are at zero
cost to the U.S. taxpayer.
Brand USA is eligible to receive money from the Travel Promotion
Fund at a one-for-one basis, up to $100 million per Federal fiscal
year. These funds can be unlocked through contributions of cash or in-
kind such as airline tickets, hotel rooms, cooperative advertising or
content (photos, videos) for use in our marketing efforts. These in-
kind contributions have a fair market value determined by established
methodologies created in cooperation by the Department of Commerce and
Brand USA. Additionally, each submission goes through a thorough review
by several offices within the Department of Commerce. Currently, The
Travel Promotion Act requires that we receive 20 percent of our funds
through cash contributions.
The ESTA fees collected actually exceed $100 million per year, with
that overage going to Federal deficit reduction. The Congressional
Budget Office has assessed that to be $425 million over a ten-year
period.
In 2013, we increased the number of markets we are deployed in from
three to nine, adding Australia, Brazil, China (including Hong Kong and
Taiwan), Germany, Mexico and the Republic of Korea. We ended the
Federal fiscal year with 340 partners who had contributed nearly $130
million to our efforts.
Our marketing efforts are having a significant and positive impact
on international arrivals. Oxford Economics, a worldwide leader in
economic impact studies, recently released a study on Brand USA's
impact on travel for 2013. They analyzed our efforts in eight markets,
of which we were marketing the United States throughout the year. The
study showed that Brand USA's marketing campaigns generated 1.1 million
incremental visitors to the United States during 2013. These additional
visitors spent $3.4 billion in the United States, including travel and
U.S. carrier fare receipts.
This spending fueled the U.S. economy by generating $7.4 billion in
business sales, $3.8 billion in GDP, and $2.2 billion in personal
income, as well as supporting over 53,000 new jobs in the United
States. These results equate to a marketing return on investment of
47:1 based on Brand USA's marketing expenses of $72 million and
incremental international visitor spend of $3.4 billion. Notably, these
results exceed projections of Brand USA's potential impact, which were
estimated during the contemplation of the passage of the Travel
Promotion Act.
In 2014, Brand USA has introduced new programs and platforms within
our broad range of marketing efforts to help reach the 100 million-
visitor goal. We have increased the number of partners to 400 and
anticipate this year's contributions will exceed last year's.
As I mentioned, we are also proud of the fact that we have had a 97
percent partner retention rate from our first year to our second
signaling to us that our partners believe we are accomplishing our
mission and adding or creating value for the mutual benefit of these
organizations and the local economies they represent. We have also been
able to keep our administrative/overhead costs to approximately 10
percent a year, ensuring that the vast majority of our budget is spent
on marketing the United States as the premier travel destination.
Last year, the Government Accountability Office conducted its
second programmatic assessment of Brand USA. The report concluded that
we are effectively and efficiently marketing the United States as a
whole and doing so in compliance with the Travel Promotion Act and
other standards.
Brand USA's Efforts to Reach 100 Million Visitors Annually
Here is a more in-depth overview of each aspect of our marketing
efforts and how they will help us contribute towards reaching the goal
of 100 million international visitors by 2021:
Consumer Campaign: The consumer campaign is a fully integrated
multi-channel campaign--comprised of TV advertising,
billboards, and other out of home media, print and social
media--plus direct in-market marketing through a global network
of representation firms being established in key international
markets.
Country specific Facebook and Twitter pages showcase targeted
promotions and our website DiscoverAmerica.com acts as an
information portal for trip inspiration and planning.
The key message in the campaign is to ``Discover this land,
like never before.'' We also wanted to spread the USA's
welcoming message around the world, inviting travelers to visit
us and see us again--or for the first time.
Through this call to action, we are reminding the world's
travelers that the United States is a land of possibilities--
from the well-known, iconic places to go, as well as
destinations beyond the gateway. Throughout the United States,
the District of Columbia, and the five territories, there are
virtually limitless experiences to discover.
Brand USA bases its target market selection on a quantitative
model that consists of a variety of factors, including:
macroeconomic factors, such as GDP growth; demographic factors,
such as population size and age; sociopolitical factors, such
as civil liberty; situational factors, such as visa waiver
status; and diversification factors, targeting a mix of
established and emerging markets.
By doing so, we are ensuring that we are concentrating our
marketing efforts in the right markets that have the greatest
potential for sustained and continued growth in order to
achieve the goal of the National Travel and Tourism Strategy of
100 million annual visitors by 2021.
To that end, by the end of 2014, Brand USA will be fully
deployed in 10 markets with an integrated consumer campaign,
co-op marketing and trade outreach in: Australia; Brazil;
Canada; China; Germany; Mexico; New Zealand; Japan; South Korea
and the United Kingdom.
Our country specific social media efforts have generated over 5
million fans throughout the globe, mostly in our target
markets. Over the course of this year, we are featuring various
content campaigns on our website and social media channels
designed to showcase the vibrancy and depth of tourism
opportunities that the USA has to offer.
The first campaign ``Great American Road Trips'' covers 39
states across the United States on our websites and social
channels. To bring this content to life we have sent
influential international travelers to experience these road
trips first hand and share their travel stories with their
fans. Each road trip was paired to a country interested in that
region. We have had amazing results so far and millions of
engagements, and the campaign continues throughout the summer.
In anticipation of the centennial of the National Park System,
Brand USA, in partnership with a leading producer of giant
screen films, is producing a giant screen film celebrating
travel to the United States and in particular our national
parks and Federally managed lands. This giant screen film will
capture the myriad of experiences available through the
Nation's great outdoors and inspire visitors to discover the
beauty and diversity across the United States.
This initiative is a great opportunity to not only showcase our
National Parks, but to reach a large number of our key
international markets. There are over 800 giant screen theatres
in over 57 countries and that number is growing.
China, one of the United States' top 10 countries in both
international visitation and spend, has the second largest
market with over 75 giant screen theatres located throughout
the country. Giant screen theatres can be found in many of
Brand USA's key target markets.
Cooperative Marketing: Our co-op programs and platforms include
a variety of opportunities for partners to support and engage
in the national marketing effort to increase visitation and
spend in mutually beneficial ways.
Brand USA has created over 100 new programs to give partners
over 200 opportunities to promote their destination and
encourage travel to the United States. These programs reach and
inspire travelers highlighting the diverse and unique travel
experiences in the United States from the great outdoors, to
culture, to indulgence, to urban excitement. We have platforms
that promote retail experiences, recreational pursuits and
cultural activities.
Brand USA has created several original co-operative marketing
platforms including: Discover America Global Inspiration Guides
(language-specific guides), Marketing and Advertising
Opportunities on DiscoverAmerica.com (Brand USA's consumer
website), Media Planning and Buying (coordinated efforts to
amplify international advertising efforts), Custom In-Country
Multi-Channel Programs (print, digital, video, e-mail, radio
and television), Media/PR and Travel Trade Outreach (online
platforms that enable destinations, attractions and travel
brands to connect directly with international journalists and
travel professionals), USA Discovery Programs (online training
tool to educate the international travel trade to sell the
diverse destinations and experiences available in the USA).
Many of these programs allow destinations to target markets and
create opportunities to increase visitation that they wouldn't
be able to do without our existence. For instance, the Discover
America Inspiration Guides are sent out throughout our markets
and have participation from large and small, urban and rural
destinations. These inspiration guides explore some of the most
authentic travel experiences and destinations in the U.S. We
print 500,000 copies in several different languages and the
digital editions receive over 100 million impressions. Because
of the size and scale that Brand USA can produce, destinations
are able to tailor their participation in a way that allows
them to gain exposure far beyond what they would be able to
create with spending the same amount on their own.
Virtually every state, the 5 territories, and the District of
Columbia contribute to the production of these inspiration
guides. Alaska, Arkansas, Hawaii, Massachusetts, Minnesota,
Missouri, Montana and South Carolina, have contributed to be
featured in the inspiration guide. Every state, whether they
contribute or not, is a part of the guide to ensure Brand USA
is marketing the whole of the United States. The guide also
provides information on visa and entry requirements into the
United States.
Trade Outreach: The business-to-business marketing efforts
includes trade shows, sales missions, road shows, themed
events, training initiatives, mega-familiarization tours of
various destinations, and advisory boards--all designed to
engage and influence tour operators, travel agents and other
travel professionals to increase business and leisure bookings
to the United States. As part of the business-to-business
effort, Brand USA is establishing one of the largest networks
of international representation firms to support its efforts
internationally.
American Airlines and British Airways have collaborated with
Brand USA to conduct what is called a ``mega-familiarization
(megafam)'' tour in 2013 and 2014. Familiarization tours, or
``fams,'' are an integral part of Brand USA's marketing
strategies to create awareness of the diverse destinations and
travel experiences that are available throughout the United
States and increase international visitation to and beyond the
gateways. When fam tour participants experience the USA first
hand, they are able to better relay information to their
clients. The Brand USA fam tours are called ``MegaFams''
because they are the largest simultaneous familiarization tours
conducted in the United States--and as such, represent
something only Brand USA through a coordinated national tourism
effort can do.
British Airways encourages travel agents within the United
Kingdom and the Republic of Ireland to sell trips to the United
States on British Airways within the first quarter of a
calendar year. Agents become eligible to participate when they
complete an online training program that was designed by Brand
USA and created specifically to educate agents to better sell
the U.S. market. The top 100 highest selling agents join the
MegaFam and are split into groups to experience different
itineraries across the United States.
These itineraries include not only the gateway cities that
British Airways flies into but more off-the-beaten-path
destinations as well. For instance this year, travel agents
will visit Arizona, California, Colorado, Florida, Georgia,
Massachusetts, Nebraska, Nevada, New Hampshire, New Mexico, New
York, North Carolina, South Carolina, South Dakota, Texas, Utah
and Vermont. Other states were featured the year before
included Minnesota, Pennsylvania and Wisconsin. We work with
our local partners in each of those states to help showcase
what each location has to offer. The travel agents participate
in social media programs while on the trip to learn what the
other agents are covering across the different itineraries.
They return to their home markets with a greater awareness,
enthusiasm and knowledge for each destination and therefore are
able to better sell and increase travel to those locations.
We have also conducted familiarization tours for travel agents
and journalists with Delta Airlines, Qantas Airlines, Lufthansa
Airlines and are developing similar efforts with several other
potential partners.
Familiarization tours are a great example of in-kind
contributions we receive. The airlines we partner with provide
plane tickets for travel agents, tour operators, and
journalists to participate, and all of the local entities help
provide lodging, meals and other activities. Often times
smaller establishments are unable to participate in large scale
international marketing efforts but can make in-kind
contributions as part of these familiarization tours.
One of the other successes in engaging the travel trade is
increasing and improving the presence of U.S. destinations at
international trade shows. Prior to our existence, U.S.
destinations and entities would attend these shows separately,
competing with countries that would have (due to their size and
budgets) a much greater presence.
In creating and hosting Brand USA pavilions, we have brought U.S.
participants together and given the country the presence that truly
reflects what the United States has to offer. These pavilions allow
entities to share a combined space and help reduce the cost of
participating in these shows as well as creating far more interaction
with tour operators and travel agents. As a result of our efforts,
trade show participation by U.S. destinations and entities has
increased in many markets.
Partnership with Federal Partners
To efficiently pursue the goals of the National Travel and Tourism
Strategy, Brand USA and the interagency Tourism Policy Council
coordinate a variety of activities. These activities, which ultimately
involve the engagement of nearly a dozen Federal agencies, include
things like clarifying visa policy and promoting Global Entry,
promoting Federally-managed areas, and building promotional programs
with government agencies. Some highlights of this collaborative
approach include:
Laid the foundation for strategic marketing collaboration
with the Tourism Policy Council--including thematic promotions
like culinary and great outdoors and geographic focuses in key
markets.
Developed a program with the Tourism Policy Council
Marketing and Promotion Working Group to showcase the culinary
travel experiences in the United States, including a culinary
guide to inspire travel to the United States, a digital
platform, and in-market PR from renowned American chefs.
Began work with the Departments of Interior, Agriculture,
Commerce and the Army Corps of Engineers to promote America's
national treasures through a digital focus on the great
outdoors and a giant screen feature film that will be produced
in time for the Centennial of the National Park Service.
Collaborated with the Foreign Commercial Service and the
State Department to equip diplomatic personnel with high-
quality marketing materials for embassy facilities and
promotional events, including video, poster and banner files.
Brand USA initiated and completed a redesign of the consular
area at U.S. Embassy London to make it a more welcoming
environment and distribution information to waiting visa
applicants on travel experiences in the United States.
Brand USA continues to work with U.S. Foreign Commercial
Service and State Department personnel on a wide variety of in-
market activities around the world including trade shows,
industry roundtables, trade and sales missions, PR events, and
promotional opportunities in markets where Brand USA does not
have a presence. These events promote travel to the United
States and communicate visa and entry policy and changes to
those policies such as ESTA familiarization in places like
Taiwan and Chile that recently joined the Visa Waiver Program.
These highlights only begin to tell the tale of the united front
that our Federal partners and the travel industry are presenting to the
world. By leveraging the best of each other's efforts, the National
Travel and Tourism Strategy is helping our public-private collaboration
live up to all that it was intended to be.
Conclusion
In summary, Brand USA is effectively and efficiently fulfilling its
mission as prescribed by the Travel Promotion Act.
But our work has only just begun. In fact, the work of Brand USA is
more important than ever. While we have been able to incrementally
increase international visitation to the United States, we still have a
lot of ground to make up to get even close to the market share we once
enjoyed more than 10 years ago. Between 2000 and 2010, the U.S. share
of international arrivals dropped 36 percent (from a market share of 17
percent to 12.4 percent), which equates to a loss of 78 million
visitors, $606 billion international spend, and support for 467,000
jobs annually.
Now in our third full year of operation, Brand USA is demonstrating
that a nationally coordinated tourism marketing effort through a public
private partnership can make a significant difference in competing for
the share of the world travel market. The 1.1 million incremental
visitors we generated were from just eight markets where we were fully
deployed last year. Imagine what the results will be as we fully deploy
our marketing efforts to additional international markets.
We will continue to build on the success we already have had and
will continue to operate in an efficient and transparent manner. As we
continue to grow and increase the number of partners and programs, we
will help fulfill the goal of the National Travel and Tourism Strategy
of welcoming 100 million annual visitors by 2021. Our efforts will
continue to help increase visitation and therefore improve the economy,
create jobs, increase revenue and exports across the entire country.
Thank you for the opportunity to testify before you today. I would
be happy to answer any questions you might have.
Senator Schatz. Thank you, Mr. Thompson.
Mr. McCartney?
STATEMENT OF MIKE McCARTNEY, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, HAWAII TOURISM AUTHORITY
Mr. McCartney. Aloha, Mr. Chairman.
Senator Schatz. Aloha.
Mr. McCartney. It is a pleasure and honor to be here before
you. And on behalf of all your friends back in Hawaii, we are
very proud that you are chairing this committee, so thank you
for the opportunity, for all the gentlemen here.
I would like to introduce Ron Williams, who is in the back
there. He is the Chair of the Hawaii Tourism Authority.
So thank you very much. I would like to share a quick story
with you of where we are at, where we are going, and some
Federal initiatives that you may be interested in.
I think, just looking quickly back at 2008, it was a tough
time for us, a tough time for the country. What happened to
Hawaii? Five really bad things happened.
We lost one major airline, ATA. They went bankrupt. We lost
Aloha Airlines, a neighbor island carrier. We lost 1.4 million
air seats. We lost 1 million visitors. Oil reached $150 a
barrel. We had the Lehman Brothers financial meltdown. And we
had the H1N1 virus.
It hit us all at once. Our tax revenues went from over $1
billion coming in from visitors to less than $935 million.
Slowly, we have climbed back out of it. We now raise about
$1.7 billion in State tax revenue, because of that, about $15
billion is generated through our visitor industry. But it was a
long climb coming back out.
So when we talk about tourism, I will talk about three
purposes and then maybe how we can tie into the Federal side.
I think the lowest level, and best level, to explain is
jobs and resources. If you look at tourism, it is a great
export. And for Hawaii, every single day, visitors spend $43
million out of their pocket, their hard-earned money, private
capital coming into Hawaii that they spend on a vacation.
And about $20 million on Oahu, about $11 million in Maui
County, $6 million in Hawaii County, and about $4 million in
Kauai County. Every single day. That is about $4.7 million in
State tax revenue that goes to pay teachers, that funds the
State budget.
It supports 175,000 jobs. So for every 49 visitors that get
off a plane in Hawaii--because you can't drive in; you have to
get off a plane----
[Laughter.]
Mr. McCartney.--it supports one job in our state.
So it is very, very important, and it provides a way of
life.
Number two, it provides access. We only have 1.3 million
people. We are 2,200 miles away from the nearest land. However,
we have 10.5 million air seats, probably 11 million by the end
of this year when you count charter flights.
You think about that, we have about 920 flights a week,
from 53 cities around the world directly connected to the
Hawaiian Islands by 21 different carriers.
That gives us strategic access to the world. That gives the
world access to us. And it gives us access to the world.
When you think about innovation, what a great opportunity
for higher education, people coming to Hawaii and going to
school. Just one idea to create innovation off of.
I think the highest level and highest benefit from tourism
is it gives us purpose. Some places have mines, and they are
proud of it. Some places have automobile factories, and they
are proud of it. Some places have casinos, and they are proud
of it.
In Hawaii, we have guests. People, they come and they
visit. They experience our people. They experience our place.
They experience our culture.
Somehow, they go back home a little better than they were.
We benefit from that because we learn a lot from them.
So it creates purpose. It creates a sense of purpose of who
we are. And when you look at travel, it is more than a
business. And if you look at an ancient Hawaiian proverb that
was given to us by one of our kupuna, Aunty Pilahi Paki, she
said, as the world searches for peace, the world will turn to
Hawaii because Hawaii has the key, and that key is aloha.
So what we like to think that we are in the business of is
that we are not just making money. We are not just creating
jobs. But we are creating this opportunity for peace.
So when we work with you on the Federal level, we have
listed about nine priorities that we would like you to maybe
consider. We know you have been a strong advocate for opening
up Kona, so I won't go into that.
We are the fourth largest port of entry for the United
States. We have grown at 25 percent in international arrivals.
We need a second port of entry that is certified.
Right now, if planes come from Japan, they have to clearly
unload in Honolulu, take everything off the plane, reload, get
back on the plane, and go to Kona. I think we need a second
port of entry. We would like to work with you on that.
We would like to expand opportunities of preclearance in
Japan. Right now in Canada, you can get off any plane because
of customs and immigration in Canada. Just imagine if you could
do that from Japan or Korea.
They are our allies. They are our trading partners. Why
wouldn't we want to do that? Why wouldn't we want to give that
opportunity to each other and use travel as an export?
There are many ideas that we want to pursue with you, from
our National Parks to improving our MCI market. We just hosted
APEC. And as Lynn Wood from the State Department said, there is
no substitute for face-to-face meetings around the country.
So we want to promote that market, and we just want to
continue to work with you as a partner, because we do see it as
a private-public partnership. Everyone can't do it alone.
Cities, states, municipalities, the Federal Government, all
working together, and I think that is the key to our success.
So America can be a leader in travel and tourism, not only in
making money and creating jobs, but helping to create peace.
Thank you very much, Mr. Chairman.
[The prepared statement of Mr. McCartney follows:]
Prepared Statement of Mike McCartney, President and Chief Executive
Officer, Hawai`i Tourism Authority
On behalf of the Hawai`i Tourism Authority (HTA), the State of
Hawai`i's tourism agency, thank you for the opportunity to present to
the Subcommittee on Tourism, Competitiveness, and Innovation of the
United States Senate Committee on Commerce, Science and Transportation,
on the benefits of international travel to our state and its impact on
the overall U.S. economy.
Hawai`i's strategic location connects the Asia Pacific region with
the United States. Despite our size and geographic location, Hawai`i
receives 920 flights from 53 cities around the world, making it the
fourth largest international port of entry in the U.S. Hawai`i also has
the fifth highest occupancy in the U.S. with a 76 percent average
statewide, and the second highest hotel average daily rate of $227.
As a result, tourism is one of the lead economic drivers in the
state of Hawai`i which generates approximately $14.5 billion in visitor
expenditures every year, approximately 20 percent of our state's total
GDP. The tourism industry is also one of the biggest employers in state
and supports more than 173,000 jobs for residents. This means for every
1,000 visitors, 20 local jobs are supported.
In 2013, Hawai`i reached record numbers with year-over-year growth
in visitor spending (+2 percent to $14.5 billion) and arrivals (+2.6
percent to 8.2 million), despite slower growth during the second half
of the year. Through the cyclical pattern of the tourism economy, we
are anticipating a downturn starting this year, with continual declines
in spending and arrivals, especially from our core markets.
Our largest international market, Japan, showed four percent growth
in arrivals in 2013, with 1.5 million visitors. On an average daily
basis, Japanese visitors spend more ($280) than U.S West ($155) and
U.S. East ($200) visitors to Hawai`i.
Although Japan's economy remains relatively unstable due to a
recent hike in consumption tax (the first tax increase in 17 years with
another increase in 2015), there are still opportunities to promote
travel to Hawai`i and the U.S. in Japan. Nearly 60 percent of Japanese
visitors to Hawai`i are repeat travelers, mainly from the major
metropolitan areas. We continue to work with our marketing contractor
in Japan to target regional areas of the country as well as promote
first-time travel to all of the Hawaiian Islands.
In order to balance the softening of our mature U.S. and Japan
markets, the HTA is focusing on growing and expanding developing
international markets, especially in ``Other Asia,'' which includes
Korea, China and Taiwan. While these markets make up a relatively
smaller market share in comparison to Japan, they continue to show
significant growth and potential.
Ease of access through the U.S. visa waiver program in Korea and
Taiwan, and improvements to the visa process in China have led to a
rise in outbound travel from these regions. With new direct service and
nonstop flights connecting these markets to Hawai`i, arrivals from
Other Asia markets continue to increase year-over-year. In 2013,
arrivals grew 18.4 percent to 343,327 visitors and we anticipate
reaching 438,800 arrivals, a 27.8 percent increase in 2014.
Recent travel trends from Korea to Hawai`i demonstrate how the U.S.
visa waiver program has helped to stimulate travel. Since being
implemented in Korea in 2008, arrivals to Hawai`i jumped 350 percent
from 38,110 to 171,506 visitors. Total expenditures also increased
substantially from $79.4 million in 2008 to $314.6 million in 2013. And
we anticipate continual growth in 2014, targeting 190,000 visitors from
Korea (+10.8 percent) and $350 million (+11.3 percent) in expenditures.
Implementing the U.S. visa waiver program in Taiwan created
opportunities for airlift to Hawai`i. In June 2013, China Airlines
launched its first nonstop flight between Taipei and Honolulu. Within
one year of implementing the visa waiver program in November 2012,
visitor arrivals have increased 208 percent.
These results show the impact of the U.S. visa waiver program in
supporting travel and validate a need to extend it to other major
markets.
We also appreciate the improvements made to the visa process in
China, where travel demand continues to grow. In 2013, 132,634 Chinese
visitors (+13.5 percent) came to Hawai`i and spent $329 million in
total expenditures. As our highest daily spenders (average $397 per
day), we anticipate total expenditures to increase 37.6 percent in
2014, with a 21.5 percent increase in visitors, to 180,000.
Oceania, which include Australia and New Zealand, continues to be
one of the fastest growing markets for Hawai`i. In 2013, visitor
arrivals grew 29 percent to 353,965 arrivals, while spending grew 31
percent to $840 million in annual expenditures. With additional access
and supplemental marketing efforts by the HTA and its partners, we
anticipate nearly 11 percent year-over-year growth in arrivals from
this region in 2014.
Increasing international arrivals throughout our state is a high
priority for Hawai`i. The following are initiatives that will help us
to accomplish this goal and where we would like to request Federal
support in:
1. Enhancing access to Hawai`i through:
Reestablishing Kona Airport (KOA) on Hawai`i Island as
a second international port of entry;
Expanding border pre-clearance authorization for major
international market areas like Japan;
Allocating Federal funding for airport improvements
for Hawai`i's airports;
2. Expanding the Visa Waiver Program;
3. Reauthorizing the Brand USA initiative;
4. Creating Federal tax credits for destination development and
upgrades;
5. Maintaining investments in our National Parks and other cultural
and natural attractions and resources;
6. Supporting legislation that will enable tourism workforce and
career development;
7. Advocating Hawai`i as a meetings, convention and incentive (MCI)
destination;
8. Sustaining funding and support for the National Oceanic and
Atmospheric Administration (NOAA) and its programs in Hawai`i;
and
9. Developing a public awareness campaign to educate Americans about
the importance and benefits of tourism to our country.
Our Honolulu International Airport (HNL) on the island of O`ahu is
currently the fourth busiest international airport in the Nation. In
2013, there were more than 3.6 million international visitors that came
to Hawaiʻi through HNL. The ability to open a second
international port of entry would help to alleviate the high traffic at
U.S. Customs at HNL during peak arrivals from international flights and
cut down on additional costs and time for interisland transfers.
Kona Airport, which was previously certified to receive nonstop
flights from Japan, welcomed 138,539 Japanese visitors via HNL in 2013,
making it the second most popular destination for this market.
Granting a five-year exemption to reestablish KOA as a second
international port of entry will allow us to re-open and develop to
full potential, a Federal international inspection facility. This
requires additional staffing of Federal and border control officials.
The State of Hawai`i Department of Transportation (DOT) is also looking
at new technology, like Auto Passport Control (APC) kiosks to support
customs and alleviate the strain on staffing. The APC technology that
the DOT is considering can help to process up to 162 passengers per
hour versus 41 passengers by a customs official.
With Federal Government, the HTA will also work with Hawai`i state
DOT to facilitate collaborative support with the State, Hawai`i County
and our industry partners. Reestablishing Kona as a second
international port of entry and granting border pre-clearance
authorization in Japan will greatly alleviate strain and resources at
HNL as well as grow international demand not only for Hawai`i but for
the U.S., overall.
We are also working with the Ministry of Land, Infrastructure,
Transport and Tourism (MLIT) in Japan to discuss the option of
establishing pre-clearance authorization for international flights from
Japan to the U.S. The HTA has been in discussions with the MLIT to
start trial efforts in Narita International Airport in Tokyo, Japan's
largest international airport, which services 63 flights to Hawai`i per
week. In order to accomplish this, the U.S. Government would need to
sign a treaty with the Japanese government.
While the HTA continues to work with the State of Hawai`i
Department of Transportation (DOT) to renovate and improve our airports
statewide, additional Federal funding would help to upgrade our
facilities in order to accommodate newer aircrafts, like the Airbus
380. These newer aircraft models offer larger passenger capacity and
can fly longer distances nonstop, which will help to improve
international access and promotions.
Air access is Hawai`i's lifeline and supporting these airlift
initiatives is essential to sustaining and growing one of the state's
largest industries. Therefore, we hope that you take into
consideration, ways to support reestablishing Kona as a second port of
entry, granting pre-clearance authorization and funding airport
upgrades in Hawai`i.
As mentioned above, the Visa Waiver Program is a significant factor
in stimulating interest in travel abroad and has resulted in
exponential growth in visitor arrivals and expenditures for Hawai`i
from developing markets like Korea and Taiwan. By expanding the
program, we will not only continue to strengthen the Nation's tourism
economy, but also enhance our global relations.
We also hope to continue collaborating with the Brand USA team.
Through working with them and our global marketing contractors, we have
developed co-op campaigns and been able to better leverage funding and
resources to increase outreach in our international markets. We
recently partnered with Brand USA on their ``Discover America Road
Trip'' campaign, in which they brought a Chinese influencer to help
promote the unique experiences on O`ahu and Maui. We worked together to
enroll our partners for co-op support, resulting in extensive exposure
for our state in China.
We would also like to propose creating Federal tax credits for new
hotels and renovations. Mexico and the Caribbean are among our biggest
competitors, who continue to redevelop and upgrade their accommodations
and offerings. They are currently developing 260 new projects, which
translates to 26,000 rooms to accommodate an influx of travelers. In
order to remain competitive, Hawai`i needs to invest in increasing the
number of accommodations available to our guests as well as focus on
upgrading and improving the existing hotel inventory. A tax credit
would support destination development, and also create jobs not only in
construction but also support long-term job stability within the
tourism industry once the finished products are complete.
Our National Parks and other cultural and natural attractions and
provide visitors with unique travel experiences. The World War II Valor
of the Pacific, also known as Pearl Harbor and other attractions like
the National Memorial Cemetery of the Pacific at Punchbowl and the
Iolani Palace offer visitors a deeper look at the history and culture
of our state.
Growing our meetings, convention and incentive (MCI) market is also
a priority for the HTA. During the 2011 Asia Pacific Economic
Cooperation (APEC) Summit, Hawai`i proved to be a world-class MCI
destination. Our strategic location, connecting Asia Pacific with the
U.S. makes us an ideal destination for global meetings and we continue
to work on positioning Hawai`i as the location of choice for
international meetings and conventions.
We also encourage you to continue to support the National Oceanic
and Atmospheric Administration (NOAA), which is a major partner for the
HTA. As an island state, the sustainability of marine life is a key
element in our destination appeal. The Hawaiian Islands Humpback Whale
National Marine Sanctuary is a joint effort between NOAA and the State
of Hawai`i, which helps to protect one of the world's most important
humpback whale habitats. Thousands of visitors from around the world
come to Hawai`i each winter to experience this natural wonder, which
sets us apart from anywhere else in the world. We need to work together
to continue to preserve this effort.
NOAA also supports the Polynesian Voyaging Society and their
efforts to perpetuate the ancient tradition of Hawaiian voyaging. The
upcoming world tour of the Hokule`a has not only allowed us to revive
this tradition but share the Hawaiian culture with the world. Their
2009 voyage to Japan further fortified our relations through port
greetings throughout the country. It is important to support the
preservation of our natural resources as well as our cultural
traditions that make Hawai`i so unique.
Thank you and mahalo for allowing us this opportunity to present an
update on Hawai`i's tourism economy and our efforts in expanding our
international travel markets. Travel is more than just a business. It
is a valuable export that allows us to enhance our global relations and
share our unique people, place and culture that we have not only in
Hawai`i but in the U.S. Like one of Hawai`i's community leaders, Aunty
Pilahi Paki once said, ``The world will turn to Hawai`i as they search
for world peace because Hawai`i has the key . . . and that key is
aloha.''
We must continue to work together with our industry partners,
marketing contractors, government agencies and the Brand USA Team to
promote travel to the U.S. with aloha. We are all in the same canoe and
must sail together in the right direction to grow our Nation's tourism
economy.
Senator Schatz. Thank you, Mr. McCartney. Thank you for
making the trip.
Thank you, Ron, for being here as well.
Mr. Dean?
STATEMENT OF BRAD DEAN, PRESIDENT
AND CHIEF EXECUTIVE OFFICER,
MYRTLE BEACH AREA CHAMBER OF COMMERCE
Mr. Dean. Chairman Schatz, Ranking Member Scott, Senator
Blunt, thank you for the opportunity to join you today to
discuss the state of America's travel and tourism industry.
In my capacity as president of the Myrtle Beach area
Chamber of Commerce, I serve nearly 3,000 businesses that
employ 46,000 hardworking Americans in the Palmetto state.
This hearing as well-timed as communities throughout our
Nation are celebrating National Tourism Week, a week set aside
to recognize the very positive impact of travel and tourism on
our Nation and its people.
