[Senate Report 111-25]
[From the U.S. Government Publishing Office]
111th Congress Report
SENATE
1st Session 111-25
_______________________________________________________________________
Calendar No. 71
TRAVEL PROMOTION ACT OF 2009
__________
R E P O R T
OF THE
COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
on
S. 1023
June 5, 2009.--Ordered to be printed
Filed, under authority of the order of the Senate of June 4, 2009
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
one hundred eleventh congress
first session
JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii KAY BAILEY HUTCHISON, Texas
JOHN F. KERRY, Massachusetts OLYMPIA J. SNOWE, Maine
BYRON L. DORGAN, North Dakota JOHN ENSIGN, Nevada
BARBARA BOXER, California JIM DeMINT, South Carolina
BILL NELSON, Florida JOHN THUNE, South Dakota
MARIA CANTWELL, Washington ROGER F. WICKER, Mississippi
FRANK R. LAUTENBERG, New Jersey JOHNNY ISAKSON, Georgia
MARK PRYOR, Arkansas DAVID VITTER, Louisiana
CLAIRE McCASKILL, Missouri SAM BROWNBACK, Kansas
AMY KLOBUCHAR, Minnesota MEL MARTINEZ, Florida
TOM UDALL, Colorado MIKE JOHANNS, Nebraska
MARK WARNER, Virginia
MARK BEGICH, Alaska
Ellen Doneski, Chief of Staff
James Reid, Deputy Chief of Staff
Bruce Andrews, General Counsel
Christine Kurth, Republican Staff Director and General Counsel
Paul J. Nagle, Republican Chief Counsel
Todd Bertoson, Republican Senior Counsel
Calendar No. 71
111th Congress Report
SENATE
1st Session 111-25
======================================================================
TRAVEL PROMOTION ACT OF 2009
_______
June 5, 2009.--Ordered to be printed
Filed, under authority of the order of the Senate of June 4, 2009
_______
Mr. Rockefeller, from the Committee on Commerce, Science, and
Transportation, submitted the following
REPORT
[To accompany S. 1023]
The Committee on Commerce, Science, and Transportation, to
which was referred the bill (S. 1023) to establish a non-profit
corporation to communicate United States entry policies and
otherwise promote leisure, business, and scholarly travel to
the United States, having considered the same, reports
favorably thereon with amendments and recommends that the bill
(as amended) do pass.
PURPOSE OF THE BILL
The purpose of the Travel Promotion Act of 2009, as
reported, is to increase international travel to all areas of
the United States, communicate United States travel policies
overseas, and make entry procedures into the United States more
efficient and welcoming.
BACKGROUND AND NEEDS
Travel and tourism generates approximately $1.3 trillion in
economic activity in the United States every year. The United
States travel and tourism industry is one of the nation's
largest employers with approximately 8.3 million direct travel-
generated jobs. According to the Department of Commerce (DOC),
international travel receipts (travel-related tourism spending,
including passenger fares) in the United States were $142.1
billion in 2008, which surpassed the previous record of 2007 by
16 percent. The bulk of these dollars came from purchases made
by international visitors, which totaled $110.5 billion in
2008. Travel and tourism exports (food, lodging, recreation,
gifts, entertainment, transportation, etc.) accounted for eight
percent of all U.S. exports and 27 percent of services exports.
In percentage terms, U.S. travel and tourism related exports
showed the strongest growth for Italy (up 38 percent), France
(up 38 percent), Argentina (up 32 percent), Netherlands (up 32
percent), and China (up 31 percent). The top five international
markets for U.S. travel and tourism exports include Canada
($18.7 billion), United Kingdom (17.5 billion), Japan ($15.1
billion), Mexico ($9.8 billion), and Germany ($6.5 billion).
According to the U.S. Travel Association, an increase of one
percent in international travel market share would produce a
$3.9 billion increase in payroll receipts. While the tourism
industry continues to be vital to the U.S. economy, the United
States' share of the world market of international tourism is
in decline. The U.S. Travel Association noted that since 9/11,
the 17 percent decline in America's share of international
travelers has resulted in the loss of more than 200,000 jobs
and nearly $100 billion in lost visitor spending. According to
the DOC, in 1992, the United States attracted 9.4 percent of
all international tourist arrivals from around the world. In
2007, the United States attracted only 6.2 percent of total
international arrivals. Federal officials and travel and
tourism industry executives have been grappling with how to
reinvigorate the tourism industry to recapture lost world
market share. Officials and experts note two issues that
contribute to the decline and need to be addressed: (1) lack of
a coordinated international tourism advertising campaign; and
(2) increased difficulty for international visitors to gain
entry to the United States.
