[Senate Hearing 117-713]
[From the U.S. Government Publishing Office]
S. Hrg. 117-713
THE STATE OF TRAVEL AND TOURISM
DURING COVID
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON TOURISM, TRADE,
AND EXPORT PROMOTION
OF THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
APRIL 13, 2021
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available online: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
53-085 PDF WASHINGTON : 2024
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
MARIA CANTWELL, Washington, Chair
AMY KLOBUCHAR, Minnesota ROGER WICKER, Mississippi, Ranking
RICHARD BLUMENTHAL, Connecticut JOHN THUNE, South Dakota
BRIAN SCHATZ, Hawaii ROY BLUNT, Missouri
EDWARD MARKEY, Massachusetts TED CRUZ, Texas
GARY PETERS, Michigan DEB FISCHER, Nebraska
TAMMY BALDWIN, Wisconsin JERRY MORAN, Kansas
TAMMY DUCKWORTH, Illinois DAN SULLIVAN, Alaska
JON TESTER, Montana MARSHA BLACKBURN, Tennessee
KYRSTEN SINEMA, Arizona TODD YOUNG, Indiana
JACKY ROSEN, Nevada MIKE LEE, Utah
BEN RAY LUJAN, New Mexico RON JOHNSON, Wisconsin
JOHN HICKENLOOPER, Colorado SHELLEY MOORE CAPITO, West
RAPHAEL WARNOCK, Georgia Virginia
RICK SCOTT, Florida
CYNTHIA LUMMIS, Wyoming
David Strickland, Staff Director
Melissa Porter, Deputy Staff Director
George Greenwell, Policy Coordinator and Security Manager
John Keast, Republican Staff Director
Crystal Tully, Republican Deputy Staff Director
Steven Wall, General Counsel
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SUBCOMMITTEE ON TOURISM, TRADE, AND EXPORT PROMOTION
JACKY ROSEN, Nevada, Chair RICK SCOTT, Florida, Ranking
AMY KLOBUCHAR, Minnesota DAN SULLIVAN, Alaska
TAMMY DUCKWORTH, Illinois MARSHA BLACKBURN, Tennessee
JON TESTER, Montana RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona SHELLEY MOORE CAPITO, West
JOHN HICKENLOOPER, Colorado Virginia
CYNTHIA LUMMIS, Wyoming
C O N T E N T S
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Page
Hearing held on April 13, 2021................................... 1
Statement of Senator Rosen....................................... 1
Letter dated April 13, 2021 to Hon. Jacky Rosen and Hon. Rick
Scott from David Audrain, Co-President and David DuBois,
CMP, CAE, FASAE, CTA, Co-President, Exhibitions &
Conferences Alliance....................................... 39
Letter dated April 13, 2021 to Hon. Jacky Rosen and Hon. Rick
Scott from Brian Crawford, Executive Vice President of
Government Affairs, American Hotel & Lodging Association... 40
Prepared statement from the American Bus Association......... 41
Statement of Senator Scott....................................... 3
Statement of Senator Wicker...................................... 4
Statement of Senator Cortez Masto................................ 6
Statement of Senator Klobuchar................................... 26
Statement of Senator Sullivan.................................... 28
Statement of Senator Cantwell.................................... 30
Statement of Senator Sinema...................................... 32
Statement of Senator Hickenlooper................................ 33
Statement of Senator Blackburn................................... 35
Witnesses
Steve Hill, CEO and President, Las Vegas Convention and Visitors
Authority...................................................... 6
Prepared statement........................................... 8
Jorge Perez, Regional Portfolio President, MGM Resorts
International.................................................. 10
Prepared statement........................................... 12
Tori Emerson Barnes, Executive Vice President, Public Affairs and
Policy, U.S. Travel Association................................ 13
Prepared statement........................................... 15
Carol B. Dover, President and CEO, Florida Restaurant and Lodging
Association.................................................... 19
Prepared statement........................................... 20
Appendix
Prepared Statement of the Travel Management Coalition............ 43
Response to written questions submitted to Steve Hill by:
Hon. Jacky Rosen............................................. 44
Hon. Dan Sullivan............................................ 46
Response to written questions submitted to Jorge Perez by:
Hon. Jacky Rosen............................................. 46
Hon. Dan Sullivan............................................ 47
Response to written question submitted to Tori Emerson Barnes by:
Hon. Dan Sullivan............................................ 48
Response to written question submitted to Carol B. Dover by:
Hon. Dan Sullivan............................................ 49
THE STATE OF TRAVEL AND TOURISM DURING COVID
----------
TUESDAY, APRIL 13, 2021
U.S. Senate,
Subcommittee on Tourism, Trade, and Export
Promotion,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 3:06 p.m., in
room SR-253, Russell Senate Office Building, Hon. Jacky Rosen,
Chairman of the Subcommittee, presiding.
Present: Senators Rosen [presiding], Klobuchar, Cantwell,
Tester, Cortez Masto, Sinema, Hickenlooper, Scott, Wicker,
Sullivan, Blackburn, and Capito.
OPENING STATEMENT OF HON. JACKY ROSEN,
U.S. SENATOR FROM NEVADA
Senator Rosen. The inaugural hearings of the newly formed
Subcommittee on Tourism, Trade, and Export Promotion. I would
like to thank Senator Rick Scott, the Ranking Member of the
Subcommittee, for agreeing to work with me in a bipartisan way
on the critical issues that are so important to workers,
businesses, and families in both of our states and across the
country. And I look forward to a productive partnership.
I would also like to thank Chair Cantwell and Ranking
Member Wicker for their tremendous leadership and for agreeing
to establish this crucial subcommittee at a time when travel,
tourism, and hospitality, they need more support than ever
before. Travel and tourism related industries drive job
creation and economic growth in states across America,
especially in Nevada. These industries and the workers they
employ are absolutely essential to our state's prosperity.
From the excitement and energy of the Las Vegas Strip, the
exquisite outdoor recreation opportunities at Lake Tahoe, to
the magnificent engineering feat that is the Hoover Dam, and
the vast and pristine public lands throughout our state, people
love to visit Nevada. Prior to the pandemic, in 2019 about 55
million people visited the Silver State, which was a record
setting figure. In the Las Vegas area alone, direct visitor
spending reached almost $37 billion, directly supported more
than 242,000 workers in the tourism, leisure, and hospitality
industries. Jobs in those sectors account for about 9 percent
of all U.S. jobs, a major slice of the Nation's economy, and in
Nevada, they employ about a quarter of our workforce.
With tourism as our lifeblood, this pandemic has hit Nevada
particularly hard. It brought our travel and tourism-heavy
economy screeching to a halt and decimated the jobs that these
industries support. In April 2020, the unemployment rate in
Nevada was the highest in our state's history and the worst in
the Nation, it skyrocketed to almost 30 percent. I want to
repeat that, 30 percent unemployment. They were unemployed
through no fault of their own. It was all because of the COVID-
19 pandemic, and that contributed to the worst economic
downturn in the tourism industry we have ever experienced in my
State of Nevada.
Through PPP loans, the Employee Retention Tax Credit,
direct aid to restaurants and live entertainment, and
unemployment relief, Congress has worked to support tourism
businesses and workers during this difficult period. But far
more needs to be done. Now it is time to bring this critical
industry back to its thriving pre-pandemic economic status. I
intend to use this subcommittee to find bipartisan pathways and
solutions to do just that. We are going to get Americans and
the world traveling again. Today's inaugural hearing, titled
The State of Travel and Tourism During COVID, will examine the
economic impacts of the COVID-19 pandemic on the travel and
tourism industry, with a particular focus on hotels,
conventions, and the broader hospitality industry. We will
discuss regional impacts of the pandemic on tourism heavy
economies like Nevada's and Florida's and those communities
disproportionately affected by economic downturn as a result of
COVID-19.
Here today, both virtually and in person, we have a panel
of wonderful witnesses to share their expertise, provide
insight and recommendations, and take questions from members of
the Subcommittee. We will hear from witnesses representing the
Las Vegas Convention and Visitors Authority, MGM Resorts
International, U.S. Travel Association, and the Florida
Restaurant and Lodging Association. From this hearing, I hope
the Subcommittee will gain a robust understanding of the
current needs of our Nation's travel and tourism industry so
that we can craft the most effective and targeted solutions to
revive our economy and support the travel and tourism work
force. Travel and tourism industry has many components.
So while the focus of today is primarily hotels,
conventions, and the broader hospitality industry from
restaurants to casinos, Ranking Member Scott and I will ensure
this subcommittee hears from key stakeholders across the board.
Over the next few months, we will hear from our airports and
others about the pandemic's impacts on international travel. We
will examine the outdoor recreation economy and eco-tourism. We
will raise the voices of small businesses, hospitality workers,
and the live entertainment work force. And we will chart a path
toward the future.
Thank you all again for being here today. I look forward to
hearing each of you share your experiences and expertise with
us. Now I will turn it over to Ranking Member Scott for his
opening statement and to introduce our witnesses so they can
provide testimony to the panel. Senator Scott.
STATEMENT OF HON. RICK SCOTT,
U.S. SENATOR FROM FLORIDA
Senator Scott. Well, first I want to thank Chair Rosen. We
both come from tourism states and we know the importance of
making sure that we have robust tourism. I remember being at, I
think it is supposed to be the largest tourism convention or
event supposedly in the world down in Rio de Janeiro, Brazil,
and Las Vegas had an unbelievably beautiful space there and
they presented Nevada really well. So it is a great state, and
it is a great place to take a vacation. I want to thank all of
our witnesses for being here today and sharing their
experiences. I would like to thank somebody from Florida, Carol
Dover, who is the President and CEO of the Florida Restaurant
and Lodging Association for being with us today.
I finished--a couple of years ago as Governor of Florida
and I worked hand in hand with Carol. Tourism is a big deal in
our state, and she is truly a champion for our tourism industry
in our state. I want to thank Chair Cantwell and Ranking Member
Wicker for giving us the opportunity to do this. It is an honor
to lead this subcommittee with Senator Rosen. I look forward to
the important work we are going to do to drive our Nation's
tourism and trade sectors to economic success. And as you heard
from Chair Rosen, some of our States have really gotten hurt
because of what has happened with the pandemic. During my time
as Governor, we put--we invested actually quite a bit of State
money and worked on growing tourism. We went from about 80
million tourists a year to my last year 126 million tourists.
But of course, last year, the State of Florida's tourism,
like all other states, was down significantly. We shed records,
tourism records, and it creates a lot of jobs. And these
visitors, they support our small businesses, they field our job
growth, they help increase our State and local investments in
the environment and transportation and public safety and
education. Always said, what happens in Florida is people come
to visit, and I am sure the same thing happens in Nevada,
people come to visit, say this is a pretty nice place, I think
I will move here. I will build my business here. So it is a
real driver for economic development I think in both of our
states.
Our State also has 15 seaports, and it is the gateway to
Latin America. Florida has become a hub for businesses all
across the Nation for import and export. We try to move all the
business we can out of California over to Florida. So goods
that flow through Florida airports and seaports have grown to
$154 billion a year due to our focus on building international
trade relationships. We--in 2016 exports from Florida supported
an estimated 232,000 American jobs. So these are--the tourism
is big jobs, the trade jobs are big jobs with our ports. We
invested in my eight years about $1.4 billion just in our
ports. I know that all of this--the pandemic has impacted every
one of us, our families, and all of us have tried to figure out
how to deal with this, keep everybody safe, our family safe,
our businesses safe, and our employees safe. I have heard from
a lot of small businesses around my State that rely on the
tourism industry and have been absolutely devastated by the
pandemic.
While I am glad Florida is open for business, our
businesses are open, our schools are open, the uncertainty of
when the tourism industry will reopen in other States in
communities across the country has clearly impacted those
States and it has even impacted us. I know everybody is working
incredibly hard to keep their businesses going and get back in
business and be able to employ everybody again, and I hope that
happens quickly. As our Nation works to recover from the
coronavirus and get our economy back on track, I am going to do
everything I can with Senator Rosen to support the tourism
industry in Florida and across the country.
I am also very focused on what happens in Puerto Rico. You
know, Puerto Rico is devastated by Hurricane Maria and then
they had the earthquake and now COVID-19. We worked hard to
make sure there is good aid for Puerto Rico's recovery. I have
been working on a lot of bills like Senator Rosen has. I have
my bipartisan Fly Safe K-9 COVID Detection Act with Senator
Sinema, which directs the TSA to conduct a feasibility study on
the use of K-9 units, which have been reportedly effective in
detecting COVID and hopefully will provide an opportunity to
make people feel safer flying.
We have got to get people back in the air for all of our
states. We also have a bipartisan bill Fly Safe and Healthy Act
with Chair Cantwell to enable a temperature check pilot program
at airports. And today I introduce the Careful Resumption Under
Improved Safety Enhancement Act or the CRUISE Act with Senator
Sullivan and Senator Rubio to help our cruise industry restart
and support the many businesses in our communities that rely on
the success of the cruise industry. I guess you don't have a
lot of cruises, but you have a lot of people----
[Laughter.].
Senator Rosen. They cruise up and down the Las Vegas strip.
Senator Scott. That is right. And you have got a lot of
water people where people cruise on. So our--it has been really
frustrating. Now, the cruise industry has been waiting for
months for updated guidance from the CDC and I think it is
wrong what has happened. They have got to--we have got to give
the cruise industry the terms, the rules, and they will reopen
safely. I know that industry wants to do it safely. It is an
important job created for us.
So I want to make sure that happens. We are going to do
everything we can. And I look forward to working with all my
colleagues to grow tourism, not just in Nevada, not just in
Florida, but even in states, beautiful States like Mississippi.
Senator Rosen. Now, thank you, Senator Scott, and I would
like to now introduce here in person our Ranking Member.
Senator Wicker.
STATEMENT OF HON. ROGER WICKER,
U.S. SENATOR FROM MISSISSIPPI
Senator Wicker. Thank you, Senator Rosen, Senator Scott.
And Senator Scott, I share that sentiment with you because we
have a number of tourism opportunities, not the least of which
is the National Civil Rights Trail and the National Blues
Trail, which more and more people are coming to visit, as well
as our other more traditional tourism sites. But thank you both
for holding this hearing today to hear industry perspectives on
the state of the travel and tourism industry. This is a great
topic for the new Tourism, Trade, and Export Promotion
Subcommittee.
I expect this committee will be a very busy and I look
forward to participating. The travel and tourism industry is a
key pillar of the American economy. Before the COVID-19
pandemic, this industry supported roughly 16 million jobs and
generated $1.1 trillion in consumer spending, accounting for
over $2.5 trillion in total economic output. COVID-19 has
devastated the industry, perhaps more than any other economic
sector in the United States. Nearly 40 percent of the total
U.S. jobs lost during the pandemic have been in leisure and
hospitality employment. During the worst point of this crisis,
unemployment in the travel and tourism industry reached over 50
percent, more than double the National unemployment rate at the
height of the Great Depression.
Congress has sought to provide much needed support to help
the industry recover. The CARES Act provided urgently needed
relief to travel and tourism businesses in the form of grants,
emergency loans, and lines of credit. The fifth COVID relief
bill, which passed in December as part of the Fiscal Year 2021
Appropriations Act, expanded the industry's access to many of
these CARES Act relief programs.
More recently, the American Rescue Plan Act provided $750
million for the Economic Development Administration to help
communities impacted by the loss of travel and tourism.
Additionally, the bill included a $28.6 billion restaurant
revitalization fund for restaurants modeled after the
bipartisan Restaurants Act, which I drafted with my friend,
Senator Sinema, a member of this subcommittee. The Small
Business Administration has been tasked with standing up the
restaurant fund, and the SBA may start allocating grants very,
very soon.
Federal resources should help shore up the travel and
tourism sector, but I recognize the impacts of the pandemic
will be long lasting. I hope our witnesses today will update
the Committee on the current status of the travel and tourism
industry, how the increasing availability of COVID-19 vaccines
affects opportunities for recovery, and ways the public and
private sectors can partner to help restore demand for travel
as the public health situation improves--continues to improve.
It may take years to restore travel and tourism to its pre-
pandemic levels, but I hope not. I am hopeful that this
subcommittee can identify bipartisan opportunities to help the
sector heal and prosper much sooner than that. Thank you, Madam
Chair.
Senator Rosen. Thank you. Thank you, Senator Wicker. And I
appreciate you being Chairman, Chairman and Ranking Member.
Right now, I would like to welcome via WebEx, Senator Cortez
Masto. She is my partner in representing Nevada in the Senate.
She is a tireless advocate for travel and tourism industry. And
I would like to welcome her to introduce to the Subcommittee
our witness from Las Vegas. Senator Cortez Masto, I turn it to
you to introduce Mr. Hill.
STATEMENT OF HON. CATHERINE CORTEZ MASTO,
U.S. SENATOR FROM NEVADA
Senator Cortez Masto. Chair Rosen, thank you so much.
Ranking Member Scott, I really appreciate the opportunity to
join you today. It is great to be back in the Commerce
Committee that I enjoyed serving on when I first came to the
Senate. This committee does great work promoting our science,
transportation, technology sectors and gives Congress the
ability to hold hearings on important sectors like this one on
tourism. As you know and as you have stated, tourism is vital
to the economic health of our country.
I so appreciate you bringing these experts to talk about
the importance of the travel industry to Nevada and to the
Nation as a whole. All of these participants are great partners
and leaders in the travel industry, which has been so hard hit
by the COVID-19 pandemic. And our tourism economy will need our
full support as the Nation recovers. That is why I have been
working in a bipartisan way on the Hospitality Congress Job
Recovery Act with Senator Cramer, along with a bipartisan Step
Act with Senators Blunt and Klobuchar, and the Travel Act that
I am about to introduce to help elevate tourism at the
Department of Transportation.
With that, I appreciate the chance to be here and introduce
Steve Hill. Steve has been an economic champion in Nevada for
many years. Since being named the CEO and President of the Las
Vegas Convention and Visitors Authority in 2018, Steve has done
a great job of creating more opportunities for Southern Nevada
to be an even more inviting place for our visitors every year.
From completion of the Convention Center expansion, to the
innovative people mover system, and now weathering this health
and economic crisis, Steve has been a solid and steady hand in
working to bring us out of this critical challenge to our state
and local economy.
I appreciate his partnership on many of the legislative
efforts that we have worked on as a Nevada delegation. And
again, I appreciate the Committee bringing his expertise in for
this hearing today. Thank you.