As America recovers from this great recession and grapples
with the challenge of creating jobs and fueling economic
growth, I believe that travel and tourism must be a part of the
national economic solution.
Myrtle Beach, South Carolina, is a relatively small town
with only 30,000 residents. And yet, despite that size, we
welcome more than 15 million visitors each year.
As you might expect, tourism is our number one industry. It
sustains two-thirds of our local jobs and generates an economic
impact of nearly $7 billion.
It is not just Myrtle Beach that thrives on tourism in
South Carolina. In my home state, tourism has an annual
economic impact of nearly $18 billion and sustains one in 10
jobs throughout South Carolina. From the historical elegance of
Charleston, to the natural beauty of Hilton Head, to the
grandeur of the upstate, to the charm of the thoroughbred
country, and all throughout, a state known for its history, its
heritage, its hospitality, and very good barbecue, tourism is
thriving and doing quite well today.
Industry metrics have improved. Revenues are rising. The
tax base is growing. Jobs have been created. New businesses
have opened up. And these jobs, as Roger Dow mentioned, can't
be outsourced to other countries.
But while there is much to celebrate during this year's
National Tourism Week, much remains to be accomplished. As you
know, many of the jobs lost during this recession will not
return. Today, too many Americans are either unemployed or
underemployed.
Proactive leadership from this Congress and the White House
is essential to the future success of our travel and tourism
industry.
I come before you today to thank you and your peers for
your leadership on key initiatives that have helped our
industry rebound. Reductions in wait time for travel visas have
expanded our visitor base. Creation of Brand USA as part of a
national promotional strategy has been very impactful,
generating returns on investment that rival our best marketing
programs.
Expanding the use of preclearance processing and
improvements in security procedures have made travel to the
U.S. much more enjoyable and more efficient.
A U.S.-Canadian border agreement in 2012 has helped to grow
travel to and from our neighbor to the north. And the
leadership and attention given to tourism by key Federal
agencies, like the Department of Commerce, have been very
positive and very impactful.
But we shouldn't stop here. Much remains to be done. And
with this in mind, I offer a few simple recommendations today
that could have a very positive, long-lasting impact on our
travel and tourism industry.
Prior to the creation of Brand USA, our Nation was far from
competitive in international travel. As you are well aware, we
lost out on a huge surge of global travel in years past, in
what Roger Dow and others have termed the lost decade of
tourism.
But under the leadership of Chris Thompson, Brand USA has
flourished and delivers a very positive, measurable impact on
international travel to the U.S. Brand USA allows me and my
peers in Charleston and Hilton Head to collaboratively promote
coastal South Carolina in numerous countries throughout the
world.
Since our partnership with Brand USA began, we have seen
double-digit growth in international travel to the U.S. and to
our community. And that growth, I might add, in our community
has outpaced domestic growth by nearly 3 times.
When it comes to Brand USA, I would say to the Senate just
two simple words: Thank you. And if you would permit me to add
two more: please reauthorize.
In addition, if we intend to grow international travel to
the U.S., we need to greet our visitors with a world-class
transportation system. As you know better than I, our highways
are crumbling, airports are crowded, and roadways are jammed.
We need a transportation plan that begins to address the
Nation's backlog of construction and maintenance of our roads
and bridges. As Senator Scott rightly mentioned, Myrtle Beach
is the busiest vacation destination in America without
interstate access. Each year, millions of visitors drive to the
Myrtle Beach area on one four-lane State highway. Our first
impression and last impression is traffic congestion. And as
you might imagine, my greatest competitor is my local highway
system.
Whether it is completing Interstate 73 in South Carolina,
modernizing our airports, solidifying the highway trust fund,
or a variety of other important infrastructure investments,
transportation infrastructure will create jobs and sustain our
economy.
Our Nation's travel and tourism industry has emerged from
dire economic circumstances, and today it is healthy and
growing. The recent increases in international tourism are a
big part of the success, and we can point to the bold
leadership from Congress and key Federal agencies, advancements
made in preclearance processes and travel visa processing,
improved security measures and along with promotional success
of Brand USA, to understand why all of this has occurred.
Nevertheless, much remains to be accomplished.
Reauthorization of Brand USA, investing in infrastructure, and
a sensible approach to government regulation, will help fuel
economic growth and job creation.
I thank you for the opportunity to join you today. On
behalf of the 46,000 South Carolinians and the Myrtle Beach
tourism industry, I thank you for your leadership. Like you, I
believe that great days lie ahead for our Nation. And I believe
that travel and tourism will be a part of that.
[The prepared statement of Mr. Dean follows:]
Prepared Statement of Brad Dean, President and Chief Executive Officer,
Myrtle Beach Area Chamber of Commerce
Chairman Schatz, Ranking Member Scott and distinguished members of
the Senate Committee on Commerce, Science, and Transportation, thank
you very much for the opportunity to join you to discuss the state of
America's travel and tourism industry. I am Brad Dean, President of the
Myrtle Beach Area Chamber of Commerce, in Myrtle Beach South Carolina.
In that capacity, I represent nearly 3,000 businesses which employ more
than 46,000 hard-working Americans. Our organization is a proud member
of the U.S. Travel Association, the American Hotel and Lodging
Association and the U.S. Chamber of Commerce.
I appreciate your invitation to testify on the state of travel and
tourism and future growth opportunities. This hearing of the
subcommittee on tourism, competitiveness and innovation is well-timed,
as communities throughout our nation, in every one of our 50 states,
are celebrating National Tourism Week, a week dedicated to recognizing
the significant and positive impact travel and tourism has on our
Nation and its people. More importantly, as America recovers from the
Great Recession and grapples with the challenge of creating jobs and
fueling economic growth, I believe travel and tourism can be a key part
of the solution.
Background
Myrtle Beach, South Carolina is a small town of approximately
30,000 permanent residents. Several small communities are tied
economically to the City of Myrtle Beach but the entire population of
our region is still very small by most standards. Despite our small
permanent population, the Myrtle Beach area is a major tourism mecca,
welcoming more than 15 million visitors each year. As you might expect,
tourism is our number one industry, and it fuels other local industries
like real estate, construction and retail.
Visitors come to Myrtle Beach to enjoy the 60 miles of beautiful,
pristine beaches, 100-plus championship golf courses, and a wide array
of amusements, attractions, dining, shopping and entertainment options.
While the activities and amenities are a draw, the Myrtle Beach area
has been fortunate to enjoy a high repeat visitation rate, due in large
part to the extraordinary southern hospitality our visitors enjoy
during each visit. The tourism industry in Myrtle Beach generates an
annual economic impact of nearly $7 Billion and sustains more than
73,000 jobs.\1\ In fact, two-thirds of all full-time jobs in our
community are tied to tourism.
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\1\ Salvino, Dr. Robert F. 2012. ``The Economic Impact of Tourism
on the Grand Strand.'' Coastal Carolina University. http://
www.tourismworksforus.com/docs/TourismImpactStudyCCI_5-16-12_final.pdf
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But it's not just Myrtle Beach that thrives on tourism. In my home
state of South Carolina, tourism has an annual economic impact of $17.6
Billion.\2\ Tourism accounts for 10 percent of all jobs in South
Carolina.\3\ And it's worth noting that tourism jobs can't be
outsourced to other countries. Suffice to say that tourism is big
business in my community and throughout our state, as it is in many
states throughout America. Yet we must be mindful that the travel and
tourism industry is made up of many small businesses that depend upon
the flow of commerce created through travel and tourism. For every
Marriott or Disney or Delta, there are hundreds of small,
independently-owned businesses that fuel the travel and tourism
industry and these small businesses create jobs that keep America
working.
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\2\ South Carolina Parks Recreation and Tourism. May 2, 2014. 2013
Fiscal Analysis.
\3\ South Carolina Parks Recreation and Tourism. May 2, 2014. 2013
Fiscal Analysis.
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Tourism Leading the Recovery
In my community, tourism has led the economic recovery in recent
years. Facing a severe economic downturn in 2008 and 2009, we invested
heavily in additional promotion and tourism-related infrastructure, and
the results have been astounding. We have experienced three straight
years of economic growth, propelling our tourism industry to near-
record levels, and the outlook for 2014 is very encouraging. Bear in
mind, in my community, when tourism grows, tax revenues for schools and
local governments grow, too, so what's good for tourism is good for
everyone.
Likewise, the tourism industry throughout South Carolina has
rebounded from the recession. Last year, Revenue per Available Room, a
key measurement in our industry, was up 6.7 percent. Tourism tax
revenues are rising and many new jobs have been created. Both in my
community of Myrtle Beach, and throughout South Carolina, our economy
has improved substantially and tourism has been a key part of that
economic growth.
While there is much to celebrate during this 2014 National Tourism
Week, we should not let the success of the recent past cloud our vision
of the future, for much remains to be accomplished. As you know, many
of the American jobs lost during the recession will not return and too
many Americans remain unemployed or under-employed. For too many years,
we were not competitive in international travel and tourism, causing us
to fall further and further behind and largely missing out on a boom in
global travel, resulting in what Roger Dow, CEO of the U.S. Travel
Association, in The Wall Street Journal rightly termed the ``Lost
Decade of Tourism''.\4\ Small businesses today face a growing level of
regulatory burdens which can stifle growth, even with the best of
intentions. And, sadly, our transportation infrastructure is failing.
If we are to grow America's economy, create jobs and successfully
compete in global trade, we must seize the opportunities that lie
before us, and growing travel and tourism must be a part of that. The
businesses that I represent are prepared to do so, and I suspect that
is true not just in Myrtle Beach, not just in South Carolina, but
throughout this great nation. But we cannot do this without you.
Proactive leadership from this Congress, and the White House, is
essential to the future success of our travel and tourism industry. Mr.
Chairman, I come before you today to thank you, and your peers, for
your leadership in key initiatives that have helped our industry. The
attention given travel and tourism by the U.S. Department of Commerce
has been superbly managed and administered. Creation of Brand USA, as
part of a national travel promotion strategy, was necessary and very
impactful. Expanding the use of pre-clearance processes and travel visa
waiver programs has positively impacted our industry. A U.S.-Canadian
border agreement in 2012 helped grow travel to and from our neighbor to
the north.
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\4\ Dow, Roger J. November 21, 2011. ``The Lost Decade of
Tourism.'' Wall Street Journal.
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But let's not stop here. Much remains to be done. With this in
mind, I come before you today with three simple recommendations that
could have a very positive, long-lasting impact on travel and tourism
and, as a result, on our national economy.
Promotion of Travel and Tourism Worldwide
Prior to the creation of Brand USA, our Nation was far from
competitive in international travel. There was no `come visit America'
message. Advertising and promotion in foreign countries was largely
limited to top-tier cities and worldwide brands. As a result,
communities like Myrtle Beach, South Carolina had little or no
opportunity to compete on the global scale. As it's now baseball
season, allow me to put this in terms that any baseball fan can
appreciate: America's international tourism strategy before Brand USA
was much like trying to hit a major-league fastball using a broom
handle. You can swing all you want, and every now and then you might
get lucky, but long-term success is highly improbable, if not
impossible.
Under the leadership of Chris Thompson, Brand USA has flourished.
In addition to promoting the beauty, grandeur and widespread appeal of
America and all it has to offer, Brand USA has opened up promotional
doors for communities like mine in countries throughout the world. They
provide valuable research and generate added-value publicity that far
exceeds anything we could create on our own. More importantly, they
allow individual destinations and states to leverage our promotional
resources in multiple foreign markets. Prior to Brand USA, my efforts
to promote the Myrtle Beach brand were largely limited to Canada.
Today, through partnerships with Brand USA, I am able to
collaboratively promote our brand, along with my peers in Charleston
and Hilton Head, in numerous countries both in Europe and the Far East.
Because of Brand USA, our promotional investments generate a much
higher return-on-investment and we can now leverage our brands in more
markets.
Since our partnership with Brand USA began, we have seen double-
digit growth in international travel to the Myrtle Beach area.\5\ In
fact, the growth in international travel to my community has risen at
nearly three times the rate of domestic travel. We also now have two
airlines providing non-stop service from Toronto to Myrtle Beach. When
it comes to Brand USA I have two words for Congress: Thank You. And, if
you'll permit me, I have two more words to offer: please reauthorize.
This program, which does not cost U.S. taxpayers a dime, is helping to
grow tourism and create jobs, not only in Myrtle Beach, but throughout
South Carolina and the other forty-nine states.
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\5\ Myrtle Beach Area Chamber of Commerce. May 2, 2014. 2009-2013
Credit Card Expenditure Analysis.
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Invest In Our Infrastructure
In addition, if we intend to market America as the premier place
for world travelers to vacation, we need to make sure they are greeted
with a world-class transportation system. You are no doubt aware of the
delicate situation we face with our Nation's infrastructure. Our
highways are crumbling and many bridges are not safe. Our airports are
crowded and our roadways are jammed. This problem was not created
overnight and it won't be solved overnight, either. But something must
be done now. Our infrastructure system is largely inadequate for our
needs today, and the situation is only going to get worse. And while we
have tremendous prospects for growing travel and tourism, both
domestically and internationally, if we cannot meet the demands of our
infrastructure system today, we can safely assume we will not be able
to seize the opportunity to grow travel and tourism in the future.
Congress must find an adequate source of funding for the highway
trust fund which is currently projected to run out in late August.
Sadly, there is little to trust about this trust fund. Also, Congress
and the Administration should enact a long-term reauthorization of MAP-
21 which will expire on October 1st. While the President's proposal
last week was a step in the right direction, much more needs to be
done. We need the next Federal highway, transit, and safety program
authorization bill to be a solution that will work for the future and
begin to address the Nation's backlog of construction and maintenance
of our roads and bridges.
Congress should also finish what it began with the interstate
system. Today, Myrtle Beach South Carolina is the busiest vacation
destination in America without interstate access. More than 15 million
visitors travel to our community, with most of them coming during the
spring and summer months via automobile. Yet we have one four-lane
state highway that serves as the main thoroughfare. As you might
expect, the first impression, and last impression, our visitors gain is
that of congestion and traffic jams. We have used local and state taxes
to begin the construction of Interstate 73 and only look to Congress to
reauthorize a highway bill and finish what it began so many years ago
by completing 35 miles of highway and connecting the Myrtle Beach area
to the U.S. interstate system. This will create twenty-nine thousand
jobs, boost tourism, attract new industries and save lives in the event
of a hurricane.
Likewise, we should seek to modernize our airports and air travel
systems. Airport delays at our Nation's gateway airports are becoming
far too common and will increasingly become a limiter of productivity
and travel.
Reform Regulatory Process
Regulation of business and other industries is necessary and
appropriate in many instances, but when regulations are issued without
appropriate consideration of their impact and burdens, they become
onerous. As a result, businesses, employees and consumers all suffer.
While the pundits often criticize the gridlock in Congress, this
apparently has no impact on Federal regulatory activity. According to
the Competitive Enterprise Institute, the Federal Register finished
2013 at 79,311 pages, yet there appears to be no slowing down. This
same report estimates that there are 3,305 regulations in the pipeline,
191 of which are ``economically significant'', meaning they carry an
annual cost of at least $100 million.\6\
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\6\ Hackbarth, Sean. April 17, 2014. ``Regulation Nation: Federal
Bureaucracy is as Busy as Ever.'' United States Chamber of Commerce.
https://www.uschamber.com/blog/regulation-nation-federal-bureaucracy-
busy-ever.
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Just one example of regulatory changes being discussed that could
have a tremendous impact on travel and tourism, have been precipitated
by the Administration's recent memo to the U.S. Department of Labor to
update of the Fair Labor Standards Act (FLSA),\7\ with the expressed
goal of rewriting overtime regulations. The tourism industry is labor
intensive and requires workers that are very flexible in the hours they
work and the jobs they perform. New unnecessary or burdensome
requirements that will only serve to raise the cost of labor without
any foresight as to the overall economic impact of new rules and
guidelines would weaken the very industry that is helping to lead our
Nation out of the Great Recession. Similar to the recent Congressional
Budget Office's report on ``The Effects of Minimum-Wage Increase on
Employment and Family Income'',\8\ changes to the overtime regulations
could benefit some and cost others their jobs.
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\7\ Obama, President Barack. March 13, 2014. ``Presidential
Memorandum: Updating and Modernizing Overtime Regulations.'' Memorandum
to Secretary of Labor Thomas E. Perez.
\8\ Congressional Budget Office. February 14, 2014. ``The Effects
of a Minimum-Wage Increase on Employment and Family Income http://
www.cbo.gov/publication/44995
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In this era of increasing regulation, some measures exceed sensible
reform and, occasionally, exceed Congressional intent, as well. Small
businesses are caught in the cross-hairs and can easily become the
victim of unintended consequences. We've seen this in Myrtle Beach and
I suspect we are not alone. Congress, when devising new laws, and the
administration when implementing them should apply the same, basic
principle that well-managed businesses and households apply: think
before you act, and weigh the costs as well as the intended benefits.
Conclusion
Our nation's travel and tourism industry has not merely rebounded
from the dire economic circumstances we faced just a few years ago.
Today, this industry has emerged from the toughest of times and is
healthy and growing. And it's no coincidence that America's national
economy is experiencing similar growth. The recent increases in
international tourism are a big part of this success, and we can point
to the leadership from the U.S. Department of Commerce, advancements
made in pre-clearance processes and border security, along with the
promotional success of Brand USA, to understand why this has occurred.
Nevertheless, much remains to be accomplished. Our nation faces
difficult fiscal circumstances amidst an increasingly competitive
worldwide marketplace. At the same time, too many Americans remain
unemployed and some of the jobs lost during the Great Recession will
not return.
These are big problems. Yet I believe travel and tourism is part of
the solution. We can, and I believe we will, reach the objective of 100
million international visitors annually. But doing so requires
reauthorization of Brand USA, improvements to our transportation
infrastructure, and a sensible approach to government regulation.
I thank you for the opportunity to join you here today. And on
behalf of the nearly 3,000 businesses I serve and the more than 46,000
employees I represent, I thank you for your service to our Nation. I,
and those in the industry in which I am a part of, stand ready, willing
and able to work with you to help propel America forward. There is no
doubt we face significant challenges, but thankfully, the problems we
face are solvable. And the opportunity for success today is
unprecedented. Like you, I still believe that America's best days lay
before us, and not behind us, and I thank you for your commitment in
leading our Nation forward.
Senator Schatz. Thank you very much, Mr. Dean.
Before recognizing Senator Scott for questions, we would
like to recognize Senator Blunt for an opening statement.
STATEMENT OF HON. ROY BLUNT,
U.S. SENATOR FROM MISSOURI
Senator Blunt. Thank you, Chairman. And, Chairman, thank
you and Senator Scott for leading this committee. We couldn't
have two people who are more dedicated to the effort of travel
and tourism, and understand what it means to our economy. Both
of your states, as Senator Heller's and mine, represent this
industry as an important part of our overall economy. I am glad
to have this hearing today.
All of our states have things to talk about. In my state,
from Branson to St. Louis, Kansas City, Hannibal, St. Joseph,
and other places, it makes a difference.
Just last month, I was pleased to introduce, with our
colleague that I have worked with on these issues before,
Senator Klobuchar, the Travel Promotion Enhancement and
Modernization Act of 2014. We have been joined already in this
effort by two dozen Senate members, bipartisan in nature. A
bipartisan companion measure has been introduced in the House
by Congressman Bilirakis and Congressman Welch.
This bill would reauthorize the Travel Promotion Act,
signed into law in 2010 after 5 years of effort.
Of course, we had a dramatic decline in foreign visitors
between 2000 and 2010. When you look at the economic
opportunities before us, nothing is more attainable than more
foreign visitors, if we just do the right thing.
That is why I was so pleased to be able to work with Roger
Dow and his team at U.S. Travel Association, as well as our
colleagues in the House to pass this. I think in the House,
when I was there, we actually passed the original authorization
bill several times. And finally, the Senate caught up and we
were able to have a bill on the President's desk and got it
signed into law.
The centerpiece for the Travel Promotion Act was
establishing the Corporation for Travel Promotion, known now as
Brand USA. And, certainly, Brand USA has benefited from the
leadership of Mr. Thompson. The efforts that have been made at
Brand USA have been significant.
Brand USA is a private-public partnership that markets
American tourism abroad, and keeps international travelers
informed about our security policies. Other countries have been
doing this for a long time. We have only been doing it for a
few years now, but I think with obvious results. Virtually
every developed nation makes this kind of effort, and the
United States is finally joining that competition.
According to a study conducted by Oxford Economics, tourism
arrivals grew faster than expected from the countries where
Brand USA did its marketing, generating 1.1 million additional
international visitors in 2013.
Foreign visitors spend more. They stay longer. And they
like us better when they leave, in virtually every single case.
Just the sheer diplomatic gains from this, the ability to
extend who we are by sharing who we are with people who visit,
is by itself, I think, enough of a reason to reauthorize this
program. But the economic impact, of course, is great as well.
Brand USA, Mr. Chairman, members of Committee, and the
people here at this hearing, is not funded by any Federal tax
dollars. Half of its budget comes from the private sector
through cash and in-kind contributions. The rest of the budget
is funded by a nominal fee assessed on international travelers
in the Visa Waiver Program.
So this is money that would not be available if people
weren't traveling. It doesn't involve U.S. taxpayer money. But
it certainly creates lots of revenue whenever we are part of a
successful travel and tourism industry.
Brand USA can't receive these funds without first raising
private sector contributions. It can only collect up to $100
million in fees paid by foreign travelers. Any fees collected
in excess of that cap go to the Treasury. And more than $50
million has already gone to the Treasury since Fiscal Year
2012.
So every traveler that is encouraged to come here actually
is likely to help us exceed the amount of money that we collect
to promote travel abroad.
Anytime Congress passes legislation, we need to keep the
goal of that legislation in mind. And, clearly, those goals
have already been stated here in both economic and diplomatic
terms.
So I am glad we have this panel here today to talk about
travel, generally, and foreign travel, specifically.
And I look forward to an opportunity when we see this
legislation on the floor and extend the current program that is
clearly proving it can accomplish exactly what we hoped it
would accomplish.
Senator Schatz. Thank you very much, Senator Blunt.
Senator Scott?
Senator Scott. Thank you, Mr. Chairman.
This is a two-part question for Mr. Dean and Mr. Thompson.
I saw the announcement by WestJet of an increase of flights
from Toronto to Myrtle Beach this summer. These flights can
come directly to a smaller airport like Myrtle Beach because of
the preclearance program that allows travelers to go through
Immigration and Customs processing before boarding the plane,
rather than having to connect through a larger international
airport.
I was hoping to hear from Mr. Dean about how the Canadian
market is contributing visitors to South Carolina. And then
perhaps Mr. Thompson could talk a little bit about the success
of Brand USA and what it is doing to stimulate the Canadian
market specifically.
Mr. Dean. Thank you, Senator. As you point out, the Myrtle
Beach area has grown its penetration in Canada recently. For
many years, we welcomed Canadian visitors, but it was typically
for about an 8-week season. And it was really only those
Canadians living in Ontario who were willing to make an 18-hour
drive.
One of our challenges was to broaden our reach, and not
simply raise our name I.D. in Canada, but to attract more
Canadian visitors to the area.
Through the partnership with Brand USA, we have been able
to expand our destination awareness not only in Ontario, but
throughout other areas. Part of the benefit of that has been
attracting direct air service from Toronto to Myrtle Beach.
To use a sports analogy, this is a game changer. This
allows us to bring Canadian visitors not only for 8 weeks out
of the year but for now 8 months out of the year. And it
reaches a whole new segment of travelers who wouldn't have come
to the area before.
And what we have seen even in the past 12 months is some of
those Canadians are now buying real estate in the Myrtle Beach
area and becoming investors. So this is truly helped to expand
our presence there.
Part of that are the promotional efforts and support from
Brand USA. But, Senator, part of that as well is the
preclearance that has been established, and helps make the
travel more efficient and more enjoyable when coming to this
area.
I daresay, as a small destination that is not a port of
entry, without that, we would not have much success in
attracting air service to the Myrtle Beach area. But because of
preclearance and Brand USA, we have been able to do that.
Senator Scott. Thank you. That is, certainly, important for
a community with 30,000 residents and 15 million tourists. The
importance of the program and its success with preclearance
really has been illuminated.
Thank you, Mr. Dean.
Mr. Thompson?
Mr. Thompson. Senator, I appreciate the opportunity to talk
about the Canadian market. It is clearly our number one market.
We share a border, which obviously explains a lot of that.
It is also one of our established markets. So if we look at
our goal of 100 million visitors by 2021, we currently are at
70 million. In order to get to that goal, we are not going to
get huge numbers out of Canada because we already enjoy a huge
market share, not only in South Carolina, Myrtle Beach, but
many states along the Eastern seaboard, in particular. And the
Western seaboard, from the Vancouver area, already enjoys great
Canadian visitation.
But in order get to the 100 million visitors annual number,
we have to maintain in our existing markets. So we are deeply
deployed in Canada. It is not really talking about the dream
phase of visiting. These are visitors who have been here many
times. So in a lot of cases, it is asking them to continue to
come back and go to the destinations that they have been to
before, but otherwise, explore beyond the gateways and maybe to
other cities and other states that they haven't been to before.
And this example is what Brad was talking about as far as
our partnership. If you look at our ability to be able to find
ways to add value to what is already there, this is a
partnership with Brand USA working with our supplier partner in
this case, which is Myrtle Beach, our buyer partner in this
case, which is WestJet, to actually leverage the opportunity to
promote that destination and to bring greater focus to it.
And I think what Brad would tell you, what he shared with
me, is the ability to bring in the additional flights and the
reach has actually expanded their season from what was 5 months
to 9 months. And he is telling me that with a little more
promotion, that we are liable to turn it into a year-round
market.
So those little success stories are going to allow us to be
as successful in the markets that have been supporting us for
so long, but continue to help communities like Myrtle Beach as
they are trying to expand their international footprint.
Senator Scott. Thank you, sir.
I have just a couple minutes left, so I want to get to two
more questions.
There is no doubt, Mr. Thompson, that the Brand USA
activities and program have been very successful. And as we
think about going from 70 million visitors to 100 million
visitors, and looking specifically at the in-kind contribution,
you said earlier that the program has been supported by 3 to 1
by Members of Congress and 3 to 1 here in the Senate.
One of the concerns focused on are the in-kind
contributions, and the GAO reports suggest perhaps that the way
the in-kind contributions are being counted needs to be done
better.
Do you have any comments about what the organization has
been doing to address those concerns?
Mr. Thompson. Yes, sir. In particular, those concerns were
tied to--first of all, our charge is to not only attract cash
contributions, but in-kind contributions. Those in-kind
contributions that we get, where we can--for instance, for
media that is donated to us and there is an invoice tied to
that media, and it would be what we would have to pay in order
to replicate that media, that is something that is an easy in-
kind match dollar for dollar.
When it is, for instance, logo advertising in ads, we have
a third-party outside source that actually helps us evaluate
what that is worth to us. And then that is shared with Commerce
and Treasury, and also vetted by Commerce and Treasury, to be
able to determine that value.
That process is what was called into question, and agency
that we hired initially to bring on board was not done in our
normal procurement procedures. But since then, we have RFPed
that process. And we have a regular, ongoing working
relationship with the Department of Commerce where we literally
addresses those issues on a daily basis for sure, and at
minimum twice a year.
Senator Scott. Thank you.
Mr. Dow, as you testified, last year we were able to
attract about 70 million visitors, international visitors, a
4.7 percent growth rate. For us to achieve a goal of 100
million visitors, we are going to have to have a slightly
higher growth rate that is sustained over the next 6 or 7
years.
Do you think this growth rate is achievable? And what other
changes would we need to consider for us to achieve that goal?
Mr. Dow. It is absolutely achievable.
Number one, reauthorize Brand USA because it is promoting
the United States as a travel destination to many international
markets.
Two, add more countries to the Visa Waiver Program. There
are 9 countries that would make a lot of sense, such as Brazil,
Poland, and Israel. Visa Waiver Program countries increase
travel and improve security.
Three, making sure that those low visa wait times for
interviews stay there. That is what the JOLT Act does in the
comprehensive immigration bill that moved forward in the
Senate. We want to make sure either the JOLT Act or the
immigration bill gets passed, or you attach JOLT to something
else, because you don't want to lose the gains that you have
achieved in visa reform.
And lastly, we have to find a way to make it easier for
international travelers to come and return to the U.S. easily.
A lot of them are shifting to--you mentioned Canada. The
Chinese go to Canada because they can get a 10-year visa. We
only give them a 1-year visa. They can go to and from Canada
very easily.
We don't want to lose those travelers because a lot of them
are not only leisure travelers, they come here for business,
and to buy American products.
Senator Scott. Thank you.
Final question, Mr. Dean, I was interested in the points
you brought up about the Federal regulatory environment and its
impact on local tourism, whether it is a 30-hour workweek, or
other issues. I would love just to hear you expound a little
bit on the impact of the regulatory environment and what we can
do to perhaps stimulate more tourism if we were able to have a
different secret sauce.
Mr. Dean. Sure. Thank you, Mr. Scott.
You know, you referenced some numbers earlier, $2 trillion
of economic output, and, of course, the tens of millions of
dollars that come with that. There is no doubt tourism in
America today is big business.
But we shouldn't lose sight of the fact that the big
business of tourism is made up of small businesses.
I run the largest chamber and CBB in the Carolinas, yet
four out of five businesses that I represent have 20 employees
or fewer. So tourism is big business but made up of small
businesses.
And oftentimes it seems that the regulation that comes out
of Washington, while well-intentioned, and in many cases very
necessary, can also stifle growth in small business, if it is
not appropriately considered and implemented.
I think of a recent situation in the Myrtle Beach area
where it was nothing other than a bizarre overreach by one
Federal agency that held 3,000 jobs at bay. I realize here in
Washington, that is probably a rounding error.
But for me, that wasn't a number. These were friends and
neighbors and coworkers.
And with all due respect, I should point out that
regulatory decision was not made by Congress, and it took 4 1/2
years and 42 trips to the Nation's capital to rectify that.
Now, the Congress did rectify that, but the effort it took just
to solve an issue that never really existed--there was no
problem to begin with--it was just very challenging for our
business community.
You know, if I could wave a magic wand and change one thing
in Washington today, it would be that Congress when passing
laws and the administration when implementing them would to
what well-managed businesses and households do: Think before
you act, and weigh the consequences as well as the intended
benefits. And that, with a heavy dose of common sense, I think
would lead to regulation that would be fruitful for our Nation.
I noticed the Federal Register last year, I think, ended up
at over 79,000 pages, but what is alarming to me is that there
are 3,300 regulations in the pipeline. Many of those are
economically significant.
Some of them are very important and necessary. But if we
are not careful, we could stifle the very growth that all of us
are working together to try to achieve.
Senator Scott. Thank you, Mr. Dean.
Mr. Chairman, thank you for the lavish amount of time that
you have provided me during this hearing. I haven't had this
experience previously to talk more than 5 minutes. I appreciate
being a ranking member under your leadership.
Senator Schatz. Well, thank Senator Heller for waiting.
Senator Heller?
STATEMENT OF HON. DEAN HELLER,
U.S. SENATOR FROM NEVADA
Senator Heller. Is this a community where we all get 10
minutes?
Senator Scott. No, sir.
[Laughter.]
Senator Schatz. So ordered.