The Federal government recognizes the importance of travel
to the U.S. economy. The DOC has taken an active role to
promote international travel to the United States, but
Departmental emphasis on specific promotions has waxed and
waned over time. In addition, following September 11, 2001, the
U.S. government increased border security dramatically, which
resulted in a significant decrease in the number of visitors to
the United States. Recently, the State Department and the
Department of Homeland Security (DHS) have recognized the need
to make the visa and entry process more efficient and welcoming
for foreign visitors, while maintaining border security. In
2006, former Secretary of State Condoleeza Rice and former
Secretary of Homeland Security Michael Chertoff initiated a
joint agreement, the Rice-Chertoff Joint Vision to Ensure
Secure Borders and Open Doors (Rice-Chertoff Joint Vision), to
utilize technology and eliminate inefficiencies to improve
border security and the ability for international travelers' to
participate in United States tourism and border security.
Despite these efforts, the travel industry continues to push
for greater reforms.
The Economic Crisis and the Impact on Business Travel.
Industry experts believe that the travel and tourism industry
could lose nearly 250,000 travel-related jobs in 2009 due to
the economic downturn and the growing public perception that
business travel is wasteful and unethical. A report
commissioned by The Economist and released on February 10,
2009, found that executives will make fewer, shorter, and
cheaper business trips in 2009 and prefer basic efficiency over
luxury services. Similarly, a recent survey by the Association
for Corporate Travel Executives, found that 60 percent of
American businesses would avoid taking business trips to an
exotic locale to avoid public backlash, even if the proposed
location were cheaper.
History of Federally Funded International Travel Promotion.
Federal promotion of tourism in the United States dates back to
the establishment of the U.S. Travel Bureau in 1937. However,
only in the past 40 years has the DOC had an office or
administration that promotes U.S. tourism to foreign nationals
through coordinated advertising. Enacted in 1961, the
International Travel Act required the Secretary of Commerce,
through the establishment of the U.S. Travel Service (USTS), to
carry out a program that encouraged travel to the United States
by foreign nationals. Appropriations directed to the USTS
increased until 1977, when Congress and the White House began
scaling back the government's role in advertising. Federal
funding for advertising was eliminated in 1996, when Congress
abolished the U.S. Travel and Tourism Administration (USTTA),
the successor of USTS. Between 2001 and 2003, total tourism
receipts dropped almost 12 percent, and tourism-related
industries lost approximately 390,000 jobs. Congress decided to
reinitiate Federal tourism advertising in 2003 in response to
the downturn. The FY 2003 Consolidated Appropriations
Resolution (P.L. 108-7, Sec. 210), authorized the Secretary of
Commerce to ``award grants and make direct lump sum payments in
support of an international advertising and promotional
campaign developed in consultation with the private sector to
encourage individuals to travel to the United States consisting
of radio, television, and print advertising and marketing
programs.'' This law also established the United States Travel
and Tourism Advisory Board (USTTAB) and provided a one-time $50
million appropriation, though $44 million was later rescinded.
The USTTAB, re-chartered in August 2005 and again in September
2007, is comprised of up to 15 senior travel and tourism
executives from across the United States. These members advise
the Secretary of Commerce on how best to increase the number of
international visitors to the United States and make sure that
the share of the country's international receipts continues to
grow. In addition, the board advises the Secretary on the
creation of a national tourism policy. On September 5, 2006,
the USTTAB issued a report to the DOC entitled, Restoring
America's Travel Brand: A National Strategy to Compete for
International Visitors, in which it recommended actions in the
following four areas to help improve America's standing in the
international travel market. Its recommendations are summarized
below.
Barriers to Travel. The USTTAB report recommended removing
unnecessary barriers to travel. The report highlighted concerns
about the current waiting periods for legitimate travelers. The
USTTAB noted that the Nonimmigrant Visa Program is
understaffed. It cited a General Accountability Office report
that found almost half of the State Department's 211 visa-
issuing posts reported maximum wait times for visa interviews
of 30 days or more. The USTTAB was particularly concerned about
the long waits in Brazil, China, India, Mexico and Venezuela.
Since the report was released, the State Department has greatly
improved its interview wait times.