STATEMENT OF STEVE HILL, CEO AND PRESIDENT, LAS VEGAS
CONVENTION AND VISITORS AUTHORITY
Mr. Hill. Thank you, Senator Cortez Masto. That was a very
kind introduction. And thank you, Chair Rosen, Ranking Member
Scott, for inviting me to be here today. I don't know if it is
appropriate to congratulate you on the formation of this
subcommittee, but it seems like the right thing to do. And so I
would like to congratulate you and also add the appreciation of
our industry for doing so. We have great supporters, and
Senator Cortez Masto and Senator Rosen, I know they represent
Nevada well in our tourism industry.
Well, in the Senate, we have really appreciated being able
to work with them on much of the legislation that they
sponsored on behalf of the travel industry, so thank you very
much. And I am going to emphasize really some of the things
that you have already said. Our industry is central to the U.S.
economy. It is a big part of the U.S. economy, and it is
critical to the recovery of the U.S. economy. As you mentioned,
the full strength our industry supports 16 million jobs in the
United States, one in every nine jobs. It is one of the seventh
largest industries in the country, and it was certainly the
industry most affected by the pandemic.
When our industry is suffering, it's large enough, it has a
big enough impact that it is felt throughout all of our
communities. It affects all of our suppliers and service
providers. And that is from those that you think of initially
from restaurants and local attractions, but also the cab
drivers and laundries and the construction workers who set up
trade shows. The list goes on. Tourism is a significant driver
in every state, but this is particularly true in Nevada, where
as Senator Rosen mentioned hospitality supports one in four
Nevada jobs, two and a half times the National average. The Las
Vegas Convention and Visitors Authority is a unique
organization in that we are the only entity in a major city in
the United States to serve as both the destination marketing
organization as well as the Convention and Visitors Bureau. As
with many convention centers throughout the country, our
mission certainly expanded over the last year, and it includes
doing what we could to help the community respond to the
pandemic.
We are the state's largest COVID test center. We are
currently the state's largest vaccine site. We are a FEMA
distribution center. We provided space for courtrooms, for
addiction assistance. We have space and the community needed
space, and we were happy and proud to be a part of all of those
efforts. We recently purchased the Las Vegas monorail system
after it was forced to close due to the pandemic. We needed to
preserve this important transportation system. And through the
last year, we finished the construction of our 1.4 million
square foot expansion, and you may have seen last week
showcased on the first commercial application of Elon Musk, the
Boeing Company's innovative transportation system, which now
runs underneath the campus of our convention center. We are
here looking forward to both recovery and return to prosperity,
and we do hope to be able to speed that up. People in this
industry need that. They need their jobs back.
Our State and local Governments need this industry to
recover to generate the tax revenue they count on, to provide
services. Our customers need to travel, frankly. They need to
see their family and friends they haven't seen in the last
year. They need to meet a potential new customer, to experience
a new culture, or frankly, just to set aside what has happened
over the last year and get away for a few days. The first step,
part of the recovery, as you all mentioned, will be moving
beyond the health crisis and continuing the vaccination process
is the key to making that happen. We need to get to the point
now where social distancing is no longer necessary.
Like many destinations, Las Vegas doesn't work well without
a crowd. And we are optimistic that we are on the cusp of that.
We think that it has the ability to happen soon. But once
beyond the health crisis, our industry will be faced with a
situation that is roughly equivalent to the depths of the Great
Recession. That will be where we are once we get past the
health crisis and are just simply dealing with the economic
fallout as a result. Domestic and leisure travel will recover
first, and it is already doing so. We are seeing strength
there. But business travel and international travel will
certainly take longer. The LVCVA receives a good portion of our
funding through a fixed percentage of room tax, and it is a
good indicator of the health of our tourism and hospitality
industry. Typically, we would receive about $300 million a
year. In our current Fiscal Year, which ends in June, we will
receive about $100 million. So about a third of our normal
revenue. We are projecting next year that we will receive about
70 percent of our normal room tax revenue. So we will show
improvement, but it is only about halfway to where we need to
be over the next 12 months.
Because the LVCVA is involved in a number of ways--I will
just mentioned the transportation and transportation
infrastructure in all forms will be a key to recovering fully
and having real growth from there. I was honored to serve on
the National Advisory Committee on Travel and Tourism
Infrastructure 2 years ago. The report we issued then was
relatively brief and contained a focused set of
recommendations. The key recommendation was to create a
National travel infrastructure strategy. We have a National
freight plan, but we do not have a full National travel plan.
Corridors of regional significance need to be a focus of that
strategy. In the West and in Nevada, our state I-15 is one such
corridor that affects states, that runs directly through from
California to Montana, as well as neighboring states such as
Wyoming and Colorado. And the importance of that corridor can
be seen in the makeup of this committee, where half of this
committee represents states affected by I-15.
So we look forward to working with you, Senator Rosen, on
the formation of an I-15 caucus in Congress, and we thank you
for your help with that. And again, I would like to thank you,
Ranking Member Scott, all the members of the Committee for the
opportunity to be before you here today. Thank you for all you
have done and all you will do for the travel industry.
[The prepared statement of Mr. Hill follows:]
Prepared Statement of Steve Hill, CEO and President, Las Vegas
Convention and Visitors Authority
Thank you, Chairwoman Rosen and Ranking Member Scott for inviting
me before the subcommittee today to speak on the impact of the COVID-19
pandemic on travel and tourism. I also want to thank Chairwoman
Cantwell and Ranking Member Wicker of the full committee.
Congratulations on the formation of this subcommittee. The additional
spotlight on the tourism industry is acutely needed right now; we
appreciate your efforts to bring our issues to the forefront.
Our industry is central to the U.S. economy; in 2019, domestic and
international travelers spent $1.1 Trillion which equates to 3 percent
of the U.S. GDP and supported approximately 15.8 Million jobs \1\.
While every economic sector was affected to some degree by the COVID-19
pandemic, the health and safety measures required to battle the spread
of the virus, brought our industry to a virtual standstill with a 42
percent decline in U.S. economic output and a 34 percent reduction in
jobs \2\.
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\1\ US Travel Association
\2\ US Travel Association
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This industry is a significant economic driver of Las Vegas, its
surrounding communities and the State of Nevada. The Las Vegas
Convention and Visitors Authority acts as an economic engine for the
region; our mission is to promote Las Vegas as a premier destination
for both business and leisure travelers; delivering both visitors and
economic prosperity for the region. We create iconic global campaigns
that deliver on our brand promise, growing and sustaining tourism.
As the only Destination Marketing Organization in the Nation that
owns a convention center, we have a unique perspective as both
promoter, and stakeholder of the travel and tourism economy. We are the
proud owner of the largest column-free convention space in the world,
as the LVCVA has 4.6 Million square feet of convention space that is
the home to the Consumer Electronics Show, World of Concrete, Mecum
Auto Auctions and more. In a nonpandemic year, we average roughly 60
conventions and 20 special events with a combined total of over 6.5
Million convention attendees.
In order to both serve the region and position the destination as a
global leader, we have focused on innovation to help us develop more
efficient and sustainable travel infrastructure for both visitors and
the workforce who call Las Vegas home.
We recently acquired the region's only monorail system which serves
as a quick and safe public transportation option for visitors and area
residents to travel between key Las Vegas destinations. Additionally,
we partnered with The Boring Company to create the Las Vegas Convention
Center Loop which will allow our conventiongoers to navigate our large
convention center campus through a revolutionary underground
transportation system when it opens in less than a month.
While we have worked hard not to slow down our innovation agenda,
the COVID-19 pandemic hit tourism the hardest and Las Vegas, harder
still. Our identity as a world-renowned tourism destination, and the
thousands of regional jobs that support it, were jeopardized as Las
Vegas dimmed its lights to keep not only our residents safe, but
contribute to the global effort to combat COVID-19. In 2020, visitor
volume plummeted by 45 percent or to 19 Million, compared to over 42
Million visitors in 2019 \3\. Revenue for our organization, which is
driven by visitors is down 70 percent, and tourism revenue for the
region is down by over 50 percent, and for the state of Nevada, 25
percent \4\.
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\3\ LVCVA Research Center
\4\ LVCVA Research Center
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The resulting economic downturn, as inevitable as it was necessary,
placed Nevada once again at the forefront of an unemployment crisis for
the second time in a generation. As I speak, it remains one of the
highest unemployment figures in the nation, at around 8 percent down
from a peak of 13 percent in the depths of the pandemic \5\. The
effects were felt even more acutely in Las Vegas, which peaked at
almost 15 percent and hovers now at 10 percent \6\. The LVCVA itself
has had to furlough 49 percent and layoff 20 percent of our workforce
in order to survive the pandemic related downturn. Although we were
financially challenged, we maintained our commitment to our workforce
and community, providing health insurance for our furloughed staff and
serving as a COVID-19 testing site, administering over 85,000 tests in
10 months.
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\5\ US Bureau of Labor Statistics
\6\ US Bureau of Labor Statistics
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In order to recover, Las Vegas needs to fully reopen. In order to
reopen, several factors must take place.
First--vaccine penetration must become widespread. Our Convention
Center is a vaccine distribution location, administering over 150,000
vaccines to date. Clark County has administered over one million
vaccines and the state of Nevada is coming along with 34 percent
vaccine penetration for our population. We are optimistic those numbers
will quickly improve as Nevada moved early to offer doses to all adults
16 and older.
In addition to vaccines, the U.S. needs to open international
travel. Las Vegas relies on international visitors to deliver a
significant percentage of our tourism revenue. Initiatives like
replacing quarantine rules with streamlined and uniform testing rules
would ensure visitors are healthy and remove the onerous and often
unenforceable burden of isolation that many now experience.
Finally, implementing new safety protocols will allow our
businesses to stay open in the event of future health concerns.
Chairwoman Rosen is leading the effort in the Senate to help small
businesses meet the challenge of updating safety infrastructure through
the FRESH Air Act, which incents the installation of new air filtration
systems which can help reduce the spread of viruses such as COVID-19.
We thank you, Madam Chairwoman for your leadership on this issue.
The LVCVA has taken several steps to improve air filtration and
ventilation throughout the convention center campus such as increasing
total airflow supply and the percentage of circulated outdoor air, per
CDC recommendations. We were recently awarded the Global Biorisk
Advisory Council, GBAC-STAR facility accreditation from the Worldwide
Cleaning Industry Association. This is the gold standard for safe
facilities and ensures we have gone above and beyond to address visitor
and employee safety aligned with not only state and local directives,
but with emerging global standards.
As we reopen Las Vegas and our Nation to leisure and business
travel, the LVCVA intends to continue on its path to innovate the
travel experience in Las Vegas for the benefit of our visitors, our
environment and our workforce.
As the pandemic and its lingering effects change the way Americans
travel, we expect more vehicular traffic coming in and out of the Las
Vegas area. I-15, stretching from Los Angeles to Las Vegas and north to
Salt Lake City, is already one of the most heavily trafficked stretches
of highway in the Nation and was identified by the U.S. Department of
Transportation as one of the Nation's ``Corridors of the Future.'' The
congestion issues along I-15 not only create delays and safety
challenges for travelers and freight, but also degrades air quality
throughout the region.
To focus regional attention on this vital economic corridor, we are
working with Members of Congress to form a Congressional I-15 Caucus
and we thank you Chairwoman, for working to make this Caucus a reality
in the Senate. We look forward to partnering to find modern solutions
to support the vitality of the corridor.
Additionally, as we look ahead, we are partnering with our regional
transportation authorities, the Nevada Department of Transportation,
the Southern Nevada Regional Transportation Commission and the Nevada
Governor's Office of Economic Development to develop a regional
infrastructure plan that connects tourism and visitor traffic to the
overall picture of travel in the area.
We are proud of the role Las Vegas played in keeping Americans and
Nevadans safe over the past year, but it was not without significant
sacrifice on the part of the tourism workforce--the lifeblood of our
community.
As we have in the past, we will recover. Again, I thank you for
inviting me today, and I am happy to take any questions you may have.
Senator Rosen. Next is Jorge Perez, Regional Portfolio
President at MGM Resorts International. Mr. Perez oversees the
strategic direction for eight of MGM's Resorts properties. Mr.
Perez is an industry veteran with 25 years of experience in the
hospitality industry. Mr. Perez, I recognize you for your
opening remarks.
STATEMENT OF JORGE PEREZ, REGIONAL PORTFOLIO PRESIDENT, MGM
RESORTS INTERNATIONAL
Mr. Perez. Good afternoon. Thank you, Chairwoman Rosen,
Chairwoman Cantwell, Ranking Member Scott, and Ranking Member
Wicker, and members of the Subcommittee. As you mentioned, my
name is Jorge Perez. I am the Regional Portfolio President. I
oversee the eight regional domestic properties for MGM Resorts
outside of Las Vegas. And I appreciate the opportunity to
provide testimony on behalf of our organization and to share
some of our experiences during this incredibly challenging
year. MGM Resorts International is a global entertainment
company with 29 unique hotels and gaming destinations across
eight States and Macao. Last year was one of the most difficult
years ever faced by our industry, our company, and by our
employees.
MGM first felt the impacts of the pandemic at our
properties in Macao, which closed in February 2020, and shortly
thereafter in March 2020, our regional properties were closed
and then eventually our Las Vegas properties, leaving the strip
closed for the very first time in its history. Like many, we
face a number of difficult decisions, including having to
furlough a significant portion of our work force. But during
this time of great hardship, our company and team members
sought ways to demonstrate care and compassion for one another,
and for the most impacted in our communities. We provided
extended health benefits for our employees and their families.
We dispersed over $15.5 million to help employees during the
pandemic via our employee emergency grant fund. And within days
of shutting down, we donated hundreds of thousands of meals to
people in need.
MGM also helped to procure much needed PPE for medical
professionals, including masks, gowns, and gloves. We continue
to focus on our commitment to the communities that have
welcomed us, to give generously to our neighbors and embody our
core values, embracing humanity every day. While it has been a
year of hardship, it has also been a year of innovation and
change. When we reopened our properties, we drastically
overhauled our operations.
MGM implemented comprehensive protocols via our seven point
health and safety plan, which included installation of
plexiglass dividers, handwashing stations across our resorts,
digital innovations, including touchless menus in restaurants
and our bars, the ability for our guests to check-in utilizing
a mobile phone, enhanced HVAC protocols, temperature testing
for team members and our guests, and on-site rapid COVID-19
test for our events, just to name a few.
As the world strives to return to normal, we appreciate the
continued leadership and support of the Federal Government. The
coronavirus relief bills passed by Congress helped so many
around the country, our furloughed employees with extended
unemployment benefits, our small business partners through the
Paycheck Protection Program, and MGM through the Employee
Retention Tax Credit, which helped provide extended health
benefits for employees and their families. Notwithstanding
these efforts, the country's travel and tourism industries and
our workers have been hit disproportionately hard. Nationwide,
as mentioned earlier, travel spending was down $500 billion,
costing the U.S. economy about $1.1 trillion.
At the current pace, the travel industry is not expected to
fully recover until 2025, but we are hopeful the recovery will
arrive much sooner. There are key political initiatives that
can help our industry achieve a speedy recovery and the nearly
16 million American workers that it employed before the
pandemic. One of the biggest policy priorities for the
traveling tourism industry is the bipartisan legislation
introduced by Senator Catherine Cortez Masto and Senator Kevin
Cramer, the Hospitality and Commerce Job Recovery Act of 2021,
which provides various tax credits to stimulate our industry.
Additionally, it would assist the convention and trade show
sector, which was disproportionately impacted and is so crucial
to the industry's recovery. We also welcome the safe and
science-based easing of Government restrictions, which will
permit us to bring back more of our world renowned amenities to
a greater number of guests, allowing us to bring back more of
our employees. At MGM, we understand the need to remain
diligent and maintain our focus on the well-being of our
employees and our guests. Vaccination is a critically important
tool in helping to end a pandemic and accelerate our
community's economic recovery.
We are committed to doing anything we can to help get as
many people vaccinated as quickly as possible by removing
barriers to access and bringing vaccination clinics directly to
our employees. It has been a difficult year, but there is great
reason for cautious optimism, and we are starting to see signs
of recovery. We at MGM Resorts await the ability to welcome and
entertain the world without restriction, and to help our guests
celebrate life to its fullest. Thank you for the opportunity to
present testimony today.
[The prepared statement of Mr. Perez follows:]
Prepared Statement of Jorge Perez, Regional Portfolio President,
MGM Resorts International
Chairwoman Rosen, Ranking Member Scott, and Members of the
Subcommittee:
My name is Jorge Perez and I am the Regional Portfolio President
for MGM Resorts International. I appreciate the opportunity to provide
testimony on behalf of MGM Resorts and our experience during the past
year as the country and the world has been ravaged by the coronavirus
pandemic.
MGM Resorts International is a global entertainment company with 29
unique hotel and gaming destinations across eight states domestically
and Macau. Last year was one of the most difficult years ever faced by
our industry, company, and employees. The coronavirus has created a
worldwide crisis, a disruption and uncertainty at a scale that would
have been unimaginable before 2020.
MGM Resorts first felt the impacts of the pandemic at our
properties in Macau, which closed on February 5, 2020. In March of
2020, each of our regional properties closed. And those shutdowns were
followed by Las Vegas--with the Las Vegas Strip going dark for the
first time in its history. Our properties in Las Vegas and regionally
were closed for months. Like many, MGM Resorts faced a number of
difficult decisions, including widespread furloughs and workforce
reductions. We furloughed as many as 60,000 members of our team.
During this time of great hardship, MGM Resorts and our team
members sought ways to demonstrate great care and compassion for one
another and for those most impacted in our communities.
MGM Resorts provided extended health benefits for tens of thousands
of employees and their families. Our MGM Resorts Foundation Employee
Emergency Grant Program disbursed over $15.5 million to help employees
pay for financial difficulties faced during the pandemic, covering over
21,000 bill payments. Thanks to the tenacity of our chefs and our long-
standing community partnerships, within days of shutting down, MGM
Resorts donated more than 662,000 pounds of food--or 552,000 meals-to
various community organizations.
We also worked to help with the significant shortage of personal
protective equipment (PPE) for our medical professionals. MGM Resorts
leveraged our supply chain, procurement capabilities, and other
resources to provide urgent logistical support to manage supply
shortages. Through our colleagues in Macau, we procured and delivered
261,000 gowns, 200,000 gloves, and 500,000 KN-95 masks in Nevada. We
continue to focus on our commitment to the communities that have
welcomed us, to give generously to our neighbors, and embodying our
core value of embracing humanity every day.
