[Senate Hearing 110-79]
[From the U.S. Government Publishing Office]
S. Hrg. 110-79
PROMOTING TRAVEL TO AMERICA: AN
EXAMINATION OF ECONOMIC AND SECURITY CONCERNS
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HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
JANUARY 31, 2007
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
U.S. GOVERNMENT PRINTING OFFICE
34-743 PDF WASHINGTON DC: 2006
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0SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
DANIEL K. INOUYE, Hawaii, Chairman
JOHN D. ROCKEFELLER IV, West TED STEVENS, Alaska, Vice Chairman
Virginia JOHN McCAIN, Arizona
JOHN F. KERRY, Massachusetts TRENT LOTT, Mississippi
BYRON L. DORGAN, North Dakota KAY BAILEY HUTCHISON, Texas
BARBARA BOXER, California OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida GORDON H. SMITH, Oregon
MARIA CANTWELL, Washington JOHN ENSIGN, Nevada
FRANK R. LAUTENBERG, New Jersey JOHN E. SUNUNU, New Hampshire
MARK PRYOR, Arkansas JIM DeMINT, South Carolina
THOMAS R. CARPER, Delaware DAVID VITTER, Louisiana
CLAIRE McCASKILL, Missouri JOHN THUNE, South Dakota
AMY KLOBUCHAR, Minnesota
Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
Lila Harper Helms, Democratic Deputy Staff Director and Policy Director
Margaret Spring, Democratic General Counsel
Lisa J. Sutherland, Republican Staff Director
Christine D. Kurth, Republican Deputy Staff Director
Kenneth R. Nahigian, Republican Chief Counsel
C O N T E N T S
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Page
Hearing held on January 31, 2007................................. 1
Statement of Senator Dorgan...................................... 1
Prepared statement........................................... 2
Statement of Senator Inouye...................................... 3
Prepared statement........................................... 3
Statement of Senator Stevens..................................... 4
Prepared statement........................................... 4
Statement of Senator Thune....................................... 25
Witnesses
May, James C., President/CEO, Air Transport Association.......... 15
Prepared statement........................................... 17
Porter, Stevan, President, The Americas, InterContinental Hotels
Group; Chairman, Discover America Partnership.................. 5
Prepared statement........................................... 6
Rasulo, Jay, Chairman, Walt Disney Parks and Resorts; Chairman,
Travel Industry Association; Chairman, U.S. Travel and Tourism
Advisory Board................................................. 12
Prepared statement........................................... 14
Tisch, Jonathan M., Chairman, Travel Business Roundtable;
Chairman/CEO, Loews Hotels..................................... 8
Prepared statement........................................... 10
Appendix
Response to written questions submitted by Hon. Frank R.
Lautenberg to:
James C. May................................................. 33
Stevan Porter................................................ 32
Jay Rasulo................................................... 32
Jonathan M. Tisch............................................ 31
PROMOTING TRAVEL TO AMERICA: AN
EXAMINATION OF ECONOMIC AND
SECURITY CONCERNS
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WEDNESDAY, JANUARY 31, 2007
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 2:50 p.m. in room
SR-253, Russell Senate Office Building, Hon. Byron L. Dorgan,
presiding.
OPENING STATEMENT OF HON. BYRON L. DORGAN,
U.S. SENATOR FROM NORTH DAKOTA
Senator Dorgan. [presiding] We will call the hearing to
order today, this is the Senate Committee on Commerce, Science,
and Transportation. It's a full Committee hearing on the issue
of promoting travel to our country and an examination of the
economic and safety concerns of those issues.
I am joined by my colleague, the Chairman of the full
Committee, who has asked me to chair this Committee hearing. I
am the Chairman of the Subcommittee that deals with the issue
of tourism.
I am joined by the Chairman, Senator Inouye, and the former
Chairman of this Committee, Senator Stevens.
I'd just like to make some very brief comments, then I will
turn to my colleagues, and then we will turn to the witnesses.
We welcome all of you here today. A lot of very important
work has been done by organizations and groups dealing with the
subject of travel and tourism.
Travel and tourism is a very important part of our economy.
It's well over a trillion dollars to the American economy, and
it provides many jobs.
And in the shadow of 9/11 and also in the intervening years
with the war in Iraq and other issues, we have seen substantial
decline in the share of destination tourism to the United
States versus tourism and travel and tourism around the rest of
the world.
Consequently, there is a discussion going on in this
country about what we can do to reach out to the rest of the
world, and what we can do to promote travel and tourism in our
country. We think it is important to tell the rest of the
world, ``You're welcome here. Come and see this country. We
have a lot to offer; it is a great, great place.''
Understanding and seeing America firsthand is something, I
think that promotes greater understanding around the world
about who we are and what we are about. I think all of us share
a determination to see how we can better effectively--or more
effectively, rather--accomplish that.