Creating a Welcoming First Impression. The report contained
numerous suggestions about how to make the first arrival
experiences of international travelers more welcoming. The
USTTAB report recommended fully staffing the Customs and Border
Patrol (CBP) and the Transportation Security Administration
(TSA) to reduce wait times at inspection points. Another
problem discussed in the report was the delay caused by re-
screening passengers by TSA. The report noted the examples of
Canada and the Netherlands as countries that prioritized
efficient inspections and succeeded in attracting more
travelers because of the changes. Members of the USTTAB and
other industry participants have offered their expertise in
managing waiting lines and staffing patterns to Federal
agencies interfacing with travelers. The U.S. Travel
Association began discussions with the Under Secretary of State
for Public Diplomacy and Public Affairs in that effort. The
travel and tourism industry also has offered to advise Federal
agencies on signage and the use of international symbols to
direct and prepare travelers for the inspection process.
Several leading travel companies stated their willingness to
loan customer service/hospitality experts to provide training
for CBP officers at the Federal Law Enforcement Training Center
in Georgia.
Provide a Stronger Voice for Travel and Tourism in
Government. The USTTAB report found that the countries that
claim the largest share of the growth in the international
travel market are those that have either ministries of tourism
or other governmental entities that help coordinate tourism
policy decisions. The United States, by contrast, has neither a
dedicated office of tourism nor an official to advocate at the
highest policy levels. The USTTAB report recommended the
creation of an office with the power to coordinate government
policy to enhance the nation's competitive standing in the
global travel market. That Federal office would:
Serve as an institutional home and voice for the industry;
Energize the interagency process for travel and tourism
through an elevated Tourism Policy Council, with ex officio
status for private sector representatives, and ensure all
government decisions potentially affecting this industry
receive early attention in the interagency process;
Identify existing private sector advisory committees that
included representatives from the tourism industry, while
widely sharing their recommendations across agencies and with
other private sector groups and the public; and Coordinate the
roles of other government agencies to more effectively expand
travel and tourism promotion while addressing infrastructure
needs and development.
Avoid Inappropriate Taxes, Fees, and Regulations. The
USTTAB report argued that Federal, state, local, special entity
and foreign-government imposed taxes and fees on rental cars,
commercial aviation, hotels and restaurant meals, among other
services, increase the cost of travel and can dampen demand for
inbound travel. In the report, the USTTAB asked the DOC to
advocate against discriminatory taxing structures and to work
within the interagency process to discourage travel taxes
imposed by international authorities when the revenue raised
has no clear benefit or connection to the travel and tourism
industry.
In addition, the report reiterated and supported the
airline industry's request for a review of the CBP rates and
charges based on costs, due to concerns about further
increasing costs on international travelers.
Travel Promotion Activity by States. Many States invest
significant time and resources to promote tourism. According to
the U.S. Travel Association, the projected State tourism office
budget for 2007-2008, for all 50 States, is $869 million. The
average State budget is $17 million. For most States, however,
only a small portion of their budgets is designated for
international advertising and sales promotions. State
international promotions generally focus on a limited number of
attractions in the state and target countries with likely
visitors. States rarely work in conjunction with their
neighbors to cross-promote destinations and encourage longer,
more expansive visits to the United States. Moreover, many
States cannot afford large international initiatives and
therefore foreign visitors are less likely to know about and
travel to such States.
A national travel promotion program would be well
positioned to spotlight a range of travel destinations and
tourist options throughout America. States that do not have the
resources to target international travelers would benefit from
increased exposure through a national campaign.
In addition, State-operated promotion programs have neither
the resources nor the incentive to address international
travelers' concerns and questions regarding the U.S. visa
application process and entry procedures. As the USTTAB pointed
out, the United States' visa and entry procedures have created
the perception that international travelers are not welcome to
the United States. Some analysts contend that a national
promotion program operated with input from the DOC, the State
Department, and the DHS would be in a position to ameliorate
the concerns of international travelers over Federal government
processes.
SUMMARY OF PROVISIONS
S. 1023 would establish a nonprofit corporation
(Corporation) to create and execute a nationally coordinated
travel promotion program. The program's purpose would be to
accurately communicate the Nation's travel policies, to
encourage travel to the United States, and to provide
international exposure for areas of the United States that do
not have the resources to promote themselves overseas. The
Corporation would be governed by an 11-member board of
directors appointed by the Secretary of Commerce, which
consists of representatives from States, the Federal
government, and the sectors of the travel industry. In the
first year, the Corporation would be provided $10 million from
moneys collected from travelers under the Electronic System for
Travel Authorization (ESTA) system currently being established
by the DHS. After FY 2010, in order to be entitled to receive
Federal funding, the Corporation would be required to raise
non-Federal money and in-kind matching contributions at the
rate of 50 percent in fiscal year 2011 and 100 percent in the
subsequent years.