Due to the pandemic, families and friends were unable to get
together. Your committee, and others, have needed to adjust how you
work and we are here today, joining each other virtually. Just as the
Nation and the world, and this committee, has had to adjust their way
of living, MGM Resorts has had to adjust our way of conducting
business.
While it has been a year of hardship, it has also been a year of
innovation and change. When we reopened our properties, we overhauled
our operations drastically. Developed in consultation with scientific,
medical, and public health experts, we implemented comprehensive health
and safety protocols, including installing plexiglass dividers and
handwashing stations throughout our resorts; digital innovations such
as contactless check-in/check-out and restaurant menus; enhanced HVAC
protocols; temperature testing for team members and guests; and on-site
rapid COVID-19 testing for events, just to name a few.
As the world strives to return to normal, we appreciate the
continued leadership and support of the Federal government. Coronavirus
relief bills passed by Congress helped so many around the country--
whether it be our small business partners through the Paycheck
Protection Program or MGM through the Employee Retention Tax Credit
(ERTC), which helped us in our efforts to provide extended health care
benefits to our employees and their families while our properties were
shuttered.
Notwithstanding these efforts, the country's travel and tourism
industries, and our workers, have been hit disproportionally hard. At
MGM Resorts, our Las Vegas resorts were particularly impacted versus
our Regional properties as both domestic and international customers
chose to stay closer to home and their mid-week reliance on the
Convention and Trade Show sector. Our Regional Resorts experienced a
slight benefit from the lack of competition in local markets as dining
and entertainment options were limited.
Nationwide, travel spending was down $500 billion, costing the U.S.
economy $1.1 trillion. At the current pace, the travel industry is not
expected to fully recover until 2025 \1\. We are hopeful that this
estimate is not accurate, and that recovery will arrive much sooner
than 2025. There are key policy initiatives that can help the
industry--and the nearly 16 million American workers it employed before
the pandemic--achieve a speedier recovery.
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\1\ U.S. Travel Association
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One of the biggest policy priorities for the travel and tourism
industry is the bipartisan legislation introduced by Senator Catherine
Cortez Masto (D-NV) and Senator Kevin Cramer (R-ND), the Hospitality
and Commerce Job Recovery Act of 2021 which provides individual tax
credits to stimulate nonbusiness travel, restores the entertainment
business expense deduction, and would provide tax relief for
restaurants and food beverage companies. Additionally, it would assist
the convention and trade show industry, which saw a year-over-year
decline of 98.3 percent from the fourth quarter of 2019 to 2020 \2\.
The bill would establish a temporary tax credit to support the industry
by providing tax credits for costs associated with reopening convention
and trade show facilities, including any renovation, remediation, PPE,
cleaning, testing, or associated labor costs. We are looking forward to
welcoming conventions back to our resorts and welcoming them back
safely.
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\2\ Center for Exhibition Industry Research
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We welcome the safe and science-based easing of government
restrictions, which will permit us to bring back more of our world-
renowned amenities to a greater number of guests, allowing us to bring
back more employees. At MGM Resorts, we understand the need to remain
vigilant and maintain our focus on the wellbeing of our employees and
our guests. Vaccination is a critically important tool in helping to
end the pandemic and accelerate our community's economic recovery. We
are committed to doing all that we can to help get as many people
vaccinated as quickly as possible by removing barriers to access and
bringing vaccination clinics directly to our employees in Nevada,
Michigan, and other states where we operate. Throughout our footprint,
we have worked with local partners to offer vaccinations to our
employees at no cost.
It has been a difficult year, but there is great reason for
cautious optimism. We at MGM Resorts await the ability to welcome and
entertain the world without restriction and to help our guests
celebrate and live life to its fullest.
Thank you for the opportunity to present my testimony.
Senator Rosen. Thank you, Mr. Perez. Testifying next is
Tori Emerson Barnes, Executive Vice President of Public Affairs
and Policy at the U.S. Travel Association. Ms. Barnes leads the
U.S. Travel Association's Government relations, policy
development, communications, marketing, and research teams. Ms.
Barnes is here with us today in person. And I recognize you for
your opening remarks.
STATEMENT OF TORI EMERSON BARNES,
EXECUTIVE VICE PRESIDENT, PUBLIC AFFAIRS
AND POLICY, U.S. TRAVEL ASSOCIATION
Ms. Barnes. Thank you, Chair Rosen and Ranking Member Scott
and members of the Subcommittee. Good afternoon. I am Tori
Emerson Barnes, Executive Vice President of Public Affairs and
Policy for the U.S. Travel Association. We are the only
Association that represents all sectors of the travel industry,
and I am very happy to be here in person and grateful for the
leadership that you are putting forward here today. Before the
pandemic, $1.1 trillion in travel spending generated $2.6
trillion economic impact and supported 16 million American
jobs. This came to a halt at the onset of the pandemic.
Last year, travel spending fell 42 percent, costing the
economy $500 billion in lost travel spend. International
inbound visitation declined 76 percent and business travel
spending fell 70 percent. Additionally, 5.6 million travel-
supported jobs were lost, accounting for 65 percent of all jobs
lost to the pandemic. At the State level, Nevada, Florida, and
Washington State suffered travel spending declines of more than
40 percent. Travel spending fell 26 percent in Mississippi.
Currently, the travel industry is expected to take 5 years to
recover from this crisis, and that is far too long to wait.
While we expect domestic leisure travel to recover more
quickly, a full rebound is not certain, and it won't make up
for losses in other segments.
Professional meetings and events, which are the travel
industry's largest generator of spending revenue, are still
restricted in many states. This sector is projected to take 4
years to recover. And with our borders still closed to much of
the world, international travel to the U.S. will take as many
as 5 years to return to pre-pandemic levels. With the
uncertainty around reopening, it could be even longer. U.S.
Travel has identified four key priorities to restore travel
demand, accelerate rehiring, and shorten the recovery timeline.
First, we must safely and quickly reopen international travel.
We have the right protections in place to safely reopen, but we
don't have clear public health benchmarks or a definitive
timeline to return--to open our borders. U.S. Travel has urged
the Biden Administration to develop, by this May, a roadmap and
a timeline for lifting entry restrictions with the goal of
reopening international travel by July.
We can start by establishing public health corridors
between the U.S. and other low risk countries such as the
United Kingdom. Second, the CDC should approve clear guidance
that states and localities can use to lift restrictions and
safely restart professional meetings and events. Nearly all
sectors of the economy have clear guidelines to allow them to
reopen amid the pandemic. Business meetings are distinct from
other mass gatherings due to the level of control that can be
implemented and should not remain closed while the rest of the
economy is given the green light to reopen. Third, Congress
should enact the Hospitality and Commerce Jobs Recovery Act to
spur demand and accelerate rehiring. This bill would increase
travel demand among low to middle income families by providing
targeted and temporary refundable tax credits to travel while
also helping to boost demand, spending and rehiring.
The bill would also provide refundable tax credits to
encourage professional meetings and events to restart. Further,
Oxford Economics estimates that enacting this bill would
shorten the recovery timeline from 5 years to just three, while
creating an incremental 1.5 million jobs and generating nearly
$600 billion in spending. Fourth, Congress should provide
temporary emergency funding for Brand USA, America's
destination marketing organization. Over the last 7 years,
Brand USA's marketing efforts has generated a 26 to 1 return on
investment for the U.S. economy.
However, the drastic decline in ESTA fee collections due to
international travel restrictions, combined with scarce private
sector contributions during the economic crisis, have decimated
the program's funding. If Brand USA is unable to continue its
important work, international travel recovery will be severely
limited. Specific policies can also be implemented to improve
the industry's long term competitiveness and ensure that we
come back stronger than ever. These policies include passing
the Visit America Act, which Senator Sullivan introduced last
year to elevate travel leadership in the Federal Government.
This would strengthen the Commerce Department's role in
coordinating Federal travel policies and set consistent
National goals and strategies to boost travel exports.
Finally, investing in our country's infrastructure will
help facilitate travel and better prepare us to welcome back
visitors from around the world. By prioritizing infrastructure
investments now, the U.S. can emerge from the pandemic and
rebuild the travel industry with stronger, more connected
systems than ever before. We need the Federal Government to
enact the right policies to ensure all sectors of travel can
recover as quickly as possible.
And any delay in reopening any segment will only hurt our
economy further. Thank you again for inviting the travel
industry to testify today on such a devastating economic impact
of the pandemic, and I welcome your questions. Thank you.
[The prepared statement of Ms. Barnes follows:]
Prepared Statement of Tori Emerson Barnes, Executive Vice President,
Public Affairs and Policy, U.S. Travel Association
Chairwoman Rosen, Ranking Member Scott, Chairwoman Cantwell,
Ranking Member Wicker, and members of the subcommittee, good afternoon.
I'm Tori Emerson Barnes, Executive Vice President of Public Affairs
and Policy for the U.S. Travel Association. Thank you for inviting the
travel industry to participate in this critically important hearing.
U.S. Travel is the only association that represents all sectors of
the travel industry--airports, airlines, hotels, state and local
tourism offices, cruise lines, car rental companies, theme parks and
attractions and many others. All of these sectors of travel are crucial
to our broader industry's economic revival and should be treated
equitably as we develop strategies to restart and restore widespread
travel.
Before the devastating COVID-19 pandemic, $1.1 trillion in traveler
spending in the U.S. generated a $2.6 trillion total economic impact
and supported 15.8 million jobs in 2019.\1\ Travel was the second
largest industry export and largest service industry export, generating
a trade surplus of $51 billion.
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\1\ https://www.ustravel.org/system/files/media_root/document/
Research_Fact-Sheet_US-Tra
vel-Answer-Sheet.pdf
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This all came to a halt at the onset of the public health crisis.
As this subcommittee is well aware, travel and tourism is the hardest-
hit industry in the economic fallout of the pandemic. And now we know
what happens when the world stops moving: Economies and livelihoods are
decimated. In 2020, travel spending in the U.S. plummeted 42 percent,
costing the U.S. economy $500 billion in lost travel spending.\2\ Both
Nevada and Florida suffered travel spending declines of more than 30
percent. Travel spending tumbled 44 percent in Washington and 22
percent in Mississippi.\3\
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\2\ https://www.ustravel.org/system/files/media_root/document/
Research_Fact-Sheet_Indus
try-Table.pdf
\3\ https://www.ustravel.org/research/travel-recovery-insights-
dashboard?utm_source=Magnet
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mail&utm_content=3%2E25%2E21%20%2D%20COVID%20Research%20
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These spending declines gutted the travel workforce: 5.6 million
travel-supported jobs were lost, accounting for 65 percent of all jobs
lost in the U.S.\4\
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\4\ https://www.ustravel.org/system/files/media_root/document/
Research_Fact-Sheet_Indus
try-Table.pdf
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Currently, the travel industry is expected to take five years to
recover from this crisis; that is far too long to wait. While we expect
domestic leisure travel to be the segment of our industry that recovers
the fastest, a rebound is not inevitable. Low-to-middle income families
have been hardest-hit by the pandemic and research shows they are less
likely to travel in the next year. Business meetings, conventions and
events are still severely restricted in many states, and this sector--
which also happens to be the largest revenue generator and job
creator--is projected to take four years to recover. And, with our
borders still closed to much of the world, international travel to the
U.S. will take more than five years to return to pre-pandemic levels--
and with the uncertainty around reopening, it could even longer.
We must implement the right strategies now to restart widespread
travel. U.S. Travel has identified four key priorities to restore
travel demand, accelerate rehiring and shorten the timeline for
recovery:
1. First, we must safely and quickly reopen international travel.
2. Second, the CDC should approve clear guidance to safely restart
professional meetings and events.
3. Third, Congress must enact the Hospitality and Commerce Job
Recovery Act to spur incremental demand and accelerate
rehiring.
4. Fourth, Congress should provide temporary emergency funding for
Brand USA to welcome visitors back to the U.S.
Specific policies can also be implemented to improve the industry's
long-term competitiveness and ensure we come back stronger and better
than ever, such as:
1. Enact the Visit America Act to establish permanent leadership in
Federal government on travel policies.
2. Invest in repairing and modernizing travel infrastructure.
Reopen international inbound travel
First, U.S. Travel has urged the Biden administration to set, by
this May, a timeline for lifting entry restrictions and reopening
international travel. If nothing is done to restore international
travel, a total of 1.1 million American jobs and $262 billion in
spending will be lost by the end of 2021.\5\
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\5\ https://www.ustravel.org/sites/default/files/media_root/
International%20reopening%20fact
%20sheet%20data_2021.pdf
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However, our research shows that if the U.S. can restart
international travel by the second quarter of this year, it can have a
dramatic impact on restoring jobs. If international travel from the top
inbound markets (such as the United Kingdom, Canada and the European
Union), can reach an average of just 40 percent of 2019 levels by the
end of 2021, we can restore an additional 225,000 jobs and $30 billion
in travel exports this year alone.\6\
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\6\ https://www.ustravel.org/sites/default/files/media_root/
International%20reopening%20fact
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Even small steps will go a long way. For example, if the U.S. can
quickly establish a public health corridor between the U.S. and the
U.K.--while avoiding quarantines upon arrival--it could add 1.9 million
arrivals and $4.4 billion in spending in 2021 alone.\7\
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\7\ https://www.ustravel.org/sites/default/files/media_root/
International%20reopening%20fact
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The good news is that we can reopen international travel without
compromising safety. A Harvard study found that the risk of COVID-19
transmission while flying is already low and the Federal mask mandate
has made flying even safer.\8\ All inbound international passengers
must now provide proof of a negative COVID-19 test within 72 hours of
departure, effectively eliminating the need for quarantines. Further,
the Centers for Disease Control and Prevention's (CDC) own guidance
says that fully vaccinated travelers are less likely to get and spread
COVID-19.\9\ Finally, the vaccination rate among U.S. adults is growing
rapidly each day and as we begin to reach a staturation point,
vaccinated individuals ought to be able to come to the U.S. without
having to have proof of a negative COVID test.
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\8\ https://cdn1.sph.harvard.edu/wp-content/uploads/sites/2443/
2020/10/APHI-Phase-I-Press
-Release.pdf
\9\ https://www.cdc.gov/coronavirus/2019-ncov/ travelers/travel-
during-covid19.html
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While we have the right protections in place to restart
international travel and keep our country safe, we do not have clear
public health benchmarks or a definitive timeline to reopen our
borders. The CDC, Department of Transportation, Department of Homeland
Security and other agencies must quickly come together to develop a
data-driven, risk-based roadmap by May to rescind international inbound
travel restrictions by July 2021.
This plan should start by quickly establishing ``public health
corridors'' between the U.S. and other low-risk countries, like the
U.K. The CDC should then use clear benchmarks, such as infection and
vaccination rates, to determine when entry restrictions can be lifted
for other countries. The development of uniform Federal standards for
digital health credentials can also facilitate safe travel. While
vaccines should never be a requirement to travel, digital health
credentials can verify both test results and vaccination history,
protect personal privacy, and work across local, state and
international borders.
The subcommittee can help impress upon the White House and other
agencies the urgent need to develop this plan and support them in
developing it.
Restart professional meetings and events
Similar to international travel, our industry cannot recover
without a resumption of professional meetings and events. Business
travel spending in the U.S. fell 70 percent from $348 billion in 2019
to just $103 billion in 2020. To put this in real terms, as leisure
travel businesses and destinations are experiencing slight increases in
demand, convention hotels remain empty. Restaurants, caterers, event
organizers and AV companies are without customers. Rental car lots are
full. Business travel, including professional meetings and events, is
one of the most lucrative and important segments of travel and it must
be restored in order to get the industry back on its feet.
It must be acknowledged that it is possible to resume professional
meetings and events safely. Professional meetings and events are
distinct from other mass gatherings due to the level of control that
can be implemented, and therefore should not be singled out while the
rest of the economy is given the greenlight to reopen. The CDC should
provide or approve safety guidance--such as mask wearing, sanitation
and physical distancing--that states and localities can use to lift
restrictions on small, medium and large business events. The Federal
government must embrace the leadership role it can play in helping to
restart this vital sector of the economy responsible for so many good-
paying jobs.
Enact the Hospitality and Commerce Job Recovery Act
Simply reopening international and business travel won't be enough
on its own. Congress can play a direct role in shortening the timeline
for recovery and quickly restoring jobs in every region of the country.
In the travel industry, hiring is directly connected to demand.
When demand for travel increases and customers return, travel
employment happens immediately. But, as mentioned previously, travel
demand and employment are forecast to take five years to reach 2019
levels. However, we can accelerate demand and rehiring by enacting the
Hospitality and Commerce Job Recovery Act (HCJRA).
While domestic leisure travel will come back first, the rebound in
demand will not be equitable. Research by McKinsey shows that low-to-
middle income families, who have been hit hardest by the pandemic, are
29 percent to 16 percent less likely to travel in 2021 compared to
high-income families. The HCJRA would focus on increasing travel demand
among all households by providing targeted and temporary refundable tax
credits for low-to-middle income families to take a trip, while
simultaneously helping to boost spending, demand and rehiring.
The bill would also provide refundable tax credits to encourage the
resumption of business meetings, conventions and events, and defray the
costs of hosting these job-generating gatherings.
Together, with other targeted measures in the bill, Oxford
Economics estimates that enacting the HCJRA would shorten the recovery
timeline from five years to just three, while creating an incremental
1.5 million jobs and generating nearly $600 billion in spending.
Support and protect Brand USA
Third, we are asking Congress to support $250 million in emergency
funding for Brand USA, the United States' destination marketing
organization. Brand USA does the important work of promoting the U.S.
to international visitors. Over the past seven years, Brand USA's
marketing efforts have generated 7.5 million incremental visitors to
the U.S. who spent nearly $25 billion, supporting more than 50,000
incremental jobs each year.\10\
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\10\ https://www.thebrandusa.com/media/newsletters/article/brand-
usa-fiscal-year-2019-roi-
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However, the drastic decline in ESTA fee collections (which fund
Brand USA, in part) due to international travel restrictions and scarce
private sector contributions amid the economic crisis has severely
diminished the program's funding. If Brand USA is unable to continue
its work of promoting the U.S. once borders reopen, the international
inbound travel segment's recovery will be severely hampered. We cannot
restore international travel or compete in the global travel market
without Brand USA.
Advance the Visit America Act
Fourth, there are also measures that Congress can enact to make
America's travel industry stronger and more globally competitive than
ever before.
The Visit America Act, which was introduced by Senator Dan Sullivan
in the last session of Congress, would strengthen the Commerce
Department's role in coordinating Federal travel policies, set
consistent national goals to boost travel exports and develop clear
strategies to achieve them.