Senator Heller. Thank you very much for holding this
hearing, to both the Chairman and Ranking Member.
I also want to thank our witnesses for taking time to be
here today.
I don't think you can have a discussion on tourism, these
issues, without someone talking about Nevada and the growth we
are seeing, especially in Las Vegas. And that is what I would
like to do today, I would like to give some perspective of what
is going on in Las Vegas.
I don't have to defend the importance of tourism for the
state of Nevada and specifically Las Vegas. We can talk about
Reno, we can talk about Lake Tahoe, but obviously the hook
would be in southern Nevada.
I would say the brand is probably as strong as ever in
southern Nevada, the Las Vegas area. I think that resonates
around the world.
We have seen some pretty good statistics, there is some
growth. And it is good to see after this recession, because as
you can imagine, Nevada was hit pretty hard the last 5 years.
To see the kind of growth we are now seeing in visitations, not
only domestically but internationally, it plays out quite well.
Just this past March, we had a record of nearly 3.7 million
visitors into Las Vegas. The first quarter of this year, 10.2
million visitors. For the first time, we believe, for 2014, we
will break the 40 million visitor mark.
And I think the business community is so confident in the
future of the growth of Las Vegas that we now have $9 billion
worth of projects under construction or near construction over
the next several years.
So it all bodes very well. I don't think I have to make the
argument that, as important as tourism is for South Carolina
and Hawaii, that Las Vegas has been and will continue to be the
number one meeting and convention destination in North America.
But I do also want to move over to international
visitation. We know that international visitors stay longer and
spend more. And currently 20 percent, or nearly 8 million, of
our visitors are international. And our goal is to grow that
international number to 30 percent in Las Vegas over the next
decade. And that is probably where most of you come in.
The top three international markets for Las Vegas in 2012,
it probably doesn't surprise you, are Canada, Mexico, and the
U.K. But they are followed by Australia, China, Hong Kong,
France, Germany, South Korea, Brazil, and Japan.
We want to expand this particular market. Places like
Brazil show tremendous promise for cities like Las Vegas.
I know there are hurdles. I want to talk to you about what
some of these hurdles are. Mr. Thompson, maybe you
specifically. I wish there were some representatives here from
the government, but maybe you can enlighten us on what some of
these hurdles are in order to bring some of these international
visitors into the country.
Mr. Thompson. Thank you, Senator. I appreciate the
opportunity to comment on that.
Certainly, our focus is on the marketing side of the
equation, so we want to market, first of all, the opportunity
and the vast amount of experiences that are provided by our
destinations and our brands. And if we do our job well enough,
then that is going to obviously continue to fuel the demand
that you are talking about that Las Vegas has experienced very
well.
I think a lot of what has been highlighted here through my
colleagues are the issues at hand, both at the national level
and the local level.
I think as far as Visa Waiver, the opportunity to be able
to bring additional countries into Visa Waiver, our ability to
improve and expand upon the welcoming aspect of the travel and
tourism industry as it relates to the first impression once
they get here, particularly in some of the areas that are the
major chokepoints, are probably two of the main things that
could contribute significantly to being able to expand not only
visitation to the entire country, but also to Nevada.
And I know my colleague, Roger Dow, would be able to speak
to even more on that.
Senator Heller. If you could, please.
Mr. Dow. Yes, Senator. Again, thanks for all your support
with the JOLT Act and all those things that you are behind.
The hurdles, I will take Las Vegas and be very specific.
For example, McCarran International Airport is expanding
greatly internationally, but PFC funds for McCarran are tapped
out for the next 40 years, because the passenger facility
charge is already committed to pay for bonds and future
projects. If we increase the fee to $8.50, it gives the airport
a huge opportunity to increase investment and modernize. That
investment can only be made for capacity, security, airport
noise, safety, and competition. It can't be used for a
McDonald's or revenue-generating areas. So funding for airport
infrastructure is a big hurdle.
Another hurdle is not having enough Customs and Border
Protection officers at our gateway airports to process
international travelers. We applaud the first 2,000 officers
that were just appropriated, but we need more.
When you look at the number of visitors we are getting, and
the goal to attract 100 million, the current CBP staffing
during peak times can sometimes feel like having one cashier at
Costco during the holidays. It just doesn't work.
When these people stand in line for hours, it is a shame.
They are ticked off before they get to Las Vegas.
So there are two big hurdles, having enough CBP officers to
get them through entry and having the opportunity to build
adequate infrastructure at our airports.
Senator Heller. I agree. I have stood in those lines, by
the way. And it can be very frustrating. And I wondered what
the return rate is, having stood in those lines for so long.
Going to Brand USA, I think Brand USA has been very
instrumental to cities like Las Vegas. For that reason, those
promotion efforts to premier travel destinations, I think, have
done a great job. And for that reason I have cosponsored the
legislation and the reauthorization, as you mentioned, Mr. Dow.
But I guess my question is this, I think there needs to be
more transparency and accountability. I think CBO came out with
a report regarding performance indicators, performance
measures, and addressed concerns regarding the competitive
procurement process.
Can you speak on that a little bit, what we have been doing
to try to improve that, Mr. Thompson?
Mr. Thompson. Absolutely. Initially, as far as the
performance indicators that are in place, the main part of our
emphasis in the first couple years was the launch of our brand
campaign. As we deployed that in three markets around the
world, Canada, the U.K., and Japan, our measures on the
frontend of it was what was our message, how is that
influencing the intent to travel. So we feel like at our level,
three times removed from our partners at the city and State
levels, and in cooperation with our brands, if we can load the
funnel, we can keep the USA top of mind, that is our ability to
then have an impact on that.
What we are now putting into place are not just those broad
measures, but how do we deploy against specific marketing
channels. And probably the most obvious example of
accountability has been the most recent study, which looked at
the entirety of what we are doing, not just as Brand USA, but
in partnership with our suppliers and our buyers around the
world, and that overall ROI that was incremental visitors that
Senator Blunt talked about, and that I talked about my
presentation.
As far as accountability, the GAO really only cited one
example of where we stepped outside of our procedures, and it
was in the very early stages of the existence of the
organization. It was in that ability for us to be able to bring
forward an outside third party that could help us evaluate our
in-kind contributions. And there are actually very few
companies that do that. So in cooperation with the Department
of Commerce and with Treasury, we actually identified a company
that could do that. It wasn't a competitive process, but it was
the best company at the time that could to that.
But since then, as I mentioned just a while ago, we are
entering into an RFP process as we speak to actually verify
that that company is the correct one or to look at others that
are going to be able to help us.
Senator Heller. Thank you very much. My time has run out.
Thank you, Mr. Chairman.
Senator Schatz. Thank you, Senator Heller. And thank you
for raising the question of bringing some of our government
agencies to the table in subsequent hearings. And, certainly,
Ranking Member Scott and I will be taking a hard look at that,
so we can get some additional information.
Thank you to all of the testifiers. I will have some
additional questions for the record, as well.
I would like to start with Mr. McCartney.
You know that Hawaii has been doing travel promotions since
the 1900s. I would like to ask you if you have any lessons
learned for the Committee or for Brand USA or U.S. Travel to
offer to us.
Mr. McCartney. It is not just marketing. It is putting
everything together. It is an experience. It is the people,
place, and culture.
You can market all you want, but if you don't have a great
destination, people don't have a good time and enjoy
themselves.
When you look at some of the issues of standing in line or
not getting to their vacation destination as quickly as
possible, those all have cumulative negative impacts on the
vacation experience.
So I think one of the lessons we have learned over the
years is that you have to provide a great experience. You can
have all the marketing you want in the world, but if you don't
provide a great experience, it won't last.
Number two, I think what we have learned as competitors: We
have to work together. We all live on an island. We all live in
the U.S. We all live in the world. We are all going to have to
work together.
And there are enough visitors to go around, if we all work
together and make that happen. We can learn a lot from each
other. So what we have done in Hawaii, many times, competitors
work together. And we sit down and we talk about what is good
for Hawaii, not so much their business, but for Hawaii.
And we know that if Hawaii grows, their business will grow.
And I think we see partnership lining up very closely with
Brand USA.
Really quickly, Mr. Chair, we are working on a special
program with Brand USA, where we have a marketing co-op program
where we have a 3 to 1 match. Now we have a 4 to 1 match
because we are working closely with them on Japan marketing
programs. So, for example, Japan travel bureau, instead of us
getting a $300,000 program, thanks to them, we have a $400,000
program.
It helps America. It helps us. It helps improve exports.
So we are looking to working with each other on how to
leverage our resources. We are probably going to spend $1
million on that type of programming as we go forward into the
future.
Senator Schatz. Thank you.
One more question for you, Mr. McCartney, about the Asia-
Pacific region. Can you talk about the potential generally, but
I am interested for the purposes of the record for you to kind
of take us through the major targets that you see from an HTA
standpoint, but also from Brand USA and U.S. Travel.
Mr. McCartney. There is a PowerPoint in my presentation,
and it actually gives circles of the major markets. And if you
were to look at Hawaii's visitor portfolio, we are like a
mutual fund, and we want to diversify our investments.
We are diversifying our investments by pivoting to Asia.
And by pivoting to Asia, we are going to our core market in
Japan, where we have almost 20 flights a day, and adding direct
flights from various destinations--Fukuoka, Nagoya, Osaka,
Haneda, Sapporo. Those are all direct flights.
We are looking at creating direct access. We are creating
charter flights where farmers finish their farm season and
catch a direct flight from their city to Hawaii. Direct access
is so critical and important.
Korea, because it is a Visa Waiver country, and we see the
growth. We have four flights per day now, Hawaiian Airlines
flights, two Korean Airlines flights, and an Asiana flight.
Incheon International Airport is one of the best hubs in the
world. I invite all of you to go there.
They connect to over 20 cities in China. They connect all
over Europe. You can catch flights from India there.
We are expanding to China. I just came back from China last
week on the first Hawaiian Airlines flight to Beijing. So we
are having Air China and Hawaiian Airlines go to Beijing, and
we have China Eastern with direct flights from Shanghai. So we
have nine flights per week.
We are also working very aggressively in Oceania. That
would be Australia. So we are not only going to Sydney but
Brisbane and Melbourne.
They are doing well economically because they are selling
minerals to China. They have disposable income. They love to
come to Hawaii. So those markets are growing.
We are expecting almost half a million visitors from
Oceania. We also have markets growing in Australia.
We are working hard to expand Taiwan. Taiwan is a new Visa
Waiver country. We had two carriers, but we are back to one. We
think that is going to continue to grow. We see growth in Hong
Kong.
So Asia has a lot of potential for America. So we talk
about preclearance. That should be a no-brainer for us. Just as
Canada is one of our best partners, our greatest ally, so is
Japan. Why shouldn't we create a relationship with them where
we can do business with each other? They can fly directly. I
can see JAL flying directly into Myrtle Beach, getting off the
plane and having a wonderful experience. It benefits us all.
I think Hawaii will get our fair share. But I think we need
to seriously look at that. And that is going to take the work
of a lot of you. It is going to take work of Senators, because
it takes a treaty to make that happen.
The last big treaty that took place was between Shannon,
Ireland, and the United States, and I wonder what Senator
helped with that.
So you are in a position where you can make a great
difference, and we are in a position where we can help you. All
our cities, all our States, would benefit. If we work together,
get a few countries in on preclearance, it could make a big
difference.
Senator Schatz. Thank you very much.
Mr. Dow, I know that U.S. Travel published a report, which
conveyed to me the urgency on improving the entry process. And
you provided some of the key findings in your testimony. I am
wondering whether you wouldn't mind further explaining,
especially the polling data that I found alarming, that almost
4 out of 10 visitors would be less likely to come back to the
United States as a result of the delays. I am wondering if you
could convey to us some of your findings.
Mr. Dow. Yes, sir. As we spoke earlier, this is a major
challenge to overcome, when you have 43 percent of overseas
travelers saying they would recommend against coming to the
U.S. The worst news is that those visitors are going to tell
eight people about their entry experience.
So you have these people that become tourism terrorists,
that begin telling their friends don't go there because of
major delays at airports.
One in seven people are missing connections. So they get to
their destinations late or not at all. They think they are
going on a cruise. Guess what? They can't make their
connection, so they miss their cruise, or they miss the flight
to Hawaii, or their flight home.
Improving our entry process is very, very important. One of
the things we have to get right, along with the right number of
officers, is metrics. I applaud many things that CBP is doing.
They are doing a great job putting together schedules and where
officers should be deployed.
But we also need metrics. We need to know, is it working?
What are the numbers? This is customer satisfaction.
When you run a business, and you have been a businessman
yourself, you want to know: Are my customers happy? Are they
telling their friends they ought to come here, versus telling
their friends they shouldn't come here?
Senator Schatz. Thank you very much.
Senator Blunt?
Senator Blunt. Well, thank you again for having this
hearing. I know a couple questions Senator Heller asked were
questions I would ask. I may have a question or two for the
record.
Do we have any indication, I know I had some numbers in my
testimony, Mr. Thompson, on increases from countries that you
were advertising in, that Brand USA was active in. Is that
trend continuing? Do we have any later numbers than 1.1 million
additional visitors we believe we got from countries where you
have made your effort?
Mr. Thompson. No, sir. Thank you for the question. We are
actually working right now on being able to translate that down
from the overall 1.1 million incremental visitor number. And a
lot of that, unfortunately, or fortunately, is tied to the
Department of Commerce numbers as it relates to our ability to
be able to account for that.
We do know that, in the markets we have been very active
in, on the indicators that we have in place, which is our
ability to influence intent to travel, which is keeping the USA
top of mind in a very competitive marketplace with lots of
promotion and advertising going on from an increasing number of
countries around the world. What we are looking for now is to
be able to translate that intent into actual visitation.
Our first attempt to be able to do that was the study by
Oxford Economics. They looked at it in a macro way. And now we
are working with Commerce to figure out how to take the macro
numbers and put it down to individual countries.
Senator Blunt. And in terms of the private sector matching
funds, how do you look at that today after the several years of
experience we now have had? And what kind of thing do you think
really should qualify? And what kind of thing would you think
is less of a matching component to what you are doing?
Do you have some standards that have changed over the last
couple years? Would you talk a little bit about that?
Mr. Thompson. Yes, sir. That is a relationship that we have
in partnership with the Department of Commerce. Commerce is the
lead agency as it relates to our relationship with Congress and
our relationship with the Federal Government. And we have been
working on those standards for matching, particularly as it
goes to in-kind, from day one.
We talk about those on a regular basis. We refine those at
least a minimum of twice a year.
I would say that what we have in place right now is pretty
good. It is actually very strong. We have refined the things
that have proved to be very valuable both to us and in the eyes
of Commerce and Treasury. So that has been an ongoing
relationship.
And what we are actually finding is the cash contributions,
that is where people see value in what we are doing in
marketing the country around the world, have increased
significantly. In our first year, we brought $26 million of
cash contributions from industry to the table. Last year it was
$32 million. We actually expect the current Fiscal Year to
actually exceed the number from last year.
So we see a growing confidence by our partners, the
supplier partners around the country, in what we are doing and
the value proposition we are creating. And we see great
strength in the relationship we have with the Department of
Commerce to make sure that, the resources that we are given by
the Federal Government, that we spend those in a very efficient
and effective manner.
Senator Blunt. And what new countries are you looking at
that you would want to be making efforts in beyond where you
are now? Or maybe you just want to concentrate on the decisions
you already made?
Mr. Thompson. Out of the gate, we were in Canada, U.K.,
Japan, because those were some of our established market that
we wanted to maintain our market share. But now, we are
actively involved in Japan, South Korea, China, Taiwan, Hong
Kong, India, Australia, New Zealand, Brazil, and Mexico. So we
have expanded our footprint considerably over the last year.
We, actually, through our representation or through the
activity that we have in market, we are actively involved in 30
major markets around the world that represent 92 percent of the
inbound travel that comes to the United States. So we feel that
is a really good footprint now that we got to where we were
originally planning to get to.
But now the three keywords that we are operating on is how
do we continue to collaborate, integrate, and optimize with
what we are doing. As you can imagine, when I was at the state
of Florida, 90 percent of the visitation came from around the
country. So when you were deploying resources domestically, it
is pretty uniform as far as mediums and opportunities and
whatnot. But you can imagine, as we are trying to deploy
resources around the world, we not only have different cultures
but different mediums within countries.
So now, what we are trying to do is figure out how to
optimize our resources against all of those countries and
different opportunities that they provide.
Senator Blunt. Thank you.
Thank you, Mr. Chairman.
Senator Schatz. Thank you, Senator Blunt. Thank you for
your leadership on this issue for many, many years, on a
bipartisan basis.
I think you have seen from this subcommittee hearing that
there is strong bipartisan support for this issue, because it
knows no ideology, because in a lot of ways, what we have to do
is difficult, but it is not complicated. It may be a real
challenge for us to be as helpful as we really need to be and
want to be in the Congress, but there is not very much
disagreement among members in either chamber or either party.
The other thing that strikes me is how much private sector
leadership is required, and there continues to be. So I want to
thank the testifiers, thank my ranking member, thank Senator
Blunt for his leadership.
And we are looking forward to working with you on ongoing
basis.
[Whereupon, at 11:12 a.m., the hearing was adjourned.]
A P P E N D I X
American Hotel & Lodging Association
Washington, DC, April 7, 2014
Hon. Amy Klobuchar,
United States Senate,
Washington, DC.
Dear Senator Klobuchar:
The American Hotel & Lodging Association, the sole national
association representing all segments of the 1.8 million-employee U.S.
lodging industry, commends you for introducing legislation extending
the Travel Promotion Act of 2009 until FY 2020 and reauthorizing a
critical tourism promotion entity, BrandUSA.
BrandAUSA (formerly the Corporation for Travel Promotion) was
established by the Travel Promotion Act to help attract millions of new
international visitors, explain U.S. security policies, and promote the
U.S. as a premier travel destination. It is paid for entirely by
international travelers and voluntary industry donations; no taxpayer
money is involved.
Nearly every other country in the world has an official program to
welcome international tourists to their nation, and the lack of a
similar promotional program in the U.S. is preventing us from
maximizing the number of visitors to our country. Through industry
efforts like BrandUSA, travel is now increasingly recognized as a
leading growth industry and a source of valuable jobs that cannot be
outsourced.
Between 2011-2012, international travel to the United States
increased 7 percent to a record 67 million visitors, resulting in the
U.S. claiming the most tourism receipts (11.7 percent) in the world in
2012. In 2012, international visitors contributed $180.7 billion in
travel spending and supported 14.6 million jobs in all 50 states,
including 7.7 million directly in the travel industry. Reauthorization
of BrandUSA will help ensure a sustained increase in international
travelers coming to the U.S. and staying in our hotels, which will
allow the lodging industry to continue driving this economic activity
and much needed job creation. Further, we appreciate your efforts to
include additional transparency and accountability measures to allow
for the program's success into the future.
AH&LA and our members across the country thank you for your
leadership on this issue, and we look forward to working with you to
make sure BrandUSA is reauthorized.
Sincerely,
The American Hotel & Lodging Association
Alabama Restaurant & Hospitality Alliance
Alaska Hotel & Lodging Association
Arizona Lodging & Tourism Association
Arkansas Hospitality Association
California Hotel & Lodging Association
Colorado Hotel & Lodging Association
Connecticut Lodging AssociationFlorida Restaurant & Lodging Association
Georgia Hotel & Lodging Association
Hawai`i Lodging & Tourism Association
Illinois Hotel & Lodging Association
Indiana Restaurant & Lodging Association
Louisiana Hotel & Lodging Association
Maine Innkeepers Association
Massachusetts Lodging Association
Michigan Lodging and Tourism Association
Montana Lodging & Hospitality Association
Nebraska Hotel & Motel Association
Nevada Hotel & Lodging Association
New Hampshire Lodging & Restaurant Association
New York Hospitality & Tourism Association
North Carolina Restaurant & Lodging
Association Ohio Hotel & Lodging Association
Oklahoma Hotel & Lodging Association
Oregon Restaurant & Lodging Association
Pennsylvania Restaurant & Lodging Association
Rhode Island Hospitality Association
South Carolina Restaurant & Lodging Association
Tennessee Hospitality Association
Texas Hotel & Lodging Association
The Hawai'I Lodging & Tourism Association
Utah Hotel & Lodging Association
Vermont Chamber of Commerce
Virginia Hospitality & Travel Association
Washington Lodging Association
West Virginia Hospitality & Travel Association
Wisconsin Hotel & Lodging Association
Wyoming Lodging & Restaurant Association
______
American Bus Association
Washington, DC
Hon. Gus Bilirakis,
United States House of Representatives,
Washington, DC.
Re: Support for HR 4450
Dear Mr. Bilirakis:
My name is Clyde J. Hart and I am the Senior Vice President for
Government Affairs and Policy for the American Bus Association (ABA).
The ABA is the premier trade association for the private over-the-road
bus and motorcoach industry. The ABA is home to some 800 bus operator
companies and also represents some 3200 associations, companies,
destinations, attractions, hotels and restaurants in the North America.
Our bus operating companies transports some 640 million passengers
annually. We transport more passengers in two weeks than Amtrak does in
one year.
At the same time ABA is very interested and very engaged in
promoting travel to the United States as a tourist destination. Our
membership includes many convention and visitors' bureaus (CVBs) and
Chambers of Commerce whose mission is to increase tourism to their
areas. Moreover, ABA membership extends to attractions and destinations
in Canada. It is because of our mission to grow the motorcoach travel
industry that we support HR 4450, the Extend the Travel Promotion Act
of 2009, bill.
The Travel Promotion Act of 2009 did much to promote travel into
the United States. It is responsible for bringing 1.1 million tourists
into the country. The TPA demonstrated the success of a public-private
partnership in advancing tourism and the need for it. ABA is happy to
be a part of the coalition of tourism entities to continue the work of
the TPA.
Sincerely yours,
Clyde J. Hart,
Senior Vice President for
Government Affairs and Policy.
Cc: Adam Russell [email protected]
______
American Gaming Association
Washington, DC, April 17, 2014
Hon. Gus Bilirakis,
United States House of Representatives,
Washington, DC.
Hon. Peter Welch,
United States House of Representatives,
Washington, DC.
Dear Representatives Bilirakis and Welch,
On behalf of the members of the American Gaming Association, I
write to express our endorsement of your legislation to strengthen our
Nation's ability to promote and market that international travelers
visit the United States. AGA strongly supports the reauthorization the
Travel Promotion Act and the good work of agency responsible for
achieving this mission, Brand USA.
Overwhelmingly approved by Congress in 2010, the Travel Promotion
Act, which created the public-private partnership Brand USA, helps our
nation:
Regain its share of the booming travel market, thereby
enhancing U.S. economic growth;
Spur American job creation--as international travel supports
1.2 million American jobs; \1\ and
---------------------------------------------------------------------------
\1\ Source: U.S. Travel Association
Advance public diplomacy through better communication of
U.S. security policies and clearly articulating that the U.S.
---------------------------------------------------------------------------
welcomes international travelers.
Moreover, all of these benefits come at zero cost to American
taxpayers, as the costs for Brand USA are underwritten jointly by
private-sector contributions, which are matched by a $10 fee incurred
by visitors from Visa Waiver Program nations.
International business and leisure travel is critical to gaming
communities across the U.S., as gaming serves is a popular activity
among international visitors and as many of our Nation's most
attractive and desirable destinations are also home to casinos.
The fastest growing inbound travel market, Chinese identify
``visiting casinos'' as one of the top ten activities during a visit to
the U.S. With the average Chinese traveler spending more than $7,000
per visit, it's essential that we're marketing and promoting for these
and other international visitors to spend their money here rather than
the other emerging overseas gaming markets, which are located in closer
proximity and--at times--easier places to visit than the U.S.
Reauthorizing Brand USA to help market and promote gaming along
with the myriad benefits of visiting the U.S. is critical to our
economies continued success and global competitiveness.
Thank you for championing this legislation and working with
Senators Klobuchar and Blunt toward a bipartisan, bicameral passage of
the reauthorization of the Travel Promotion Act and, in turn, Brand
USA.
We appreciate your leadership and stand along with our 332,000
strong gaming employees ready to assist your efforts.
Sincerely,
Geoff Freeman,
President and CEO,
American Gaming Association.
______
ASAE--The Center for Association Leadership
Washington, DC, May 8, 2014
Dear Representative Bilirakis:
ASAE represents more than 21,000 association executives and
industry partners from nearly 10,000 tax-exempt organizations. Our
members manage leading trade associat ions, individual membership
societies, and voluntary organizations in every state as well as in 50
countries around the globe. Associations are highly supportive of
policies that facilitate international travel to meetings and
conventions here in the U.S.
As a stakeholder in the travel industry, ASAE fully supports your
bill, H.R. 4450/S. 2250--the Travel Promotion, Enhancement, and
Modernization Act of 2014. This bipartisan bill will reauthorize Brand
USA, allowing the public private partnership to continue its critical
work promoting the U.S. abroad and attracting international travelers
to our shores.
International travel is a major economic driver for the U.S.
economy. When international visitors travel to the United States, they
inject new money into the U.S. economy by staying in hotels, spending
in stores, visiting attractions and eating at restaurants. In 2013,
international visitors to the U.S. spent $180.7 billion, making it the
leading service export of all U.S. industries.
While it is clear that travel is helping drive the U.S. economic
recovery, the benefits could be far greater. The United States' share
of global international long-haul travel actually fell from 17 percent
in 2000 to just 13.2 percent in 2013 despite a nearly 60 percent growth
in overall global travel. While global international travel boomed over
the last decade, America failed to keep pace. In 2010, Brand USA was
created by the Travel Promotion Act to reverse this trend and has
already begun to show an impressive return on investment.
For every $1 Brand USA spent in 2013 promoting the U.S. abroad, $47
were spent by added international visitors. For Fiscal Year 2013 alone,
Brand USA attracted 1.1million additional international travelers whose
spending supported more than 53,000 new American jobs. The average
international visitor spends $4,500 per trip on American goods and
services in communities across the country.
This legislation would help the U.S. regain our lost market share
by allowing Brand USA to continue promoting the U.S. in what has become
a truly competitive global travel market. Half of Brand USA's budget is
funded by the private sector, with a match (up to $100 million)
provided by $10 from a fee assessed on visa-free international
travelers screened through Department of Homeland Security's Electronic
System for Travel Authorization (ESTA). Under this funding structure,
Brand USA benefits the U.S. economy at no cost to American taxpayers.
I urge you to help us create more American jobs by advancing H.R.
4450/S. 2250--the Travel Promotion, Enhancement, and Modernization Act
of 2014, a common sense, bipartisan approach to boosting travel to the
U.S. and strengthening our economy.
Sincerely,
John H. Graham IV, CAE,
President and CEO.
______
American Society of Travel Agents
Alexandria, VA, April 11, 2014
Hon. Amy Klobuchar,
302 Hart Senate Office Building,
Washington, DC.
Hon. Roy D. Blunt,
260 Russell Senate Office Building,
Washington, DC.
Dear Senators Klobuchar and Blunt:
I am writing on behalf of the American Society of Travel Agents
(ASTA) to express our full support for the Travel Promotion,
Enhancement, and Modernization Act of 2014 (S. 2250), bipartisan
legislation to reauthorize Brand USA.
ASTA represents 3,300 travel agencies and related travel companies
who collectively account for 80 percent of the estimated $141 billion
in travel booked through the travel agency channel in the U.S. Our
members vary in size from the smallest home-based agent to the large
travel management companies like Carlson Wagonlit to the household-name
online agencies like Expedia and Priceline.
Internationally, we are proud to count among our members nearly 800
travel agencies in 120 different countries who drive a substantial
amount of ``inbound'' travel to the U.S., a fact recognized by the 2012
National Travel and Tourism Strategy, which noted that ``travel agents
are important sources of trip planning information for many
international travelers.''
As such, ASTA strongly supports S. 2250, which will help the U.S.
recapture our historic share of worldwide overseas travel. We view the
Travel Promotion, Enhancement, and Modernization Act as essential to
marketing the U.S. as a desirable destination for international
tourists, conferences and business, and applaud your commitment to
generating jobs and economic activity through increased travel. If
there is anything ASTA can do to help advance this legislation, please
let us know.
Thank you for considering ASTA's views on this critical issue. If
you or your staff have any questions on this or any issue related to
the travel industry, please don't hesitate to contact me or Eben Peck,
ASTA's VP of Government Affairs.
Yours sincerely,
Zane Kerby,
President and Chief Executive Officer.
______
Business Travel Coalition
May 16, 2014
Dear Members of Congress,
As Chairman of the Business Travel Coalition, I urge you to co-
sponsor H.R. 4450/S. 2250--the Travel Promotion, Enhancement, and
Modernization Act of 2014. Introduced in the House by Representatives
Gus Bilirakis (R-FL-12) and Peter Welch (D-VT-1) and in the Senate by
Senators Amy Klobuchar (D-MN) and Roy Blunt (R-MO), this bipartisan
bill will reauthorize Brand USA, allowing the public-private
partnership to continue its critical work promoting the U.S. abroad and
attracting international travelers to our shores.
International travel is a major economic driver for the U.S.
economy. When international visitors travel to the United States, they
inject new money into the U.S. economy by staying in hotels, spending
in stores, visiting attractions and eating at restaurants. In 2013,
international visitors to the U.S. spent $180.7 billion, making it the
leading service export of all U.S. industries.
While it is clear that travel is helping drive the U.S. economic
recovery, the benefits could be far greater. The United States' share
of global international long-haul travel actually fell from 17 percent
in 2000 to just 13.2 percent in 2013 despite a nearly 60 percent growth
in overall global travel. While global international travel boomed over
the last decade, America failed to keep pace. In 2010, Brand USA was
created by the Travel Promotion Act to reverse this trend and has
already begun to show an impressive return on investment.
For every $1 Brand USA spent in 2013 promoting the U.S. abroad, $47
were spent by added international visitors. For Fiscal Year 2013 alone,
Brand USA attracted 1.1 million additional international travelers
whose spending supported more than 53,000 new American jobs. The
average international visitor spends $4,500 per trip on American goods
and services in communities across the country.
This legislation would help the U.S. regain our lost market share
by allowing Brand USA to continue promoting the U.S. in what has become
a truly competitive global travel market. Half of Brand USA's budget is
funded by the private sector, with a match (up to $100 million)
provided by $10 from a fee assessed on visa-free international
travelers screened through Department of Homeland Security's Electronic
System for Travel Authorization (ESTA). Under this funding structure,
Brand USA benefits the U.S. economy at no cost to American taxpayers.
I urge you to help us create more American jobs by co-sponsoring
H.R. 4450/S. 2250--the Travel Promotion, Enhancement, and Modernization
Act of 2014, a common sense, bipartisan approach to boosting travel to
the U.S. and strengthening our economy.
Sincerely,
Kevin Mitchell,
Chairman,
Business Travel Coalition.
______
Cruise Lines International Association
Arlington, VA, April 9, 2014
Hon. Amy Klobuchar,
United States Senate,
Washington, DC.
Dear Senator Klobuchar:
The Cruise Lines International Association (CLIA) is pleased to
join with the broader travel and tourism industry in commending your
leadership in introducing legislation to reauthorize the Travel
Promotion Act (TPA), and for recognizing the importance of travel and
tourism to the U.S. economy. The TPA resulted in the creation of Brand
USA, the Nation's first global marketing initiative to promote travel
and tourism to and within the U.S.