In addition, the Travel Promotion Act would establish an
office in the DOC known as the Office of Travel Promotion. The
Office would serve as a liaison to the Corporation, work with
the Secretaries of State and Homeland Security to ensure that
international visitors are processed efficiently, and to
promote travel to the United States.
LEGISLATIVE HISTORY
The Subcommittee on Competitiveness, Innovation and Export
Promotion on May 13, 2009, held a hearing on the Travel
Promotion Act of 2009, as well as the economic and security
issues relevant to promoting travel to America. The
Subcommittee heard testimony from representatives of the travel
industry and State tourism agencies regarding their
perspectives as to the state of the travel industry,
difficulties that travelers face coming to the United States,
and recommendations for encouraging international travel to
America.
On May 12, 2009, Senator Byron Dorgan introduced S. 1023,
the Travel Promotion Act of 2009, which was referred to the
Committee on Commerce, Science, and Transportation. Chairman
Rockefeller was an original cosponsor of the measure. When S.
1023 was considered in executive session, Senators Ensign,
Inouye, Martinez, Klobuchar, Begich, Udall of New Mexico and
Vitter also were cosponsors of the legislation.
On May 20, 2009, the Committee met in an open executive
session to consider S. 1023. Senator Dorgan offered an
amendment that made technical corrections to the legislation.
The Travel Promotion Act of 2009, as amended, was accepted
by voice vote and the Committee ordered the bill be reported.
ESTIMATED COSTS
In compliance with subsection (a)(3) of paragraph 11 of
rule XXVI of the Standing Rules of the Senate, the Committee
states that, in its opinion, it is necessary to dispense with
the requirements of paragraphs (1) and (2) of that subsection
in order to expedite the business of the Senate.
REGULATORY IMPACT STATEMENT
In accordance with paragraph 11(b) of rule XXVI of the
Standing Rules of the Senate, the Committee provides the
following evaluation of the regulatory impact of the
legislation, as reported:
Number of persons covered
The formation of the Corporation would require
representatives of various sectors of the travel industry to
participate on its board of directors. The general travel and
tourism industry will not be impacted by S. 1023 directly,
unless the Corporation chose to initiate a referendum under
Section 6. At that point, impacted members of the travel and
tourism industry would participate in a referendum and, if an
assessment is approved, pay the assessment.
Economic impact
S. 1023 is not expected to have an adverse impact on the
Nation's economy. Rather, promoting international travel to the
United States through the creation of the Corporation and
establishing an Office of Travel Promotion within the DOC
should substantially increase the number of international
travelers to America, which will result in economic growth in
the travel industry.
Privacy
S. 1023 would have no anticipated impact on the privacy
rights of individuals.
Paperwork
In general, there will not be an increase in paper work for
members of the travel and tourism industry. If the Corporation
initiates a referendum and assessment under Section 6, then
affected companies would need to submit associated paperwork.
SECTION-BY-SECTION ANALYSIS
Section 1. Short title
The section cites the short title of the bill as the
``Travel Promotion Act of 2009.''
Section 2. The Corporation for Travel Promotion
The section establishes the Corporation for Travel
Promotion as a nonprofit corporation governed by an 11-member
board of directors appointed by the Secretary of Commerce. The
members shall represent State and local interests, the Federal
government, the small business community, hotels, restaurants
and retail businesses, air transportation, attraction
businesses, the intercity passenger railroad business, and
travel distribution services. The members of the board are
required to have professional expertise in travel and
international travel promotion and marketing, and to broadly
represent all regions of the United States. No member of the
board may be considered a Federal employee by virtue of his or
her service on the board.
The board shall appoint an executive director and other
officers who shall be responsible for hiring staff necessary to
carry out the mission of the Corporation. No political test or
qualification shall be used in personnel actions with respect
to officers or employees of the Corporation. The Corporation
may not contribute to or otherwise support any political party
or candidate for elective public office. The Committee further
intends that the Corporation not engage in activities to
directly or indirectly influence legislation.