The bill importantly creates the role of Assistant Secretary of
Commerce for Travel and Tourism, who would be responsible for setting
an annual goal for the number of international visitors to the U.S.,
providing support for improved visitor visa processing and promoting
travel exports. Specifically, the bill directs the Department of
Commerce to develop a 10-year travel and tourism strategy with the goal
of achieving, by 2028, 116 million annual international visitors to the
U.S. and $445 billion in travel exports.\11\ The U.S. is the only
country among the top 30 destinations worldwide that does not have a
cabinet- or subcabinet-level leadership for travel, putting the U.S. at
a competitive disadvantage.
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\11\ https://www.congress.gov/bill/116th-congress/senate-bill/3831
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As travel exports declined 64 percent from $234 billion in 2019 to
just $83 billion in 2020, a Federal strategy to boost travel exports
will be vital to the travel industry's overall recovery.\12\
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\12\ https://www.ustravel.org/system/files/media_root/document/
Research_Fact-Sheet_Indus
try-Table.pdf
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Improve America's travel infrastructure
Lastly, we are urging Congress to prioritize legislation to improve
America's travel infrastructure to facilitate domestic travel and to
better prepare to welcome back visitors from around the world.
Even before the public health crisis, cities and towns were growing
further apart due to aging, insufficient infrastructure and congested
roadways. By prioritizing infrastructure investments that enhance the
economic contributions of travel and improve passenger mobility, the
U.S. can emerge from the pandemic and rebuild the travel industry with
stronger, more connected infrastructure systems than ever before.
This committee has played a leadership role in establishing
national strategies, networks and programs to improve the mobility of
freight. It's time to develop and fund the same type of national
strategies and programs to improve the mobility of people. By ensuring
discretionary grant and formula programs target investments towards
projects that improve national travel mobility and achieve the goals of
the National Travel and Tourism Infrastructure Strategic Plan, this
committee can help change the way America moves.
Closing
One thing is clear: there are both challenges and opportunities
ahead. The travel industry will not recover on its own. Travel has
suffered more than any other industry throughout this crisis, and we
need the Federal government to enact the right policies to ensure all
sectors of travel can recover as quickly as possible. There is a great
deal at stake, and any delay in restarting widespread travel will only
hurt the economy further.
Thank you again for inviting the broader travel industry to testify
on the devastating economic impact of the pandemic on our industry. We
look forward to working with you on these solutions to restore this
crucial economic sector and I welcome your questions. Thank you.
Senator Rosen. Thank you, Ms. Barnes. Our final witness is
Carol Dover, President and CEO of the Florida Restaurant and
Lodging Association. Ms. Dover also serves as a member of
several boards, including the Board of Directors for the
National Restaurant Association, Council of State Restaurant
Associations, and International Society of Hotel Association
Executives. Ms. Dover, I recognize you via WebEx for your
opening remarks.
STATEMENT OF CAROL B. DOVER, PRESIDENT AND CEO, FLORIDA
RESTAURANT AND LODGING ASSOCIATION
Ms. Dover. Thank you, Chair Cantwell, Ranking Member
Wicker, and subcommittee Chair Rosen and Ranking Member Scott,
and other distinguished members for the opportunity to be here
to represent Florida's hospitality industry. For more than 26
years, I have led the Florida Restaurant and Lodging
Association, FRLA, which represents over 10,000 members from
the biggest names in hotels, restaurants, theme parks, to small
independent operators and suppliers. Hospitality and tourism is
the largest industry in Florida, and it is the economic engine
of our state. In 2019, a record setting 131 million visitors
added nearly $97 billion to Florida's economy. Tourism was
Florida's largest employer, with over 1.5 million employees.
Before COVID, our nearly $112 billion hospitality industry
was booming, with hundreds of new hotels, thousands of new
restaurants, and we were on track to set new records. When
COVID hit, we were shell shocked. More than 62 percent of
Florida's hospitality employees were furloughed or laid off.
Hotels, restaurants, bars, cruise lines, theme parks shut down,
air travel stopped, business conferences and large events were
canceled.
The FRLA went into overdrive to help our members survive,
interpreting executive orders and serving as an information
clearinghouse. We helped our workers get PPE and other COVID
supplies. We were heavily engaged with our State and Federal
leaders and are grateful for the support of Senators Scott and
Rubio. We were blessed to work closely with Governor DeSantis
by assisting to create guidelines and safety protocols to get
our industry reopened. There were many creative solutions that
our industry embarked upon, from opening grocerants, to putting
up dining tables in parking lots. Alcohol to-go became a
critical revenue source for restaurants, and we were working
now with the Florida legislature to try to make that permanent.
We have worked with our National Association partners on
Federal relief packages that have been critical to our
survival.
Our industry is also facing historic workforce challenges.
Although we are allowed to operate at 100 percent capacity in
Florida, we can't find staff. Simply put, we are competing with
State and Federal unemployment benefits. Workers tell us that
they make too much money on unemployment to return to work, so
businesses are forced to limit capacity, shorten their hours
without adequate staff to serve guests. Florida is open for
business, but we are desperate for workers. COVID has decimated
the U.S. tourism industry, which suffered more than $500
billion in pandemic-related losses. Half of the U.S. hotel
rooms are projected to remain empty this year, and hotel
employment will not come back until at least 2023. Business
travel, the single largest source of hotel revenue, will remain
down 85 percent and it is going to take years to recover.
Thousands of hotels have closed and have been foreclosed.
Florida had the second highest hotel job loss in the Nation
behind California.
Restaurants have also been shattered, from Nationwide
shutdowns to ban on indoor dining to misleading claims about
the safety of restaurants, 2020 ended with total sales that
were $240 billion less than projections. Nationally, more than
8 million restaurant employees were laid off or furloughed, and
600,000 of them were in Florida. More than 110,000 restaurants
closed permanently, including over 10,000 of those in Florida.
Nationally, the restaurant industry lost nearly 2.5 million
jobs. We are hopeful that PPP, tax credits, and the recently
passed Restaurant Revitalization Fund have been huge victories.
The RRF will provide $28.6 billion in grants for restaurants
who desperately need it.
Thank you, Ranking Member Wicker and committee member
Sinema, for your bipartisan work in creating the Restaurant Act
to keep us open. Travel, tourism, and the hospitality
industries have faced the worst years in history. In Florida,
we understand emergencies, but there was no playbook for COVID-
19, and nothing has ever tested us like this. We love creating
memorable experiences for guests that keep coming back, but we
need for them to be able to come back. International visitors,
cruises, business travel, we are working to rebuild this
industry that we love so dearly. We are hospitality strong, but
we have no problem asking for your help and we still
desperately need your support as we rebuild. Thank you, Chair,
and I will be happy to take any questions that you may have.
[The prepared statement of Ms. Dover follows:]
Prepared Statement of Carol B. Dover, President and CEO,
Florida Restaurant and Lodging Association
Good afternoon. I want to thank Chair Cantwell and Ranking Member
Wicker, Subcommittee Chair Rosen, and Ranking Member Scott, as well as
the many distinguished members of this subcommittee for the opportunity
to be here today to represent Florida's hospitality industry and
discuss COVID-19 impacts to travel and tourism. Across the nation, our
leaders have been challenged with balancing public and economic health
throughout the pandemic, and the hospitality, travel, and tourism
industries have been disproportionally affected.
I have had the honor of leading the Florida Restaurant and Lodging
Association (FRLA) for 26 years and have spent most of my life in the
hospitality industry. I am also active on the Board of Directors for
both the National Restaurant Association and the American Hotel and
Lodging Association and am eager to discuss the status of our industry
and what we have been doing in Florida.
FRLA represents everyone from the biggest brands in theme parks,
hotels, restaurants, and suppliers, all the way down to small,
independent restaurants and hotels. We have been working with all of
them to adapt to new business practices and help their employees since
the beginning of the COVID-19 pandemic.
Throughout my tenure at FRLA, I have watched the growth of the
hospitality and tourism industry to become the largest one in Florida,
a top employer, and the economic engine for our state. Travel and
tourism directly affect the success of our hospitality industry, so it
is important to share some data from our partners at VISIT FLORIDA on
the power of tourism in Florida.
Tourism is Florida's top economic driver. In 2019, a record-setting
131.4 million visitors added nearly $97 billion to Florida's economy.
That is more than the entire GDP of 13 other states. Pre-COVID, Florida
tourism was growing faster than the U.S. economy, consumer spending,
health care spending, and spending on recreation. Every 81 visitors
equal one Florida job, and tourism keeps Florida's taxes low. Latest
data shows that tourism accounted for 13.4 percent or more than $3.22
billion of total state sales tax collections. Our visitors save every
Florida household more than $1,500 a year on state and local taxes.
In the five years prior to COVID, nearly 300 new hotels and more
than 9,500 new restaurants opened. We were on track to continue to set
records. Pre-COVID, we were a nearly $112 billion industry with more
than 1.5 million employees. Florida has so much to offer with our
beautiful beaches, unparalleled attractions, and the finest hotels and
restaurants across that nation. Our hotels enjoyed fully booked
capacities, and our restaurants were full.
When 2020 began, our industry was projected to have a banner year
with continued growth, increased tourism, and records sales. Florida is
one of the top tourism destinations in the world and our visitors have
a significant impact on hospitality revenues. Pre-COVID, we were a top
location for convention business, and our travelers and visitors
accounted for a huge percentage of restaurants sales. Nationally, they
accounted for about 30 percent of overall restaurant sales: 35 percent
for full service and 25 percent for limited service.
As we entered 2020, things were looking good. We had no idea what
was about to hit us. Our industry experienced a severe and sudden shock
as we were shutdown. More than 934,000 of our 1.5 million employees
were almost immediately furloughed or laid off. Businesses including
restaurants and bars were shut down, air travel stopped, and business
conferences and large events were cancelled.
The Florida Restaurant and Lodging Association went into overdrive,
working around the clock to interpret executive orders for our members,
advocate for the best possible outcomes for our businesses and workers,
and get accurate information out as quickly as possible. We engaged
with our state and Federal leaders. We are grateful to our wonderful
Senators Scott and Rubio for their support and promotion for the CARES
Act, PPP, and Federal relief, and we have been blessed to work closely
with our great Governor, Ron DeSantis, to get our industry re-opened
and on the road to recovery.
We fought hard to keep carryout and curbside pick-up and expand
allowances for outdoor dining. We had restaurants putting up tables
down sidewalks and in their parking lots. Many opened grocer-aunts to
sell goods like toilet paper and other supplies, along with pre-
packaged, cook-at-home meals to their guests. Many hotels and
restaurants had to make very difficult staffing decisions, sometimes
laying off people who had worked with them for decades--people they
considered family. And they kept those who they could and employed them
in any way they could. Managers were cleaning restaurant bathrooms and
hotel suites, hostesses were making necessary restaurant repairs, and
everyone pitched in to do whatever was needed.
Alcohol-to-go became a lifeline for restaurants as Governor
DeSantis issued an executive order allowing for alcohol sales for
consumption off-premises--something that we are working to codify
permanently through the Florida Legislature right now.
We worked hard to keep our association members informed and
connected to important COVID supplies and resources like PPE, and we
even secured more than one million masks for our hospitality workers
from the U.S. Department of Health and Human Services when masks were
hard to find. We conducted giveaway events for the workers and made
sure they were connected to other important resources for support.
FRLA and our members were heavily engaged on Governor DeSantis' Re-
opening Task Force, creating re-opening guidance and safety procedures
for hotels and restaurants along with our great partners at the
National Restaurant Association, the American Hotel and Lodging
Association (AHLA), and the Asian American Hotel Owners Association
(AAHOA). We strongly advocated for Federal relief like the CARES Act
and the Paycheck Protection Program, which was truly the difference
between survival of our businesses and them being forced to close their
doors and leave their teams without work.
As our Governor implemented his re-opening plan and counties began
opening gradually, building consumer confidence was critical. FRLA
launched our Seal of Commitment program to provide enhanced sanitation
and COVID safety training for the industry which would result in a Seal
they could display as a promise to build confidence for both employees
and guests and to demonstrate that the staff are well-trained, and that
the establishment exceeds sanitation protocols. We are also working
with AHLA to promote their Safe Stay program for hotels.
We worked to promote increased dining room allowances as our COVID
numbers went down and asked for small events to be permitted with
social distancing. I had the honor of participating in a roundtable in
Central Florida before Vice President Mike Pence and was joined by
other industry leaders to discuss the challenges we were facing.
We are proud of the progress we have made towards rebuilding such
an important industry in Florida, but there is still much work to be
done. We are hard at work right now in our state's legislative session
where our Governor has already signed the first bill of the session to
limit civil liability against businesses for damages related to COVID-
19. This new law is critical for so many who are doing the right things
day in and day out for customers and staff but feared needing resources
they do not have to fight a nuisance lawsuit.
While we push for other important state needs like codifying
alcohol-to-go, tourism marketing funding, and protecting the revenue
from tourism and convention tax dollars, we also need continued support
from you and your fellow Senators, as well as your colleagues in the
U.S. House and across the Federal government. We were pleased that the
CDC recently released new guidance on vaccinated travelers, which will
help to build confidence in both personal and business travel, but more
could be done to aid in recovery. Perhaps there could be more COVID
liability protections for businesses who normally produce events and
have large conventions across the U.S.
Also, our industry is facing historic workforce challenges. Despite
our ability in Florida to operate at 100 percent capacity, many are
unable to because of a lack of staff. Simply put, we are competing with
state and Federal unemployment benefits. At the beginning of the
pandemic when there were no jobs, this unemployment was critical for
our workers who were furloughed or laid off, but now, we have the jobs,
but many are unwilling to go back to work when they can obtain similar
pay while at home. Some may have been hesitant to return until greater
access to vaccinations were implemented, but all adults in Florida now
have that access and still we cannot hire enough staff. We have
businesses limiting their capacity, reducing operating hours, and
closing on days they are usually open because there is not enough staff
to meet the needs of our guests. We are working on state solutions
through innovating partnerships with career resource organizations, job
fairs, hiring signing incentives, and competitive wages, but our
efforts have been only minimally effective. While you look to next
steps in how to aid in the recovery of our industry, I ask you to
remember this staffing challenge. In Florida, we are open for business
and desperate for workers.
We are on the road to recovery, but the effects of COVID on our
industry are still present. The national tourism industry suffered more
than $500 billion in pandemic-related losses, with leisure and
hospitality accounting for nearly 40 percent of pandemic-related
unemployment.
Pre-pandemic, hotels supported one in 25 American jobs with 2.3
million direct hotel jobs and 8.3 million hotel-supported jobs, which
contributed $660 billion to the U.S. GDP. But the hotel industry has
been decimated and faces a much slower recovery than other business
sectors.
According to AHLA, half of U.S. hotel rooms are projected to remain
empty in 2021. While 2019's average national occupancy was 66 percent,
occupancy fell to 44 percent in 2020, and many of my members in Florida
had single-digit occupancy last year. Occupancy is projected to average
at 52.5 percent this year. Only 21 percent of consumers have traveled
for a vacation or leisure since the beginning of the pandemic, and only
a little more than a quarter of those stayed in a hotel. Hotel
employment is not expected to rebound until 2023. One major factor
affecting hotel revenue is the lack of business travel, which is
projected to remain down 85 percent this year and will not return to
pre-pandemic levels until 2024. This is critical because business
travel is the single largest source of hotel revenue. Businesses across
the world have put in place travel bans or at least have severely
restricted travel, which has resulted in huge losses in Florida--
especially in Orlando and Central Florida.
Visitors to Florida dropped to its lowest point in over a decade
with just 86 million visitors in 2020. Local and state tax revenue from
visitors significantly dropped from $41.1 billion in 2019 to $27
billion in 2020. And across the US, hotels faced closing and
foreclosure and direct hotel and hotel-supported jobs were lost in
staggering numbers. With nearly 175,000 jobs lost--nearly a quarter of
our total hotel jobs--Florida had the second highest direct hotel and
hotel-supported job loss in the Nation only behind California and far
exceeding Nevada, New York, and Texas.
And restaurants have been shattered as well from COVID. From
nationwide shutdowns and bans on indoor dining to irresponsible and
misleading claims--even from the CDC--about the safety of restaurants,
it has been incredibly tough. While some sectors like fine dining were
affected more than the fast casual and quick service sectors, all
restaurants have experienced significant loss this year.
Data from the National Restaurant Association tells us that 2020
ended with total sales that were $240 billion less than the pre-
pandemic forecast for the year. Although restaurant and foodservice
sales are expected to post double-digit growth in 2021, it will not be
nearly enough to make up for the substantial losses from 2020.
Nationally, more than 8 million eating and drinking establishment
employees were laid off or furloughed--nearly 600,000 of those were in
Florida. More than 110,000 restaurants closed permanently, including
10,000 in Florida. Most of those shuttered locations were not new
ventures; they had been well-established and in operation for more than
15 years, and 16 percent had been open for at least 30 years. This is a
lasting blow to communities across the U.S. who are centered around
neighborhood restaurants. Many restaurants survived by changing their
business model overnight to shift to off-premises and delivery. They
created contactless options and dramatically reduced their menus to
control waste. As I previously mentioned, they set up or expanded
outdoor dining, sold packaged bundled meals, and served cocktails to go
with the food. The rise of technology that was projected in the next
five to 10 years happened in just one year. Overall, the eating and
drinking place sector finished 2020 down nearly 2.5 million jobs
nationally. And now that Florida and other states have opened or are in
the process of doing so, we are facing these historic labor shortages
that are restricting us from getting out of the hole we have been in
for the last year. And yet, we are hopeful. PPP, tax credits, and the
recently passed American Rescue Plan all have been huge victories for
our industry. The Restaurant Revitalization Fund will provide $28.6
billion in grants for restaurants who desperately need it.
I want to thank Ranking Member Wicker and Committee Member Sinema
for your bipartisan work in creating the RESTAURANTS Act. While it is
not a silver bullet and the restaurant industry will need more support
to recover from this ongoing crisis, it is an absolutely invaluable
tool to keep restaurants open across our Nation. We are extremely
grateful for all you have done.