CLIA North America is comprised of 26 cruise lines and 10,700
travel agencies representing more than 35,000 individual travel agents
and works closely with the U.S. Travel Association and other U.S.
travel and tourism organizations to encourage travel to United States.
The expansive U .S. tourism industry seeks to facilitate more travel to
the U.S. so that it can be a long-term contributor to U.S. economic
growth. In 2012, the cruise industry provided significant economic
benefits throughout the U.S., generating $42.3 billion in gross output
and 356,311 direct and indirect jobs paying $17.4 billion in wages.
Cruise passenger embarkations at U.S. ports, a number of which are
international visitors, reached a record 10.1 million, an increase of
2.5 percent over 2011.
Brand USA is a catalyst for economic growth and job creation. In
Fiscal Year 2013, Brand USA generated 1.1 million additional
international trips to the U.S., an increase of 2.3 percent in inbound
international travel, and those visitors spent an average of $4,400 per
visit. Overall, visitors to the U.S. add nearly $130 billion annually
to the U.S. economy.
CLIA, along with other travel industry assoiations and ,
businesses, believes that by reauthorizing the Travel Promotion Act,
the scope and scale of Brand USA's outreach to potential international
visitors will continue to increase. Even a one percent increase in
travel from America's top ten inbound travel markets would add more
than $1 billion per year to the U.S. economy.
Thank you again for your leadership on this legislation and
promoting the contributions of travel and tourism to the U.S. economy.
Sincerely,
Christine Duffy,
President and CEO.
______
Destination Marketing Association International
Washington, DC, April 24, 2014
We are writing in support of the reauthorization of Brand USA and
urge your continued support of The Travel Promotion, Enhancement and
Moderation Act of 2014 (H.R. 4450 and S. 2250).
Brand USA (BUSA) is funded by international visitors and private
contributions--not U.S. taxpayer dollars. Their work promoting the
United States is essential in contributing to the U.S. economy and
reducing the deficit. Half of BUSA's budget comes from the private
sector through cash and in-kind contributions. Many of these
contributors are members of Destination Marketing Association
International (DMAI).
DMAI represents nearly 600 official destination marketing
organizations across the United States. These organizations are charged
with promoting their respective destinations and helping the long-term
development of their communities through a travel and tourism strategy.
Collectively, these cities, counties and states invest nearly $3
billion annually to fuel the economy and create jobs. While $3 billion
is a significant investment collectively, over 50 percent of DMAI
members have total budgets of less than $1 million. These destinations,
in particular, are largely reliant on the representation of Brand USA
to drive high value international traveler dollars to their
destinations.
In a recent analysis performed by Oxford Economics, the study
estimated in FY13 Brand USA generated 1.1 million additional visitors
who spent an estimated $3.4 billion. A one percent increase in
visitation from America's top 10 inbound travel markets would add more
than $1 billion per year to the U.S. economy--thus offsetting taxpayer
burden in local communities and creating jobs.
The travel industry's trade surplus is 6.7 percent higher so far
this year compared to the first two months of last year, far better
than the 3.4 percent improvement in the U.S. trade balance of other
goods and services. Without the $10.1 billion travel trade surplus so
far in 2014, the U.S. overall trade deficit would be 12.4 percent
larger. As you consider making the necessary Federal budget adjustments
and investments our Nation needs, we ask you to help preserve the
economic stability of destinations by supporting the Travel Promotion,
Enhancement and Modernization Act of 2014, including the
reauthorization of funding the Brand USA.
Sincerely,
Michael Gehrisch,
President and CEO,
Destination Marketing Association International
______
Disney Destinations
Lake Buena Vista, FL, May 8, 2014
Senator Roy Blunt,
260 Russell Senate Office Building,
Washington, DC.
Senator Amy Klobuchar,
302 Hart Senate Office Building,
Washington, DC.
Dear Senators Blunt and Klobuchar:
Walt Disney Parks and Resorts is pleased to support your efforts to
pass the Travel Promotion, Enhancement and Modernization Act (S. 2250).
Each year, Disney welcomes millions of guests from around the world
who come to America to make memories that will last a lifetime. We are
uniquely positioned to understand the added value of organizations like
Brand USA in increasing visitation. In fact, our positive experience
with similar public-private partnerships in both Florida and California
makes us strong advocates for the reauthorization of Brand USA.
Brand USA is the Nation's first international marketing endeavor to
promote the United States as a premier travel destination. With a
mission of increasing international visitation to the United States,
Brand USA works in close partnership with the travel industry to
maximize the economic and social benefits of travel.
This effort has been successful in attracting millions of new
international visitors to the United States, and these visitors are
spending billions of dollars during their travels, creating thousands
of new American jobs each year, at no cost to the U.S. taxpayer. In
Fiscal Year 2013, Brand USA generated 1.1 million additional
international trips to the United States, resulting in an estimated
$3.4 billion in new visitor spending, $7.4 billion in increased
economic output and $972 million in federal, state and local tax
revenue. The program also supported 53,000 U.S. jobs and returned an
estimated $47 in direct economic benefits for every $1spent on travel
promotion.
In addition to promoting the United States as a premier travel
destination through consumer and travel trade marketing, advertising,
events and promotions, Brand USA partners with the Federal Government
to communicate U.S. entry and security processes in order to facilitate
an easier and more welcoming journey into the United States.
Walt Disney Parks and Resorts supports reauthorization of this very
important program and applauds your efforts to pass the bipartisan,
bicameral Travel Promotion, Enhancement and Modernization Act, S. 2250
and H.R. 4450.
Sincerely,
Kenneth Svendsen,
President,
Walt Disney Travel Company,
Senior Vice President Global Sales.
______
Explore Minnesota Tourism
St. Paul, MN, May 7, 2014
Hon. Amy Klobuchar,
United States Senate, State of Minnesota,
302 Hart Senate Office Building,
Washington, DC.
Dear Senator Klobuchar:
On behalf of the 245,000 Minnesotans employed in the tourism
industry, thank you for your leadership on the reauthorization of Brand
USA.
In 2010, the Congress overwhelmingly approved the Travel Promotion
Act to establish a public-private partnership to help regain the U.S.
share of the global travel market. Brand USA has proven to be
successful in increasing international visitors to the United States.
Thank you for introducing the Travel Promotion, Enhancement and
Modernization Act of 2014 to reauthorize the work of Brand USA to
promote the United States as an international destination. By
attracting more visitors, Brand USA enhances U.S. economic growth,
creates jobs, and advances public diplomacy--all at no cost to
taxpayers.
Explore Minnesota's partnership with Brand USA is extremely
important as we look to increase the number of international visitors
to our region and Minnesota in particular.
Explore Minnesota Tourism is proud to support Brand USA and remains
committed to working with them to create coop marketing programs that
allow Minnesota's tourism businesses to advertise on a world stage at a
scale not otherwise possible. We urge Congress to keep this vital
resource for the U.S. travel and tourism industry by reauthorizing
Brand USA this year.
Sincerely,
John F. Edman,
Director,
Explore Minnesota Tourism.
______
International Association of Amusement Parks and
Attractions
Alexandria, VA, May 6, 2014
Hon. Amy Klobuchar,
United States Senate,
302 Hart Senate Office Building,
Washington, DC,
Hon. Roy Blunt,
United States Senate,
260 Russell Senate Office Building,
Washington, DC.
Dear Senators Klobuchar and Blunt:
The International Association of Amusement Parks and Attractions
(IAAPA) represents more than 4,500 facility, supplier, and individual
members from more than 90 countries. In the United States, IAAPA has
members in all 50 states. Member facilities include amusement/theme
parks, waterparks, attractions, family entertainment centers, arcades,
zoo, aquariums, museums, science centers, and resorts. We thank you for
introducing S. 2250 which reauthorizes the ``Travel Promotion,
Enhancement, and Modernization Act of 2014.''
Attractions in the United States have an economic impact of nearly
$219 billion each year. Additionally, in the past ten years, the
industry has also grown at twice the rate of the U.S. economy
increasing employment opportunities across the country. Amusement parks
and attractions are among the top draw for international visitors to
the U.S.
The Travel Promotion Act and Brand USA have been extraordinarily
successful in increasing international tourism in the United States. A
recent study by Oxford Economics found Brand USA marketing generated
1.1million incremental trips to the U.S. in 2013 and those visitors
spent $3.4 billion. The success of the program has also allowed the
return of $52 million to the United States Treasury in FY2012 and 2013
from fee collection.
The reauthorization of Brand USA will allow the program to
strengthen and build on the success it has already achieved. The bill
strengthens the oversight for the program, requiring more performance
metrics and reporting. These changes will allow the program to continue
to flourish and hopefully work to further increase international
tourism through 2020.
IAAPA enthusiastically supports the reauthorization of the Travel
Promotion Act through S. 2250. Amusement parks and attractions are an
important sector of the U.S. economy, providing thousands of jobs. The
industry will only continue to grow and benefit the U.S. economy with
greater international tourism.
Sincerely,
Paul Noland,
President and CEO.
______
Mall of America
Bloomington, MN, May 6, 2014
Hon. Amy Klobuchar,
United States Senate,
302 Hart Senate Office Building,
Washington, DC.
Dear Senator Klobuchar,
Mall of America, ``America's Mall'' and one of the most visited
attractions in the country, would like to thank you for introducing S.
2250, the ``Travel Promotion, Enhancement, and Modernization Act.''
Tourists, particularly those from international markets have a huge
positive impact on our local and national economy. Brand USA has been
instrumental in increasing visitation to the United States since 2011.
This increase resulted in 53,000 new jobs and a $7.4 billion impact on
the U.S. economy.
The international tourist market is the most significant
opportunity for Mall of America's $1 billion expansion plan over the
next 10 years. Our research shows an international visitor spends on
average at least 2.5 times more money per visit to MOA than a local
shopper and 1.5 more than a U.S. tourist. In addition, for every $1
international visitors spend at the Mall, they spend at least $3 more
in the local economy on lodging, car rental, dining, theater,
professional sports, etc. Brand USA is the critical fuel for MOA to
achieve this growth through partnership activities.
At Mall of America we have seen an increase in visitors from China
due to partner marketing with Brand USA and complementary promotional
activities. Chinese visitors have quickly become the highest spending
international tourists in our country. Brand USA is our key to promote
effectively in China, Brazil, Mexico and many other international
markets which we otherwise could not.
Brand USA has another important benefit in that it allows Mall of
America to partner closely with Explore Minnesota Tourism, the
Bloomington Convention and Visitors Bureau and other state tourism
entities through coordinated opportunities. For example, MOA partnered
with EMT and BCVB last summer to produce in-language promotional videos
for China, Japan, Brazil, Mexico, Germany and Canada. We are showcasing
Minnesota's state-wide tourism entities on many websites and through
social media to international audiences throughout the world. Brand USA
is the basis for these targeted and effective tourism activities.
As you know, tourism is a $12.5 billion industry in Minnesota and
employs 245,000 residents. MOA and other state tourism organizations
are working closely with EMT to grow tourism to a $20 billion industry
by 2020. This is an aggressive plan and achievable only with Brand USA
providing the international marketing platform. A $20 billion state
tourism industry will produce thousands of new jobs and increase state
revenue for a multitude of benefits including education, transportation
and health care.
It is critical to our economy that we keep marketing the United
States through Brand USA. Letting the world know that all parts of
America are full of history, cultural attractions, entertainment,
unique cuisine and of course, great retail will continue to increase
visits and create thousands of new jobs.
S. 2250 would strengthen the United States' position in the global
travel and tourism market by reauthorizing Brand USA, a vital public-
private partnership that promotes international travel to the U.S. and
at no cost to taxpayers.
The travel and tourism industry is an important piece of the
overall U.S. economy, and Brand USA strengthens that sector by
encouraging millions of international visitors to come to the U.S., who
spend billions of dollars in our economy.
Mall of America thanks you for introducing this important bill and
for your continued support of our tourism industry.
Sincerely,
Maureen Hooley Bausch,
Executive Vice President,
Mall of America.
______
National Tourism and Heritage Association
Dear Members of Congress:
As a leader within the travel industry, I urge you to co-sponsor
H.R. 4450/S. 2250--the Travel Promotion, Enhancement, and Modernization
Act of 2014. Introduced in the House by Representatives Gus Bilirakis
(R-FL-12) and Peter Welch (D-VT-1) and in the Senate by Senators Amy
Klobuchar (D-MN) and Roy Blunt (R-MO), this bipartisan bill will
reauthorize Brand USA, allowing the public-private partnership to
continue its critical work promoting the U.S. abroad and attracting
international travelers to our shores.
International travel is a major economic driver for the U.S.
economy. When international visitors travel to the United States, they
inject new money into the U.S. economy by staying in hotels, spending
in stores, visiting attractions and eating at restaurants. In 2013,
international visitors to the U.S. spent $180.7 billion, making it the
leading service export of all U.S. industries.
While it is clear that travel is helping drive the U.S. economic
recovery, the benefits could be far greater. The United States' share
of global international long-haul travel actually fell from 17 percent
in 2000 to just 13.2 percent in 2013 despite a nearly 60 percent growth
in overall global travel. While global international travel boomed over
the last decade, America failed to keep pace. In 2010, Brand USA was
created by the Travel Promotion Act to reverse this trend and has
already begun to show an impressive return on investment.
For every $1 Brand USA spent in 2013 promoting the U.S. abroad, $47
were spent by added international visitors. For Fiscal Year 2013 alone,
Brand USA attracted 1.1 million additional international travelers
whose spending supported more than 53,000 new American jobs. The
average international visitor spends $4,500 per trip on American goods
and services in communities across the country.
This legislation would help the U.S. regain our lost market share
by allowing Brand USA to continue promoting the U.S. in what has become
a truly competitive global travel market. Half of Brand USA's budget is
funded by the private sector, with a match (up to $100 million)
provided by $10 from a fee assessed on visa-free international
travelers screened through Department of Homeland Security's Electronic
System for Travel Authorization (ESTA). Under this funding structure,
Brand USA benefits the U.S. economy at no cost to American taxpayers.
I urge you to help us create more American jobs by co-sponsoring
H.R. 4450/
S. 2250--the Travel Promotion, Enhancement, and Modernization Act of
2014, a common sense, bipartisan approach to boosting travel to the
U.S. and strengthening our economy.
Sincerely,
Wayne Ingram,
President and Chief Executive Officer,
National Tourism and Heritage Association.
______
Springfield Missouri Convention and Visitors Bureau
Springfield, MO, April 11, 2014
Hon. Roy Blunt,
U.S. Senate,
B40C Dirksen Senate Office Building,
Washington, DC.
Dear Senator Blunt,
Thank you for your role in introducing the Travel Promotion,
Enhancement and Modernization Act. Reauthorizing Brand USA to continue
promoting international travel to the United States will help the
Nation's economy and help keep the economy strong in Missouri.
Your ongoing support of the travel and tourism industry is
appreciated and is making a difference for your constituents.
Sincerely,
Tracy Kimberlin,
President/CEO.
______
Travel Tech
Washington, DC, May 8, 2014
Hon. Amy Klobuchar,
302 Hart Senate Office Building,
Washington, DC.
Hon. Roy D. Blunt,
260 Russell Senate Office Building,
Washington, DC.
Dear Senators Klobuchar and Blunt:
On behalf of The Travel Technology Association (Travel Tech), the
association for the online travel industry, I would like to extend our
full support for the Travel Promotion, Enhancement and Modernization
Act of 2014 (S. 2250).
Travel Tech's members include online travel companies Expedia,
Orbitz, Priceline, Travelocity and Vegas.com and travel technology
service providers Amadeus, Sabre and Travelport. As travel distributors
and technology solutions providers to the travel marketplace, our
members see first-hand how travel and tourism positively impacts our
local, state and national economies. International visitors spent $181
billion on U.S. travel-related goods and service in 2013. Congress
should continue its commitment to growing and enhancing travel to the
United States by foreign travelers and the reauthorization of Brand USA
is and has been a successful investment in that endeavor. Brand USA, in
its unique structure and make-up, must also ensure that American
taxpayer dollars are used wisely and ensure that taxpayers are getting
the most from their investment. This includes sound management of the
organization, strategic deployment of resources, and a continued focus
on results-based initiatives.
The recent data reported by Brand USA demonstrates the tangible
impact of their efforts and the campaign is paying dividends. Based on
these recent successes and Travel Tech's full backing and support of
the travel and tourism economy here and around the world, please add
Travel Tech to the list of supporters for the passage of the Travel
Promotion, Enhancement and Modernization Act of 2014.
Please feel free to contact me with any questions about this issue
or other travel-related topics where Travel Tech may be a resource for
your continued deliberations.
Sincerely,
Stephen Shur,
President.
______
U.S. Chamber of Commerce
Washington, DC, April 22, 2014
Hon. Amy Klobuchar,
United States Senate,
Washington, DC.
Hon. Roy Blunt,
United States Senate,
Washington, DC.
Dear Sens. Klobuchar and Blunt:
The U.S. Chamber of Commerce, the world's largest business
federation representing the interests of more than three million
businesses of all sizes, sectors, and regions, as well as state and
local chambers and industry associations, and dedicated to promoting,
protecting, and defending America's free enterprise system, thanks you
for introducing S. 2250, the ``Travel Promotion, Enhancement, and
Modernization Act.''
S. 2250 would strengthen the United States' position in the global
travel and tourism market by reauthorizing Brand USA, a vital public-
private partnership that promotes international travel to the U.S. and
at no cost to taxpayers. Since it began operations in 2011, Brand USA
has been a successful driver of increased travel and tourism to the
U.S., supporting millions of jobs and creating economic growth. In
fact, Brand USA's activities resulted in a $7.4 billion impact on the
U.S. economy in Fiscal Year 2013 according to an Oxford Economics
study.
The travel and tourism industry is an important piece of the
overall U.S. economy, and Brand USA strengthens that sector by
encouraging millions of international visitors to come to the U.S., who
spend billions of dollars in our economy. The Chamber thanks you for
introducing this important bill and looks forward to working with you
on this issue.
Sincerely,
R. Bruce Josten,
Executive Vice President, Government Affairs.
______
U.S. Travel Association
April 4, 2014
Hon. Amy Klobuchar,
United States Senate,
302 Hart Senate Office Building,
Washington, DC.
Hon. Roy Blunt,
United States Senate,
260 Russell Senate Office Building,
Washington, DC.
Dear Senators Klobuchar and Blunt:
On behalf of the 14.6 million Americans whose jobs are supported by
travel, I am writing to thank you for introducing the Travel Promotion,
Enhancement, and Modernization Act of 2014 to reauthorize the work of
Brand USA to promote the United States as an international destination.
By attracting more visitors, Brand USA enhances U.S. economic growth,
spurs job creation and advances public diplomacy--all at no cost to
taxpayers. We strongly support your legislation.
In March 2010, the Congress overwhelmingly approved the Travel
Promotion Act, to establish a public-private partnership--now called
Brand USA--to help regain the U.S. share of the booming global travel
market and to better communicate U.S. security policies. The cost is
underwritten jointly by private sector contributions, matched by a $10
fee on visitors from Visa Waiver Program nations.
Because overseas business and leisure travel to the United States
is critical to local economies across the nation, the President's
National Travel and Tourism Strategy set an ambitious goal in 2012 of
attracting 100 million additional international visitors within 10
years. To help realize this objective, Brand USA has forged working
relationships with American communities--large and small, urban and
rural--and leveraged their promotional efforts into a coherent, cost-
effective and successful national marketing campaign.
According to Oxford Economics, during 2013, Brand USA's worldwide
marketing campaigns generated 1.1 million incremental visitors to the
United States--a 2.3 percent increase that generated an additional $3.4
billion in revenues. This spending generated $7.4 billion in business
sales, $3.8 billion in GDP and $2.2 billion in personal income, as well
as supporting 53,000 new jobs. That equates to a remarkable return on
investment of 47 to 1.
Travel is already America's top services export. International
visitors spent nearly $181 billion in the U.S. on travel-related goods
and services last year, an increase of more than nine percent over
2012. U.S. travel exports now account for over 26 percent of all U.S.
service exports and nearly eight percent of total U.S. exports. On
average, overseas visitors spend $4,500 per trip, yielding a travel
balance of trade surplus exceeding $50 billion. Moreover, these
visitors then return home to spread the word about America's
attractions and hospitality, generating goodwill for years to come.
That is why we are so enthusiastically supportive of your bill to
reauthorize Brand USA. Through Brand USA and at no public expense, the
United States can continue to expand its share of the extraordinarily
lucrative international travel market. Toward that end, we are very
pleased that you--with Reps. Welch and Bilirakis, the lead House
sponsors--are working on a bipartisan, bicameral basis for its
reauthorization. We appreciate your leadership and stand ready to help
in any way possible.
Sincerely,
Roger J. Dow,
President and CEO,
U.S. Travel Association.
______
United States Olympic Committee
May 23, 2014
Hon. Amy Klobuchar,
United States Senate,
302 Hart Senate Office Building,
Washington, DC.
Hon. Roy Blunt,
United States Senate,
260 Russell Senate Office Building,
Washington, DC.
Dear Senators Klobuchar and Blunt:
On behalf of the United States Olympic Committee (USOC), we would
like to thank you for introducing the Travel Promotion, Enhancement,
and Modernization Act of 2014 to reauthorize the work of Brand USA to
promote the United States as an international destination. By
attracting more visitors, Brand USA enhances U.S. economic growth,
spurs job creation, and of particular interest to us, advances public
diplomacy--all at no cost to taxpayers.
The United States Olympic Committee is itself an organization
chartered by Congress through the Ted Stevens Olympic and Amateur
Sports Act. We are the umbrella organization for 47 Sport National
Governing Bodies, encompassing sport disciplines competed in at the
Olympic, Paralympic, and Pan American Games.
The USOC remains uniquely and actively engaged in international
travel and security issues with our International Olympic Committee
(IOC), International Paralympic Committee (IPC), and International
Sport Federation (IF) counterparts around the globe. We regularly work
with the Department of Homeland Security and the Department of State to
facilitate the visa and entry process for athletes, coaches, referees,
the IOC, IPC, and IF officials during the dozens of competitions and
conferences hosted in the U.S. annually. Overseas business travel to
these U.S.-hosted events is not only critical to local economies across
the nation, but to the vibrancy of the Olympic Movement in general, and
the sustained competitive excellence of Team USA especially.
The USOC was supportive in 2012 of the President's National Travel
and Tourism Strategy, which set an ambitious goal of attracting 100
million additional international visitors within 10 years. The
facilitation of the image of the U.S. as a welcoming destination has
other direct implications--many of those individuals who come to the
U.S. for the abovementioned competitions and conferences will be in
decision-making positions about whether major events, such as World
Championships, World Cups, and even Olympic and Paralympic Games, will
be hosted in the United States. Hosting these major events can be a
potential driver for job creation, and these individuals' entry
experience into the United States will continue to shape their
perceptions and opinions about how receptive the U.S. is to foreign
travelers. Positive changes to these perceptions are important
benchmarks along the path to the U.S. potentially being selected again
to host the Olympic and Paralympic Games.
Thank you, again, for introducing this important legislation. We
enthusiastically support the reauthorization of Brand USA. Through
Brand USA, and at no public expense, the United States can continue to
expand its share of the economically vital international travel market.
We look forward to continuing to support your efforts--and those of
Representatives Welch and Bilirakis, the lead House sponsors--to move
this bi-partisan, bi-cameral legislation through Congress. We
appreciate your leadership and stand ready to be of assistance.
Sincerely,
Desiree Filippone,
Managing Director, Government Relations.
______
United States Tour Operators Association
New York, NY, April 22, 2014
Senator Amy Klobuchar,
302 Hart Senate Office Building,
Washington, DC.
Dear Senator Klobuchar:
On behalf of the United States Tour Operators Association (USTOA),
Iam writing to thank you for introducing the Travel Promotion Act, S.
2250, which would reauthorize Brand USA through 2020. You have long
been a great supporter of the travel and tourism industry, and we truly
appreciate your continued leadership in pushing for important,
successful programs like Brand USA.
As the trade association for America's tour operators, USTOA
strongly supports efforts to build and promote a vibrant travel and
tourism industry in the U.S. Our industry is a major sector of the
nationaleconomy,generating $2 trillion annually in economic activity.
It supports 14.6 million American jobs and has far-reaching economic
impacts throughout the supply chain. Since it was formed, Brand USA has
been instrumental in promoting American travel and tourism. We are
grateful that you recognize the program's success and are proposing to
reauthorize it through 2020. We are also very encouraged that your bill
has wide bipartisan support from Senators across the U.S. When it comes
to creating jobs and improving the economy, Democrats and Republicans
can agree that the travel and tourism industry presents unique
opportunities for growth in all fifty states.
Again, please accept our sincere thanks for introducing the Travel
Promotion Act.
About USTOA
The United States Tour Operators Association (USTOA) is a
professional, voluntary trade association created with the primary
purpose of promoting integrity within the tour operator industry. USTOA
was founded in 1972 by a small group of California tour operators
concerned about tour operator bankruptcies. These founding members
recognized the need for a unified voice to protect the traveling
public, as well as to represent the interests of tour operators. In
1975, USTOA became a nationalorganization with its headquarters in New
York.
USTOA Active Members represent an $11 billion industry that
purchases over $8 billion in goods and services for travel packages.
Together with its Associate Members they employ over 450,000 U.S.
citizens.
Sincerely,
Terry Dale,
President and CEO,
United States Tour Operators Association.
______
VISIT FLORIDA
March 5, 2014
Congressman Gus M. Bilirakis,
2313 Rayburn House Office Building,
Washington, DC.
Dear Rep. Bilirakis:
On behalf of the nearly 1.1 million Floridians employed in the
tourism industry, thank you for your leadership on the reauthorization
of Brand USA.
Brand USA has proven to be extremely successful in increasing
international visitation to the United States. A recent Oxford
Economics report on the impact of Brand USA shows that their marketing
efforts in 2013 increased inbound international travel to the United
States by 2.3 percent, spurred $3.4 billion in new visitor
spending,supported 53,000 jobs and generated $972 million in taxes.
Brand USA returns $47 in direct economic benefits for every $1 spent on
travel promotion.
VISIT FLORIDA's partnership with Brand USA is extremely important
as we work to establish Florida as the No. 1travel destination in the
world. Brand USA allows VISIT FLORIDA and our Florida tourism industry
partners to leverage our international resources, increase our presence
in the global marketplace and participate in innovative global
marketing partnerships that could only be implemented on a national
scale. VISIT FLORIDA was the first destination marketing organization
to sign on as a Brand USA Founding Partner and because of the value
that they add to our destination marketing efforts and their success in
growing the number of international visitors to the U.S. we will
continue to increase our investment moving forward.
VISIT FLORIDA is proud to have supported Brand USA from their
inception and remains committed to working with them to create co-op
marketing programs that allow Florida's tourism businesses to advertise
on a world stage at a scale not otherwise possible. We urge Congress to
keep this vital resource for the U.S. travel and tourism industry by
reauthorizing Brand USA this year.
Sincerely,
Will Seccombe,
President and CEO,
VISIT FLORIDA.
______
Hawai`i Tourism Authority
Hawai`i's Visitor Industry Background and Data
Table of Contents
1. Fact Sheet: Context for 2014
2. Targets
3. Return of Investment
4. Airseat Outlook
5. Fact Sheets: By Island
a. O`ahu
b. Maui
c. Kaua`i
d. Hawai`i Island
6. Fact Sheets: by Major Market Area
a. North America
b. Japan
c. Oceania
d. China
e. Korea
f. Taiwan
g. Europe
7. Appropriations and TAT Allocation
8. Powerpoint: Hawai`i's Visitor Industry
9. Aloha
Context for 2014
For the first 90 days, we have seen a plateau or leveling off of
our 2014 arrivals and expenditures which has resulted in:
Slightly lower numbers than our record 2013 year.
516 fewer air passenger arrivals per day (-2.3 percent).
Approximately 215,927 guests on all islands on any given day
(-2.1 percent).
$1.33 less per day in visitor spending in comparison to last
year (-3.1 percent).
An average of $1,854 in visitor spending per trip, $3 more
than last year (0.2 percent).
An average of $42.3 million in total visitor spending per
day: $20 million on O`ahu, $11.8 million in Maui County, $4.3
million on Kaua`i, $6.1 million on Hawai`i Island, and $156,000
by visitors who arrived by cruise ship. This resulted in $406
in state tax revenue.
173,000 jobs annually supported by the tourism industry.
Fewer arrivals from the U.S. West and East during the first
three months of the year. In 2013, 1,240,665 visitors (60
percent of all visitors) came to the Hawaiian Islands compared
to 1,178,610 (58 percent of all visitors) in 2014.
Increases in international visitor arrivals during the first
three months of the year with 1,282,490 (62 percent of all
visitors) in 2013 compared to 1,291,121 (64 percent of all
visitors) in 2014.
5th highest occupancy in the U.S., with 76.2 percent average
statewide.
2nd highest ADR in the U.S., with an average rate of $227.
Fourth largest international port of air entry in the U.S.
1.3 million residents and yet more than 11 million air
seats.
920 flights per week from more than 53 cities by 21
carriers.
In Summary
We have to keep on top of the trends for our customers, airlines,
hotels and destination experiences. What we do in the next five years
will affect the next 25. Time is short and the list is long. Reopening
Kona as a secondary international port of entry, creating new inventory
to growing international markets, and increasing our MCI segment are
all key initiatives for the HTA.
We must collectively work together with focus and purpose for the
long-term sustainability of Hawai`i's tourism economy.
Our partnerships with Hawai`i Business Round Table, Enterprise
Honolulu, Hawai`i Chamber of Commerce and the Hawai`i Retail Merchants
Association will be very powerful, dynamic and helpful as we move
forward collectively. As will our leadership role with the U.S. Travel
Association. These collaborations will help us move forward and keep
tourism, as well as the military and other businesses and industries
strong, while creating a new vehicle for promoting science and
innovation to benefit Hawai`i's economy and community.