The Corporation must develop and implement a plan to: (1)
provide information to travelers, tour operators, and other
international travel stakeholders, including materials provided
by the Federal government concerning entry requirements and
other information that would allow travelers to better navigate
the process of entering the United States; (2) counter and
correct international misperceptions regarding United States
travel policy; (3) maximize the economic and diplomatic
benefits of travel to America through promotional activities;
(4) ensure that the Corporation's promotional efforts benefit
all 50 states and the District of Columbia, including areas not
traditionally visited by international travelers; and (5)
prioritize the use of Corporation resources towards countries
and potential travelers that are most likely to travel to
America. In order to carry out its mission, the Corporation is
empowered to contract with public and private entities hire or
accept voluntary services of consultants and experts, and such
other actions as may be necessary. Promotional expenditures of
over $25,000,000 must be authorized by a vote of at least 2/3
of the board at a meeting at which six of more members are
present.
Meetings of the board must be open to the public with the
limited exception that portions of a meeting may be closed for
the period of time necessary to preserve the confidentiality of
commercial or financial information or to discuss legal
matters. An independent accounting firm must conduct an annual
audit of its operations, and the Corporation must provide the
Comptroller General and the Congress full and complete access
to its books and records.
Section 3. Accountability measures
The section requires the Corporation's board to establish
annual objectives for the Corporation subject to approval by
the Secretary of Commerce and establish a marketing plan for
each fiscal year. It also must submit an annual budget to the
Secretary with an explanation of any expenditure in excess of
$5 million, which shall be made available to the public. The
Corporation must submit an annual report to the Secretary of
Commerce for transmittal to Congress detailing its operations,
activities, financial conditions, and accomplishments, as well
as an objective and quantifiable measurement of the
Corporation's progress on an objective-by-objective basis, and
an explanation of the reason for any failure to achieve an
objective established by the board.
Section 4. Matching public and private funding
The section establishes a fund in the Treasury known as the
Travel Promotion Fund (Fund). For fiscal year 2010, the
Corporation shall be provided up to $10 million from the ESTA
to cover its initial expenses and activities under the Act.
Subsequently, the Secretary of Treasury shall transfer not more
than $100,000,000 in fees collected pursuant to section 5 of
the Act to the Fund. Based on the amount of private industry
contributions raised by the Corporation, the Secretary of the
Treasury may distribute to the Corporation matching moneys from
the Fund. At least 20 percent of the private-sector
contributions must be in cash and remaining contributions may
be in-kind contributions such as television advertising time,
advertisement space or services calculated at the fair market
value of such goods or services. The Corporation shall have the
right to refuse any contribution that is not useful or
inappropriate. For fiscal year 2011, the Corporation must
provide matching funds from non-Federal sources equal to 50
percent of the amount received from the government. After
fiscal year 2011, the Corporation must provide matching funds
from non-Federal sources equal to 100 percent of the amount
received from the government. Matching Federal funds will not
exceed $100 million per year. To the extent that industry
contributions entitle the Corporation to more matching money
than is available in the Fund in a given year, the value of
contributions may be carried forward for matching purposes in
subsequent years.
Section 5. Travel Promotion Fund fees
The Secretary of the Department of Homeland Security shall
establish and collect a fee from the ESTA, which will include a
$10 fee for the matching funds for the Corporation. The
authorization to collect the fee for the Travel Promotion Fund
will expire on September 30, 2014.
Section 6. Assessment authority
The Corporation may impose an annual assessment on the
United States travel industry, other than airlines and small
businesses, of up to $20 million. Prior to initiating such an
assessment, the members of the industry that would be assessed
must agree to such an assessment by referendum. The Corporation
shall establish a means of collecting the assessment and may
bring suit in Federal court to compel compliance with an
assessment. Pending disbursement of the funds assessed, the
Corporation may invest the funds in any interest-bearing
account.
Section 7. Office of Travel Promotion
The section establishes the Office of Travel Promotion in
the DOC. The office would serve as liaison to Corporation,
support and develop programs to increase the number of
international visitors to the United States, support state,
regional, and private sector initiatives to promote travel to
and within the United States, and work with the Departments of
State and Homeland Security to ensure that international
visitors are processed efficiently. Within a year after the
date of enactment, the Secretary shall transmit a report to
Congress describing the office's work with the State Department
and DHS to ensure that international visitors are processed
efficiently.
Section 8. Research program
The section amends the International Travel Act of 1961 and
requires that the Office of Travel and Tourism Industries to
expand its research and development activities in support of
promoting international travel to the United States, including
expanding access to official Mexican travel surveys data,
improving the DOC's Survey of International Travelers,
developing estimates of international travel exports on a
State-by-State basis, and evaluating the success of the
Corporation in achieving the objective set forth in the Act.