Travel, tourism, and the hospitality industries have all faced the
worst year in recent industry history and will be recovering for a long
time. And while the financial recovery will come first, the emotional
toll of this crisis will linger for a long time. In Florida, we
understand emergencies--whether environmental events, hurricanes, or
even terrorist or mass casualty events. . .but we have never been
tested quite like COVID has tested us. We have been fighting hard to
survive just one more day. . .for more than a year. It is exhausting
and yet, we see the light at the end of the tunnel and are eager to
reach it. We are resilient, and we are, quite literally, in the
business of serving people. We love nothing more than to create
memorable experiences for visitors and guests that keep them coming
back. But we need them to be able to come back: international visitors,
cruises, business travel. . .We are working to rebuild this industry we
love so dearly, and we like to say that we are ``Hospitality Strong,''
but we have no problem asking for help. And we still need that support
from you as we rebuild.
Thank you. I would be happy to take any questions you may have.
Senator Rosen. Well, thank you so much for your opening
remarks, and I really appreciate everyone's thoughtful opening
remarks because Senator Scott and I believe that we must get
Americans traveling again. And so, as we have discussed several
times, travel and tourism, of course, are the lifeblood of
Nevada's economy.
COVID-19, like you all have said, has taken a toll on our
workers across this Nation, on our businesses, and on our
communities. But with more Americans getting vaccinated and the
CDC giving the green light for safe travel, there is a light at
the end of the tunnel. But to fully recover and bring back the
jobs lost, the industry, we must bring it back to pre-pandemic
levels. We need to get Americans and the world traveling again.
That means making sure that people from across the country and
across the globe know that our tourism destinations, they are
open for business.
So, Mr. Perez, can you talk about the importance of out-of-
state and international travelers to MGM success and that of
its work force, and I would say all of our hotels in the
success of its work force, please.
Mr. Perez. Thank you, Ms. Chair. Let me start off first
with the regional properties. You know, we are in seven
different states, some of the Northeast, Mid-Atlantic and down
Senator Wicker's neck of the woods, down in Mississippi. For
those properties, most of our business comes from an hour's
drive and we were a bit more insulated, barring the closure
obviously, but we were a bit more insulated in Las Vegas,
because the barriers of travel were just easier. You could jump
in your car and not have to deal with airfare and that sort of
thing. Las Vegas--and I will parallel that too with we do have
two semi-destination resorts, one of which is in Biloxi,
Mississippi.
That property also was hampered more as compared to the
other seven, as an example. It behaved a little bit more like
Las Vegas. And it also Borgata in Atlantic City had similar
characteristics to recovery in Las Vegas, but nowhere near as
devastating. And to your point, and you have heard the
testimony from the panelists, the getting customers comfortable
with air travel primarily is paramount. And it is going to take
some time to get international travel to come back in earnest,
particularly in Las Vegas, which is vitally important.
We know those customers stay longer. They enjoy our
restaurants, they enjoy our casinos, they enjoy our shows. They
spend quite a bit on retail. And they are vitally important to
Nevada and Las Vegas' economy. So anything that we can do
certainly to reduce those barriers would be incredibly helpful,
especially for Las Vegas.
Senator Rosen. Thank you. Mr. Hill, I would like to ask you
a similar question, but really about our conventions. We know
that conventions, business travel is the lifeblood of not just
Las Vegas, but so many other cities across the country. So how
do you feel about what can we do to bring that ecotourism back,
what do we need, and its importance to our communities?
Mr. Hill. Thank you, Chair Rosen. Ranking Member Scott
earlier mentioned the connection between tourism and economic
development, and I would just add that really tourism is
economic development too, and it brings money in from outside
of our State into our state. It creates those 26 percent of the
jobs in Nevada. It is a--it is the economic engine for our
state. And domestic and international tourists are what make
that possible.
That, you know, a year ago or a little longer ago when we
were trying to get from 87 percent room occupancy to 90
percent, that concept seemed maybe not as important as what we
went through when we shut down for 10 weeks and didn't have any
visitors in Nevada, and as you pointed out, suffered the worst
unemployment rate of any state in history during that period of
time. So it is--our domestic and international travelers are
what make this state go.
And we need to do everything we can to allow them to
return, and I know everyone is. From a meeting and convention
perspective, we are excited to have, I think, the first large
trade show in the United States returning to our convention
center in early June, The World of Concrete by Informa, the
publicly traded firm that is one of the biggest customers of
Las Vegas. That is a show that typically has 50,000-60,000
attendees. We don't think it will be that size, but it will be
a major show. And we look forward not only to that show
returning, but it serving as evidence and an example of how to
do this right. And we are excited about that.
International visitation is a big component of visitation,
both from a business traveler standpoint as well as the leisure
traveler. We enjoy about 15 percent in a normal year visitation
from our international fans, and that has been almost
completely shut down and has not really started to recover at
this point. And as Ms. Barnes mentioned, working to get those
back, those visitors back, working on a method so that they can
have confidence in their travel plans and be able to
confidently make those trips we think is critically important.
Senator Rosen. Thank you. And now I will recognize Ranking
Member Scott.
Senator Scott. Thank you, Chair Rosen. I want to thank each
of the witnesses for your testimony. Ms. Dover, in your written
testimony you state that the travel and tourism industry is
facing historic labor shortages, which could significantly
restrict the industry from recovering from the severe downturn.
Can you share the reasons behind this? Would you be able to
give you some examples from your members as well as what they
have done to mitigate this issue? And just go ahead and talk
about some of the challenges your members are facing with
regard to labor shortages.
Ms. Dover. Yes, thank you very much, Senator Scott. So as I
stated in my other statement that we are in competition with
our unemployment system, so many people are making more money
staying home, and we are having a really tough time getting
people to even want to apply for jobs. We have been hosting job
fairs. Some of our members are even offering bonuses, and
people are still not showing up to apply for the jobs.
Just a couple of examples, Senator, that we are hearing
from our members. I have a member yesterday who was telling me
that they haven't had their garbage picked up in almost a week.
And so this is bigger than just the hotel and restaurant
industry. The waste management industry, they don't have
drivers. We got notice from our food distribution companies and
our beverage companies that they may not be receiving their
products in a timely manner because they, too, don't have
enough drivers applying for jobs.
So one of the things that we are in hopes is that we can
find between both State and Federal--clearly, unemployment is
important for many people, but there are so many jobs available
right now that if we could go back to a system where you used
to have to show that you had applied and been turned down for
several jobs, three jobs, I believe is what it was in Florida,
that if we could reverse some of those mandates, then I believe
that we could begin to see people want to go back to work. So
we are desperate.
And anything that you all can do in Congress to help us
relieve this burden. I hear from my colleagues all across the
country that this is not just a Florida issue, that it is
everywhere. So thank you for asking and allowing me the
opportunity to talk to you about our very critical labor
shortage.
Senator Scott. So Ms. Dover, so if somebody--if an employer
tells an employee that they have a job opening, in my
understanding Nationwide we have 7.4 million job openings. If
an employer says they have a job opening does the employee, are
they able to continue on unemployment or do they--are they
required to come back to work?
Ms. Dover. Well, they are not required, Senator, from my
understanding, to come back to work. They can make the decision
and what we are trying to also do, education to many of the
people who are not coming back to work is to remind them that
these jobs will not be available forever. I mean, we have all,
you have heard us all today on the panel talk about the need to
rebound and we will rebound. This is--we are a resilient
country, and we will rebound. But 1 day these jobs that people
are turning down won't be available anymore.
So we are reminding people to take these jobs while they
are available. Unemployment in Florida is already down to a
little over 4 percent. So it is not long before we are going to
be in a very low unemployment and nearly an unemployable. So
hopefully we can get people to see that we have great jobs
available. Florida is the tourism mecca. We have--just
hopefully people will see the importance of coming back to
work.
Senator Scott. Thank you, Ms. Dover. Ms. Barnes, we have
seen the cruise industry at a standstill under the current CDC
restrictions with no timeline in place for return. What impact
has this had not only on the cruise industry, but throughout
the travel and tourism industries?
Ms. Barnes. Thank you for the question. You know, we very
much are supportive of the legislation that you and Senator
Sullivan introduced today along with Senator Rubio, because we
really do think that the entire industry needs to have clear
guidelines on how to reopen with the timeline and a date
certain to do so. And really, we are normally used to welcoming
over 13 million travelers via cruise ship annually to the
United States and the impact that that has on ports and
destinations throughout the country, restaurants, attractions,
folks that are--being able to sell gifts for their families at
those ports and in those cities.
So the impact really has been quite significant. And we
really believe that every segment of the industry should be
able, again, to reopen and that it isn't fair not to have clear
guidelines. So we hope that the CDC will be able to put forward
clear guidelines in the immediate term, because the economic
consequences really are significant not only to Florida, but to
the other countries--like Alaska, Louisiana, California,
Washington and other states across the country.
Senator Scott. Thank you. Thank you, Chair Rosen.
Senator Rosen. Thank you, Senator Scott. I would like to
next recognize via WebEx, Senator Klobuchar.
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you very much, Chair Rosen, and
thank you as well to Senator Scott. And I am really excited to
hear from our witnesses today. I know this has been such a
tough time for tourism but having this hearing couldn't be more
timely. I have long been involved in this issue from the time
that I had the job of chairing the Tourism Subcommittee in
Commerce. Proud of the work that we have done together with
some of the witnesses on Brand USA and the work that you are
doing today.
And I guess I would start there because I know that Senator
Rosen asked a question and talked about the loss at least of
international travel on the MGM Resorts and also really
everywhere in the country, which is part of the reason we were
so proud of the work we have done on Brand USA, which finally
allowed us to have an even playing field when it came to
promoting our own country. This has been a real gut punch for
the tourism industry, obviously. We had to shut down the
borders for international tourists.
But as we see this, as we call it on Lake Superior, the
lighthouse on the horizon, as opposed to light at the end of
the tunnel, with the vaccine and what is happening. Ms. Barnes,
in your testimony, you highlight that if international travel
is not reopened soon, a total of 1.1 million American jobs and
$262 billion in spending will be lost by the end of 2021. And
that temporary emergency funding for Brand USA is needed. Can
you talk about what resources you think are needed?
Ms. Barnes. Sure. Thank you, Senator, for your question and
for your tremendous leadership as the Chair of the Travel
Tourism Caucus in the Senate. We are very grateful for your
leadership in particular as we sought to reauthorize Brand USA
back in late 2019, which feels like a decade ago.
Senator Klobuchar. Except you must admit we were smart to
do it early. We got it done a year early, thanks to Senator
Blunt and other things.
Ms. Barnes. Yes. Thank you. So, as I noted, international
travel declined by 76 percent. And right now we are looking at
a 5-year time horizon for recovery. But we know that we can
shorten that timeline. And just in the losses for 2021, if we
are able to reopen international travel by July, that can
stymie 40 percent of the expected losses this year. So we
really need Brand USA that is currently having a funding
challenge because of the lack of international travel. Usually
the ESTA fee is coming in in a robust fashion and capped at
$100 million, which goes to Brand USA.
But because that money isn't coming in, because the
international borders are closed, we really need an emergency
funding mechanism. What we think is about $250 million in an
appropriation. Usually the $100 million that comes in on
international fees is matched by the private sector. But
unfortunately, due to the decimation of the private sector
right now, those matching funds are unlikely to be captured.
So, again, if the Appropriations Committee could put forward
$250 million, we think they will be able to do their work to
bring back international travelers and make sure that that 26
to 1 return on investment is provided. And I will just note
this, since we were talking about exports, that in 2019 the
tourism industry provided a $59 billion export for the country.
So it really is important beyond just domestic funding.
Senator Klobuchar. Very good. And then another bill that
Senator Blunt and I have introduced, the Protecting Tourism in
the United States Act, directs the Commerce Department in
consultation with the U.S. Travel and Tourism Board and key
Federal agencies to develop a plan to help the tourism industry
recover. Simply because, you know, I think that as things are
getting a little better, their ramp up is going to be slower by
virtue of the nature of the customers here and where they come
from and how they can travel than other industries.
And I guess I will turn to you on--to you with this, Mr.
Perez. And by the way, I also want to mention the great
leadership of Chair Rosen as well as Senator Cortez Masto on
these issues with Nevada. But one report found that in 2020
more than 670,000 hotel industry jobs, and in your testimony
you note that MGM Resorts had to furlough 60,000 employees as a
result of the pandemic. Can you speak to how long the hotel
industry can sustain itself on the current Federal economic
relief, particularly regarding your work force?
Mr. Perez. Thank you very much, Senator, for the question.
The employees are coming back not only in Las Vegas, but also
for our regional properties, but they are doing so when the
customers have started to come back. What we have seen clearly
as vaccinations, shots in arms are becoming more and more
pervasive, things have turned around relatively quickly.
The question for us is, how sustainable is that? Because it
happened as we were leaving the winter, if you will, entering
better weather and getting along with the stimulus. So there is
a little bit of noise, but the way this is--I apologize, can
you repeat the question for a second, I am sorry.
Senator Klobuchar. No, it is--it OK because I am probably
out of time and my colleagues are probably glad that you forgot
the question. But I was just thinking about--it was mostly
about how long the hotel industry can sustain itself.
Mr. Perez. Yes. So, what I am seeing, I will just end it
really quickly. And right now, it is a bit of a challenge,
particularly in Las Vegas and a few of the other regional
properties, to find labor for the reasons mentioned earlier.
And the--you know, as our customers return, we feel that with
time we can get our employees back and do this in the right
form and right fashion so, but it is a process.
Senator Klobuchar. Very good. And we hope you are working
as well with Carlson companies in Minnesota. We are proud of
the work they are doing. Thank you.
Senator Rosen. Thank you, Senator Klobuchar. Next, I would
like to recognize in person, Senator Sullivan.
STATEMENT OF HON. DAN SULLIVAN,
U.S. SENATOR FROM ALASKA
Senator Sullivan. Thank you, Madam Chair, and I really
appreciate this committee. I think it is exciting. I think it
is going to be an important committee. Very bipartisan, all
these issues and I am looking forward to your and Senator
Scott's leadership on this. Ms. Barnes, I wanted to ask you,
you mentioned my Visit America Act, which is very bipartisan
with Senator Schatz and Senator King. One thing it would do, it
would establish an Assistant Secretary of Commerce for travel
and tourism.
As you and I have discussed, many countries have cabinet
officials in charge of tourism. We don't even have an Assistant
Secretary. Now, I am not a big Government guy. But as you know,
when you are in the debates within the Federal agencies, you
need someone, Senate confirmed, to stand up for this huge part
of our economy which goes across so many states. Can you share
with me a little bit of your perspective of the importance of
this Act that passed out of this committee very strongly, every
Senator but one voted for it? And we are going to try and move
it again quickly this year.
Ms. Barnes. Yes, thank you for your question and for your
leadership on this issue. You are right. We are the only one of
the top 30 global destinations that doesn't have a cabinet
level person and, or an arm that actually goes out and promotes
travel. That is why we have Brand USA. So we believe very much
that the leadership is needed. We have been very pleased with
Secretary Raimondo's interest in how important travel and
tourism is to the industry. But obviously she has many things
to focus on.
So we couldn't agree with you more that we would like to
see your bill introduced again quickly and passed. And we have
already also raised with the Secretary the importance of
elevating this position. So I am hopeful that we will be able
to move it forward. It is also something that we have talked to
the Travel and Tourism Advisory Board at the National Travel
and Tourism Office at the Department of Commerce about and
believe that with this type of leadership to really be able to
draw that interagency group together, that we can set that
National strategy to reopen not only domestic travel, but bring
back international travel, bring back meetings and events. We
need the whole of the industry focused upon and having a
cabinet level position would absolutely help do that.
Senator Sullivan. Great. Thank you. My next question is for
you and Ms. Dover. I want to talk a little bit about the cruise
ship industry. And, you know, a lot of times the industry gets
attacked for certain issues. But what I really want to talk
about is how important this industry is to small businesses,
whether in Florida or in Alaska, and if you can give us a sense
on that. But also, Ms. Barnes, I saw that the U.S. Travel
Association recently called for the CDC to end its ban on
cruise ship travel in America. That is what our bill, Senator
Scott and my bill, the CRUISE Act that we introduced today,
would do. And they need the guidance.
And look, the CDC does a good job on the science. They have
had a tough year, an important agency. My state has worked hard
dealing with the health issues. We have been the number one
state in the country throughout the pandemic in terms of
testing per capita, in terms of the vaccination rates per
capita. We are proud of that in Alaska. Fortunately, one of the
lowest death rates per capita.
But my state's economy is getting crushed. Oil and gas, no
help from the Biden Administration there, which is anti-oil and
gas. Commercial fishing, tourism, as it has hurt so many
industries. Senator Murkowski and I had a meeting with the CDC
Director a couple of weeks ago. With all due respect to her,
she didn't really have a clue on these issues. We had another
follow-up meeting on her with her recently. She gave us a lot
of good news. All the guidance on the cruise ships was going to
be coming out at the same time. There was going to be needs for
new CDC approvals.
Cruising in America and Alaska by mid-July was what she
thought we could do and none of that turned out to be true. So
that is 0 for 2 on meetings with U.S. Senators. I think
somebody on her staff needs to be held accountable. She is
obviously getting really, really bad information from people,
but it is really disappointing. But can you and Ms. Dover, if
you have a view on it, give us a sense of why you think it is
important to get cruising again, particularly when cruise ship
industries, executives are coming together saying, hey, we will
have it, we will put an escrow account in if there is funding
issues, we will make sure everybody on the ships are
vaccinated.
There is a whole host of things that can happen that we can
do this safely while still taking into account the economy and
the health impacts, let's face it, of Americans who are out of
work because of this ban.
Ms. Barnes. Sir, thank you for the question. Again, we
really believe that no sector of the travel industry should be
unable to be able to reopen. One U.S. job is created just with
30 cruisers, so 30 people on a ship equals 1 U.S. job. That is
a significant contribution to the U.S. economy. And quite
frankly, we think that there needs to be clear guidelines so
that we can reopen this summer. Sorry, am I over time?--Oh,
okay, sorry.
I am sorry, but to finish, we do believe that we need clear
guidelines, very much support the legislation you introduced
today. We also don't believe that there should be a vaccine
requirement to travel, but we do think that it is an important
layer, and we are very much advocating that folks get
vaccinated.
Senator Sullivan. And Ms. Dover, do you have a view on any
of this? Sorry, Madam Chair, I will go over, but I know it is
important to Florida too.
Ms. Dover. Thank you very much, Senator Sullivan, for the
question, and to Tori Barnes, she answered it very well, but to
just add on to what she said. In Florida, we have over 115,000
jobs that were relying on the cruise industry. The trickle-down
effect of what you have mentioned, hotel rooms, restaurants,
retail, gas that is suffering in those areas of Florida that
rely so heavily on the cruise industry, not to mention what an
economic engine it is to our state.