Hawaii Tourism Authority
Comparison of Visitor Industry and Economic Indicators to HTA FY Expenditures
--------------------------------------------------------------------------------------------------------------------------------------------------------
Calendar Year 2002 2003 2004 2005 2006 2007 2008
--------------------------------------------------------------------------------------------------------------------------------------------------------
Visitor Arrivals (air + cruise) 6,452,834 6,442,020 6,991,927 7,494,236 7,628,118 7,627,819 6,822,911
Visitor Expenditures (millions $) \1\ $9,994 $10,055 $10,862 $11,904 $12,492 $12,811 $11,399
Visitor Days 60,515,052 59,227,930 63,343,173 68,241,986 69,884,925 70,075,021 63,857,378
Per Person Per Day Spending (PPPD$) \1\ $165.15 $169.77 $171.48 $174.44 $178.75 $182.82 $178.51
Length of Stay (LOS) 9.38 9.19 9.06 9.11 9.16 9.19 9.36
Air Seats (scheduled & charter) 8,252,306 8,557,770 9,317,245 10,024,142 10,361,052 10,190,698 9,162,013
State tax revenues (million $) $912.00 $905.40 $950.80 $1,046.50 $1,158.30 $1,220.60 $1,076.30
TAT (FY) $157,634,488 $170,864,689 $181,847,751 $198,774,268 $216,996,215 $224,931,245 $229,377,993
Jobs \2\ 165,978 167,582 169,062 178,047 175,115 172,416 151,331
Cost per Arrival \3\ $9.26 $9.82 $9.05 $8.65 $9.27 $9.61 $11.47
ROI: Tax Revenue Generated/HTA 15.3 14.3 15.0 16.1 16.4 16.6 13.8
Expenditures
ROI: Visitor Expenditures/HTA 167.3 158.9 171.6 183.7 176.6 174.7 145.7
Expenditures
HTA FY Expenditures $59,743,471 $63,292,000 $63,292,000 $64,800,411 $70,740,766 $73,327,586 $78,229,323
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hawaii Tourism Authority--Continued
Comparison of Visitor Industry and Economic Indicators to HTA FY Expenditures
----------------------------------------------------------------------------------------------------------------
Calendar Year 2009 2010 2011 2012 2013 2014T
----------------------------------------------------------------------------------------------------------------
Visitor Arrivals 6,517,054 7,018,133 7,299,047 8,028,743 8,235,510 8,443,500
(air + cruise)
Visitor $9,993 $11,066 $12,158 $14,365 $14,735 $15,314
Expenditures
(millions $)
\1\
Visitor Days 60,836,666 65,465,125 68,466,519 74,519,278 75,395,940 76,557,979
Per Person Per $164.26 $169.04 $177.6 $192.8 $195.44 $200.02
Day Spending
(PPPD$) \1\
Length of Stay 9.33 9.33 9.38 9.28 9.15 9.07
(LOS)
Air Seats 8,676,773 9,299,913 9,392,291 10,322,464 10,896,815 11,086,424
(scheduled &
charter)
State tax $932.46 $1,045.55 $1,324.66 $1,501.21 $1,539.93 $1,600.35
revenues
(million $)
TAT (FY) $210,613,996 $224,242,539 $284,462,891 $323,939,591 368,555,996 $403,048,000
Jobs \2\ 133,618 145,235 155,732 166,480 170,775 177,475
Cost per Arrival $11.05 $9.85 $10.98 $9.39 $8.40 $10.12
\3\
ROI: Tax Revenue 12.9 15.1 16.5 19.9 22.3 18.7
Generated/HTA
Expenditures
ROI: Visitor 138.7 160.1 151.7 190.6 213.1 179.2
Expenditures/
HTA
Expenditures
HTA FY $72,029,987 $69,139,336 $80,139,000 $75,375,000 $69,152,000 $85,455,000
Expenditures
----------------------------------------------------------------------------------------------------------------
T--HTA target (February 2014)
\1\ Includes Supplemental Business Expenditures
\2\ Jobs generated from tourism sector
\3\ Cost is HTA's FY Expenditures
HTA Airline Seat Capacity Outlook for Second Quarter 2014
The Hawai`i Tourism Authority (HTA), the state's tourism agency,
forecasts the continued growth of total scheduled nonstop air seats to
Hawai`i in the second quarter of 2014. The projection is based on
flights appearing in Diio airline schedules as of March 2014.
Following a 2.4 percent increase in the first quarter of 2014,
scheduled nonstop air seats to Hawai`i are expected to grow at a
slightly faster rate (+3.1 percent) in the second quarter.
Growth in the second quarter of 2014 is expected to be driven by
continued increases from international cities (+4.8 percent), along
with a 2.2 percent increase in domestic seats. Supported by growth in
both the domestic and international markets, airlines are expected to
operate more than 2.7 million air seats to the Hawaiian Islands in the
second quarter, a record high for inbound scheduled capacity to the
state during the April through June period.
------------------------------------------------------------------------
2014 Q2 2013 Q2 %
------------------------------------------------------------------------
TOTAL 2,740,102 2,659,002 3.1%
DOMESTIC 1,851,086 1,811,018 2.2%
US WEST 1,644,857 1,596,995 3.0%
US EAST 206,229 214,023 -3.6%
INTERNATIONAL 889,016 847,984 4.8%
JAPAN 508,993 481,906 5.6%
CANADA 82,282 75,494 9.0%
OTHER ASIA 127,844 105,178 21.6%
OCEANIA 105,602 109,798 -3.8%
OTHER 64,295 75,608 -15.0%
------------------------------------------------------------------------
Source: Diio Mi Airline Schedules as of March 2014
U.S. West
Scheduled seats from each of Hawai`i's top core U.S. West gateway
markets are expected to rise (Los Angeles, +7.9 percent; San Francisco,
+1.6 percent; Seattle, +6.3 percent), more than offsetting capacity
reductions from San Jose (-4.0 percent) and smaller markets operated by
Allegiant (i.e., Eugene, Fresno, Phoenix-Mesa, Santa Maria and
Spokane). Overall, U.S. West scheduled seat capacity is expected to be
up 3.0 percent above prior year levels.
U.S. East
Second quarter seat capacity from the U.S. East market is expected
to decrease 3.6 percent, as additional service from Dallas (+5.1
percent) and Houston (+3.9 percent) is offset by reductions in capacity
from Washington, D.C. (-35.3 percent) and New York (-13.2 percent).
Japan
Scheduled nonstop seats from Japan are expected to rise 5.6 percent
in the second quarter, boosted by Japan Airlines' upgrading to larger
Boeing 777 aircraft on the majority of its flights to Hawai`i, as well
as an increase in flights out of Tokyo-Narita. United Airlines'
upgrading from Boeing 777 to larger Boeing 747 aircraft is also
expected to contribute to the second quarter increase. Notable year-
over-year increases are expected from Osaka (+8.4 percent) and Nagoya
(+37.1 percent).
Canada
Nonstop air seats from Canada to Hawai`i are expected to rise 9.0
percent in the second quarter of 2014, driven by significant increases
in service to the neighbor islands: Maui (+10.2 percent), Kaua`i (+66.7
percent) and Hawai`i Island (+50.8 percent).
Other Asia
Other Asia is expected to be Hawai`i's fastest growing region for
scheduled air seats during the April through June 2014 period, boosted
by the launch of nonstop Beijing-Honolulu flights by Air China
(January) and Hawaiian Airlines (April), and the expansion of Shanghai-
Honolulu service by China Eastern Airlines (+73.2 percent). The
continuation of nonstop Taipei-Honolulu flights by China Airlines
(launched in June 2013) and Hawaiian Airlines (launched in July 2013,
but suspended as of April 2014) will also contribute to the expected
double-digit increase (+21.6 percent) in seats from the overall Other
Asia market. Meanwhile, nonstop seats from South Korea are expected to
decrease 10.1 percent in the second quarter.
Oceania
After posting double-digit increases in annual air seats every year
since 2011, air seat growth from Oceania is leveling off with a
projected 3.8 percent decrease in air seats in the second quarter.
While scheduled seats from Auckland (+7.3 percent), Brisbane (+8.1
percent) and Melbourne (+9.7 percent) are all expected to register
notable year-over-year gains, these increases are expected to be offset
by an 11.1 percent decrease in capacity from Sydney.
For more information about the Airline Seat Capacity Outlook or
other research related reports, please contact:
Daniel Naaho`opi`i
Director of Tourism Research
Hawai`i Tourism Authority
[email protected]
www.hawaiitourismauthority.org/research
CITY & COUNTY OF HONOLULU OVERVIEW
Visitor Statistics
----------------------------------------------------------------------------------------------------------------
YTD % % change
Honolulu 2014 YTD* 2013 YTD* change 2013p 2012 2011 2013/12
----------------------------------------------------------------------------------------------------------------
Total Expenditures ($mil) 587.4 670.4 -12.4% 7,277.9 7,672.5 5,593.1 -5.1%
Visitor Arrivals 413,425 407,151 1.5% 5,100,169 4,904,045 4,372,181 4.0%
PPPD Spending ($) 193.2 214.4 -9.9% 205.0 213.9 176.8 -4.2%
----------------------------------------------------------------------------------------------------------------
Source: Hawai`i Tourism Authority
*YTD actuals through January 2014 and January 2013
Air Seats
----------------------------------------------------------------------------------------------------------------
YTD % % change
Honolulu 2014 YTD* 2013 YTD* change 2013p 2012 2011 2013/12
----------------------------------------------------------------------------------------------------------------
Domestic Seats 356,805 351,098 1.6% 4,372,884 4,215,824 3,968,283 6.2%
International Seats 305,403 276,563 10.4% 3,416,433 3,043,155 2,592,284 17.4%
----------------------------------------------------------------------------------------------------------------
Total Seats 662,208 627,661 5.5% 7,789,317 7,258,979 6,560,567 10.6%
----------------------------------------------------------------------------------------------------------------
Source: Diio for 2013 YTD and 2012 YTD, OAG for whole years 2012 and 2011
*YTD actuals through January 2014 and January 2013
Transient Accommodations Tax to City & County of Honolulu
----------------------------------------------------------------------------------------------------------------
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
----------------------------------------------------------------------------------------------------------------
TAT ($mil) 44.44 45.32 41.61 39.94 45.39 41.01 41.01
----------------------------------------------------------------------------------------------------------------
Note: City & County of Honolulu receives 44.1% of the TAT revenues distributed to the counties.
HTA Programs and Funding
----------------------------------------------------------------------------------------------------------------
2012 2013 2014
----------------------------------------------------------------------------------------------------------------
No. of No. of No. of
HTA Programs Programs Amount Programs Amount Programs Amount
----------------------------------------------------------------------------------------------------------------
County Product Enrichment 40 $325,000 28 $310,000 26 $325,000
*Kukulu Ola: Hawaiian Culture 5 $303,323 9 $268,000 8 $220,000
Community
Major Festivals 4 $361,000 4 $591,000 4 $591,000
Native Hawaiian Festivals 5 $420,000 5 $420,000 5 $470,000
*Natural Resources Community- 8 $543,448 8 $291,612 7 $234,000
Based
Safety & Security 1 $230,000 1 $218,000 1 $272,000
Sporting Events 6 $5,135,000 7 $5,212,500 7 $5,790,000
**Career Development 1 $20,000 0 $-- 1 $25,000
***O`ahu Visitors Bureau $3,269,812 $3,245,269 $3,279,269
================================================================================================================
Total HTA Program Funding $10,607,583
$10,556,381
$11,206,269
----------------------------------------------------------------------------------------------------------------
*In 2013, the HTA funded 4 statewide Natural Resources Community-based programs at $133,058 and 1 statewide
Hawaiian Culture Community program at $28,000
In 2014, the HTA funded 3 statewide Natural Resources Community based programs at $100,000 and 4 statewide
Hawaiian Culture Community program at 138,000.
**In 2013, the HTA funded 2 statewide Career Development programs at $72,500 ($45,000 DOE CTE and $27,500 LEI)
***HTA provides funding for the Hawai`i Visitors and Convention Bureau. Total amounts are inclusive of leisure,
MCI, HVCB and international contractors funding.
MAUI COUNTY OVERVIEW
Visitor Statistics
----------------------------------------------------------------------------------------------------------------
YTD % % change
Maui County 2014 YTD* 2013 YTD* change 2013P 2012 2011 2013/12
----------------------------------------------------------------------------------------------------------------
Total Expenditures ($mil) 366.8 391.6 -6.3% 3,737.5 3,461.2 3,043.8 13.7%
Visitor Arrivals 195,400 200,937 -2.8% 2,362,629 2,309,194 2,168,487 6.5%
PPPD Spending ($) 193.2 212.0 -8.9% 194.0 185.5 173.5 6.9%
----------------------------------------------------------------------------------------------------------------
Source: Hawai`i Tourism Authority
*YTD actuals through January 2014 and January 2013
----------------------------------------------------------------------------------------------------------------
YTD % % change
MOLOKAI 2014 YTD* 2013 YTD* change 2013P 2012 2011 2013/12
----------------------------------------------------------------------------------------------------------------
Total Expenditures ($mil) 6.7 4.5 4.4% 30.1 28.3 28.0 1.3%
Visitor Arrivals 5,143 5,588 -8.0% 55,237 53,323 55,250 -3.5%
PPPD Spending ($) 193.2 129.7 49.0% 113.7 109.5 108.9 0.5%
----------------------------------------------------------------------------------------------------------------
*Source: Hawai`i Tourism Authority
**YTD actuals through January 2014 and January 2013
----------------------------------------------------------------------------------------------------------------
YTD % % change
Lanai 2014 YTD* 2013 YTD* change 2013P 2012 2011 2013/12
----------------------------------------------------------------------------------------------------------------
Total Expenditures ($mil) 4.4 7.9 -44.3% 87.2 79.6 80.2 -0.7%
Visitor Arrivals 5,697 6,527 -12.7% 74,526 72,649 75,004 -3.1%
PPPD Spending ($) 193.2 317.0 -39.1% 334.9 303.1 304.0 -0.3%
----------------------------------------------------------------------------------------------------------------
Source: Hawai`i Tourism Authority
*YTD actuals through January 2014 and January 2013
Air Seats
----------------------------------------------------------------------------------------------------------------
YTD % % change
Kahului 2014 YTD* 2013 YTD* change 2013P 2012 2011 2013/12
----------------------------------------------------------------------------------------------------------------
Domestic Seats 137,709 141,269 -2.5% 1,671,934 1,613,642 1,537,738 4.9%
International Seats 26,704 27,056 -1.3% 171,994 168,399 150,856 11.6%
----------------------------------------------------------------------------------------------------------------
Total Seats 164,413 168,325 -2.3% 1,843,928 1,782,041 1,688,594 5.5%
----------------------------------------------------------------------------------------------------------------
Source: Diio for 2013 YTD and 2012 YTD, Diio database for whole years 2012 and 2011
*YTD actuals through January 2014 and January 2013
Transient Accommodations Tax (TAT) Distributed
----------------------------------------------------------------------------------------------------------------
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
----------------------------------------------------------------------------------------------------------------
TAT ($mil) 22.98 23.43 21.51 20.65 23.47 21.20 21.2
----------------------------------------------------------------------------------------------------------------
Note: Maui County receives 22.8% of the TAT revenues distributed to the counties.
HTA Programs and Funding
----------------------------------------------------------------------------------------------------------------
2012 2013 2014
----------------------------------------------------------------------------------------------------------------
No. of No. of No. of
HTA Programs Programs Amount Programs Amount Programs Amount
----------------------------------------------------------------------------------------------------------------
County Product Enrichment 24 $332,000 22 $305,000 23 $345,000
*Kukulu Ola: Hawaiian Culture 0 $-- 0 $-- 1 $ 20,000
Community
Major Festivals 1 $105,000 1 $105,000 1 $105,000
Native Hawaiian Festivals 2 $60,000 2 $60,000 2 $60,000
*Natural Resources Community- 2 $59,225 4 $90,700 6 $136,000
Based
Safety & Security 1 $25,000 1 $46,000 1 $46,000
Sporting Events 3 $579,000 3 $565,000 3 $565,000
**Career Development 2 $55,000 0 $-- 0 $--
***Maui Visitors & Convention $2,906,436 $2,882,071 $2,877,071
Bureau
***Moloka`i Visitors $248,782 $244,741 $244,741
Association
**Destination Lana`i $144,000 $143,000 $143,000
================================================================================================================
Total HTA Program Funding $4,514,443
$4,441,512
$4,541,812
----------------------------------------------------------------------------------------------------------------
*In 2013, the HTA funded 4 statewide Natural Resources Community-based programs at $133,058 and 1 statewide
Hawaiian Culture Community program at $28,000
In 2014, the HTA funded 3 statewide Natural Resources Community based programs at $100,000 and 4 statewide
Hawaiian Culture Community program at 138,000.
** In 2013, the HTA funded 2 statewide Career Development programs at $72,500 ($45,000 DOE CTE and $27,500 LEI)
*** HTA provides funding for the Hawai`i Visitors and Convention Bureau and each of the island chapter bureaus.
Total amounts are inclusive of leisure, MCI, HVCB and international contractors funding.
KAUA`I COUNTY OVERVIEW
Visitor Statistics
----------------------------------------------------------------------------------------------------------------
YTD % % change
Kaua`i County 2014 YTD* 2013 YTD* change 2013p 2012 2011 2013/12
----------------------------------------------------------------------------------------------------------------
Total Expenditures ($mil) 160.0 136.6 17.1% 1,453.2 1,290.3 1,174.0 12.6%
Visitor Arrivals 91,161 92,142 -1.1% 1,113,523 1,084,681 1,011,500 2.7%
PPPD Spending ($) 193.2 175.3 10.2% 171.0 158.0 154.5 8.3%
----------------------------------------------------------------------------------------------------------------
Source: Hawai`i Tourism Authority
*YTD actuals through January 2014 and January 2013
Air Seats
----------------------------------------------------------------------------------------------------------------
YTD % % change
Kaua`i County 2014 YTD* 2013 YTD* change 2013p 2012 2011 2013/12
----------------------------------------------------------------------------------------------------------------
Domestic Seats 48,807 53,603 -8.9% 581,754 575,667 511,660 1.1%
International Seats 5,394 2,158 150.0% 18,514 16,434 7,504 12.7%
----------------------------------------------------------------------------------------------------------------
Total Seats 54,201 55,761 -2.8% 600,268 589,030 519,164 1.4%
----------------------------------------------------------------------------------------------------------------
Source: Diio for 2013 YTD and 2012 YTD, OAG for whole years 2012 and 2011
*YTD actuals through January 2014 and January 2013
Transient Accommodations Tax to Kaua`i County
----------------------------------------------------------------------------------------------------------------
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
----------------------------------------------------------------------------------------------------------------
TAT ($mil) 14.61 14.90 13.68 13.13 14.92 13.48 13.48
----------------------------------------------------------------------------------------------------------------
Note: Kaua`i receives 14.5% of the TAT revenues distributed to the counties.
HTA Programs and Funding
----------------------------------------------------------------------------------------------------------------
2012 2013 2014
----------------------------------------------------------------------------------------------------------------
No. of No. of No. of
HTA Programs Programs Amount Programs Amount Programs Amount
----------------------------------------------------------------------------------------------------------------
County Product Enrichment 21 $325,000 28 $325,000 24 $350,000
*Kukulu Ola: Hawaiian Culture 1 $40,000 2 $79,000 2 $50,000
Community
Major Festivals 1 $63,500 1 $63,500 1 $63,500
Native Hawaiian Festivals 2 $22,200 2 $24,000 1 $20,000
*Natural Resources Community- 2 $64,225 5 $169,372 2 $80,000
Based
Safety & Security 1 $56,000 1 $53,000 1 $53,000
Sporting Events 0 $-- 1 $25,000 1 $25,000
**Career Development 1 $10,000 0 $-- 0 $--
***Kaua`i Visitors Bureau $2,315,209 $2,285,893 $2,280,893
================================================================================================================
Total HTA Program Funding $ 2,896,134
$ 3,024,765
$ 2,922,393
----------------------------------------------------------------------------------------------------------------
* In 2013, the HTA funded 4 statewide Natural Resources Community-based programs at $133,058 and 1 statewide
Hawaiian Culture Community program at $28,000
In 2014, the HTA funded 3 statewide Natural Resources Community based programs at $100,000 and 4 statewide
Hawaiian Culture Community program at $138,000.
** In 2013, the HTA funded 2 statewide Career Development programs at $72,500 ($45,000 DOE CTE and $27,500 LEI)
*** HTA provides funding for the Hawai`i Visitors and Convention Bureau and each of the island chapter bureaus.
Total amounts are inclusive of leisure, MCI, HVCB and international contractors funding.
HAWAI`I COUNTY OVERVIEW
Visitor Statistics
----------------------------------------------------------------------------------------------------------------
YTD % % change
Hawai`i County 2014 YTD* 2013 YTD* change 2013p 2012 2011 2013/12
----------------------------------------------------------------------------------------------------------------
Total Expenditures ($mil) 234.9 217.3 8.1% 1,898.8 1,660.8 1,459.2 13.8%
Visitor Arrivals 130,059 133,953 -2.9% 1,450,247 1,433,282 1,318,310 8.7%
PPPD Spending ($) 193.2 181.3 6.6% 177.1 158.9 150.6 5.5%
----------------------------------------------------------------------------------------------------------------
Source: Hawai`i Tourism Authority
* YTD actuals through January 2014 and January 2013
Air Seats
----------------------------------------------------------------------------------------------------------------
YTD % % change
Kona 2014 YTD* 2013 YTD* change 2013p 2012 2011 2013/12
----------------------------------------------------------------------------------------------------------------
Domestic Seats 55,685 55,884 -0.4% 588,403 609,337 574,934 6.0%
International Seats 6,238 3,832 62.8% 26,311 21,439 11,980 79.0%
Total Seats 61,923 59,716 3.7% 614,714 630,776 586,914 7.5%
----------------------------------------------------------------------------------------------------------------
Source: Diio for 2013 YTD and 2012 YTD, OAG for whole years 2012 and 2011
* YTD actuals through January 2014 and January 2013
----------------------------------------------------------------------------------------------------------------
YTD % % change
Hilo 2014 YTD* 2013 YTD* change 2013p 2012 2011 2013/12
----------------------------------------------------------------------------------------------------------------
Domestic Seats 3,804 4,239 -10.3% 48,588 58,577 37,052 58.1%
International Seats 0 0 na 0 0 0 na
----------------------------------------------------------------------------------------------------------------
Total Seats 3,804 4,239 -10.3% 48,588 58,577 37,052 58.1%
----------------------------------------------------------------------------------------------------------------
Source: Diio for 2013 YTD and 2012 YTD, OAG for whole years 2012 and 2011
* YTD actuals through January 2014 and January 2013
Transient Accommodations Tax (TAT) to Hawai`i County
----------------------------------------------------------------------------------------------------------------
FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013
----------------------------------------------------------------------------------------------------------------
TAT ($mil) 18.74 19.11 17.55 16.85 19.15 17.3 17.3
----------------------------------------------------------------------------------------------------------------
Note: Hawai`i County receives 18.6% of the TAT revenues distributed to the counties.
HTA Programs and Funding
----------------------------------------------------------------------------------------------------------------
2012 2013 2014
----------------------------------------------------------------------------------------------------------------
No. of No. of No. of
HTA Programs Programs Amount Programs Amount Programs Amount
----------------------------------------------------------------------------------------------------------------
**County Product Enrichment 22 $357,083 18 $ 329,200 18 $ 328,983
*Kukulu Ola: Hawaiian Culture 1 $45,000 1 $25,000 5 $52,000
Community
Major Festivals 1 $63,500 1 $63,500 1 $63,500
Native Hawaiian Festivals 3 $107,500 3 $109,000 4 $125,000
*Natural Resources Community- 2 $60,527 5 $185,258 7 $250,000
Based
Safety & Security 1 $123,500 1 $117,500 1 $120,500
Sporting Events 2 $400,000 3 $390,000 2 $380,000
Workforce Development 1 $10,000 0 $-- 0 $--
***Big Island Visitors Bureau $2,265,968 $2,236,356 $2,231,356
================================================================================================================
Total HTA Program Funding $ 3,433,078
$ 3,455,814
$ 3,551,339
----------------------------------------------------------------------------------------------------------------
* In 2013, the HTA funded 4 statewide Natural Resources Community-based programs at $133,058 and 1 statewide
Hawaiian Culture Community program at $28,000
In 2014, the HTA funded 3 statewide Natural Resources Community based programs at $100,000 and 4 statewide
Hawaiian Culture Community program at 138,000.
** The County Product Enrichment Program (CPEP) FY 12 budget is $335,583. In addition, $21,500 was rolled over
from 2011 & 2010 CPEP budgets.
*** HTA provides funding for the Hawai`i Visitors and Convention Bureau and each of the island chapter bureaus.
Total amounts are inclusive of leisure, MCI, HVCB and international contractor funding.
North America Fact Sheet
North America Overview
North America continues to be Hawai`i's largest source market for
visitors. This market includes visitors who travel to the Hawaiian
Islands from the U.S. West (defined as the 11 Pacific states west of
the Rockies), U.S. East (all other states) and Canada. As the U.S.
economy is projected to grow in 2014, demand for travel to the Hawaiian
Islands from the region remains strong, with domestic air seats
accounting for 66 percent of total seats to the state. The HTA
continues to work with the Hawai`i Visitors & Convention Bureau (HVCB),
its marketing contractor for North America, to reach aggressive targets
set by the HTA.
2013 Quick Facts
Visitor Expenditures: $9.38 billion
Primary Purpose of Stay: Pleasure (4,499,274) vs. MCI (288,195)
Average Length of Stay: 10.14 days
First Time Visitors: 27.6%
Repeat Visitors: 72.4%
U.S. West
----------------------------------------------------------------------------------------------------------------
% Change % Change
U.S. WEST MMA (by Air) 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
----------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ Millions) 4,142.8 4,640.1 4,772.8 2.9% 4,839.0 1.4%
Visitor Days 28,768,587 30,471,505 30,733,731 0.9% 30,549,130 -0.6%
Arrivals 2,994,731 3,178,824 3,219,621 1.3% 3,219,600 0.0%
Per Person Per Day Spending* ($) 144.0 152.3 155.3 2.0% 158.4 2.0%
Per Person Per Trip Spending* ($) 1,383.4 1,459.7 1,482.4 1.6% 1,503.0 1.4%
Length of Stay (days) 9.61 9.59 9.55 -0.4% 9.49 -0.6%
----------------------------------------------------------------------------------------------------------------
U.S. East
----------------------------------------------------------------------------------------------------------------
% Change % Change
U.S. EAST MMA (by Air) 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
----------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ Millions) 3,108.2 3,434.2 3,566.6 3.9% 3,612.9 1.3%
Visitor Days 17,178,727 17,852,103 17,821,304 -0.2% 17,786,143 -0.2%
Arrivals 1,642,279 1,699,625 1,698,454 -0.1% 1,698,500 0.0%
Per Person Per Day Spending* ($) 180.9 192.4 200.1 4.0% 203.1 1.5%
Per Person Per Trip Spending* ($) 1,892.6 2,020.6 2,099.9 3.9% 2,127.1 1.3%
Length of Stay (days) 10.46 10.50 10.49 -0.1% 10.47 -0.2%
----------------------------------------------------------------------------------------------------------------
Canada
----------------------------------------------------------------------------------------------------------------
% Change % Change
CANADA MMA (by Air) 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
----------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ Millions) 906.0 1,022.8 1,044.8 2.2% 1,047.5 0.3%
Visitor Days 6,040,316 6,497,799 6,470,918 -0.4% 6,435,869 -0.5%
Arrivals 477,564 499,144 509,565 2.1% 519,800 2.0%
Per Person Per Day Spending* ($) 150.0 157.4 161.5 2.6% 162.8 0.8%
Per Person Per Trip Spending* ($) 1,897.1 2,049.0 2,050.4 0.1% 2,015.2 -1.7%
Length of Stay (days) 12.65 13.02 12.70 -2.5% 12.38 -2.5%
----------------------------------------------------------------------------------------------------------------
* Excludes supplemental business spending
Contact Information
Hawai`i Tourism Authority:
Laci Goshi, Tourism Brand Manager
[email protected]
Hawai`i Visitors & Convention Bureau:
Jay Talwar, Senior Vice President, Marketing
Hawaii Visitors & Convention Bureau
2270 Kalakaua Avenue, Suite 801
Honolulu, Hawaii 96815
[email protected]
Market Summary
U.S. West
In 2013, total expenditures reached $4.77 billion at a 2.9
percent YOY increase. The average daily spending increased to
$155 per person and total visitor arrivals increased YOY by 1.3
percent to 3,219,621.
For 2014 YTD, visitor expenditures are currently $743
million. The average daily spending increased to $158.60 per
person and total visitor arrivals are at 454,750. Average
length of stay is off to a strong start at 10.3 days.
Airlift: In 2013, air seats increased YOY by 2.1 percent to
6,373,358 scheduled seats.
As for 2014, domestic seats are forecasted to increase with
an estimate of 6,574,021 compared to 6,373,358 in 2013 for U.S.
West. Discontinued service from Santa Maria and reduced service
from Anchorage, Bellingham, Boise, Eugene, Fresno, Phoenix
Mesa, San Jose, Spokane and Stockton are offset by increased
service from Denver, Los Angeles, Oakland, Portland, Salt Lake
City, San Diego and Seattle.
U.S. East
In 2013, total expenditures reached $3.57 billion at a 3.9
percent YOY increase. The average daily spending increased to
$200 per person and total visitor arrivals slightly decreased
YOY by -0.1 percent to 1,698,454.
For 2014 YTD, visitor expenditures are currently $714.7
million. The average daily spending increased to $209.60 per
person and total visitor arrivals are at 289,877. Average
length of stay is targeted at 11.67 days with the 2014 YTD
slightly exceeding it at 11.76.
Airlift: In 2013, air seats increased YOY by 7.8 percent to
832,797 scheduled seats.
As for 2014, air seats are expected to slightly increase
with an estimate of 841,059 compared to 832,797 in 2013.
Flights out of Washington D.C. have been reduced and there is
also a reduction in seats from New York JFK and Chicago. These
declines are offset by additional seats out of Dallas and
Houston, a result of a shift toward larger aircrafts used for
Hawai`i flights.
Canada
In 2013, total expenditures reached $1.04 billion at a 2.2
percent YOY increase. The average daily spending increased YOY
by 2.6 percent to $161.50 per person. Total visitor arrivals
increased YOY by 2.1 percent to 509,565.
For 2014 YTD, visitor expenditures are currently at $293.6
million. The average daily spending decreased to $154 per
person and total visitor arrivals are at 136,400. Average
length of stay increased to 13.98 days compared to 13.55 YTD in
2013.
Airlift: In 2013, air seats increased YOY by 1.4 percent to
367,825 nonstop seats.
As for 2014, Canada is expected to grow to 386,517 scheduled
air seats to Hawaii, a 5.1 percent increase compared to 2013.
WestJet's expanded service from Vancouver to Kona and Lihue
from December 2013 has contributed to growth in the market.
Market Conditions
Overall U.S.
Slow economic growth.
``Affordability'' and ``value'' continue to play a
large role in consumer willingness to travel.
While demand for travel to Hawai`i remains strong
among U.S. air leisure travelers, rising travel prices
continue to play a factor with converting this demand into
actual Hawai`i vacations.
After the U.S. Consumer Confidence Index showed
increases for December 2013 and January 2014, it decreased
to 78.1 in February.
Unemployment rate showing gradual improvement.
U.S. housing market showing slow improvement.
U.S. GDP increased at an annual rate of 2.4 percent in
the fourth quarter of 2013.
U.S. mainland continues to be Hawai`i's single largest
air service market, accounting for approximately 66 percent
of scheduled seats to the state.
Canada
Canadian outbound travel is expected to grow, but at a
more modest pace than previous years.
Canadian consumer confidence showing gradual
improvement.
Unemployment rate remains low.
A strong housing market, especially in the Vancouver
target market.
Canada GDP increased at an annual rate of 0.7 percent
in the fourth quarter of 2013.
A slightly unfavorable exchange rate.