None of us, I believe, are interested, in any way, in
sacrificing security issues in the name of the economy. We
understand that what we need to do, and will do, in trying to
promote travel and tourism in this country, has to be
consistent with the interests of national security.
And again, in the shadow of 9/11, the issues of national
security have become ever more important. We understand there
is a war on terrorism and terrorists going on--we want to try
to keep bad people out of this country. We want to have
sufficient border security to try to prevent terrorists from
entering our country. We understand all of that, and no one is
more sensitive to that than my two colleagues who have been
involved in the security and defense issues for many, many
decades.
Although we are certainly familiar with that issue, and
cognizant of it, we--at the same time--believe that you can
develop an approach that recognizes and addresses our security
interests, and at the same time does more to promote our travel
and tourism.
Many of our allies have engaged in a much more aggressive
campaign, fueled with substantial investment dollars to promote
tourism to their countries, and at about the same time, we
have--in many ways--retracted in this country.
We used to have a specific agency in the Commerce
Department, that was abolished in the mid-1990s, to address
some of these issues.
But we felt that it was important to both have an early
hearing and have an opportunity to hear from witnesses about
their views on this issue of travel and tourism and promoting
our country as a destination for tourists. We felt it was
important to also examine, in the context of that, economic and
security issues.
So, I'm pleased that witnesses have come forward to testify
today, and Mr. Chairman, thank you for allowing me--as the
Subcommittee Chairman--to chair the full Committee hearing
today.
[The prepared statement of Senator Dorgan follows:]
Prepared Statement of Hon. Byron L. Dorgan,
U.S. Senator from North Dakota
Today's hearing is the first in a series of hearings to examine the
reasons why the United States is becoming less competitive in
attracting international travelers. While travel and tourism is
America's second largest services export industry creating a $9.7
billion balance of trade surplus in 2005, other countries have gained
market share to our detriment. In 1992, the United States had 9.4
percent of the total international travel market. In 2004, that number
slipped to 6 percent, and if we do nothing to address this trend we
will lose even more market share.
The absence of Federal leadership in travel promotion has
encouraged states to fill that void, such as the efforts made by my
home state of North Dakota. Tourism is an essential industry for North
Dakota. It is the state's second largest industry, with visitors
spending $3.36 billion in 2004. The investment that North Dakota made
to encourage travel and tourism has reaped enormous benefits, with the
state getting a return of investment of almost $82 for each dollar
spent on travel promotion. While states have made inroads to attracting
travelers, the lack of a coordinated Federal campaign creates a
comparative disadvantage to countries that have centralized ministries
or offices to encourage international travel to their countries. The
example of North Dakota should be a lesson for the entire country. A
small investment has the potential to create a significant windfall for
our economy.
However, investing in promotion means nothing if the underlying
impediments to international travel are not addressed. Travel industry
leaders have done extensive research and polling to find that
international travelers believe the process to come to America is one
of the worst in the world. The visa application process has been
inefficient, with travelers in some countries having to wait extended
periods before receiving an answer on an application. And if the
traveler is successful in obtaining a visa, he is met by a confusing
and inhospitable border and entry process. Word of mouth is a powerful
thing, and the terrible reputation we have earned is an additional
hurdle to encouraging more people to visit America. It is not just
about losing destination tourists. Businesses are losing clients to
companies in other countries because of how hard it is to enter the
United States. The economic health of the country however must also be
balanced with homeland security. We should by no means decrease the
security of the Nation for economic gain, but I believe there is room
to make the visa and entry process more efficient and welcoming. Our
competitors in the European Union appear to have found that balance.
Our agencies can do the same.
I look forward to listening to today's witnesses and we will have a
second hearing in the near future to hear from the State Department and
the Department of Homeland Security. I plan to work with Chairman
Inouye and the other members of the Commerce Committee to examine these
issues thoroughly and begin work on legislation to address our
competitiveness in the international travel sector. This is a great
country, and we should welcome visitors to our shores to meet our
people and experience our culture.
Senator Inouye.
STATEMENT OF HON. DANIEL K. INOUYE,
U.S. SENATOR FROM HAWAII
The Chairman. Thank you very much, Mr. Chairman. May I ask
that my full statement be made part of the record?
Senator Dorgan. Without objection.
The Chairman. When I do this, I'd like to note two facts.
This is one of the very few major industries with a favorable
trade balance at a time when our Nation is suffering from
negative trade balances. I think it's the only major,
industrialized country without a cabinet position in charge.
All other countries have ministers--we don't.
I just hope that the government of the United States takes
a much more serious look at tourism. Naturally, it's a major
industry in Hawaii, but it's also a major industry in the
United States.
Thank you very much, Mr. Chairman.