So I would agree and echo everything that Tori Barnes said
about we don't believe that maybe vaccinations are necessary.
We know that the cruise line industry has been meeting round
the clock to put in safety standards. There is nothing more
important to them than the safety and health of the welfare of
the people who want to cruise. So no industry is close. Florida
has been open for business for many months, and we certainly
believe that our cruise line friends should be allowed to open
up for business and get out in the waters and start enjoying
life again.
Senator Sullivan. Alright. Thank you, Madam Chairman.
Senator Rosen. Thank you. And next, I would like to
recognize our Chair, Senator Cantwell. And before I do, I just
want to thank her for helping us to organize this committee. It
is our inaugural hearing, and we look forward to just doing
great work here. And we appreciate you allowing us to start on
this mission. Senator Cantwell.
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
The Chairwoman. Well, thank you, Chair Rosen, and thank you
to you and the Ranking Member. Appreciate both of your interest
in this subject of tourism. And you are right, I couldn't be
more excited about a committee that is called Tourism, Trade
and Export Promotion, because that is pretty much the State of
Washington, and very much appreciate the two of you bringing an
intense focus to the tourism aspect amongst the other
responsibilities here. I wanted to ask our witness, I think
you, Ms. Barnes. Senator Scott and I introduced legislation on
what I just call another layer of infrastructure. You guys have
all articulated in your questions and many of our colleagues
about the important economic consequence of tourism.
Well, if it is such an important aspect to the economy, why
aren't we doing more to build layers of protection into the
system that gives us more data and information. So I traveled
to China many years ago and the airport went through a
screening as it related--I didn't really know I was going
through a screening, but I was going through a screening on
temperature checks. So we see small businesses all over the
United States doing this now and doing it successfully.
What do you think of getting the infrastructure at airports
so that this is something that we can, again, just give more
certainty and predictability to the system by just putting this
kind of infrastructure in place?
Ms. Barnes. We think as it relates to technology, that
there is a lot of good that can be done from biometric
touchless solutions that you can opt into, to additional layers
within the airport. I think that, you know, as we--the travel
industry put forward a guidance early in May of last year, has
had the most great health and safety standards in hotels and
airports, in airplanes, in every different mode of
transportation and as well as in any every segment of the
travel ecosystem. So we very much support anything that can
help to continue safety, and the health and safety first and
foremost.
Again, we don't think that there should be a vaccine
requirement to travel. We do think that is another important
layer. But there are things, as you note, temperature checks
and other systems that can be piloted perhaps to see how that
how they can help the system move forward. One of the things we
want to also be careful, though, is that we don't put anything
in place that we can't ease as things get better with the
health crisis because we don't want to be in 10 years from now,
like we were taking off our shoes still after 9/11. We want to
make sure that we have something that is adjustable as we move
forward from the pandemic.
The Chairwoman. I think Senator Scott and I are talking
about something that is basic infrastructure. So the concept is
airports where even just international destinations would have
the kind of technology where you would just walk through and
detect whether someone had a temperature or not. So I think you
get a lot of pushback from people say, well, how many people
have they caught in international airports? Well, I am not sure
we have caught anybody lately at SeaTac on a National security
issue as it relates to the TSA lines, but I am pretty sure we
are going to keep the TSA line.
So these things are lines of deterrence. And I just think
that all of you are articulating how important the tourism
economy is to us. I think thinking long term about what other
challenges we face, I think it is a pretty cost effective
technology that has been used around the world. So hopefully we
will be able to get our colleagues to do the same here and
better protect the traveling public and focus on what we can do
to give confidence. So thank you, Madam Chair. Appreciate
calling you that.
Senator Rosen. Thank you very much, Senator Cantwell, Chair
Cantwell. And next, I would like to recognize via WebEx,
Senator Sinema.
STATEMENT OF HON. KYRSTEN SINEMA,
U.S. SENATOR FROM ARIZONA
Senator Sinema. Well, thank you, Madam Chair, and thank you
to all of our witnesses for joining us today. You know, tourism
is such an important industry for my State of Arizona. In 2019,
Arizona's tourism industry welcomed more than 46 million
overnight visitors, which generated over $25 billion in direct
travel spending and helped support State and local Government
tax revenue. The COVID-19 pandemic has been very difficult for
many Arizona communities, small business owners, and Arizonans
who work in the tourism industry. In 2020, spending by domestic
and international travelers declined by 35 percent, hurting
many local businesses and putting many Arizonans out of work.
According to Arizona Lodging and Tourism Association,
COVID-19 has wiped out 10 years of job growth for Arizona
tourism. And unfortunately, we are not out of the woods yet.
Although 2021 has seen a recent uptick relative to 2020, we are
still nowhere near the 2019 numbers, and that means that many
Arizonans and Arizona businesses are still struggling. Given
these significant challenges for Arizonans, I will continue to
work with my colleagues on the Subcommittee to develop
bipartisan solutions to these issues and help get Arizona's
tourism industry back to work.
My first question is for Ms. Dover. Many Arizona
restaurants or small businesses rely on travelers to support
their operations. As you know, I worked with my friend, Senator
Roger Wicker to author the Restaurants Act, which was
bipartisan legislation to provide structure relief to local and
independent restaurants. And our effort became law as part of
the American Rescue Plan. And soon restaurants will be able to
apply for $20.6 billion of structured relief.
Now, many restaurants also received assistance from the
Paycheck Protection Program. Could you share from the
perspective of restaurants why the restaurants relief is
different than PPP and how you expect restaurants to benefit
from these funds?
Ms. Dover. Well, thank you, Senator, for your question.
Obviously, first, I want to just thank all of you for the
support that you have given the industry in passing the PPP
because all of those were critical to just getting the industry
propped up. But one of the things about the, your new
Restaurant Revitalization Act is that they are going to look at
minorities and small businesses and some who may have not been
able to apply in the first go round.
I can tell you that we are already hearing great concerns
that that money may be gone in a very short order, so we are
quite concerned about that. But we--you know, we represent just
as many small, independent or more operators as we do large.
And so many of our small businesses are struggling. So but for
the first PPP round and now the Restaurant Revitalization Act,
they would not be able to keep their doors open nor hire back
their employees. So I want to thank you for that. The employee
retention tax credit is critical also to our industry.
And we want to thank you for all of the efforts that you
have put forth, especially in extending that, because that was
crucial to our employers in our industry.
Senator Sinema. Well, thank you. My next question is for
Ms. Barnes. According to a recent report by the American Hotel
and Lodging Association, half of U.S. hotel rooms are projected
to remain empty in 2021 and hotel employment is not expected to
rebound until 2023. As you know, Arizona is a prime destination
for large business and group travel.
And according to the Arizona Lodging and Tourism
Association, business and group travel accounts for more than
half of annual hotel revenue. And estimates show that these
travelers may not return to pre-pandemic levels until 2024. Can
you describe how business and group travel is so important to
the tourism industry and how the decline in this type of travel
has hurt Arizona small businesses?
Ms. Barnes. Thank you, Senator, for the question, and I
would echo, Carol Dover's comments about gratitude for the hard
work that you have done on the Restaurant Act and many other
issues on behalf of the industry. And as you note, 60 percent
of business travel has declined in Arizona. And we think that
it is really important that we have clear guidelines for
reopening business meetings and events, and that we really
differentiate them from mass gatherings.
We think that this is absolutely critical that as other
parts of the industry are able to open and other parts of the
economy are able to open, the majority of revenue that comes
into the industry really is from that business travel. So 40 to
60 percent of revenues come from a hotel perspective and
business travel. And when you think about it right now, while
we are seeing that leisure market really pick up and that will
help for certain weeks of the year and the weekends, Monday
through Thursday travel really isn't happening right now. And
until we open business travel up, it is not going to. So the
thing that we need to do is beyond just opening up business
meetings and events, we need to increase those gathering
limitations for structured meetings. They can be held in a safe
way.
There are layers of protection. And as we have more and
more folks vaccinated, that should be even more possible. So we
hope that the CDC can put forth clear guidelines to increase
those gathering limitations and to open up business meetings
and events. Again, 70 percent decline year over year is just
not acceptable or sustainable into the future.
Senator Sinema. Alright, thank you. Madam Chair, I see my
time has expired. Thank you for hosting this hearing.
Senator Rosen. Thank you, Senator Sinema. Next, I would
like to recognize Senator Hickenlooper via WebEx.
STATEMENT OF HON. JOHN HICKENLOOPER,
U.S. SENATOR FROM COLORADO
Senator Hickenlooper. Thank you, Madam Chair, and I think
this is a remarkably enlightening and informative session.
First, I want to ask Mr. Hill, when we see the importance to
cities and regions and States of convention business and how in
many cases is the first place that a business executive will
come to a different place, a different city, and you know,
maybe 5 years later they will open an office there, it is
vitally important for that, not to mention all the restaurant
and hotel business that accompanies those visit.
You are just as much captive to the loss of confidence as
all the restaurants and hotels and musical venues, all the
parts of hospitality, and I thought you actually might have the
best perspective on how you are thinking of trying to rebuild
that confidence in your consumers who are a little more
educated in many cases, but certainly are subject to the same
fears and cautions as the rest of the American public.
Mr. Hill. Thank you for the question, Senator, and
certainly for your support of our industry. And you are right,
the confidence of the business people, leisure travelers, both,
is critical to the return. We are seeing that as people get
vaccinated, their confidence returns, starts to return because
of that process. And frankly, those who have chosen not to be
vaccinated may have some of that confidence as well. So the
vaccination process is just exceptionally important. We
encourage that to move forward as at least as quickly as it
has. If we can increase that, that is great. That is critical.
Getting past the health crisis is what will really restore
confidence.
Frankly, the messaging from our elected officials is
important too. Consistency there--it is certainly important to
have communicated the need to be careful, the need to be
responsible and safe and healthy, but as that takes hold,
messaging around, it is time to go back and travel, needs, I
think, to be heard by all of our constituents out there.
And it also, you know, a lot of people think of marketing
as not necessarily generating information and providing our
potential customers with that information, but particularly in
this environment, having the ability to provide that
information is really important. Frankly Senator Cortez Masto's
Step Act bill is designed to help with that.
Senator Hickenlooper. Great, thank you. Great answer, and I
appreciate that. Ms. Barnes, I wanted to ask you also, again,
coming from Colorado and having spent almost 20 years in
hospitality and tourism, we have a big space for outdoor
recreation. And in many cases, they were not as negatively
impacted as some of the other forms of hospitality and tourism
just because it is easier to social distance when you are
outside hiking and things like that.
But I do think that we have seen disruption in the trends.
And I was wondering if you have got a sense on a National basis
of what changes we have seen both in outdoor recreation but in
total tourism, but especially concerned about outdoor
recreation? Which of the changes and the disruptions are going
to become permanent and which ones are more likely to bounce
back? And is that a good thing or a bad thing?
Ms. Barnes. Thank you for the question. You know, we are
seeing and have seen a significant interest in visiting our
National parks and going to beaches and definitely being in
those outdoor recreation environments. That is something that
in particular started last summer. And certain destinations
definitely fared better than others because not everyone has
the same to offer.
But, you know, I think that that will be a trend for some
period of time, that we will continue to see folks wanting to
be in outdoor environments. However, it really is important
that we bring back the whole of the economy and diversify that
by broader--by more holistic opening of the country and of all
of the experiences that all of the States and destinations have
to offer throughout this country.
I would say with regards to outdoor recreation, you know, a
theme that has been important is making sure that we do have
our National parks are sustainable for the future, that we are
cognizant of some over-visitation trends. And so I think that
there will be a return to making sure that we are cognizant and
careful with our public lands moving forward. But overall, I
expect that the outdoor environments will be here to stay for
some period of time and folks will welcome those opportunities
to get out and explore.
Senator Hickenlooper. Great. Well, thank you very much. I
see I am over my time, so Madam Chair, I will yield back the
floor to you. Thank you.
Senator Rosen. Thank you, Senator. I believe next via WebEx
is Senator Blackburn.
STATEMENT OF HON. MARSHA BLACKBURN,
U.S. SENATOR FROM TENNESSEE
Senator Blackburn. Yes, thank you, Madam Chair. I
appreciate this so much and appreciate the time and the
attention that is focused on this. Ms. Barnes, let me come to
you first. International travel. In your testimony, you talked
about the CDC, DOT, DHS coming together to have a data-driven,
risk-based roadmap by May to rescind international inbound
travel restrictions by July 2021. What are you hearing from the
agencies right now? Is there any consensus on a timeline for
both inbound and outbound, these restrictions that we are
hearing as we look to reopen our country's borders and allow
this international travel?
And I am asking you this because in Nashville, in
Tennessee, in Nashville, in Memphis, the Great Smoky Mountains,
you were just talking about people getting back, which of
course, the Smoky Mountains are the most visited National Park
in our entire park system. So let's talk about getting that
open and people coming back into these tourism spots in our
country.
Ms. Barnes. Thank you, Senator, for the question. And I
think right now there really is a hesitancy to really create a
roadmap to reopen international travel, and that is something
that we really are urging the Biden Administration to put
forth. Some agencies have a zero risk based approach. Some are
interested in finding a path forward. And throughout the
pandemic, we really heard the data and science should lead the
way. And so we agree. We think that there can be a data-driven,
science-based approach to reopening international travel and
other countries, our competition really, are already
contemplating that.
We have seen timelines put out by the United Kingdom and
others and really think that with a clear roadmap that
contemplates vaccination rates and perhaps infection rates and
others, that there can be a reopening. And first and foremost,
we need that timeline. We need a timeline that is certain.
So when we look at May, we are saying please put out a road
map for reopening so that we can you know, if it is starting
with the U.K. and a travel corridor, then let's do that. But we
need to find a path. We need to have clear timelines and
benchmarks and clarity from the Federal Government. We should
be a leader in this regard. We are the United States of America
and we want to be able to welcome international travelers back
to the U.S.
Senator Blackburn. Sounds good. And I think it was Mr. Hill
who is Las Vegas tourism. Is that correct?
Mr. Hill. That is correct, Senator.
Senator Blackburn. Yes, and you know, Las Vegas, like
Nashville, depends a lot on the event venues. And you have
talked about the work force. And as our live event industry
looks to recover, one of the things we have learned is about 30
percent of the people in the firms have left the industry and
30 percent of the support service firms have actually ceased to
exist during the pandemic. So what do you see as the way back
to the live event and the concert industry for areas like Las
Vegas and Nashville? How are they going to handle this
workforce shortage?
Mr. Hill. Senator, I was in your state at the NFL draft a
couple of years ago and Nashville did such a great job. We
learned a lot. We look forward to hosting that draft next year.
So I want to say thanks for your support for the industry and
the question. There is--when you dissipate a vast majority of
your work force, the ability to get them back is very
difficult.
And there are--we are experiencing, Mr. Perez mentioned
earlier, experiencing labor shortages here, even though we are
quite a ways away from a full recovery. But the ability to
attract people back to the industry, particularly after they
have been dislocated, they are concerned about the certainty of
that job, is going to be an issue the industry is going to have
to deal with moving forward. It is going to be difficult to do.
Senator Blackburn. Yes. Well, we are going to have to do
it, and in Nashville, a large part of the tourism industry is
comprised of conventions and convention work. And I know
between June and the end of the year, there are 80 major
conventions that are on the books in Nashville, and that would
be about $200 million in direct spending and $16 million in
State taxes. Now, without clearly defined timelines these
conventions are threatening to cancel. You know, we kind of got
that hanging out there. So are you seeing the same thing in Las
Vegas? And what are you doing to keep these in person
conventions coming your way?
Mr. Hill. We are seeing the same thing, Senator. It takes
three, four, or 5 months at times for these meetings and
conventions to plan the event, to mobilize for the event. And
it is expensive for them to do that. If they don't have some
level of certainty that the event is going to be able to take
place, we were seeing conventions cancel four to 6 months out
on kind of a rolling basis.
Recently, our Governor provided some certainty and so we
are able to go forward with World of Concrete, which we think
will be kind of a gateway event for the industry, not only here
in Nevada, but to be able to show how to do it right, that it
went well. The entire industry is watching that. And we think
that should provide some confidence so that policy
decisionmakers can provide that certainty moving forward.
Senator Blackburn. That is great. Thank you so much, Madam
Chairman. I yield my time.
Senator Rosen. Thank you. I am going to go to a second
round of questions. I know I have a lot of questions, but just
one final question and then ask for Senator Scott for a final
question. So as I have been hearing all the thoughtful
testimony and questions from all of my colleagues, what I am
really struck by is the bottom line is about infrastructure,
how tourism infrastructure, how important it is.
So we are going to be moving forward with infrastructure
legislation here in the U.S. Senate and Congress in general,
and we have an opportunity to make investments that revive and
enhance our travel and tourism economy. Of course, in Nevada,
our airports are gateways to everything we have to offer.
Before the pandemic, they were nearly at capacity. Those who
don't fly to us come to us at bus or cars. We have highways
that need major improvement, even expansion. Northern part of
my state, our rail offers another place for visiting wonderful
places like Reno, Elko, and Winnemucca.
And rail service, of course, has slowed over the past year.
So what I would like to ask Mr. Hill and then Ms. Barnes, how
key is passing an infrastructure bill that deals with our ports
for the cruises, of course, our ports, our roads, our bridges,
our airports, our railways in order to get the tourism economy
revitalized? Mr. Hill.
Mr. Hill. Chair Rosen, thank you for the question. This has
been an issue that I have worked on for most of my career. And
as you mentioned, all modes of transportation are critical in
order to allow our industry to recover and thrive in the
future. And nowhere is that more critically seen in Las Vegas
than the I-15 corridor. We have more than recovered our drive
traffic and that has more than caused the congestion that we
have in 2019, for example.
So that National travel strategy, the infrastructure
strategy that I mentioned earlier, I think is critically
important, and funding it through an infrastructure package is
equally important. It is--and I will mention I appreciate the
support that Congress has given to the airlines and the
airports. That industry is exceptionally capital intensive and
it obviously suffered significantly during the depths of the
pandemic.
Not having the ability to have that industry start
immediately back up when the demand is there would have been
devastating. And it is--that focus in particular was
appreciated and important when that happened.
Senator Rosen. Thank you. Ms. Barnes.
Ms. Barnes. Thank you and I would echo Mr. Hill's comments
regarding the necessary funding for the travel infrastructure
strategy. If we have a system to move freight, we should also
have the funding mechanism to move people. I would add to that
though that large hub infrastructure for airports is also
critically important, investing in high speed rail and
Hyperloop, and also in electric vehicle technology
infrastructure.