Visitor Statistics 2008-2014 U.S. West
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change % Change
U.S. WEST MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
--------------------------------------------------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ Millions) 3,897.3 3,468.2 3,913.3 4,142.8 4,640.1 4,772.8 2.9% 4,839.0 1.4%
Visitor Days 26,649,336 26,027,984 27,966,613 28,768,587 30,471,505 30,733,731 0.9% 30,549,130 -0.6%
Arrivals 2,769,229 2,718,818 2,924,430 2,994,731 3,178,824 3,219,621 1.3% 3,219,600 0.0%
Per Person Per Day Spending* ($) 146.2 133.3 139.9 144.0 152.3 155.3 2.0% 158.4 2.0%
Per Person Per Trip Spending* ($) 1,407.4 1,275.6 1,338.2 1,383.4 1,459.7 1,482.4 1.6% 1,503.0 1.4%
Length of Stay (days) 9.62 9.57 9.56 9.61 9.59 9.55 -0.4% 9.49 -0.6%
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. East
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change % Change
U.S. EAST MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
--------------------------------------------------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ Millions) 3,225.1 2,694.6 2,876.4 3,108.2 3,434.2 3,566.6 3.9% 3,612.9 1.3%
Visitor Days 17,586,975 16,271,465 16,815,125 17,178,727 17,852,103 17,821,304 -0.2% 17,786,143 -0.2%
Arrivals 1,683,114 1,561,468 1,610,421 1,642,279 1,699,625 1,698,454 -0.1% 1,698,500 0.0%
Per Person Per Day Spending* ($) 183.4 165.6 171.1 180.9 192.4 200.1 4.0% 203.1 1.5%
Per Person Per Trip Spending* ($) 1,916.1 1,725.7 1,786.1 1,892.6 2,020.6 2,099.9 3.9% 2,127.1 1.3%
Length of Stay (days) 10.45 10.42 10.44 10.46 10.50 10.49 -0.1% 10.47 -0.2%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Canada
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change % Change
CANADA MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
--------------------------------------------------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ Millions) 710.6 628.8 745.7 906.0 1,022.8 1,044.8 2.2% 1,047.5 0.3%
Visitor Days 4,632,068 4,396,325 5,143,821 6,040,316 6,497,799 6,470,918 -0.4% 6,435,869 -0.5%
Arrivals 359,580 346,583 405,040 477,564 499,144 509,565 2.1% 519,800 2.0%
Per Person Per Day Spending* ($) 153.4 143.0 145.0 150.0 157.4 161.5 2.6% 162.8 0.8%
Per Person Per Trip Spending* ($) 1,976.1 1,814.3 1,841.1 1,897.1 2,049.0 2,050.4 0.1% 2,015.2 -1.7%
Length of Stay (days) 12.88 12.68 12.70 12.65 13.02 12.70 -2.5% 12.38 -2.5%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Excludes supplemental business spending
North America: Distribution by Island U.S. West
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change % Change
U.S. WEST MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
--------------------------------------------------------------------------------------------------------------------------------------------------------
O'ahu 1,254,836 1,255,017 1,317,632 1,318,505 1,393,321 1,434,369 2.9% 1,357,756 -5.3%
Maui 979,253 931,078 1,032,190 1,047,825 1,109,708 1,113,539 0.3% 1,139,777 2.4%
Moloka'i 25,414 20,682 20,612 22,010 21,709 22,839 5.2% 22,423 -1.8%
Lana'i 30,858 24,650 27,920 30,501 29,468 29,952 1.6% 30,752 2.7%
Kaua'i 515,378 482,732 485,698 517,849 553,222 565,920 2.3% 562,910 -0.5%
Hawai'i Island 526,192 506,052 527,689 547,724 574,246 564,267 -1.7% 639,721 13.4%
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. East
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change % Change
U.S. EAST MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
--------------------------------------------------------------------------------------------------------------------------------------------------------
O'ahu 1,029,778 960,985 968,056 976,305 1,015,673 1,011,752 -0.4% 976,566 -3.5%
Maui 655,435 570,831 595,701 606,430 622,452 626,933 0.7% 630,804 0.6%
Moloka'i 20,984 15,788 15,264 17,032 14,918 15,447 3.5% 15,204 -1.6%
Lana'i 29,364 23,303 24,656 26,998 24,902 24,598 -1.2% 25,641 4.2%
Kaua'i 351,478 306,976 313,675 320,096 338,756 339,095 0.1% 340,097 0.3%
Hawai'i Island 402,908 352,734 353,065 366,155 380,022 383,917 1.0% 417,714 8.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Canada
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change % Change
CANADA MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
--------------------------------------------------------------------------------------------------------------------------------------------------------
O'ahu 195,034 168,911 195,472 223,283 209,380 213,986 2.2% 209,788 -2.0%
Maui 179,139 170,754 197,722 237,434 255,602 259,426 1.5% 269,930 4.0%
Moloka'i 6,735 3,751 3,349 4,276 3,927 3,931 0.1% 4,171 6.1%
Lana'i 6,128 4,623 4,664 4,801 4,735 5,293 11.8% 5,081 -4.0%
Kaua'i 51,356 44,638 54,627 64,128 66,205 68,249 3.1% 69,264 1.5%
Hawai'i Island 73,060 67,122 75,137 87,703 96,274 96,677 0.4% 110,275 14.1%
--------------------------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CALENDAR YEAR 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2014F 2013 %Chge 2014F 2013 %Chge 2014F 2013 %Chge 2014F 2013 %Chge 2014F 2013 %Chge
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
US West 6,574,021 6,373,358 3.1% 1,575,711 1,587,388 -0.7% 1,644,521 1,596,995 3.0% 1,766,567 1,656,217 6.7% 1,587,222 1,532,758 3.6%
US East 841,059 832,797 1.0% 205,317 202,894 1.2% 206,229 214,023 -3.6% 224,444 217,034 3.4% 205,069 198,846 3.1%
Canada 386,517 367,825 5.1% 163,860 152,496 7.5% 82,282 75,494 9.0% 44,431 41,995 5.8% 95,944 97,840 -1.9%
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
North America: Group vs. FIT; Leisure vs. Business
U.S. West
----------------------------------------------------------------------------------------------------------------
% Change
U.S. WEST MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
Group vs FIT
Group tour 71,623 51,795 56,211 55,697 54,556 57,539 5.5%
True Independent 2,132,943 2,097,624 2,243,921 2,313,576 2,517,281 2,590,586 2.9%
Leisure vs business
Pleasure (Net) 2,229,622 2,226,385 2,408,309 2,474,356 2,644,238 2,678,581 1.3%
MCI (Net) 146,822 123,627 119,814 128,335 128,014 134,079 4.7%
Convention/Conf. 90,514 82,138 76,839 76,799 78,401 81,185 3.6%
Corp. Meetings 36,236 26,856 27,890 33,760 32,710 34,550 5.6%
Incentive 24,695 18,309 18,863 22,302 21,071 23,378 10.9%
----------------------------------------------------------------------------------------------------------------
U.S. East
----------------------------------------------------------------------------------------------------------------
% Change
U.S. EAST MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
Group vs FIT
Group tour 105,006 72,499 69,661 79,006 79,493 79,079 090.5%
True Independent 1,207,278 1,138,678 1,157,985 1,185,636 1,260,957 1,619,375 28.4%
Leisure vs business
Pleasure (Net) 1,290,209 1,209,145 1,252,562 1,271,468 1,332,544 1,342,467 0.7%
MCI (Net) 162,112 139,005 122,614 138,586 136,944 139,003 1.5%
Convention/Conf. 103,221 97,194 77,710 88,033 84,890 84,240 -0.8%
Corp. Meetings 30,293 21,769 22,635 26,204 28,306 27,310 -3.5%
Incentive 34,811 24,960 27,019 30,235 29,734 33,253 11.8%
----------------------------------------------------------------------------------------------------------------
Canada
----------------------------------------------------------------------------------------------------------------
% Change
CANADA MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
Group vs FIT
Group tour 14,920 8,978 10,429 16,195 11,296 9,512 -15.8%
True Independent 254,534 250,577 287,466 346,733 371,840 389,146 4.7%
Leisure vs business
Pleasure (Net) 328,792 318,894 374,413 442,851 465,799 478,226 2.7%
MCI (Net) 16,637 17,109 15,934 20,208 18,745 15,113 -19.4%
Convention/Conf. 12,462 12,329 11,712 15,087 13,098 10,725 -18.1%
Corp. Meetings 2,073 2,858 2,003 2,650 2,318 1,824 -21.3%
Incentive 2,484 2,790 2,830 3,232 4,009 3,019 -24.7%
----------------------------------------------------------------------------------------------------------------
North America: First Timers vs. Repeat Visitors
U.S. West
----------------------------------------------------------------------------------------------------------------
% Change
U.S. WEST MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
1st timers (%) 19.6 19.1 19.1 18.6 18.5 18.6 0.1
Repeaters (%) 80.4 80.9 80.9 81.4 81.5 81.4 -0.1
----------------------------------------------------------------------------------------------------------------
U.S. East
----------------------------------------------------------------------------------------------------------------
% Change
U.S. EAST MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
1st timers (%) 43.9 43.0 42.3 41.6 41.8 42.1 0.3
Repeaters (%) 56.1 57.0 57.7 58.4 58.2 57.9 -0.3
----------------------------------------------------------------------------------------------------------------
Canada
----------------------------------------------------------------------------------------------------------------
% Change
CANADA MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
1st timers (%) 38.7 37.5 36.9 36.8 35.6 36.3 0.7
Repeaters (%) 61.3 62.5 63.1 63.2 64.4 63.7 -0.7
----------------------------------------------------------------------------------------------------------------
Cost per Arrival/Return on Investment/Tax Revenue
U.S. West
----------------------------------------------------------------------------------------------------------------
U.S. WEST MMA (by Air) 2010 2011 2012 2013p
----------------------------------------------------------------------------------------------------------------
HTA Expenses ($ Millions) 18.775 19.758 15.115 13.293
State tax revenue generated* ($ Millions) 426.4 451.4 505.5 520.0
Return on Investment (Tax Revenue) 22.71 22.84 33.45 39.12
Cost Per Arrival 6.42 6.60 4.75 4.13
----------------------------------------------------------------------------------------------------------------
U.S. East
----------------------------------------------------------------------------------------------------------------
U.S. EAST MMA (by Air) 2010 2011 2012 2013p
----------------------------------------------------------------------------------------------------------------
HTA Expenses ($ Millions) 12.10 13.48 15.09 15.05
State tax revenue generated* ($ Millions) 313.4 338.6 374.2 388.6
Return on Investment 25.90 25.12 24.80 25.82
Cost Per Arrival 7.51 8.21 8.88 8.86
----------------------------------------------------------------------------------------------------------------
Canada
----------------------------------------------------------------------------------------------------------------
CANADA MMA (by Air) 2010 2011 2012 2013p
----------------------------------------------------------------------------------------------------------------
HTA Expenses ($ Millions) 1.10 1.09 1.57 1.42
State tax revenue generated* ($ Millions) 81.2 98.7 111.4 113.8
Return on Investment 74.06 90.31 71.02 80.45
Cost Per Arrival 2.71 2.29 3.14 2.78
----------------------------------------------------------------------------------------------------------------
*State government tax revenue generated (direct, indirect, and induced)
Japan Fact Sheet
Japan Overview
Japan is Hawai`i's largest international market and plans are
underway to build on our momentum. In 2014, the HTA set targets aimed
at reaching two million annual visitor arrivals by 2016. These
increases were based on planned aircraft upgrades, new carriers
entering the market, and route expansion. HTJ continues to display
increased collaboration with both travels partners in Japan and
Hawai`i, thus enabling the Hawaiian Islands to remain well positioned
as a preferred vacation destination for the Japanese traveler.
2013 Quick Facts
Visitor Expenditures: $2,527.1 million
Primary Purpose of Stay: Pleasure (1,266,324) vs. MCI (87,432)
Average Length of Stay: 6.02 days
First Time Visitors: 40.3%
Repeat Visitors: 59.7%
Average Number of Trips: 3.93
----------------------------------------------------------------------------------------------------------------
% Change % Change
JAPAN MMA (by Air) 2011 2012 2013 2012-2013 2014 Target 2013-2014
----------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ Millions) 2,164.0 2,734.9 2,527.1 -7.6% 2,742.3 8.5%
Visitor Days 7,484,700 8,819,493 9,014,563 2.2% 9,590,400 6.4%
Arrivals 1,241,805 1,465,654 1,523,302 3.9% 1,620,000 6.3%
Per Person Per Day Spending* ($) 289.1 310.1 280.3 -9.6% 285.9 2.0%
Per Person Per Trip Spending* ($) 1,742.6 1,866.0 1,659.0 -11.1% 1,692.8 2.0%
Length of Stay (days) 6.03 6.02 5.92 -1.7% 5.92 0.0%
----------------------------------------------------------------------------------------------------------------
* Excludes supplemental business spending
Contact Information
Hawai`i Tourism Authority:
Miki Wakai, Brand Manager
[email protected]
Hawai`i Tourism Japan:
Eric Takahata, Managing Director
[email protected]
Market Summary
Arrivals from Japan rose 3.9 percent to 1,523,302 visitors
in 2013.
81 percent of total visitors stayed only on O`ahu, 2 percent
visited Kaua`i, 5.5 percent visited Maui county and 13.6
percent visited Hawai`i island. Total of neighbor island visits
increased by 6.5 percent, compared to 2012.
83 percent of all passengers visited Hawaii for pleasure and
5.7 percent visited Hawaii for MCI.
74 percent traveled on a package tour, which is 5.3 percent
higher compared to 2013.
23 percent of the total visitors were Net True Independent
traveler, which is similar to 2013.
40.3 percent of Japanese visitors were first timers, 1.6
percent lower than 2012.
59.7 percent of the visitors were repeaters and the average
number of trips to the islands was 3.93 times.
88 percent of visitors stayed in a hotel, 8.4 percent stayed
in Condo and 3.4 percent stayed in a timeshare.
There were 2,027,820 air seats from Japan in 2013, an 11.3
percent increase from 2012.
Average growth of the outbound travel from Japan is 4.2
percent for the last 10 years.
JAL provides 102 less seats daily from 4/1 to 9/30 due to
aircraft change.
China Airline provides 82 less seats daily from 5/7 to 6/29.
Korean Airline provides 89 more seats daily in 2014.
Hawaiian Fukuoka--Honolulu route stops its service on 6/1.
Market Conditions
In an effort to spur the Japanese economy, Prime Minister
Abe is adjusting the country's financial plans through
``Abenomics.'' The Japanese government approved a record
spending budget for Fiscal Year 2014 to 2015, amounting to $920
billion USD (95.9 trillion yen) aimed at lowering their public
debt and further growing the economy.
Consumption tax will increase from 5 percent to 8 percent in
April 2014.
JPY is trading at just above 100 yen to a dollar.
GDP growth for Japan in 2013 was 2.6 percent.
2013 Unemployment rate in Japan remained steady at 4.0
percent.
Private consumption has been on the rise with increases in
consumer confidence. These effects show that consumers are
willing to spend, but with the devaluation of the yen and tax
increase, Hawai`i will become a more expensive destination for
Japanese visitors.
Visitor Statistics 2008-2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change Change
JAPAN MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p 2014 Target 2013p
--------------------------------------------------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ Millions) 1,944.5 1,826.3 1,899.6 2,164.0 2,734.9 2,527.1 -7.6% 2,742.3 8.5%
Visitor Days 6,744,053 6,806,138 7,276,211 7,484,700 8,819,493 9,014,563 2.2% 9,590,400 6.4%
Arrivals 1,175,199 1,168,080 1,239,307 1,241,805 1,465,654 1,523,302 3.9% 1,620,000 6.3%
Per Person Per Day Spending* ($) 288.3 268.3 261.1 289.1 310.1 280.3 -9.6% 285.9 2.0%
Per Person Per Trip Spending* ($) 1,654.6 1,563.5 1,532.8 1,742.6 1,866.0 1,659.0 -11.1% 1,692.8 2.0%
Length of Stay (days) 5.74 5.83 5.87 6.03 6.02 5.92 -1.7% 5.92 0.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Excludes supplemental business spending
Japan: Distribution by Island
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change Change
JAPAN MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p 2014 Target 2013p
--------------------------------------------------------------------------------------------------------------------------------------------------------
O'ahu 1,127,441 1,132,226 1,185,368 1,193,378 1,409,721 1,462,073 3.7% 1,499,173 2.5%
Maui County 67,266 57,103 62,061 63,683 69,719 81,141 16.4%
Kaua'i 26,166 20,892 21,356 23,571 27,907 29,407 5.4% 30,989 5.4%
Hawai'i Island 174,701 164,745 187,236 165,250 203,009 198,456 -2.2% 246,806
--------------------------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CALENDAR YEAR 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2014F 2013 %Chge 2014F 2013 %Chge 2014F 2013 %Chge 2014F 2013 %Chge 2014F 2013 %Chge
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Japan 2,025,638 2,029,288 -0.2% 516,820 471,466 9.6% 509,223 481,906 5.7% 502,894 547,568 -8.2% 496,701 528,348 -6.0%
Fukuoka 126,609 175,775 -28.0% 43,650 43,020 1.5% 44,135 43,515 1.4% 19,412 44,620 -56.5% 19,412 44,620 -56.5%
Nagoya 221,715 192,787 15.0% 55,350 40,320 37.3% 55,965 40,826 37.1% 55,200 54,831 0.7% 55,200 56,810 -2.8%
Osaka 361,884 348,878 3.7% 87,840 79,942 9.9% 88,816 81,900 8.4% 95,436 95,328 0.1% 89,792 91,708 -2.1%
Sapporo 40,663 40,460 0.5% 10,101 10,140 -0.4% 10,101 10,118 -0.2% 10,101 10,101 0.0% 10,360 10,101 2.6%
Tokyo-HND 328,877 328,008 0.3% 81,404 81,252 0.2% 81,627 80,236 1.7% 83,536 83,536 0.0% 82,310 82,984 -0.8%
Tokyo-NRT 945,890 943,380 0.3% 238,475 216,792 10.0% 228,579 225,311 1.5% 239,209 259,152 -7.7% 239,627 242,125 -1.0%
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Japan: Group vs. FIT; Leisure vs. Business
----------------------------------------------------------------------------------------------------------------
%Change
JAPAN MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
Group vs FIT
Group tour 457,113 397,244 408,361 333,929 396,031 403,773 2.0%
True Independent 183,189 222,885 267,587 298,886 350,172 350,353 0.1%
Leisure vs business
Pleasure (Net) 1,048,593 1,074,178 1,067,488 1,074,578 1,268,715 1,266,324 -0.2%
MCI (Net) 51,626 35,576 47,613 43,305 52,386 87,432 66.9%
Convention/Conf. 10,179 14,803 17,634 9,593 18,173 10,813 -40.5%
Corp. Meetings 5,817 4,688 8,756 5,875 8,087 2,181 -73.0%
Incentive 36,937 16,529 21,954 29,173 27,068 75,517 179.0%
----------------------------------------------------------------------------------------------------------------
Japan: First Timers vs. Repeat Visitors
----------------------------------------------------------------------------------------------------------------
percent
JAPAN MMA (by Air) 2008 2009 2010 2011 2012 2013p Change
2012-2013p
----------------------------------------------------------------------------------------------------------------
1st timers ( percent) 42.3 42.1 41.5 41.1 41.9 40.3 -1.6
Repeaters ( percent) 57.7 57.9 58.5 58.9 58.1 59.7 1.6
----------------------------------------------------------------------------------------------------------------
Cost per Arrival/Return on Investment/Tax Revenue
----------------------------------------------------------------------------------------------------------------
JAPAN MMA (by Air) 2008 2009 2010 2011 2012 2013p
----------------------------------------------------------------------------------------------------------------
HTA Expenses ($ Millions) 8.89 10.14 7.22 6.53 8.47 7.62
State tax revenue generated* 173.1 185.6 207.0 235.8 298.0 275.3
($ Millions)
Return on Investment 19.47 18.29 28.67 36.11 35.18 36.13
Cost Per Arrival 7.56 8.68 5.83 5.26 5.78 5.00
----------------------------------------------------------------------------------------------------------------
* State government tax revenue generated (direct, indirect, and induced)
Oceania Fact Sheet
Oceania Overview
The HTA, through Hawai`i Tourism Oceania (HTO), targets visitors
from the countries of Australia and New Zealand which have experienced
steady growth in outbound travel to Hawai`i over recent years. Since
2004, the HTA has contracted with the Walshe Group Pty Ltd, to provide
marketing services in Oceania. In September 2011, the HTA announced
that the Walshe Group has been selected for a new multi-year contract
starting Jan. 1, 2012 with the first year valued at $1.1 million. HTO
moved into 2013 at the same base funding level and in 2014 received
$1.34 million, but with higher targets.
2013 Quick Facts
Visitor Expenditures: $840.8 million
Primary Purpose of Stay: Pleasure (328,728) vs. MCI (7,912)
Average Length of Stay: 9.48 days
First Time Visitors: 54.1 percent
Repeat Visitors: 45.9 percent
Average Number of Trips: 2.12
----------------------------------------------------------------------------------------------------------------
% Change 2014 % Change
OCEANIA MMA (by Air) 2010 2011 2012 2013p 2012-2013p Target 2013p-2014T
----------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ 328.2 477.4 639.8 840.8 31.4% 952.1 13.2%
Millions)
Visitor Days 1,586,379 2,092,356 2,606,362 3,348,374 28.5% 3,717,350 11.0%
Arrivals 161,060 209,976 273,039 353,065 29.3% 391,300 10.8%
Per Person Per Day 206.9 228.1 245.5 251.1 2.3% 256.1 2.0%
Spending* ($)
Per Person Per Trip 2,037.9 2,273.4 2,343.4 2,381.4 1.6% 2,433.2 2.2%
Spending* ($)
Length of Stay (days) 9.85 9.96 9.55 9.48 -0.7% 9.50 0.2%
----------------------------------------------------------------------------------------------------------------
* Excludes supplemental business spending
Contact Information
Hawai`i Tourism Authority:
Mike Story, Tourism Brand Manager
[email protected]
Hawai`i Tourism Oceania:
Australia: Ashlee Galea, Country Manager
[email protected]
New Zealand: Darragh Walshe, Country Manager
[email protected]
Market Summary
In 2013, Oceania KPI's continued to grow YOY (29.3 percent)
in total arrivals, daily spending was $251.1 per person; up 2.3
percent compared to last year. Visitor expenditures by Oceania
visitors reached $840.8 million. The increased arrivals can
partially be attributed to a strong Australia dollar and
additional airlift out of both Australia and New Zealand.
Airlift grew in 2013 and continues in 2014, but less
aggressively. In 2013, the majority of the growth in air seats
is attributed to Hawaiian Airlines new service from Brisbane to
Honolulu, Auckland to Honolulu, Jetstar's restarting Melbourne
to Honolulu service and Air New Zealand increasing Auckland to
Honolulu service. New service from Jetstar out of the Brisbane
market is expected to start in December of 2014.
An additional carrier which also supports the market is
Qantas.
Hawaiian Airlines new routes and connectivity throughout the
State is contributing to greater neighbor island awareness in
Oceania. However with the increase in visitor arrivals Hawai`i
is hosting more first-time visitors and these visitors
generally travel only to O`ahu on their first trip.
The increase in the price to travel to Hawai`i will affect
the growth of Oceania KPI's in 2014.
Market Conditions
Record low interest rates are having a positive effect on
the economy. The rates have been cut to 2.5 percent. Reserve
Bank of Australia
Australia's Reserve Bank expects economic growth at between
2.25 percent and 3.25 percent in 2014. Reserve Bank of
Australia
The recent rebound in the Australian dollar, combined with
expectations of tight Federal and state government budgets and
slow wage growth, leaves the Reserve Bank expecting an
improvement in consumer and business confidence. Reserve Bank
of Australia
Unemployment is anticipated to continue to increase
gradually for the next year or so as the economy grows at a
below-trend pace. Current unemployment rate is 5.7 percent.
Reserve Bank of Australia
The sustained good value of the Australian dollar continues
to provide favorable conditions for Australian overseas travel
in the near term. Reflecting this, the outlook remains positive
with outbound departures forecast to increase YOY by 4.9
percent to 8.8 million in 2013-14. Tourism Australia
Visitor Statistics 2008-2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change % Change
OCEANIA MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
--------------------------------------------------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ Millions) 290.4 256.2 328.2 477.4 639.8 840.8 31.4% 952.1 13.2%
Visitor Days 1,343,771 1,262,591 1,586,379 2,092,356 2,606,362 3,348,374 28.5% 3,717,350 11.0%
Arrivals 155,480 136,717 161,060 209,976 273,039 353,065 29.3% 391,300 10.8%
Per Person Per Day Spending* ($) 216.1 202.9 206.9 228.1 245.5 251.1 2.3% 256.1 2.0%
Per Person Per Trip Spending* ($) 1,867.8 1,873.7 2,037.9 2,273.4 2,343.4 2,381.4 1.6% 2,433.2 2.2%
Length of Stay (days) 8.64 9.24 9.85 9.96 9.55 9.48 -0.7% 9.50 0.2%
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Excludes supplemental business spending
--------------------------------------------------------------------------------------------------------------------------------------------------------
2014
OCEANIA MMA (by Air) 2008 2009 2010 2011 2012 2013p Target
--------------------------------------------------------------------------------------------------------------------------------------------------------
O'ahu 146,118 128,127 153,554 202,075 260,317 340,413 358,942
Maui 31,586 26,599 32,597 45,651 50,625 72,212 73,575
Moloka'i 3,022 1,380 2,542 3,184 3,742 4,652 5,469
Lana'i 2,907 1,528 2,167 3,508 4,240 5,513 6,261
Kaua'i 14,605 12,142 14,789 19,304 22,807 31,197 32,837
Hawai'i Island 25,674 23,434 27,642 37,832 45,749 58,074 72,114
--------------------------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CALENDAR YEAR 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2014F 2013 %Chge 2014F 2013 %Chge 2014F 2013 %Chge 2014F 2013 %Chge 2014F 2013 %Chge
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Oceania 420,668 416,863 0.9% 98,760 90,863 8.7% 105,602 109,798 -3.8% 110,331 108,835 1.4% 105,975 107,367 -1.3%
Auckland 88,452 77,620 14.0% 20,766 11,244 84.7% 21,294 19,842 7.3% 24,864 23,938 3.9% 21,528 22,596 -4.7%
Brisbane 50,764 47,727 6.4% 10,101 12,480 -19.1% 13,468 12,455 8.1% 13,727 11,655 17.8% 13,468 11,137 20.9%
Melbourne 40,602 35,451 14.5% 9,696 8,181 18.5% 10,302 9,393 9.7% 11,817 8,484 39.3% 8,787 9,393 -6.5%
Sydney 240,850 256,065 -5.9% 58,197 58,958 -1.3% 60,538 68,108 -11.1% 59,923 64,758 -7.5% 62,192 64,241 -3.2%
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Oceania: Group vs. FIT; Leisure vs. Business
----------------------------------------------------------------------------------------------------------------
% Change
OCEANIA MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
Group vs FIT
Group tour 5,906 5,291 7,178 8,411 5,840 10,046 72.0%
True Independent 79,406 72,814 78,572 103,835 139,707 180,736 29.4%
Leisure vs business
Pleasure (Net) 139,521 122,454 145,009 192,351 256,340 328,728 28.2%
MCI (Net) 5,769 5,502 6,827 5,669 3,879 7,912 104.0%
Convention/Conf. 4,385 4,995 6,192 3,936 3,202 6,414 100.3%
Corp. Meetings 333 331 338 455 197 535 171.6%
Incentive 1,222 241 537 1,360 534 996 86.5%%
----------------------------------------------------------------------------------------------------------------
Oceania: First Timers vs. Repeat Visitors
----------------------------------------------------------------------------------------------------------------
% Change
OCEANIA MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
1st timers (%) 52.9 55.5 54.3 56.6 56.1 54.1 (1.9)
Repeaters (%) 47.1 44.5 45.7 43.4 43.9 45.9 2.0
----------------------------------------------------------------------------------------------------------------
Cost per Arrival/Return on Investment/Tax Revenue
----------------------------------------------------------------------------------------------------------------
OCEANIA MMA (by Air) 2008 2009 2010 2011 2012 2013p
----------------------------------------------------------------------------------------------------------------
HTA Expenses ($ Millions) 1.16 1.32 1.06 1.56 1.36 1.41
State tax revenue generated* ($ Millions) 25.8 26.0 35.8 52.0 69.7 91.6
Return on Investment 22.32 19.66 33.74 33.34 51.26 64.97
Cost Per Arrival 7.45 9.68 6.58 7.43 4.98 3.99
----------------------------------------------------------------------------------------------------------------
* State government tax revenue generated (direct, indirect, and induced)
China Fact Sheet
China Overview
The HTA, through Hawai`i Tourism China (HTC), implements targeted
marketing programs to increase awareness and drive travel demand to
Hawai`i. In January 2014, the HTA contracted the Travel Link Marketing
(TLM) to provide marketing representation services in Mainland China.
TLM was established in 2005 with offices in Beijing, Shanghai,
Guangzhou and Chengdu. Together with TLM, the new HTC, HTA aims for
accelerated growth compared to previous years with increased air seat
capacity out of China.
2013 Quick Facts
Visitor Expenditures: $328.6 million
Primary Purpose of Stay: Pleasure (115,640) vs. MCI (10,397)
Average Length of Stay: 6.24 days
First Time Visitors: 85.2%
Repeat Visitors: 14.8%
----------------------------------------------------------------------------------------------------------------
% Change 2014 % Change
China MMA (by Air) 2010 2011 2012 2013p 2012-2013p Target 2013p-2014T
----------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ 127.7 178.2 277.1 328.6 18.6% 452.1 37.6%
Millions)
Visitor Days 364,543 479,447 699,703 827,129 18.2% 1,135,607 37.3%
Arrivals 61,455 81,738 116,866 132,634 13.5% 182,100 37.3%
Per Person Per Day 350.3 371.7 396.0 397.3 0.3% 398.1 0.2%
Spending* ($)
Per Person Per Trip 2,077.9 2,180.1 2,370.9 2,477.5 4.5% 2,482.4 0.2%
Spending* ($)
Length of Stay (days) 5.93 5.87 5.99 6.24 4.1% 6.24 0.0%
----------------------------------------------------------------------------------------------------------------
Contact Information
Hawai`i Tourism Authority: Jadie Goo
Tourism Brand Manager
[email protected]
Hawai`i Tourism China: Brenda He
General Manager
[email protected]
Market Summary
2013 arrivals from China rose 13.5 percent over 2012 to
132,634 visitors. 2014 YTD (Jan-Feb) arrivals increased 4.8
percent over the same period of last year.
In 2013, most (95 percent) visited O`ahu, 16.6 percent
visited Hawai`i Island, 15.3 percent went to Maui and 2.9
percent went to Kaua`i. Number of visitors to Kaua`i remains
the lowest, mainly due to a lack of Chinese speaking receptive
tour operators and tour guides on that island. 2014 YTD (Jan-
Feb) data showed a 29.6 percent growth YOY in arrivals to the
neighbor islands.
In 2013, Chinese visitors spent an average 6.2 days in the
islands, slightly longer (+4.2 percent) than the same period in
2012.
Average daily spending by Chinese visitors in 2013 was
$397.3, the highest out of all visitors to Hawai`i. Shopping
was their number one expenditure, followed by lodging, food,
and entertainment.
Majority of Chinese visitors to Hawai`i are first timers. In
2013, 85.2 percent visited Hawai`i for the first time and 51
percent came on group tours. As the market continues to develop
and mature, repeat visitations and FITs will increase
gradually.
Airlift: In 2013, the total number of direct service air
seats from China was 42,903. In 2014, with an additional
connecting Beijing and Honolulu and additional frequencies out
of Shanghai, the total air seats jumped to 139,473, a 225
percent increase. Currently, China Eastern flies five weekly
flights between Shanghai and Honolulu. Air China flies three
times a week between Beijing and Honolulu. Hawaiian Airlines
will launch direct Beijing-Honolulu services in April 2014.