[The prepared statement of Senator Inouye follows:]
Prepared Statement of Hon. Daniel K. Inouye, U.S. Senator from Hawaii
Travel and tourism is Hawaii's number one industry. In 2006, the
Hawaii Department of Business, Economic Development and Tourism
reported $12 billion in tourism revenues--a 3 percent increase over
tourism revenue in 2005.
This industry is just as important for the Nation's economy as it
is for Hawaii. Travel and tourism is America's second largest services
export industry and its third largest retail sales industry, generating
a $9.7 billion balance of trade surplus in 2005.
The travel and tourism industry has shown resilience since the
terrorist attacks of September 11, but America has become a less
desirable destination for many international travelers.
According to the U.S. Department of Commerce, in 1992, the U.S.
attracted 9.4 percent of all international tourist arrivals from around
the world.
In 2004, the United States attracted only 6 percent of total
international arrivals.
Success in this industry is unpredictable because of uncontrollable
influences such as natural or man-made catastrophic events or economic
downturns that impact the pocketbook of potential travelers.
However, there are certain controllable factors such as capital
investments, which can benefit the industry and help keep it
competitive, and we all know a competitive industry provides a
tremendous economic benefit to our Nation.
In fact, prior to 1997, the Federal Government made capital
investments in tourism through coordinated advertising to international
markets, and we remained competitive in attracting international
visitors.
To further prove the point that capital investment works, the
decline in international visits began in 1997 when the U.S. Government
stopped providing funds for international advertising. The Federal
Government reinstated funding for international advertising in 2003,
but we have a long way to go to recover the lost world market share.
Another essential component is to ensure our borders are protected
for both Americans and visitors. While we must secure our borders, we
must do so in a manner that ensures our international friends continue
to feel welcome. Many in the travel and tourism industry have expressed
concerns with the sometimes overly aggressive measures used by the
Department of Homeland Security and the Department of State as part of
their effort to improve border security.
I look forward to hearing from the witnesses about how to balance
these important goals.
Senator Dorgan. Senator Inouye, thank you very much.
Senator Stevens.
STATEMENT OF HON. TED STEVENS,
U.S. SENATOR FROM ALASKA
Senator Stevens. Thank you, and I thank the Chairman for
calling this hearing, it's a very important hearing and these
four gentlemen have some interesting statements to make. I
would ask that my statement be put in the record also.
Senator Dorgan. Without objection.
Senator Stevens. And if--unless one of the witnesses offers
it--I would offer, that the Blueprint to Discover America be
entered into the record.
But, I'm looking forward to the witnesses' statements.
Thank you very much.
[The prepared statement of Senator Stevens follows:]
Prepared Statement of Hon. Ted Stevens, U.S. Senator from Alaska
Thank you, Chairman Inouye, for calling this hearing to discuss the
important role that travel and tourism play in our country's economy
and the current difficulties it faces. This industry is not only vital
to our two states but it contributes a great deal to the Nation's
prosperity.
To our witnesses, I thank you for being here today, and appreciate
the time and energy each of you has spent to bring more visitors to the
United States. Many of you have worked with Commerce Secretary
Gutierrez in this endeavor and his and your efforts are appreciated.
The travel and tourism industry is the second largest private-
sector employer in my state of Alaska. More than 24,000 Alaskan jobs
rely on travel and tourism, contributing over $2 billion dollars to the
state's economy each year.
While attention to transportation security is vital for our
country, it is equally important that our security not have the
unintended consequence of driving away international visitors and
commerce. If we do not allow for quick and efficient movement through
our transportation systems we may soon hamper a critical piece of the
Nation's economy. Our country's declining share of international
visitors may be a warning sign that this already may be happening.
I look forward to hearing the results of your report, and working
with both you and the Members of this Committee to address these
important issues.
Senator Dorgan. Senator Stevens, thank you very much.
Let me begin by calling on Mr. Stevan Porter, the President
of the Americas for the Intercontinental Hotels Group,
Chairman, Discover America Partnership--the effort that my
colleague from Alaska just mentioned. Let me thank Mr. Porter
for coming forward, and thank you and so many others for a lot
of work that has gone into a very impressive proposal. Mr.
Porter, you may proceed.
STATEMENT OF STEVAN PORTER, PRESIDENT, THE
AMERICAS, INTERCONTINENTAL HOTELS GROUP; CHAIRMAN, DISCOVER
AMERICA PARTNERSHIP
Mr. Porter. Thank you, Chairman Dorgan, Chairman Inouye,
and Members of the Committee.
First, just to let you know who IHG is, we are one of the
world's largest hotel companies, we have a family of seven
brands, which include Intercontinental, Crowne Plaza, Hotel
Indigo, Holiday Inn, Holiday Inn Express, Staybridge Suites and
Candlewood Suites. Our Americas region--which is our largest--
is operated out of our headquarters office, in Atlanta,
Georgia.