As we know, the auto manufacturers have set deadlines or
goals, I should say, of 2035 and in some cases earlier or after
that, to have all electric fleets. And so as we think about the
great American road trip, we should really think about the
green American road trip and how infrastructure, if you are
going to drive from Florida to California or New York to
Washington, how you can do that in a sustainable way. So we
think that these infrastructure aspects will be really
important and that the urgency for funding these projects is
now.
Senator Rosen. Thank you. I look forward myself too--I have
driven across the country a few times. The great American road
trip, it is wonderful, and we have an amazingly beautiful
country. Each and every state has something wonderful to offer.
And hopefully we are going to get started back now that we are
starting to put the pandemic in the rearview mirror. Senator
Scott.
Senator Scott. I want to finish by, again, thanking Chair
Rosen for this great committee hearing today. I want to thank
all my colleagues and we thank all the panelists for their
thoughtful questions and conversation. Ms. Barnes, how is
Puerto Rico doing with their tourism industry as it is
recovering? You know, they had Hurricane Maria, they had the
earthquake, and now they have had COVID. So are you seeing
travelers come back to the island? What are you hearing about
Puerto Rico?
Ms. Barnes. Yes, so travel spending is down about 48
percent. So it is quite significant obviously. Their economy so
heavily dependent on tourism. And as we have talked about here,
the business meetings and events and international travel, it
really creates a significant challenge for them. So I know you
have been such a tremendous leader for Puerto Rico and the
issues that that destination is facing. But I think that there
is still a lot of work to do.
And I think that by more broadly reopening, again,
international and being able to bring business meetings and
events back, that that will be helpful in helping Puerto Rico
grow back again. Obviously, they have had a year over year
challenges. So, again, thank you for your leadership, but there
is a lot more work that needs to be done.
Senator Scott. Thank you. Again, thank you. Thank you,
Chair Rosen. It was a great event.
Senator Rosen. Thank you. Well, I would again like to thank
our four witnesses for being here today, Mr. Steve Hill, Mr.
Jorge Perez, Ms. Tori Emerson Barnes, and Ms. Carol Dover. We
really appreciate your work in this area. We look forward to
working with you going forward. I would like to submit for the
record three letters, one from the Exhibitions and Conference
Alliance, another from the American Hotel and Lodging
Association, and a third from the American Bus Association.
[The information referred to follows:]
Exhibitions & Conferences Alliance
April 13, 2021
Hon. Jacky Rosen,
Chair,
Subcommittee on Tourism, Trade, and Export Promotion,
United States Senate Committee on Commerce, Science, and
Transportation,
Washington, DC.
Hon. Rick Scott,
Ranking Member,
Subcommittee on Tourism, Trade, and Export Promotion,
United States Senate Committee on Commerce, Science, and
Transportation,
Washington, DC.
Dear Chair Rosen and Ranking Member Scott:
On behalf of the Exhibitions & Conferences Alliance (ECA), the
unified voice of the face-to-face business events industry, thank you
for hosting today's important hearing on ``The State of Travel and
Tourism During COVID.'' Given the critical role that exhibitions,
conferences, trade shows, and other face-to-face business events play
in the broader travel and tourism ecosystem, we appreciate the
opportunity to share our views on how Congress can support the recovery
and advancement of our industry and get Americans back to work and back
to business.
The economic significance of face-to-face business events in the
United States cannot be overstated. In 2019, our industry contributed
$396 billion in direct spending to the economy while supporting
6,640,000 jobs nationwide. As a result, business events drove $130
billion in total tax revenue in 2019 at the federal, state, and local
levels: $51 billion in Federal taxes and $79 billion in state and local
taxes. Additionally, these events generated a further $419 billion in
event-related economic impact in local communities across the country,
including $55 billion in hotel spending, $32 billion in airline travel,
$30 billion in restaurant and retail spending, and $29 billion on
ground transportation.
Moreover, it is important to note that small businesses are the
backbone of face-to-face business events. 99 percent of business events
companies have fewer than 500 employees, while 90 percent have fewer
than 20 employees. Additionally, of the 1.7 million exhibitors that
rely on our events to get their products and services in the hands of
buyers, 80 percent of them are small businesses. Notably, 46 percent of
small businesses participate in at least one trade or consumer show
each year.
As you know, our industry has been impacted by the pandemic. The
Center for Exhibition Industry Research (CEIR) recently reported that
the business-to-business exhibition portion of the industry alone
shrunk by 80 percent in 2020. CEIR further found that nearly all 2020
activity occurred before shutdowns began in March, with year-over-year
activity in the second quarter down 100 percent, third quarter activity
down 98 percent, and fourth quarter activity down also 98 percent.
We are grateful that Nevada and Florida are among the handful of
states that have been proactive in getting people back to work through
the safe delivery of exhibitions, conferences, trade shows, and other
in-person events. In response, we have been ready with safeguards
enabling a safe reopening for all involved. Last year, our industry set
forth the All Secure Guidelines that have raised the bar on safe,
hygienic, productive, and high-quality organized face-to-face event
experiences. The recent delivery of three co-located fashion events in
Orlando, Florida shows our collective ability to safely deliver
business events with the enforcement of protocols that prevent against
the spread of COVID-19. Additionally, many of the facilities we
represent have received Global Biorisk Advisory Council STAR
Accreditation, which ensures that they are maintaining the highest
standards for cleaning and disinfection.
That said, with planning and expenses beginning a year or more in
advance of business events taking place, our industry faces significant
challenges in fully restarting this important growth engine that drives
commerce and innovation in every state across the Nation. This is why
ECA enthusiastically supports S.477, the Hospitality and Commerce Job
Recovery Act to provide comprehensive relief and recovery to the face-
to-face business events sector, as well as the broader tourism and
hospitality industry.
Importantly, Section 2 of the bill establishes a tax credit to
support the convention and trade show industry. To stimulate
participation by both individuals and providers, this bill would create
a much-needed general business credit (or a refundable payroll tax
credit for nonprofit organizations) to help offset the cost of hosting
or participating in a convention, business meeting, or trade show in
the United States from 2022-2024. More specifically, the convention and
trade show restart credit would be equal to 50 percent of the qualified
participation costs paid or incurred by the individual, and 100 percent
of the qualified restart costs paid or incurred by an eligible
provider.
For our industry, these incentives would help ensure a vibrant
marketplace of buyers and sellers at safely-delivered face-to-face
business events beginning next year to help jumpstart the economy and
support the many small businesses that rely on these events.
Importantly, for providers, qualified restart costs would include costs
associated with reopening facilities designed for conventions, business
meetings, and trade shows including renovation, remediation, personal
protective equipment, cleaning, testing, and labor cost associated with
preventing the spread of COVID-19.
As our Nation begins to emerge from the pandemic, it is clear that
the economy will not be able to fully recover without targeted support
to address the unique economic challenges inflicted on the face-to-face
business events industry--and industry that, before the pandemic, had
long been a reliable source of economic growth and jobs in communities
across the country. This is why, on behalf of ECA and our partner
organizations, we ask you to support swift enactment of the S.477, the
Hospitality and Commerce Job Recovery Act to provide a targeted, yet
comprehensive way to support the industry and bring back the jobs that
have been lost over the past year as soon as possible.
If you have any questions or would like additional information,
please feel free to contact Thomas F. (Tommy) Goodwin, ECA's Vice
President, Government Relations, at (703) 672-0780 or
[email protected]. Thank you for your support and commitment
to a vibrant face-to-face business events sector as we emerge from the
pandemic.
Sincerely,
David Audrain,
Co-president.
David DuBois, CMP, CAE, FASAE, CTA,
Co-president.
______
American Hotel & Lodging Association
April 13, 2021
Hon. Jacky Rosen,
Chair,
Subcommittee on Tourism, Trade, and Export Promotion,
United States Senate.
Washington, DC.
Hon. Rick Scott,
Ranking Member,
Subcommittee on Tourism, Trade, and Export Promotion,
United States Senate,
Washington, DC.
Dear Chair Rosen and Ranking Member Scott,
On behalf of the American Hotel & Lodging Association (AHLA), we
thank you for your steadfast leadership during this extremely
challenging period for our Nation. Your efforts in Congress guiding our
Nation through this unprecedented health and economic crisis continue
to be critical to the recovery of the hotel and tourism industry.
Relief programs, such as the Paycheck Protection Program, provided a
crucial lifeline to struggling hotel businesses but more help is
needed. As you examine the devastating economic impacts of the pandemic
on the tourism and hospitality industry, we ask that you continue your
work with your colleagues in Congress to provide necessary further
relief to the hotel industry and our workforce and provide incentives
to spur travel as the economy begins to reopen.
AHLA is the sole national association representing all segments of
the U.S. lodging industry, including hotel owners, real estate
investment trusts (REITs), chains, franchisees, management companies,
independent properties, bed & breakfasts, state hotel associations, and
industry suppliers. The industry is comprised of more than 57,000
properties, supports $1.1 trillion in U.S. sales, and generates nearly
$170 billion in taxes to local, state and Federal governments.
Importantly, small businesses make up sixty-one percent of the
industry, and nearly half of hotels in the United States are minority
owned.
The hotel industry workforce has been uniquely devastated by the
COVID-19 health crisis. Prior to the pandemic, the industry supported 8
million jobs, providing $75 billion in wages and salaries to our
associates. For example, a typical hotel supports more than 250 jobs in
its local community. Moreover, hotels provide workers with
opportunities for lifelong careers, upward mobility, fast-tracked
promotions, and workplace flexibility. Many of these jobs have been
lost or put at risk because of the pandemic.
According to the Bureau of Labor Statistics (BLS) the
leisure and hospitality sector employed 3.1 million fewer
workers in March 2020 compared to before the pandemic.
The accommodations sector specifically has a 19.9 percent
unemployment rate, compared to the national average of 6.7
percent. It is estimated that over the last year, the industry
has lost ten years of job growth.
Leisure and hospitality account for 37 percent of all jobs
lost since the onset of the pandemic--more than any other
sector, and hotels are not projected to return to pre-pandemic
levels until 2024 at the earliest.
The economic impact to our industry is equally as dramatic, with
industry occupancy and revenues at record lows and not projected to
recover before 2024. Thousands of hotels across the country remain
shuttered or operating at extremely limited levels, with ruinous
consequences for jobs and the local communities our members support.
Hotels are a vital component of our Nation's economy, supporting
millions of jobs, generating billions in tax dollars, and providing
critical infrastructure to allow leisure, business, and government
travel to function. The hotel industry is focused on safely welcoming
guests back and has widely implemented AHLA's Safe Stay program to
accomplish that goal. We look forward to the eventual return of travel.
However, without further relief and support, the tourism and travel
industry faces permanent scarring and a protracted recovery. AHLA
appreciates the opportunity to provide these comments and is grateful
for your work in supporting the recovery of our vibrant industry.
Sincerely,
Brian Crawford,
Executive Vice President of Government Affairs.
______
Prepard Statement of the American Bus Association
The private motorcoach industry is a vital component of the
national public transportation network, providing intercity scheduled
bus service, commuter and shuttle operations, school bus
transportation, charter, tour and entertainment services, and in some
cases contracted services for public transit authorities, airlines, and
Amtrak. These same companies bring entertainers to performance venues
and bring fans to concerts and events.
All sectors of the motorcoach industry provide vital transportation
services to the larger national transportation network. The motorcoach
industry also provides sustainable employment for hundreds of thousands
of workers, both directly and indirectly. The motorcoach industry also
serves this country in times of crisis, moving people out of harm's
way, such as evacuating citizens during hurricanes and wildfires, and
serving as component of our national defense by moving our military and
their equipment for training and deployment and protecting critical
infrastructure.
Prior to COVID-19, the private motorcoach industry provided nearly
600 million passenger trips annually--nearly as many as the U.S.
passenger airlines--and was comprised of 2,800 companies, mostly small,
diverse, family-owned businesses, operating 36,000 motorcoaches. The
industry directly employed nearly 100,000 people and generated $15
billion in sales. When looking at the total economic impact of
motorcoach and group tour activities, it exceeds $200 billion in direct
and indirect economic activity nationwide and supports an additional 2
million jobs.
Today, due to the COVID-19 pandemic, the industry is devastated. It
is operating at less than 20 percent of its 2019 levels, with a very
slow recovery expected. While there was limited relief for the industry
in the December COVID-relief package, those funds have not to date been
released by the Treasury Department, have to be shared once released
with school bus companies and private passenger ferries, and are widely
expected to be over-subscribed. As of now, the motorcoach industry has
received no specific sector-wide relief and has been largely overlooked
in terms of its critical role in the Nation's transportation network,
including its travel and tourism role. This is so despite the fact that
the industry serves as an economic engine that supports hotels, tourist
destinations, conventions and other business and pleasure travel needs.
As a result of COVID-19 between 600--800 motorcoach companies (a
quarter of the industry) no longer have operating authority from the
U.S. Department of Transportation, meaning they have ceased operating
or have closed their doors forever. As many as 80,000 workers remain
idled. Banks are repossessing motorcoaches from these family
businesses.
In short, the motorcoach industry, which has been at the center of
the COVID-19 ``storm,'' has also been brought to its knees. It has
suffered huge losses due to the cancellation of entertainment events,
including concerts, tours, and theatrical productions; the cancellation
of group travel, high school and college sports; and the cancellation
of any number of other events. It has also suffered because commuters
are not going to offices and business travelers generally are staying
home. All of these consequences of the pandemic have led to the dire
situation the industry is now in.
The Paycheck Protection Program (PPP), although well-intentioned,
reached less than one-third of the industry and only provided short-
term assistance. The PPP money was quickly spent to bring employees
back although there was no possible work, and the PPP program provided
no relief from the burdens associated with the capital-intensive nature
of the industry. The Main Street Lending Program, also well-
intentioned, was delayed in implementation and the requirements are too
steep for most struggling companies seeking a lifeline for survival. At
this point, additional targeted financial assistance to bridge the
industry through this crisis is essential for it to survive and restore
the services that travelers need to get to tourist and other
destinations and to be transported to venues once they are there.
Without additional targeted funding to serve as a lifeline to the
motorcoach industry, the entire travel and tourism industry and many of
the destinations, including large ones like Las Vegas and Orlando, and
many smaller such tourist destinations across the United States that
also depend heavily on the motorcoach sector, will suffer. The nation's
airlines have appropriately received such a lifeline; the motorcoach
industry deserves no less.
Senator Rosen. This hearing record, the hearing record will
remain open for two weeks until Tuesday, April 27, 2021. Any
Senators that would like to submit questions for the record
should do so by Tuesday, April 27, 2021. For those of you who
testified today, we ask that your responses be returned to the
Committee as quickly as possible, and in no case later than two
weeks after receipt. That concludes today's inaugural hearing.
[Whereupon, at 4:45 p.m., the hearing was adjourned.]
A P P E N D I X
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Prepared Statement of the Travel Management Coalition
Dear Chair Rosen and Ranking Member Scott:
Thank you for your leadership in seeking to identify and craft
policy solutions that would serve to bolster our Nation's travel
industry. As you are aware, the COVID-19 pandemic continues to impose
unprecedented levels of economic disruption across the travel sector.
Congress has taken steps to address this by, for example, appropriating
$42 billion to aid the workforce of passenger airlines and their
contractors. Critically, although the CARES Act authorized the
Department of Treasury to extend loans to ticket agents and others
dependent upon aviation, the Section 4003(b)(1) program failed to meet
the needs of many eligible businesses, due to strict lending
requirements. Many businesses critical to the restart of travel,
including travel management companies (TMCs), have therefore received
minimal support throughout the pandemic, despite experiencing 95
percent declines in certain markets. For example, large TMCs did not
qualify for any grant amounts (airlines) or forgivable loan amounts
(PPP) like many other severely distressed businesses in our industry
did.
Our Travel Management Coalition--made up of large TMCs that help
businesses and individuals manage complex global travel needs--believe
that risk-based, data-driven policy solutions are needed to ensure the
viability of the $2.6 trillion travel industry. Specifically, Congress
should work with President Biden's Administration to:
Maintain the inbound international testing mandate, face
mask requirement, and other key COVID-19 mitigation measures,
which preclude the need for mandatory quarantines;
Lift indefinite Section 212(f) countrywide travel bans and
blanket quarantine requirements in favor of risk-based
benchmarks that would allow for a safe, managed return to
travel as more people are vaccinated and the pandemic is
brought further under control;
Exempt fully-vaccinated travelers from international testing
requirements;
Facilitate an effective rollout of private sector-driven
digital health credentials for vaccine and testing
verification; and
Ensure liquidity for the travel sector by expanding
qualifications for existing programs and providing new,
targeted relief programs to support all TMCs and other
businesses critical to the restart of travel.
Since the outset of the COVID-19 pandemic, the U.S. air travel
industry has worked closely with the Federal government to formulate
and implement an array of public health protocols to ensure the safety
of the air travel experience. By applying an extensive, multi-layered
set of biosafety measures, including enhanced cleaning, optimized
ventilation, and masking requirements, the risk of COVID-19
transmission has been reduced to the extent that the World Health
Organization (WHO) has acknowledged that air travel is safe, a
conclusion supported by Department of Defense research. Moreover, TMCs
and other aviation industry leaders continue to pursue Federal policy
that will reduce the human and economic cost of COVID-19, which is why
we have persistently advocated for mask mandates and international
testing requirements supported by a standardized, electronic-based
verification framework.
Meanwhile, largely-unenforceable quarantine measures in the U.S.
continue to impede travel industry recovery, as they run counter to the
purpose of business and leisure travel. These blanket quarantines are
in place, despite the WHO's recommendation that asymptomatic travelers
should self-monitor for symptoms, rather than be required to undergo
quarantine, and CDC's acknowledgement that fully-vaccinated travelers
do not need to self-quarantine.
Countrywide travel restrictions were an effective tool to curb the
early spread of the pandemic, but they, like quarantines, are far too
blunt an instrument now that COVID-19 test and vaccine accessibility is
rapidly expanding worldwide. The bright line rule between banned travel
from regions like the European Union and allowed travel has often
failed to prevent people coming to the U.S. from at-risk areas. For
example, on March 6, 2021, a traveler could fly to the U.S. from Chile,
where there were 1,644 new COVID-19 cases per million people confirmed
that day, but one would generally be unable to travel here from Norway,
where just 67 new cases per million people were reported (per Johns
Hopkins University CSSE COVID-19 Data).