Market Conditions
Slowdown in economic/GDP growth; relatively strong compared
to other economies
Currency exchange rate in favor of Chinese visitors
Growing middle class and experienced and affluent travelers
Continued improvement in U.S. visa processing; the U.S.
Consulate in Wuhan will open its visa service to the public in
2015 processing 200,000 (est.) visa applications per year.
Approximately 1.858 million Chinese visited the U.S. in
2013, a 26 percent increase from 2012. Total arrivals from
China in 2014 are expected to increase by 24 percent to 2.304
million according to the U.S. Department of Commerce.
Brand USA predicted China will become one of the top tourist
source markets for the United States in 2018 when the number of
visiting Chinese hits 4.7 million. Chinese travelers spent
US$8.8 billion last year in America, making America the top
spending destination for Chinese tourists.
New regulations and caps on Chinese government spending
continue to impact oversea travel by government and state owned
businesses.
Since the new China tourism law took effect on October 1,
2013, prices of group tour packages have increased as the law
forbids the levying of extra costs during tours.
Increased competition from other destinations
Visitor Statistics 2008-2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change % Change
China MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
--------------------------------------------------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ Millions) 93.3 83.8 127.7 178.2 277.1 328.6 18.6% 452.1 37.6%
Visitor Days 287,945 293,538 364,543 479,447 699,703 827,129 18.2% 1,135,607 37.3%
Arrivals 54,235 41,924 61,455 81,738 116,866 132,634 13.5% 182,100 37.3%
Per Person Per Day Spending* ($) 324.0 285.6 350.3 371.7 396.0 397.3 0.3% 398.1 0.2%
Per Person Per Trip Spending* ($) 1,720.0 1,999.8 2,077.9 2,180.1 2,370.9 2,477.5 4.5% 2,482.4 0.2%
Length of Stay (days) 5.31 7.00 5.93 5.87 5.99 6.24 4.1% 6.24 0.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
** Excludes supplemental business spending
China: Distribution by Island
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change % Change
China MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
--------------------------------------------------------------------------------------------------------------------------------------------------------
O'ahu 49,778 38,734 58,057 76,063 109,729 125,829 14.7% 164,505 30.7%
Maui 7,601 4,802 6,683 10,564 15,343 20,297 32.3% 24,244 19.4%
Moloka'i 1,356 405 579 934 1,560 1,108 -29.0% 2,478 123.7%
Lana'i 862 358 464 1,090 641 770 20.1% 1,029 33.6%
Kaua'i 2,360 1,391 2,026 2,868 3,828 3,803 -0.7% 5,992 57.6%
Hawai'i Island 8,328 6,191 8,655 12,115 17,929 21,983 22.6% 30,728 39.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2014Q1 2013Q1 %Chge 2014Q2 2013Q2 %Chge 2014Q3 2013Q3 %Chge 2014Q4 2013Q4 %Chge CY 2014 CY 2013 %Chge
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
China 25,575 11,086 130.7% 35,811 9,905 261.5% 44,170 10,560 318.3% 33,917 11,352 198.8% 139,473 42,903 225.1%
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
China: Group vs. FIT; Leisure vs. Business
----------------------------------------------------------------------------------------------------------------
% Change
China MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
Group vs FIT
Group tour 37,790 25,644 37,807 48,339 68,613 67,402 -1.8%
True Independent 9,040 9,045 12,964 15,364 22,863 33,237 45.4%
Leisure vs business
Pleasure (Net) 35,395 30,734 48,812 61,592 99,916 115,640 15.7%
MCI (Net) 7,235 5,410 5,879 11,242 8,709 10,397 19.4%
Convention/Conf. 2,307 2,518 2,808 4,558 3,064 4,003 30.6%
Corp. Meetings 1,998 910 1,142 3,798 1,223 2,223 81.8%
Incentive 2,962 2,038 2,073 3,379 4,458 4,675 4.9%
----------------------------------------------------------------------------------------------------------------
China: First Timers vs. Repeat Visitors
----------------------------------------------------------------------------------------------------------------
% Change
China MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
1st timers (%) 83.7 83.9 83.8 83.9 86.3 85.2 -1.1
Repeaters (%) 16.3 16.1 16.2 16.1 13.7 14.8 1.1
----------------------------------------------------------------------------------------------------------------
Tax Revenue
----------------------------------------------------------------------------------------------------------------
China MMA (by Air) 2008 2009 2010 2011 2012 2013p
----------------------------------------------------------------------------------------------------------------
State tax revenue generated* ($ Millions) 8.3 8.5 13.9 19.4 30.2 35.8
----------------------------------------------------------------------------------------------------------------
* State government tax revenue generated (direct, indirect, and induced)
Korea Fact Sheet
Korea Overview
The HTA, through Hawai`i Tourism Korea (HTK), implements targeted
marketing programs to increase awareness and drive travel demand to
Hawai`i. From 2004 to 2011, the HTA has contracted the Aviareps
Marketing Garden Ltd. to provide marketing services in Other Asia that
covers Korea, China, Taiwan, Hong Kong, Philippines, and Singapore. In
September 2011, the HTA announced that the Aviareps Marketing Garden
Ltd. had been selected for another new two-year contract from January
1, 2012 through December 31, 2013. Aviareps Marketing Garden Ltd. has
been extended to provide marketing services in Korea only through
December 31, 2014.
2013 Quick Facts
Visitor Expenditures: $314.6 million
Primary Purpose of Stay: Pleasure (156,481) vs. MCI (8,017)
Average Length of Stay: 7.03 days
First Time Visitors: 82.2%
Repeat Visitors: 17.8%
Avg. Number of Trips: 1.49
----------------------------------------------------------------------------------------------------------------
% Change 2014 % Change
Korea MMA (by Air) 2011 2012 2013p 2012-2013p Target 2013p-2014T
----------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ Millions) 194.0 282.4 314.6 11.4% 350.3 11.3%
Visitor Days 813,989 1,078,814 1,205,501 11.7% 1,335,494 10.8%
Arrivals 112,567 153,338 171,506 11.8% 190,000 10.8%
Per Person Per Day Spending* ($) 238.3 261.8 261.0 -0.3% 262.3 0.5%
Per Person Per Trip Spending* ($) 1,723.0 1,841.9 1,834.3 -0.4% 1,843.4 0.5%
Length of Stay (days) 7.23 7.04 7.03 -0.2% 7.03 0.0%
----------------------------------------------------------------------------------------------------------------
* Excludes supplemental business spending
T: Targets
p: Preliminary
Contact Information
Hawai`i Tourism Authority: Grace Lee, Tourism Brand Manager
[email protected]
Hawai`i Tourism Korea: Emily Kim, Marketing Director
[email protected]
Market Summary
In 2013, Korean arrivals rose 11.8 percent year to date, as
compared to the same period in 2012, to 171,506 visitors.
However, this was a decrease of 10.5 percent below our targets
of 191,671 visitors for year-end 2013.
In 2013, 82.2 percent were first time visitors similar to
85.3 percent a year ago.
Most Korean visitors went to O`ahu (98 percent), while 25
percent went to Maui, 8.9 percent went to Hawai`i Island and
2.9 percent went to Kaua`i.
One out of three Korean visitors (37.1 percent) were true
independent travelers.
Hotels accommodated 92 percent of the Korean visitors, a few
stayed in condominium properties (5.3 percent), with friends or
relatives (3.0 percent) and in bed and breakfast properties
(0.7 percent).
In 2013, there were 379,810 airseats from Seoul, which is
similar as compared to 2012, which had a total of 379,089
airseats. In 2014, there will be a projected decrease of 7.7
percent to 350,583 airseats. This is mainly due to Hawaiian
Airlines reducing their daily flight to 5 times a week.
Hawai`i has gained huge attention in Korea as the leading
long haul destination for honeymoons.
The number of Korean honeymooners accounted for 39.3
percent of total visitors from Korea in 2013.
Market Conditions
Over 24 percent of Korea's entire population of 50 million
travels overseas each year. Total outbound travel in 2013
increased 8.1 percent over 2012 reaching 14.8 million,
surpassing the all-time record high of 13.7 million set in
2012.
According to the Korea Tourism Organization, the number of
Korean outbound travelers in January 2014 was calculated at
1,468,903, 3 percent higher than the number of outbound
travelers in January 2013.
Number of Korean visitors to Hawai`i is projected to
continually increase, anticipating strength among the family
and FIT segments.
With rising interest in healthy lifestyles and a higher
quality of life--individual wellness and healthy lifestyle have
become popular themes; luxury travel products with well-being
themes, such as spas and golf holidays are becoming
increasingly popular among high-end consumers.
Plans to affect origination point expansion from the Busan/
Youngnam Region in 2014-2015.
Emergence of LLC's offering attractive prices to other Asia
countries will be a challenge.
Major purposes of travel: Pleasure (52 percent), Honeymoon
(39 percent), Business (4.6 percent), Other (4.4 percent).
Travel Trends
May and September used to be the most popular months for
honeymoons; however it is now more distributed throughout the
year. According to the current survey conducted by Korea
Gallup, 16 percent of the participants said they got married in
December while only 4 percent answered September. Since wedding
day and honeymoon expenses are much higher during the
traditional wedding season, couples are getting married during
non-traditional times.
October and November 2014 are leap months in Korea,
which are normally ``bad luck'' periods to get married.
There will be less honeymoons during this time frame.
Traditionally, overseas travel are soft during the Winter
Olympics and World Cup seasons.
Visitor Statistics 2008-2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change % Change
Korea MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
--------------------------------------------------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ Millions) 79.4 78.7 145.8 194.0 282.4 314.6 11.4% 350.3 11.3%
Visitor Days 348,244 405,762 654,025 813,989 1,078,814 1,205,501 11.7% 1,335,494 10.8%
Arrivals 38,110 51,353 81,758 112,567 153,338 171,506 11.8% 190,000 10.8%
Per Person Per Day Spending* ($) 227.9 194.0 222.9 238.3 261.8 261.0 -0.3% 262.3 0.5%
Per Person Per Trip Spending* ($) 2,082.1 1,532.6 1,783.1 1,723.0 1,841.9 1,834.3 -0.4% 1,843.4 0.5%
Length of Stay (days) 9.14 7.90 8.00 7.23 7.04 7.03 -0.2% 7.03 0.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Excludes supplemental business spending
T: Targets
p: Preliminary
Korea: Distribution by Island
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change
Korea MMA (by Air) 2008 2009 2010 2011 2012 2013p 2014 Target 2013p-2014T
--------------------------------------------------------------------------------------------------------------------------------------------------------
O'ahu 34,883 46,731 74,973 104,655 147,039 167,552 174,491 4.1%
Maui County 10,764 14,208 22,531 34,288 43,611 44,064 55,127 25.1%
Maui 10,670 14,081 22,169 33,880 43,413 43,690 54,301 24.3%
Moloka'i 169 461 506 484 363 779 456 -41.5%
Lana'i 256 286 274 268 291 359 370 3.0%
Kaua'i 1,331 1,971 1,844 3,268 2,503 5,010 3,102 -38.1%
Hawai'i Island 4,631 6,797 8,681 11,156 13,392 15,278 18,168 18.9%
--------------------------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
CALENDAR YEAR 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2014F 2013 %Chge 2014F 2013 %Chge 2014F 2013 %Chge 2014F 2013 %Chge 2014F 2013 %Chge
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Seoul 350,583 379,810 -7.7% 85,989 102,001 -15.7% 83,169 92,510 -10.1% 89,057 92,761 -4.0% 92,368 92,538 -0.2%
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
*As of March 31, 2014
Korea: Group vs. FIT; Leisure vs. Business
----------------------------------------------------------------------------------------------------------------
% Change
Korea MMA (by Air) 2008 2009 2010 2011 2012 2013p 2013p-2014T
----------------------------------------------------------------------------------------------------------------
Group vs FIT
Group tour 9,731 14,435 24,346 31,167 41,870 37,301 -10.9%
True Independent 17,806 20,474 27,727 35,742 50,815 63,737 25.4%
Leisure vs business
Pleasure (Net) 28,381 40,011 70,625 100,791 137,317 156,481 14.0%
MCI (Net) 4,261 5,309 5,062 4,926 9,218 8,017 13.0%
Convention/Conf. 3,308 3,828 2,863 3,081 4,726 4,189 -11.4%
Corp. Meetings 399 615 793 983 612 1,169 91.0%
Incentive 611 950 1,451 927 3,968 2,840 -28.4%
----------------------------------------------------------------------------------------------------------------
Korea: First Timers vs. Repeat Visitors
----------------------------------------------------------------------------------------------------------------
% Change
Korea MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
1st timers (%) 67.7 76.6 81.9 83.9 85.3 82.2 -3.6%
Repeaters (%) 32.3 23.4 18.1 16.1 14.7 17.8 21.1%
----------------------------------------------------------------------------------------------------------------
Tax Revenue
----------------------------------------------------------------------------------------------------------------
Korea MMA (by Air) 2008 2009 2010 2011 2012 2013p
----------------------------------------------------------------------------------------------------------------
State tax revenue generated* ($ Millions) 7.1 8.0 15.9 21.1 30.8 34.3
----------------------------------------------------------------------------------------------------------------
* State government tax revenue generated (direct, indirect, and induced)
Taiwan Fact Sheet
Taiwan Overview
The HTA, through Hawai`i Tourism Taiwan (HTT), implements targeted
marketing programs to increase awareness and drive travel demand to
Hawai`i. In January 2014, the HTA contracted the JWI Marketing (JWI),
the new HTT, to provide marketing representation services in Taiwan.
JWI Marketing was established in 2009 and is a wholly owned subsidiary
of the Lion Group.
Taiwan provides growth opportunities for Hawai`i with the approval
of VISA waiver and the startup of direct air services from China
Airlines which enables Hawai`i to connect deeper into and cultivate
more of Southeast Asian markets.
2013 Quick Facts
Visitor Expenditures: N/A
Primary Purpose of Stay: Pleasure (20,358) vs. MCI (3,047)
Average Length of Stay: 7.59 days
First Time Visitors: 61.3%
Repeat Visitors: 38.7%
Average Number of Trips: 1.96
----------------------------------------------------------------------------------------------------------------
% Change 2014 % Change
TAIWAN (by Air) 2010 2011 2012 2013p 2012-2013p Target 2013p-2014T
----------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ NA NA NA NA NA 95.0 NA
Millions)
Visitor Days 126,445 69,303 84,643 205,035 142.2% 395,200 92.7%
Arrivals 15,625 8,186 8,769 27,013 208.1% 52,000 92.5%
Per Person Per Day NA NA NA NA NA 240.3 NA
Spending* ($)
Per Person Per Trip NA NA NA NA NA 1826.9 NA
Spending* ($)
Length of Stay (days) 8.09 8.47 9.65 7.59 -21.4% 7.60 0.1%
----------------------------------------------------------------------------------------------------------------
Contact Information
Hawai`i Tourism Authority: Jadie Goo, Tourism Brand Manager
[email protected]
Hawai`i Tourism Taiwan: Andrew Koh, Account Director
[email protected]
Market Summary
2013 arrivals from Taiwan increased 142 percent compared to
2012 to 27,013 visitors. 2014 YTD (Jan-Feb) arrivals rose 211
percent over the same period of last year.
In 2013, 92 percent visited O`ahu, 27.4 percent visited
Hawai`i Island, 27.4 percent went to Maui and 3.3 percent went
to Kaua`i. For the first two months of 2014, O`ahu received
6,071 visitors (+228 percent); Hawai`i Island received 1,029
visitors (+236 percent); Maui received 1,020 visitors (+374
percent); and Kaua`i received 371 visitors (+244 percent).
In 2013, more than half of Taiwanese visitors to Hawai`i are
first-time visitors (61.3 percent) and 46.2 percent are true
independent travelers.
The average length of stay in Hawai`i for Taiwanese visitors
in 2013 was 7.59 days. There was a slight increase for the
first two month of 2014 to 8.42 days.
Airlift:
On June 2, 2013, China Airlines started direct non-
stop service, twice a week, between Taipei and Honolulu.
China Airlines maintains its existing 7 weekly
Taipei--Tokyo--Honolulu service.
Hawaiian Airlines will end its three weekly Taipei to
Honolulu flights in April 2014 after 9 months of serving
the Taiwan market.
Market Conditions
Economic forecast in 2014 for Taiwan is generally positive
with GDP expected to rise to roughly 3 percent. The outbound
travel industry for Taiwan is expected to remain strong with
over 10 percent growth.
In February 2014, Consumer Confidence Index (CCI) increased
by 7.69 points to 82.93 points, compared to the same period of
the previous year. Overall, the variables of CCI were
increasing, including Intention for Stock Investment, Domestic
Economic Performance, Household Economic Performance,
Employment Status and The Standard of Commodity Prices.
Unemployment rate remains low
U.S. VISA waiver continues to attract visitors to U.S.
Reduction in air seat capacity to Hawai`i will impact the
market
Competition from short-haul destinations offering attractive
and affordable deals
According to the U.S. Department of Commerce, in 2013,
approximately 363,000 Taiwanese visited the U.S., a 25 percent
increase over 2012. In 2014 and 2015, a year over year growth
rate of 15 percent and 10 percent is expected from the Taiwan
market.
Visitor Statistics 2010-2014
----------------------------------------------------------------------------------------------------------------
%Change
TAIWAN (by Air) 2010 2011 2012 2013p % Change 2014 2013p -
2012-2013p Target 2014T
----------------------------------------------------------------------------------------------------------------
Visitor expenditures ($ NA NA NA NA NA 95.0 NA
Millions)
Visitor Days 126,445 69,303 84,643 205,035 142.2% 395,200 92.7%
Arrivals 15,625 8,186 8,769 27,013 208.1% 52,000 92.5%
Per Person Per Day Spending NA NA NA NA NA 240.3 NA
($)
Per Person Per Trip Spending NA NA NA NA NA 1826.9 NA
($)
Length of Stay (days) 8.09 8.47 9.65 7.59 -21.4% 7.60 0.1%
----------------------------------------------------------------------------------------------------------------
* Excludes supplemental business spending
Taiwan: Distribution by Island
----------------------------------------------------------------------------------------------------------------
% Change 2014 % Change
TAIWAN (by Air) 2012 2013p 2012-2013p Target 2013p-2014T
----------------------------------------------------------------------------------------------------------------
O'ahu 7,852 24,821 216.1% 47,323 90.7%
Maui 1,621 7,407 357.0% 11,360 53.4%
Moloka'i 11 93 736.5% 357 284.8%
Lana'i 89 624 599.1% 202 -67.6%
Kaua'i 380 894 135.2% 1,285 43.7%
Hawai'i Island 1,699 7,391 335.1% 6,982 -5.5%
----------------------------------------------------------------------------------------------------------------
Taiwan: Airlift (2014 vs. 2013)
----------------------------------------------------------------------------------------------------------------
2014Q1 2013Q1 % Chge 2014Q2 2013Q2 % Chge 2014Q3
----------------------------------------------------------------------------------------------------------------
Taiwan 19,448 0 NA 8,864 2,763 220.8% 7,982
----------------------------------------------------------------------------------------------------------------
Taiwan: Airlift (2014 vs. 2013)--Continued
----------------------------------------------------------------------------------------------------------------
2013Q3 % Chge 2014Q4 2013Q4 % Chge CY 2014 CY 2013 % Chge
----------------------------------------------------------------------------------------------------------------
Taiwan 18,566 -57.0% 8,289 19,448 -57.4% 44,583 40,777 9.3%
----------------------------------------------------------------------------------------------------------------
Taiwan: Group vs. FIT; Leisure vs. Business
----------------------------------------------------------------------------------------------------------------
% Change
TAIWAN (by Air) 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
Group vs FIT
Group tour 980 5,450 456.0%
True Independent 4,904 12,489 154.7%
Leisure vs business
Pleasure (Net) 6,608 20,358 208.1%
MCI (Net) 1,266 3,047 140.6%
Convention/Conf. 1,038 1,273 22.6%
Corp. Meetings 158 926 487.5%
Incentive 107 871 713.8%
----------------------------------------------------------------------------------------------------------------
Taiwan: First Timers vs. Repeat Visitors
----------------------------------------------------------------------------------------------------------------
% Change
TAIWAN (by Air) 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
1st timers (%) 57.7 61.3 3.6
Repeaters ( percent) 42.3 38.7 -3.6
----------------------------------------------------------------------------------------------------------------
Europe Fact Sheet
Europe Overview
The HTA, through Hawai`i Tourism Europe (HTE), targets visitors
from the countries of the United Kingdom and Germany, the two top
source markets in the Europe Major Market Area (U.K., Germany, France,
Italy and Switzerland). In 2013 and 2014, HTA also provided additional
funds to support trainings in France and Scandinavia. Europeans
continue to travel despite their economic situation, however, they are
watching their budget and spending less. Year end 2013 visitor arrivals
are up 9.4 percent compared to the same period last year, and per
person per day spending is down 1.5 percent. The UK Pound and Euro
continue to relatively stable against the dollar.
2013 Quick Facts
Visitor Expenditures: $292.1 million
Primary Purpose of Stay: Pleasure (111,188) vs. MCI (6,489)
Average Length of Stay: 12.91 days
First Time Visitors: 70.8%
Repeat Visitors: 29.2%
----------------------------------------------------------------------------------------------------------------
% Change 2014 % Change
EUROPE MMA (by Air) 2010 2011 2012 2013p 2012-2013p Target 2013p--2014T
----------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ 228.5 244.0 292.1 334.5 14.5% 358.3 7.1%
Millions)
Visitor Days 1,437,409 1,525,705 1,669,269 1,883,581 12.8% 1,978,020 5.0%
Arrivals 112,765 119,825 129,252 141,408 9.4% 148,500 5.0%
Per Person Per Day 159.0 160.0 175.0 177.6 1.5% 181.2 2.0%
Spending* ($)
Per Person Per Trip 2,026.2 2,036.7 2,259.7 2,365.7 4.7% 2,413.0 2.0%
Spending* ($)
Length of Stay (days) 12.75 12.73 12.91 13.32 3.2% 13.32 0.0%
----------------------------------------------------------------------------------------------------------------
* Excludes supplemental business spending F: Final P: Preliminary
Contact Information
Hawai`i Tourism Authority: Caroline Anderson, Tourism Brand Manager
[email protected]
Hawai`i Tourism Europe:
Germany: Inga Dockendorf, Account Marketing and PR Manager
[email protected]
UK: Namisha Prajapati, Account Manager
[email protected]
Market Summary
Overall
European arrivals increased +9.4 percent in 2013 (exceeding
targets), with the countries of UK, Germany, France and
Switzerland showing positive growth with the exception of
Italy.
Daily spending was also up 1.5 percent at $177.6, and thus
total visitor spending to increase 14.5 percent.
Length of stay increased +3.2 percent to 13.3 days, which
brought about double-digit growth to total visitor days at
+12.8 percent.
Majority (74 percent) visited O`ahu, followed by Maui (42
percent), Hawai`i Island (34 percent) and Kaua`i (22 percent)
in 2013.
The first two months of 2014 show visitor arrivals up 7.5
percent over the same period last year.
Market Conditions
Outlook
The U.S. Department of Commerce, ITA, Office of Travel &
Tourism Industries' forecasts the following growth for 2014
(against 2013): UK (+1 percent); Germany (+4 percent); France
(+5 percent); Italy (-1 percent); Switzerland (+2 percent).
Visitor volume from Europe is expected in to increase 2.4
percent in 2014, followed by similar and slowly increasing
growth over the next four years. The largest growth from Europe
will come from the U.K., France and Germany. While the growth
forecasts reflect low-growth rates, it is based on large
traveler volume bases. (as of November 2013, OTTI)
IMF expects the UK economy to grow 2.4 percent this year--
faster than any other major European economy--against its
previous forecast of 1.9 percent.
Germans consider the domestic economy to be clearly on the
upturn at present. In the wake of this, income prospects
climbed to reach a 13-year high. Willingness to buy also
improved and surpassed its seven-year high of the previous
month. The considerable increase in the consumer climate is
further boosted by a recent slump in propensity to save. From
the consumers' point of view, the economic upswing in Germany
is gaining momentum.
Competitive Environment
In the UK market, early indications are that Vietnam, Mexico
and Cuba are becoming three of the most requested long-haul
destinations for 2014. (Kuoni)
Travel Trends
Hotels are becoming ever more important as the main holiday
element, demand is growing for smaller destinations and
technology is a must while on holiday--those are the three key
findings of a new TUI consumer survey. Long-haul destinations
are more popular than ever while demand is also growing for
smaller destinations such as Menorca, Kos and Dalaman.
Technology is the heart of the other three trends. Customers
want to combine online and offline, especially for bookings,
while they also want to be connected while on holiday.
Demand for winter holidays was good with a 6.3 percent
bookings increase last month. Cumulative winter bookings are
now 3.8 percent ahead of the previous year. There is a massive
42 percent increase in April bookings, mostly due to this
year's late Easter, which more than compensates for the 13
percent drop in March bookings. However, Germans were also just
as interested in booking their summer holidays last month.
Sales of summer holidays grew by 5.9 percent, with bookings for
June and August soaring by 20 percent. Demand for May and July
was lower than last year, however. Cumulated bookings for
summer 2014 are now 7.5 percent higher than one year
previously.
Brand USA has selected Thomas Cook Group for a multi-million
dollar co-operative marketing deal to promote the country as
the world's leading destination for European visitors. The
agreement is the biggest media and partnership deal Brand USA
has made with a travel retailer in Europe. The partnership,
which will initially last for three months from mid-January and
run simultaneously across the UK, Germany, Belgium and Holland,
will see Cook and Brand USA embark on a high-profile, multi-
media campaign that fully utilizes all the company's consumer
and trade touch-points.
TUI and Thomas Cook dominate the European tour operators
market, according to and fvw overview. Together, these two
leisure travel groups have a combined market share of more than
50 percent in the major source markets of the UK, Scandinavia,
Netherlands and Belgium, and more than 30 percent of the German
mark. Kuoni is Europe's third largest tour operator followed by
DER Touristik, Costa (a cruise firm), FTI and Alltours.
Airlift
Asiana Air is now offering flights exclusive Germany to
Honolulu. Daily service, except Monday and Tuesday, Germans can
fly from Frankfurt via Seoul to Honolulu.
Visitor Statistics 2008-2013p
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change % Change
EUROPE MMA (by Air) 2008 2009 2010 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
--------------------------------------------------------------------------------------------------------------------------------------------------------
Visitor Expenditures* ($ Millions) 248.9 197.2 228.5 244.0 292.1 334.5 14.5% 358.3 7.1%
Visitor Days 1,474,584 1,366,674 1,437,409 1,525,705 1,669,269 1,883,581 12.8% 1,978,020 5.0%
Arrivals 115,172 104,403 112,765 119,825 129,252 141,408 9.4% 148,500 5.0%
Per Person Per Day Spending* ($) 168.8 144.3 159.0 160.0 175.0 177.6 1.5% 181.2 2.0%
Per Person Per Trip Spending* ($) 2,161.5 1,888.7 2,026.2 2,036.7 2,259.7 2,365.7 4.7% 2,413.0 2.0%
Length of Stay (days) 12.80 13.09 12.75 12.73 12.91 13.32 3.2% 13.32 0.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
*Excludes supplemental business spending
Europe: Distribution by Island
--------------------------------------------------------------------------------------------------------------------------------------------------------
% Change % Change
2008 2009 2010 2011 2012 2013p 2012-2013p 2014 Target 2013p-2014T
--------------------------------------------------------------------------------------------------------------------------------------------------------
O'ahu 82,877 76,412 81,352 86,432 89,337 104,677 17.2% 98,755 -5.7%
Maui County 43,348 39,698 44,120 47,678 54,331 59,122 8.8%
Maui 42,128 39,012 43,253 46,955 53,556 57,685 7.7% 62,399 8.2%
Moloka'i 1,816 1,763 1,801 1,949 2,132 2,225 4.4% 2,499 12.3%
Lana'i 1,941 1,733 1,801 1,803 1,469 2,540 72.9% 1,739 -31.5%
Kaua'i 22,233 20,938 21,908 24,273 28,773 31,099 8.1% 33,210 6.8%
Hawai'i Island 31,748 30,397 30,868 34,916 40,687 48,571 19.4% 51,417
Hilo 14,007 14,567 14,533 16,591 18,766 25,914 38.1%
Kona 25,584 24,263 24,631 28,679 33,299 36,788 10.5%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Europe: Group vs. FIT; Leisure vs. Business
----------------------------------------------------------------------------------------------------------------
% Change
VISITOR ARRIVALS BY AIR 2008 2009 2010 2011 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
Group vs FIT
Group tour 9,503 7,236 6,913 8,493 9,124 8,009 -12.2%
True Independent 62,769 59,568 63,342 68,749 74,481 89,280 19.9%
Leisure vs business
Pleasure (Net) 97,676 89,807 97,522 103,072 111,188 121,856 9.6%
MCI (Net) 7,312 7,077 5,533 7,695 6,489 9,059 39.6%
Convention/Conf. 4,765 5,507 4,045 5,185 4,148 6,018 45.1%
Corp. Meetings 1,310 773 700 1,159 952 1,034 8.6%
Incentive 1,537 966 962 1,557 1,573 2,318 47.4%
----------------------------------------------------------------------------------------------------------------
Europe: First Timers vs. Repeat Visitors
----------------------------------------------------------------------------------------------------------------
% Change
2008 2009 2010 2011 2012 2013p 2012-2013p
----------------------------------------------------------------------------------------------------------------
1st timers (%) 70.4 70.4 71.2 69.9 70.8 71.6 0.8
Repeaters (%) 29.6 29.6 28.8 30.1 29.2 28.4 -0.8
----------------------------------------------------------------------------------------------------------------
Cost per Arrival/Return on Investment/Tax Revenue
----------------------------------------------------------------------------------------------------------------
2008 2009 2010 2011 2012 2013p
----------------------------------------------------------------------------------------------------------------
HTA Expenses ($ Millions) 0.998 0.185 0.306 0.377 0.497 0.451
State tax revenue generated* 22.2 20.0 24.9 26.6 31.8 36.4
($ Millions)
Return on Investment 22.20 108.29 81.35 70.52 64.03 80.81
Cost Per Arrival 8.67 1.77 2.71 3.15 3.85 3.19
----------------------------------------------------------------------------------------------------------------
* State government tax revenue generated (direct, indirect, and induced)
______
Response to Written Questions Submitted by Hon. Brian Schatz to
Roger Dow
Question 1. U.S. Customs and Border Protection rolled out the Model
Ports of Entry Program at America's top 20 gateway airports starting in
2006 to encourage public-private collaboration to improve the U.S.
entry process. How effective has the Model Ports of Entry Program been?
Answer. The Model Ports Program was initially piloted at Houston's
George Bush Intercontinental Airport (IAH) and Washington Dulles
International Airport (IAD) and focused on improvements to three
particular areas of the entry process: staffing, queue management, and
signage. Working in collaboration with the private sector, entry
improvements were made to provide a more welcoming experience to
international travelers through the more descriptive signage and
materials in various languages, the creation and implementation of
Passenger Service Managers, and the development (in coordination with
Disney) of a welcoming video for the queuing area. That being said, the
private sector's expertise was not fully utilized during the pilot
program or rollout to the top 20 airports.
To the surprise of the travel industry, DHS declared the Model
Ports program fully implemented at the following airports: Atlanta,
Boston, Dallas/Ft. Worth, Dulles, Chicago, Detroit, Ft. Lauderdale,
Honolulu, Houston, Las Vegas, Los Angeles, Miami, Newark, New York
(JFK), Orlando, Philadelphia, Sanford (FL), San Juan, San Francisco,
and Seattle. Although improvements were made, the travel industry feels
that the program never lived up to its potential and that additional
organized stakeholder engagement could have led to a more robust
program.
Question 1a. How could this program be better leveraged to improve
the U.S. entry process?
Answer. While there was some collaboration with private sector
entities as part of the Model Ports program, adoption of a series of
recommendations could have led to significant improvements in the
customer experience for international visitors and returning U.S.
citizens. Understanding CBP's limited resources, it is unreasonable to
expect the elimination of all wait times during peak processing hours,
however, improvements to queue management, customer service, and the
physical inspection hall could significantly improve a passengers
perception of the entry process. Additionally, leveraging the private
sector expertise could allow CBP to make significant improvements while
under tight budget constraints. The re-launching of the Loaned
Executive program is the perfect vehicle for a renewed Model Ports of
Entry effort to reexamine enhanced public/private sector collaboration.
By working with industry stakeholders including--airports, theme parks,
local destinations, convention and visitor bureaus, online travel
companies, airlines, and other organizations--CBP could develop best
practices for the customer experience that could be applied at our
Nation's busiest international entry airports.
Question 2. The U.S. Department of Homeland Security has taken
steps to reduce wait times at U.S. ports of entry by expanding U.S.
Customs and Border Protection's trusted traveler programs, primarily
the Global Entry Program. What specific actions could the Federal
Government take to further expand the program and increase enrollment
to boost enrollment and expedite the entry process?
Answer. U.S. Travel has been a strong advocate for the Global Entry
program. The program has provided benefits to CBP, program enrollees,
and the general traveling public by allowing CBP to focus their limited
resources on the `unknown' travelers, while allowing the trusted
individuals expedited entry upon arrival. That being said, the specific
initiatives below could lead to a significant increase in Global Entry
enrollees and additional efficiencies for CBP:
Domestic:
DHS and the Department of State should coordinate visa
renewals and Global Entry enrollment.
DHS should revamp and simplify the online application
process for Global Entry, without sacrificing any security
protocols.
CBP should consider waiving the Global Entry
application fee for children of Global Entry members.
CBP should consider using retired CBP officers for
Global Entry interviews to ensure current officers are
utilized for frontline screening and security operations.
International:
CBP should aggressively pursue bilateral agreements
with foreign governments and transition current pilots into
full-fledged programs.
DHS and the Department of State should coordinate visa
and Global Entry enrollment for the citizens of countries
that are currently have bilateral trusted traveler programs
but are not part of the visa waiver program.
Question 3. As the United States continues to reduce visa wait
times, it is important to consider how we compare to our biggest
competitor countries in terms of how long the visa application process
takes. The perception of a lengthy wait time for visas hurts the United
States' competitiveness in the global travel marketplace. Could you
please provide examples of how the United States compares to key
competitors in terms of the visa application process?
Answer. The United States' visa process can be more onerous than
other countries. A report by the World Travel & Tourism Council found
that in 2011, the United States required visas for 36 percent of
tourist arrivals--more than double the G20 average of 17 percent. In
fact, among the G20 countries, only Saudi Arabia and India had a higher
percentage of foreign tourists who were required to have visas. The
United States requires all Brazilians to have visas when entering the
country, while European countries waive this requirement for tourists
staying under 90 days. Likewise, the United States offers fewer
consular services in emerging markets than its competitors. Whereas the
United Kingdom has 12 consulates capable of processing visas in China,
the United States only has six.
Question 3a. What specific actions could the Federal Government
take to further streamline the visa application process?
Answer. The Federal Government can take several actions to improve
the visa process. I urge Congress to pass the JOLT Act. This bill would
streamline the application process by creating a videoconferencing
program for visa interviews, expanding the Visa Waiver Program,
creating an expedited visa service, and encouraging travelers apply for
visas during periods of low demand. I also recommend that Congress take
actions to extend the length of U.S. visas for Chinese nationals, which
currently are only valid for one year. This is cumbersome to travelers,
and it requires an inordinate amount of time and staff to process the
current number of visa renewal applications.
Question 4. Certain travel and tourism data is necessary for the
Federal Government and the private sector to target the international
markets with the greatest future growth potential to remain competitive
in the global travel marketplace. The Travel Promotion Act (P.L. 111-
145) called for the U.S. Department of Commerce to expand and continue
its research and development activities in connection with the
promotion of international travel to the United States. Does the U.S.
Department of Commerce collect the necessary data the industry
requires?
Answer. The Department of Commerce's National Travel and Tourism
Office (NTTO) has been collecting statistical data about air passenger
travelers from overseas, Canadian and Mexican markets from the Survey
of International Air Travelers (SIAT) since 1983.
In general, the content and information collected through the
survey is valuable and provides the government and the U.S. travel
community detailed information on the number of arrivals, visitors'
length of stay, level of spending and activities during their stay.
One of the major challenges for the program over the years has been
a lack of funding, which has reduced the number of surveys collected
and processed since costs for conducting the research have increased
over time. Many state travel offices and city convention and visitor's
bureaus no longer find the data from the In-Flight Survey to be
reliable due to the small sample size. This is particularly true for
small to medium-sized states.
If the SIAT could reach a one-percent sample size, all States would
be better able to determine what demographic is travelling into and out
of their market and thus use the data to attract greater numbers of
international visitors. These visitors on average spend $4,500 per trip
to the U.S. Increased tourism at the state level will create more jobs
and contribute significantly to individual state economies.
The SIAT is a critical tool in our countries continued efforts to
boost international travel. We firmly believe that funding for the SIAT
is critical to fully realizing the benefits of private and public
sector efforts to market the U.S. as a premier destination and drive
international visitation that is vital to our Nation's economy. As a
result, we support the Administration's request for an additional $1.5
million for the program in Fiscal Year 2015.
______
Response to Written Question Submitted by Hon. Bill Nelson to
Roger Dow
Question. In your testimony, you note the fact that visa issues and
customs clearance experiences and wait times are one of the main
deterrents for international visitors to the United States. I
frequently hear about these concerns from a number of tourism companies
in Florida--particularly about Customs and Border Protection (CBP)
staffing and delays at the Miami airport. From your perspective, how
much of an impediment are these factors for international visitors? In
particular, I am interested in your experience in the Brazilian
market--which is a major source of visitors to Florida.
Answer. Entry delays at our international airports are alarmingly
pervasive, including at Miami International (MIA). Because of the steep
demand in Brazil to visit the United States, the fact that Miami is the
key gateway for this traffic, and the steep growth in passenger volumes
through Miami, there is no doubt that delays there discourage potential
Brazilian visitors.
Last September, a U.S. Travel report documented that over the
preceding 12 months, more than 40,000 passengers waited over two hours
to be processed at MIA. Surveys reflected in that report also showed
that 43 percent of overseas travelers who visited the U.S. said they
will recommend that others avoid a trip here because of the entry
process. Among business travelers, 44 percent said that they will not
visit the U.S. in the next five years because of the entry
inefficiencies.
This affects travel from many overseas nations, but the impact is
particularly acute for the enormous volume of prospective visitors from
Brazil, the third-largest overseas (excluding Canada and Mexico)
inbound travel market. In 2013, the fourth consecutive record-breaking
year, the volume of Brazilian visitors rose by 15 percent, accounting
for three percent of last year's total visitor volume. One can only
imagine how much faster the volume would increase without the U.S.
entry problems.
It is my understanding that the situation has been at least
temporarily eased, although at significant local expense, by
installation of Automated Passport Control kiosks and by pilot programs
to cover CBP personnel overtime during peak periods. However, as the
fastest-growing airport in the Nation with 30 percent increase in
international passengers since 2007, these strides clearly have been
hampered by the static number of CBP officers available to process
entering visitors. As the bipartisan Miami area congressional
delegation has articulated clearly on many occasions, it is difficult
to exaggerate the impact on travel and trade.
All concerned appreciate the congressional decision, in the
recently-enacted omnibus appropriations package for Fiscal Year 2014,
to fund 2000 new CBP officers; and DHS Secretary Johnson's commitment
to fill these positions on an expedited basis. While we believe
additional CBP personnel are still needed to solve the problem you
raise, assigning a substantial amount of these initial new-hires is a
good first step.
In that context, I must stress our strong view that this must be
accompanied by new metrics to make sure that actions such as hiring
more CBP officers actually improve the traveler experience. For this
reason, we call on CBP to adopt a goal to process 80 percent of all
inbound travelers within 30 minutes and 100 percent of inbound
travelers within 45 minutes.
______
Response to Written Question Submitted by Hon. Amy Klobuchar to
Roger Dow
Question. Many people underestimate what encouraging international
tourists to visit the United States means for diplomacy--international
visitors to the United States are 74 percent more likely to have a
favorable view of America after they come and visit. Do you feel that
as tourism is making a come-back in the United States after the
economic downturn, that we are once again starting to gain the
international diplomatic benefits of international visitation to the
United States? In your opinion do you think that this type of informal
diplomacy makes our country a more secure place?
Answer. I certainly agree that, in addition to the economic
benefits, inbound international travel yields significant public
diplomacy dividends for the United States. Our best ambassadors are
ordinary Americans, who convey our fundamental values through personal
engagement with visitors. When they drive along our coastline, stop at
our vineyards, camp at our national parks, go to a ballgame, or follow
the Underground Railroad or Freedom Trail, they experience not just our
attractions but the fabric of our communities.
That's why today, more than ever, overseas travelers visit not only
our gateway cities but also make extended tours of the American
heartland. Increasingly, foreign tour operators are encouraging
itineraries that may begin and end in large metropolitan areas but also
wind through smaller and rural regions, to showcase more fully the
genuine American spirit. More than any government policy, that kind of
people-to-people hospitality breaks through cultural and political
barriers, making a lifelong impression on visitors that they return
home to report to others.
There is no doubt this has decidedly positive public diplomacy
implications. In 2007, the House Foreign Affairs Committee held a
series of hearings on this subject, examining considerable survey
research showing precisely what your question suggests: that nearly
every foreign citizen who visits here returns home more favorable
toward the United States, toward Americans and even about our foreign
policies. And we can assume that these visitors include many of
tomorrow's leaders in each of these nations--individuals who may then
come back to the U.S. in a work capacity with a much more nuanced
understanding for the American psyche, benefitting all concerned. As
the volume of international visitors rises, these benefits will grow as
well.
______
Response to Written Questions Submitted by Hon. Bill Nelson to
Christopher L. Thompson
Question 1. Mr. Thompson, I know Brand USA is currently conducting
advertising and outreach in Brazil. What are your thoughts on how
problems visitors experience with visas and wait times at customs
impact travel to the U.S. from Brazil?
Answer. Brand USA's mission is to market the United States as the
premier travel destination for international travelers. In Brazil, we
have engaged the Brazilian market in three ways. First by targeting the
consumer audience by running a consumer based advertising campaign.
Second by engaging the travel trade having participated in travel and
trade shows in Brazil in 2013 and 2014. And finally through co-
operative partnerships with our partners to market the many
destinations in the United States. Brazil has shown tremendous growth
and opportunity and Brand USA is actively engaged in the Brazilian
market to ensure the U.S. remains a top travel destination for
Brazilian tourists.
According to the recent ITB World Travel Trends Report, Brazilians
are driving the outbound travel growth in South America in large part
due to their love of short shopping trips, but this trend is shifting
as well. Middle-income consumers that may have traveled for the first
time five or six years ago are beginning to explore new places and
types of trips, especially in Europe. The challenge in the United
States is to better expose Brazilians to the diversity of opportunities
available here.
Entry into the Visa Waiver Program has proven to grow visitation
from accepted countries. Being able to compete on a level playing field
with Europe and other destinations would help our efforts. We will
continue to market the United States under any conditions and are
confident that number of Brazilians coming to the United States will
continue to grow.
Question 2. Over the past few years, Brand USA has expanded its
outreach to a number of countries. However, the only South American
country currently included is Brazil. In the future, do you contemplate
expanding outreach to other South American countries?
Answer. In South America, we actually have some form of marketing
activity in Argentina, Brazil, Chile, Columbia, and Uraguay.
With the establishment of our international representation office
in Brazil in early 2014, we have been able to roll out consumer
marketing through our co-operative marketing programs and public
relations, as well as reach consumers through our outreach with the
travel trade. Latin America is a key focus for Brand USA, and we intend
to continue our expansion in those markets--particularly in Chile,
which has recently been admitted into the Visa Waiver Program.
Brand USA has also talked to several airlines within South America
on developing new routes to the United States.
We also have efforts throughout Mexico and Central America. In
Mexico, we have a full consumer campaign and have participated in
several trade shows and have conducted public relations efforts in
Costa Rica, Dominican Republic and Guatemala.
______
Response to Written Questions Submitted by Hon. Amy Klobuchar to
Christopher L. Thompson
Question 1. Brand USA was created in 2010 and has now been
operational for three years. As a new type of public-private
partnership, Brand USA has had to pave its way to success through
cooperation and partnerships across the industry. A recent study by
Oxford Economics concluded that Brand USA has a return on investment
rate of 47 to 1. That means that for every $1 spent on travel promotion
the United States gets $47 worth of economic benefits. That is a
testament to Brand USA's efficiency . . . we're still spending less
than many of our global competitors but we're getting more bang for our
buck. Can you explain the reasoning behind this return on investment
rate and why it is such a positive story for the U.S. economy?
Answer. The Oxford Economics study utilized an econometric model,
validated with both consumer post-ad campaign studies and competitive
destination market share trends, to calculate the incremental impact of
Brand USA's marketing activities. In addition to effective general
marketing practices, there are a couple of reasons why Brand USA has
been able to achieve such a high ROI percentage:
Cooperative partner marketing (which represents a majority
of Brand USA's marketing) allows us to pool funds to boost
advertising reach, and reduce cost
In-kind contributions often further reduce marketing cost
(e.g., sourcing images) or enhance consumer reach (e.g.,
placements in magazines)
The additional international visitors attracted by Brand USA
marketing generated $3.4 billion for U.S. companies and supported over
53,000 jobs--and without a single dollar collected from U.S. taxpayers.
In addition, nearly $1 billion was collected in state, local and
Federal taxes.
It's also important to note that when the Travel Promotion Act was
being considered back in 2009, the projected return on investment of
Brand USA's activities once fully operational was a 20 to 1 with
support for 47,000 jobs. Clearly, Brand USA is exceeding that
estimate--and that was accomplished from the organization's presence in
eight markets. Today, Brand USA is fully deployed in 10 markets, has
travel trade outreach in 20 markets, and has a marketing presence in
more than 30 markets.
Question 1a. Can you give us a preview of what is next for Brand
USA?
Answer. As Brand USA moves forward in achieving the goal of
welcoming 100 million international visitors to the United States by
2020, we will continue to develop new programs and platforms and expand
our full-scale consumer marketing campaign into additional markets.
Brand USA plans to focus its efforts in multiple ways--from working in
partnership with the Federal Government in support of the National
Travel and Tourism Strategy, to promoting the great outdoors, to
implementing culinary and retail strategies, to developing the Nation's
first comprehensive calendar of events and experiences, to expanding
our fully integrated consumer campaign, to continuing to build out the
Nation's largest international representation network, to promoting and
celebrating the National Parks with the production of a giant screen
film, to sales missions, roadshows and mega familiarization trips, and
more. All of these efforts serve to promote the experiences available
throughout the 50 states, the District of Columbia, and the five
territories to, through, and beyond the gateways.
Great outdoors and National Parks
Brand USA will market around the great outdoors and national parks.
As part of that overall marketing strategy, in the fall of 2014, we
will begin production on a film for giant screen theatres that
celebrates National Parks and Federally Managed lands. We plan to
release the film in mid-2015 to honor the centennial anniversary of the
National Park Service.
Giant screen theatres can be found in many of Brand USA's key
target markets. There are over 800 giant screen theatres in over 57
countries around the world and that number continues to grow. One
market which this film can have significant impact is China, one of the
United States' top 10 countries in both international visitation and
spend, has the second largest market with over 75 giant screen theatres
located throughout the country.
In conjunction with the big screen film, we will launch a social
media campaign highlighting the great outdoors and U.S. national parks
to over 5 million fans across our social media channels.
Culinary Initiatives
We are also launching our culinary initiative inviting the world to
explore the country's rich culinary landscape. The Great American Food
Stories provides 31 chief-inspired recipes and a variety of culinary
stories for each of the six culinary regions of the United States. The
31 chefs featured in the guide are drawn from the State Department's
Diplomatic Culinary Partnership with the James Beard Foundation. The
culinary initiative is a high-quality tool to promote U.S. Food and
travel experiences around the globe, and will launch with an integrated
digital platform.
Promoting Retail
Shopping is the number one leisure activity for 88 percent of all
overseas visitors. In 2014 and beyond, we will continue and expand upon
our retail strategy with campaigns in Australia, Brazil, Canada, China,
Japan, Korea and the United Kingdom.
Calendar of Events
We will also launch a calendar of events across our consumer
website. This platform will allow our partners and destinations around
the country to showcase their festivals, sporting and cultural events
to international travelers. This will be the first national calendar of
events of its kind, created to inspire to international tourists to
visit the United States.
Consumer Campaign
The Brand USA consumer campaign will target specific markets and be
timed to roll out in markets when our target markets enter the planning
phase of their travel--with a focus on experiences that resonate most
with travelers in each market. For example, Brand USA has recently
launched targeted consumer campaigns, in Mexico and Brazil,
highlighting the great skiing the country has to offer. The timing of
this campaign was designed to target audiences as they are planning
their winter trips. Noting the attention and demand generated has
prompted Brand USA to extend this campaign. We will continue to develop
new campaigns around the great skiing experiences the United States
has.
Later this year we will be launching a campaign in several markets
around the great golf courses this country has to offer. The campaign
will be active in several markets including Brazil, Canada, Mexico and
feature golf courses across the country.
Question 1b. Where are your making your biggest investments and are
you continuing to enter new markets in the coming year?
Answer. As the Nation's destination marketing organization, we
currently have marketing initiatives in more than 30 markets that we
believe have the highest potential for growth--a combination of
emerging and established markets that currently generate more than 90
percent of all inbound travel to the United States. The markets are
Argentina, Australia, Austria, Belgium, Belize, Brazil, Canada, Chile,
China, Costa Rica, El Salvador, France, Guatemala, Germany, Honduras,
Hong Kong, India, Ireland, Italy, Japan, South Korea, Mexico,
Netherlands, New Zealand, Nicaragua, Panama, Russia, Singapore, Spain,
Sweden, Switzerland, Taiwan, United Arab Emirates and the United
Kingdom.
To date, we have fully deployed our marketing outreach efforts in
10 markets with an effective combination of our consumer brand
campaign, co-operative marketing programs and platforms, and travel
trade outreach. Those markets are Australia, Brazil, Canada, China,
Germany, Japan, South Korea, Mexico, New Zealand and the United
Kingdom.
Brand USA is currently analyzing which international source markets
to expand and deploy our marketing outreach efforts. Our analysis will
focus on identifying the markets, which have the greatest opportunity
for growth in the near term. This analysis is done to ensure we are
deploying our resources in the most efficient and effective way
possible.
Question 2. Brand USA has been able to form a number of industry
partnerships but it has also been able to form many partnerships with
local and regional visitors bureaus, such as Explore Minnesota in my
state, that are benefiting from the leverage Brand USA gives them to
market abroad more widely. Not all states have large marketing budgets
so Brand USA is opening doors to new markets around the world. What
services do you offer not only to state visitors bureaus but local or
regional visitors bureaus who are looking to expand their marketing by
partnering with Brand USA?
Answer. Brand USA offers a variety of marketing-driven cooperative
programs to inspire inbound visitor travel to the United States and
drive tourism dollars to communities in all 50 states, the District of
Columbia and the five territories. Our programs include consumer, co-
operative marketing and trade outreach opportunities that add and
create value for our partners.
We currently have over 100 programs that create over 200
opportunities for our partners to grow their international presence and
increase international visitation, all at a scale and cost that
wouldn't be possible without Brand USA.
Many local and regional visitor bureaus have participated in our
programs. Some of the most popular include our Inspiration Guides, In-
Language Videos and Discover America Global Websites.
The Inspiration Guides are Brand USA's official language-specific
print and online guides created to inspire travel by displaying the
richness and variety of the American experiences to international
travelers. Stunning photography and compelling copy are the hallmarks
that attract readers. Participating partners also have the opportunity
to promote their destination through a featured photo essay. This year,
more than 550,000 print copies will be produced in 10 languages for 18
international audiences.
Brand USA's In-Language Video program creates and distributes in-
language multimedia content to help U.S. destinations promote their
experiences to international travelers. Video content is customized to
the specific international audience's point of view and targeted to
interest (Culture, Indulgence, Great Outdoors or Urban Excitement) and
country (Australia, Brazil, Canada, China, France, Germany, Italy,
Japan, Mexico and/or the United Kingdom). Participating destinations
can distribute video content through their own marketing channels.
Additionally, Brand USA will distribute the videos through its digital
channels. With our partners, we have produced over 500 videos,
featuring many large and small destinations including Bloomington,
Minnesota; Myrtle Beach, South Carolina; Loudon County, Virginia;
Bismarck, North Dakota and many more.
Many of our partners have also enhanced their presence on our
consumer website, DiscoverAmerica.com. DiscoverAmerica.com was designed
to help inspire international visitors and travel influencers to choose
U.S. travel destinations, travel providers and experiences. There are
several options on DiscoverAmerica.com that help international
travelers learn more about specific destinations, travel brands or
organizations. These pages create another cost effective way for these
entities to expose themselves to several markets while gaining
international visibility through the consumer promotions, which lead
travelers to our websites.
______
Response to Written Questions Submitted by Hon. Roy Blunt to
Christopher L. Thompson
Question 1. The Travel Promotion Act authorizes Brand USA to
receive in-kind contributions. Can you give examples of these in-kind
contributions, and the value they provide?
Answer. Brand USA receives valuable in-kind contributions from
domestic and international partners that allow the organization to
conduct promotional activities that it would not otherwise be able to
do.
For example, in May 2013, Brand USA organized the first ever
``mega-familiarization tour'' (MegaFam) to the United States. MegaFams
are marketing initiatives that are key to promoting destinations to,
through, and beyond the gateways. Familiarization tours are a common
practice in destination marketing in which a city or state recruits
sellers of travel or travel journalists to tour the destination in
order to sell and/or write about it when they return home. The Brand
USA inaugural MegaFam expanded this to a larger scale that only the
national DMO can accomplish. Brand USA brought the top 100 sellers of
travel to the United States from the UK--in fact, the participants had
to compete on volume of sale over the preceding fiscal quarter--and put
them on seven different itineraries around the United States that
highlighted well-known and off-the-beaten path experiences. All seven
groups assembled in Miami at the end of the tour to present their
respective itineraries to the other Megafam participants.
The MegaFam was possible because of in-kind contributions to Brand
USA from its partners. British Airways provided all the airline tickets
to fly the participants to and from the United States. American
Airlines provided airline tickets to Miami for the final send-off. All
ground transportation and lodging was also contributed by a variety of
partners on an in-kind basis. These valuable contributions not only
allowed this groundbreaking campaign to take place--and to serve as a
model for similar fam tours from other markets--but also increased the
reach of the publicity associated with the trips.
Building on this success and leveraging the in-kind model, this
year Brand USA ran additional MegaFams from the UK, Australia and
Germany. These MegaFams showcased several destinations across 25
states. The results of the Megafams are impressive--during the three-
month competition phase alone, in this year's second Megafam from the
UK, participating travel agents booked over 12,000 flights to and
within the USA, up from 5,500 flights during the competition phase in
2013. As a marketing initiative, MegaFams are key to promoting all of
the experiences the United States has to offer, especially non-gateway
destinations that agents normally would not visit.
This example of an in-kind contribution is just one among many.
Other forms of in-kind include contributed advertising space such as
full-page ads and dedicated inserts in major newspapers like The
Guardian, placement in major tour guides around the world, and free
video and still images that Brand USA would otherwise have had to
create from scratch. In-kind contributions of media augment Brand USA's
marketing plans, which enables Brand USA to reallocate resources and
spend its cash budget on promotional activities elsewhere.
All submissions for Federal matching funds for in-kind
contributions are evaluated by a vetted third-party valuator (if no
invoice for sale of a comparable good or service exists) before being
certified by an independent public accounting firm and meticulously
reviewed and confirmed by the Department of Commerce.
Question 2. The recent Government Accountability Office (GAO)
programmatic review and report of Brand USA included three key
recommendations. Can you explain in greater detail how you addressed
these recommendations from GAO? What other findings were there in the
report?
Answer. The GAO report covers the period from March 2012 to July
2013 and was a follow-up to the assessment finalized in March 2012 as
required by the Travel Promotion Act. The title of the document is
``Brand USA Needs Plans for Measuring Performance and Updated Policy on
Private Sector Contributions.'' GAO reported that Brand USA
successfully promotes international travel to rural and urban areas
equally and to all 50 states, DC and the five territories. The report
provides detailed descriptions of Brand USA's personnel and procurement
policies, which are compliant with all requirements of the Travel
Promotion Act. It also provided an in-depth explanation of the in-kind
valuation methodologies and Federal matching funds oversight
administered by the Department of Commerce with input from Brand USA.
The report identifies three key recommendations: (1) to develop
metrics plans that measure not only the effectiveness of the campaign,
but its ultimate macro impact on travel to and spending in the United
States; (2) to competitively select the firm that assists in media
valuation for matching funds; and (3) to formalize procedures with the
Department of Commerce to revise the matching funds policies if
necessary.
At the time of the GAO report we shared with the GAO both our
existing metrics around advertising reach and consumer sentiment as
well as our pathway toward measure impact on macroeconomic outcomes
like actual international visitation and spend. Since the report was
issued, we have released an Oxford Economics study that demonstrates
Brand USA's incremental impact on actual visitation and spend. The
study employs an econometric model that is validated by a consumer
sentiment model and a market share model. The results showed that in
FY13 Brand USA was responsible for 1.1 million incremental
international visitors that spent $3.4 billion and led to total
economic activity of $7.4 billion, support for over 53,000 new U.S.
jobs and a 47:1 marketing ROI.
As the GAO report points out, Brand USA's hiring and procurement
policies are consistent with the Travel Promotion Act and other
applicable standards. However, in one instance the policy was not
followed in the selection of the media valuation firm, which is a
third-party valuator of media that is given to Brand USA as an in-kind
contribution. The reason the firm was selected without a competitive
bid is that the task is unique and complex, and the firm was selected
after extensive vetting and approval from the Departments of Commerce
and Treasury, which included review and approval of methodology.
However, Brand USA has since put that contract out to bid in accordance
with the GAO recommendation.
The GAO report found that the system of valuation, validation and
extensive oversight that has been set up to process applications for
Federal matching funds is quite robust and compliant with the Travel
Promotion Act and all relevant standards. The recommendation is not
about the in-kind policies themselves but about how those policies
might be amended if changes are necessary in the future. The policies
pertain to the Department of Commerce but are mutually developed to
ensure they stay of stay abreast of new types of contributions and best
practices, and the two sides have successfully amended the policies
several times. In response to the GAO recommendation, Brand USA and the
Department of Commerce have codified the process we use to amend those
procedures whenever novel types of contributions arise that necessitate
changes.
______
Response to Written Question Submitted by Hon. Amy Klobuchar to
Mike McCartney
Question. Brand USA has been able to form a number of industry
partnerships but it has also been able to form many partnerships with
local and regional visitors bureaus, such as Explore Minnesota in my
state, that are benefiting from the leverage Brand USA gives them to
market abroad more widely. Not all states have large marketing budgets
so Brand USA is opening doors to new markets around the world. Can you
expand on what your efforts were like before Brand USA and what your
international promotion efforts are like now with Brand USA?
Answer. The HTA has invested in the international markets for many
years. Our approach was driven more through direct travel trade
collaborative efforts that where focused on Japan, Oceania (Australia
and New Zealand), Europe, Canada, Taiwan, China and Korea. Brand USA
has enabled us to elevate our efforts in these countries as well as
expand our efforts into Latin America and intended entries into Hong
Kong and Southeast Asia in 2015.
Several areas where we will grow our efforts will be in co-op
advertising and on-line exposure through search engine websites and
social media.
______
Response to Written Question Submitted by Hon. Amy Klobuchar to
Brad Dean
Question. Brand USA has been able to form a number of industry
partnerships but it has also been able to form many partnerships with
local and regional visitors bureaus, such as Explore Minnesota in my
state, that are benefiting from the leverage Brand USA gives them to
market abroad more widely. Not all states have large marketing budgets
so Brand USA is opening doors to new markets around the world. Can you
expand on what your efforts were like before Brand USA and what your
international promotion efforts are like now with Brand USA?
Answer. International tourism is a tremendous growth opportunity
for the United States tourism industry. The typical international
traveler stays longer and spends more than the average domestic
traveler. As you are well aware, our Nation missed out on the growth in
international travel prior to the creation of Brand USA, resulting in
what many experts have termed the ``Lost Decade of Tourism.''
Prior to our partnership with Brand USA, our efforts were limited
to seasonal promotional in Ontario, Canada and a very limited
promotional effort in the United Kingdom and Germany. The Canadian
promotion resulted in a seasonal influx of visitors from the Toronto
area for approximately six weeks each year. Due to budget limitations
and the inability to establish sufficient brand awareness, our efforts
in Europe yielded very limited results.
Through Brand USA, our message is amplified and our investments are
more efficient. Brand USA provides us with the market intelligence and
tools which enable us to be much more competitive in international
marketing in the following ways:
(1) Through Brand USA, we can reach a much larger audience. Prior to
Brand USA, we had to be very selective on where we could
promote, today we are able to enter markets with our
destination message simply by working through the agency.
Essentially, Brand USA opens the door to new global markets and
our cost of entry is much more affordable, enabling us to
promote in more places.
(2) Brand USA enables us to leverage our resources through media
purchases and publicity strategies that we simply could not
achieve on our own. One example of how this benefits a local
tourism promoter is the relationships Brand USA has established
with large, multinational media companies and promotional
entities. We could not develop those relationships on our own.
As a result, our marketing dollars are stretched farther and
the return on our marketing investment is much higher.
(3) Brand USA is able to serve in a key part of three-way
partnerships with local/state promoters and airlines, which are
essential to our ability to significantly grow international
tourism. By partnering with Brand USA, we can bring additional
resources and expertise to the table, which gives airline
partners needed assurance that the establishing air service to
U.S. destinations will be successful.
(4) Brand USA provides insightful research and essential knowledge
and expertise that help us navigate the maze of necessities in
growing international tourism. Language translation is one
challenge, but understanding and adapting to the many cultural,
social, and generational nuances and practices in countries
throughout the world is not something we can easily attain on
our own. Through Brand USA, we become better marketers prepared
to compete on the global scale.
Brand USA enables us to expand and enhance our international
marketing efforts. In the past three years, we've seen double-digit
growth in international tourism, outpacing our domestic growth by
nearly three times. Brand USA has helped spur economic growth and job
creation in our community, and we believe the best is yet to come.
______
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