To be clear, we do not expect all quarantine and travel
restrictions to be lifted tomorrow, but the Federal government should
have a transparent plan in place to lift these restrictions once
established benchmarks are achieved. The Federal government has
endorsed states' phased-reopening policies for restaurants, gyms, and
other businesses. In the same light, Congress must work with the
Administration to formulate benchmarks that would allow for the gradual
restart of travel as more people are vaccinated and the pandemic is
brought further under control. The status quo of indefinite
restrictions and ad-hoc decision-making is exacerbating our industry's
financial plight and the job security of our workforce.
Another crucial next step towards recovery is exempting vaccinated
individuals from international testing requirements, while avoiding
vaccine requirements as a prerequisite to travel. This policy shift
would align with the CDC's guidance on domestic travel stating that,
``[f]ully vaccinated travelers do not need to get tested before or
after travel. . .''
Furthermore, the future of air travel depends on the ability of
governments to confidently determine the COVID-19 health status of
travelers, which is why countries around the world are adopting digital
health credentials in lieu of exploitable paper certificates. Since
they rely on accredited labs, digital health credentials add confidence
to the integrity of travelers' test results. Notably, a recent survey
found that just over 9 in 10 international travelers would be
comfortable using digital health credentials for their next trip. These
tools will be essential to global economic recovery, so long as
Congress and the Administration work with the private sector to develop
interoperable standards to address verification, equity, and privacy
concerns.
Lastly, in recognition of the pandemic's devastating impact on
travel--particularly business travel, an industry essential to the safe
restart of travel and the broader economy--Congress must ensure that
TMCs and other air travel industry leaders obtain the financial relief
needed to overcome this crisis. In particular, Congress should utilize
unused CARES Act funds to expand the eligibility of PPP to uniquely
impacted businesses, like large TMCs, that maintain more than 500
employees, and create new, targeted grant programs for the most
impacted sectors.
We hope you will look to our Coalition to provide input as you
consider policy solutions to revive travel. We stand ready to assist
you in any way we can.
______
Response to Written Questions Submitted by Hon. Jacky Rosen to
Steve Hill
National Tourism Strategy. The Federal government last developed a
National Travel and Tourism Strategy before the outbreak of COVID-19.
Since then, the world has changed, and it's time for a new, coordinated
approach to reviving the industry.
Question 1. Thinking about the needs of our Nation's hotels,
conventions, and their workers in the wake of COVID, what priorities do
you think the Department of Commerce should address in a new National
Travel and Tourism Strategy to help the industry recover?
Answer. A new National Travel and Tourism Strategy should include a
global framework toward reopening international borders, particularly
with low risk countries; and should include plans to add more countries
as they become safer. The absence of robust international travel is
felt most acutely in the convention and trade show industry, and if
current border entry restrictions remain, the U.S. is projected to lose
an additional $175 Billion in travel and tourism by the end of this
year \1\.
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\1\ US Travel Association
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A new strategy should also aim to support a positive travel
sentiment among Americans. Wide availability and rapid administration
of vaccines to encourage greater penetration among the U.S. population
is paramount. Highlighting vaccine efficacy to increase confidence in
the vaccine will allow for guidelines such as an increase in capacity
limits and a decrease in social distancing to be encouraged within the
strategy.
Finally, for both international and domestic travel, going to
contactless TSA checkpoints using biometric screening would ensure the
safety of TSA employees, while also providing for the safety of air
travelers. Promoting broader use of these automated tools across the
country would also be helpful within a new strategy. These techniques
have been piloted at Reagan National and Wayne County airports.
Question 2. Mr. Hill, how do you foresee the trade show industry
and convention centers adapting to increase consumer confidence in
business travel? What strategies are in places to increase the number
of conventions held in places like Las Vegas, and how do you see the
convention economy recovering? What can Congress do to help support
this return?
Answer. In 2019 total economic impacts from the Las Vegas
convention segment included 43,000 jobs, $3.1B in wages and salaries
with an overall $11.4B total economic input. To once again achieve
those numbers, or better yet, surpass them, the convention and trade
show industry must adapt to increase traveler confidence and ensure a
safe experience for convention goers.
It is imperative industry stakeholders meet the challenge of
updating their safety infrastructure to include enhanced health
safeguards such as screenings, strict cleanings and social-distancing
rules help to keep convention goers at ease. The Las Vegas Convention
and Visitors Authority has taken several steps to improve air
filtration and ventilation throughout the convention center campus such
as increasing total airflow supply and the percentage of circulated
outdoor air, per CDC recommendations. We were recently awarded the
Global Biorisk Advisory Council, GBAC-STAR facility accreditation from
the Worldwide Cleaning Industry Association. This is the gold standard
for safe facilities and ensures we have gone above and beyond to
address visitor and employee safety aligned with not only state and
local directives, but with emerging global standards.
Congress can support recent legislation that has been introduced
which will be of great benefit to the convention and trade show
industry. Passage of the Hospitality and Commerce Job Recovery Act, a
bipartisan bill sponsored by Senators Cortez Masto and Kramer would
support the convention and trade show industries by establishing a tax
credit for the cost of attending or hosting a convention, business
meeting, or trade show in the U.S. This legislation will be significant
in driving travel demand and has the potential of creating 1.5 Million
jobs and approximately $600 Billion in economic output.
In addition, supporting the passage of the TRAVEL (Transportation
Resources to Add Vital Economic Longevity) Act sponsored by Senator
Cortez Masto would ensure federal, state, and local governments are
taking travel and tourism needs into account within their
transportation plans, helping to boost economies like Nevada's that
have been hit especially hard due to pandemic related travel and
tourism restrictions.
TRAVEL PROMOTION STRATEGIES: Travel Promotion Strategies. Travel
promotion remains critical for highlighting potential travel
destinations to domestic and international visitors. The LVCVA has
implemented successful and iconic marketing campaigns like ``What
Happens in Vegas, Stays in Vegas'', ``What Happens Here, Only Happens
Here'', and ``Why Vegas'' to highlight Las Vegas as a central
destination for a vacation and business travel.
Question 3. As more and more Americans get vaccinated and start
traveling again, can you speak about how you foresee future marketing
campaigns? What should other direct marketing organizations around the
country be considering as they develop their travel promotion
strategies, particularly given a more reluctant traveling public?
Answer. Like all marketing efforts, the key is to be creative and
nimble in responding to and forecasting consumer demand and market
needs. The world is different as a result of the pandemic and marketing
campaigns must rise to the occasion, acknowledging the need to
incentivize safe travel. Targeted marketing efforts to encourage
corporate business travel, associations, and other group segments will
help drive exhibitor and attendee attendance.
Connecting marketing campaigns with other industry stakeholders is
also wise. As airlines plan future flight schedules and aim to optimize
their profitability, destination marketing organizations (DMO) will
need to find ways to stay competitive and help incentivize flights in
and out of their respective destinations.
Further, DMOs are integral parts of their local communities and
should continue to explore avenues to actively participate in the
COVID-19 response. Partnership with local, regional, and state leaders
will be critical for any DMO to manage their recovery strategies.
______
Response to Written Question Submitted by Hon. Dan Sullivan to
Steve Hill
Question. Last week a report was issued on the economic impacts the
cancellation of last year's cruise ship season had on Alaska. The
report estimated the loss annual loss to Alaska exceeds $1.6 billion,
and predicts that a two-season impact could exceed $3.3 billion.
Business meetings have been a significant contributor to the cruise
industry and to Alaska's state economy. It appears there will be a
significant lag before business meetings, conventions and trade shows
rebound following the pandemic.
What can Congress do to help jumpstart the business meeting, trade
show and convention industries?
Answer. Restoring international inbound travel will be essential
toward reactivating convention and business travel. Congress should
look to partner with the CDC and local health agencies to create
sensible Federal guidelines for international travelers which would
allow for freer travel while maintaining safety. Recent CDC decisions
signaling a decreasing need for mask wearing as a result of greater
vaccine penetration are helpful toward incentivizing more travel. The
industry needs the consistent support of Congress toward increased
vaccine availability and messaging to increase confidence in vaccine
efficacy.
Passage of the Hospitality and Commerce Job Recovery Act, a
bipartisan bill sponsored by Senators Cortez-Masto and Kramer would
support the convention and trade show industries by establishing a tax
credit for the cost of attending or hosting a convention, business
meeting, or trade show in the U.S. This legislation will be significant
in driving travel demand and has the potential of creating 1.5 Million
jobs and approximately $600 Billion in economic output.
We would also appreciate Congress providing funding in support of
Brand USA, a public-private partnership that enhances tourism and job
creation across the country through global marketing. Brand USA has
helped to bring 7.5 Million international visitors to the U.S.,
generating a total economic impact of $55 Billion, and supporting over
52,000 jobs annually. Like many in the travel and tourism industry,
Brand USA has suffered financially through the pandemic and an infusion
of Federal funding to will assist them in their vital role toward
restoring visitor volume and jobs.
Finally, showing confidence in the American tourism industry and
our current practice of enhanced health safeguards such as updated HVAC
systems, coupled with widespread COVID-19 vaccine penetration will help
restore faith for American businesses that it is safe and appropriate
to begin business travel once again.
______
Response to Written Questions Submitted by Hon. Jacky Rosen to
Jorge Perez
National Tourism Strategy. The Federal government last developed a
National Travel and Tourism Strategy before the outbreak of COVID-19.
Since then, the world has changed, and it's time for a new, coordinated
approach to reviving the industry.
Question 1. Thinking about the needs of our Nation's hotels,
conventions, and their workers in the wake of COVID, what priorities do
you think the Department of Commerce should address in a new National
Travel and Tourism Strategy to help the industry recover?
Answer. The travel and tourism industry is a pillar of the American
economy. While the industry is beginning to see signs of recovery, full
economic recovery of the industry is not expected to return until 2025
\1\. A coordinated National Travel and Tourism Strategy with the travel
and tourism industry is important for a full and speedy recovery.
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\1\ U.S. Travel
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As travelers become more conscious of safe and alternative ways to
travel, the Department of Commerce and the National Travel and Tourism
Strategy must work to promote safe, high-quality, and unique tourism
experiences. The Department of Commerce should focus on the
infrastructure needed to support and drive such demand, including
modernized and efficient ways to travel by air, rail, and road, which
could include technological advances in check-in procedures at ports of
entry and electronic vehicle charging stations near active roadways.
In addition, international travel spending suffered the sharpest
decline in 2020, falling 76 percent from 2019 levels \2\. The U.S.
travel and tourism industry suffered a loss of $766 billion last year
in direct, indirect, and induced impacts \3\. As states reopen, the
U.S. needs to examine reopening our borders to tourism and welcoming
back our international visitors.
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\2\ U.S. Travel
\3\ World Travel and Tourism Council
Past and Future Relief for Restaurants and Hotels. Like our hotels,
Nevada's restaurants have been struggling due to the COVID-19 slowdown
in travel and tourism. According to a recent report conducted by the
National Restaurant Association, sixty-two percent of fine-dining
operators and fifty-four percent of family dining and casual dining
operators say that staffing levels remain twenty percent below the pre-
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pandemic average.
Question 2. Which type of relief, such as PPP, EIDL, and the
Employee Retention Tax Credit, was the most helpful with keeping hotels
and resorts afloat?
Answer. The coronavirus pandemic continues to be a devastating
health crisis that has caused severe economic impacts throughout the
world. The Las Vegas Strip went dark for the first time in its history,
with resorts, casinos, hotels, and other businesses closing
indefinitely in March 2020. Actions taken by Congress to provide relief
to the travel and tourism industry provided much needed relief to many
throughout the industry. Our small business partners have been able to
stay in business through programs such as the Paycheck Protection
Program. Communities have benefited from extended unemployment
insurance benefits and economic injury disaster loans. MGM Resorts was
aided in our efforts to provide extended health care benefits to our
employees and their families through the Employee Retention Tax Credit.
As our country continues to recover, I urge Congress to consider
policy priorities for the travel and tourism industry, including the
bipartisan Hospitality and Commerce Job Recovery Act of 2021 which
provides individual tax credits to stimulate nonbusiness travel,
restores the entertainment business expense deduction, and would
provide tax relief for restaurants and food beverage companies.
Additionally, it would assist another vital part of the travel economy
through tax credits associated with reopening facilities for convention
and trade shows, including renovation, remediation, PPE, cleaning,
testing, and other associated labor costs.
______
Response to Written Question Submitted by Hon. Dan Sullivan to
Jorge Perez
Question. Last week a report was issued on the economic impacts the
cancellation of last year's cruise ship season had on Alaska. The
report estimated the loss annual loss to Alaska exceeds $1.6 billion,
and predicts that a two-season impact could exceed $3.3 billion.
Business meetings have been a significant contributor to the cruise
industry and to Alaska's state economy. It appears there will be a
significant lag before business meetings, conventions and trade shows
rebound following the pandemic.
What can Congress do to help jumpstart the business meeting, trade
show and convention industries?
Answer. While the tourism industry is beginning to see signs of
recovery, full economic recovery of the industry is not expected to
return until 20251. Business travel is forecasted to be down 85 percent
through the beginning of 2021, and then only begin increasing slightly.
Congress has helped the industry stay afloat through various programs
such as the Employee Retention Tax Credit and the Paycheck Protection
Program. Congress can continue to help recovery by passing measures
such as those included in the Hospitality and Commerce Job Recovery
Act, which includes incentives for business travel such as tax credits
for the cost of attending or hosting a trade show or convention, and
for qualified restart costs for venues hosting business meetings, trade
shows, and conventions, to ensure such events are hosted safely. The
travel industry has been one of the hardest hit industries as a result
of COVID-19 and we look forward to working with Congress to support
measures that encourage both leisure and business travel.
______
Response to Written Question Submitted by Hon. Dan Sullivan to
Tori Emerson Barnes
Question. Last week a report was issued on the economic impacts the
cancellation of last year's cruise ship season had on Alaska. The
report estimated the loss annual loss to Alaska exceeds $1.6 billion,
and predicts that a two-season impact could exceed $3.3 billion.
Business meetings have been a significant contributor to the cruise
industry and to Alaska's state economy. It appears there will be a
significant lag before business meetings, conventions and trade shows
rebound following the pandemic.
What can Congress do to help jumpstart the business meeting, trade
show and convention industries?
Answer. Thank you for the question. Business travel spending in the
U.S. fell from $348 billion in 2019 to just $103 billion in 2020--a 70
percent decline. General business travel spending declined by 66
percent while conferences, conventions, and trade show spending
declined by 77 percent. In Alaska, business travel went from $420
million in 2019 to $110 million in 2020, a 74 percent loss. While some
states and businesses across the country are reopening, business travel
remains constrained by overly broad State and local restrictions on
large gatherings that don't take into account industry standards and
practices that are known to be effective against the spread of COVID-19
and can allow business meetings and events to safely resume.
There are two specific things Congress could do to help revive
business meetings and events. First, Congress should call on the CDC to
promptly provide guidance for the safe return of professional meetings
and events (PMEs)--guidance that acknowledges the controlled
environment in which they occur. PMEs are tightly supervised, involving
months of planning and preparation. They allow for a more reliable
application of health and safety measures than social gatherings and
large public events, and therefore should have specialized guidance.
Furthermore, such guidance should be adaptable to changing dynamics on
the ground, in accordance with the recommendations of the CDC's own
COVID-19 Response Team:
Often, decisions made with the intent to reduce the disease
burden during a pandemic are made with incomplete information.
Effectiveness of mitigation strategies and adoption of
recommended behaviors must be continually reevaluated
throughout the pandemic, even as vaccination continues, and
prevention strategies must be adapted to the current situation
and local context, informed by local data, such as case control
investigations.
Identifying COVID-19 Risk Through Observational Studies to Inform
Control Measures (pg. 1-2)Static risk controls divorced from new
information, evolving conditions on the ground, or general community
needs not only become less effective over time but can also hurt the
communities they're meant to serve.
Second, Congress should pass the Hospitality and Commerce Jobs
Recovery Act (S. 477). The bill contains targeted incentives to
encourage businesses to reengage in contracting and planning business
meetings and events. The bill also includes tax breaks to help meeting
venues cover the cost of health and safety investments, as well as tax
incentives to encourage low-and moderate-income Americans to resume
travel planning. According to Tourism Economics, business travel
spending will take an estimated four years to recover to pre-pandemic
levels, which would be a significant drag on rehiring in the travel
industry. S. 477, if enacted, will significantly accelerate the pace of
recovery in the travel industry, generating close to $600 billion in
economic activity that wouldn't have otherwise occurred, producing 1.5
million net new jobs, and shortening the recovery timeline to just 3
years.
Having lost over a year of business to the pandemic, it's important
to quickly put these measures in place to allow for the safe return of
business meetings and events and help restore travel demand across the
country.
Thank you for your question.
______
Response to Written Question Submitted by Hon. Dan Sullivan to
Carol B. Dover
Question. Last week a report was issued on the economic impacts the
cancellation of last year's cruise ship season had on Alaska. The
report estimated the loss annual loss to Alaska exceeds $1.6 billion,
and predicts that a two-season impact could exceed $3.3 billion.
Business meetings have been a significant contributor to the cruise
industry and to Alaska's state economy. It appears there will be a
significant lag before business meetings, conventions and trade shows
rebound following the pandemic.
What can Congress do to help jumpstart the business meeting, trade
show and convention industries?
Answer. Thank you for the opportunity to address this question.
Business travel, trade shows, and conventions significantly contribute
to the success of Florida's hotels and restaurants, as well as to the
overall state economy. Business travel remains down 85 percent, and
large events and conventions have yet to come back. Here are a few
things Congress could do to support the business meeting, trade show,
and convention industries.
First, they could increase tax breaks for business travel and
expenses.
A second option would be to subsidize airlines and rental cars to
reduce fares and rates, making travel more economical to consumers.
Rental car prices have soared and airline tickets, once at their
cheapest levels in recent history, have increased to--in some cases--
higher than pre-pandemic.
A third option would be to raise the travel reimbursement and
expense limitations for government employee travel.
As referenced in the question, cruises also significantly impact
Florida's tourism and business sectors, and we need to get our cruises
operating again. Data released from the Cruise Lines International
Association shows that Florida accounted for more than 60 percent of
all passenger embarkations in the U.S. in 2019. Florida businesses
received more than $9 billion in direct expenditures, which generated
total economic impacts of nearly 160,000 jobs and over $8 billion in
statewide income.
Another potential option that might help in national recovery would
be Federal or national COVID-19 liability protections for businesses
acting responsibly. We passed this important legislation for Florida
businesses, but many of our conference and other visitors are from out
of state.
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