And, Chairman Inouye, in preparing for today's hearing, I
was reminded within the company, of the pioneer efforts of one
of our founders, one of Holiday Inns founders, Bill Walton, who
served as Vice Chairman of our board at one point in his
career. And in the 1970s, we commissioned him to come to
Washington as the unofficial Ambassador on behalf of Holiday
Inn, with a straightforward mission then--similar to now--to
increase government awareness of the significance of the travel
industry to the United States. I know he had the privilege of
working directly with you during that time, and I think you got
to know him as ``Wild Bill,'' and I would like you to know that
he sends his greetings, and he's enjoying a well-deserved
retirement.
Now, I come here today with my colleagues as a hotelier,
but also as a businessman, and as Chairman of the Discover
America Partnership. My colleagues, Jonathan Tisch, Jay Rasulo,
and a number of others, started this partnership just last year
to highlight the unique role that travel plays--not only in
America's economic arena--but also in public diplomacy efforts,
and to respond to a travel crisis that has resulted in a 17
percent decline in overseas travelers to the United States
since 9/11.
That 17 percent--according to the Travel Industry
Association--translates to something in the arena of 200,000
jobs, $90 billion in spending, and $15 billion in Federal,
State and local taxes.
The Discover America Partnership believes that travel is a
critical component of America's economic security and public
diplomacy efforts, we also believe it's time to address this
growing crisis, and to see international travel for what it
truly is--an opportunity.
To help the United States welcome millions of more visitors
annually, we've developed a three-step plan that can improve
America's visa policy, entry procedures and perceptions about
the travel process.
I'll focus my comments this afternoon on one step in the
plan--entry procedures--and my colleagues will discuss visa
policy and the need to change perceptions.
For many international travelers to the United States, a
long flight is followed by an often daunting experience--
navigating the scrutiny of the United States Customs and Border
Protection process. Policies implemented, well-intentioned,
over the past 5 years, appear to have strengthened our
security. Lost, however, have been efficiencies, and a
semblance of customer service.
And, importantly, lost are meaningful high-economic impact
events, such as the Pan-American Games, lost from San Antonio
and awarded, ultimately, to Brazil. And the United States
Olympic Committee, as we look ahead, which is one of our
members, recognizes this as a similar concern in pursuing award
of the 2016 Olympics to either Chicago or Los Angeles.
We're here today to offer our commitment to work with
Congress and the Administration to assure international
travelers a speedy and hassle-free entry process; turn our top
inbound airports into world models; bring the considerable
expertise of the travel and hospitality industry to provide
foreign travelers with a positive first impression of the
United States; and to develop an effective international
registered traveler program; in short, America Welcomes You.
The specifics of how we propose to implement these steps
are--as you've already noted--included in the Blueprint to
Discover America, which we did submit to the Committee, along
with my statement, and we would ask that it be made part of the
hearing record. *
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* The information referred to has been retained in Committee files.
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The hotel industry has a track record of stepping up to
lend its expertise to managing the challenges facing our
Nation. During the gasoline shortage of 1973 and 1974, Holiday
Inns drew on the local knowledge of our hotel managers across
the country, coupled with our unique HOLIDEX reservation
system, to compile information on the availability of gasoline,
and to serve as a central data collection point for the Federal
Government.
Likewise, when Hurricane Katrina hit the Gulf Coast, IHG
and many other hotel companies were quick to respond. We
provided housing and meals for rescue workers, refugees, and
those working to restore critical infrastructure to that
ravaged area.
The Discover America Partnership seeks to continue that
record of service, by lending the travel industry's expertise
to assuring that foreign visitors to this country find their
initial entry experience as welcoming and positive as the rest
of their stay. We hope that Congress will join with us in
making this a high-priority issue.
Thank you for the opportunity to testify before this
Committee today, and I'll be happy to answer any questions you
may have.
[The prepared statement of Mr. Porter follows:]
Prepared Statement of Stevan Porter, President, The Americas,
InterContinental Hotels Group; Chairman, Discover America Partnership
Chairman Inouye, Members of the Committee, good afternoon. My name
is Stevan Porter and I am President, The Americas, of InterContinental
Hotels Group (IHG). IHG is the world's most global hotel company with
more than 3,600 owned, leased, managed and franchised hotels across
nearly 100 countries and territories. IHG owns a portfolio of well-
recognized and respected brands including InterContinental Hotels and
Resorts, Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express,
Staybridge Suites, and Candlewood Suites. IHG's Americas region is
managed from our headquarters in Atlanta, Georgia.
I am here today not only as a hotelier, but also as Chairman of the
Discover America Partnership. My colleagues Jonathan Tisch, Jay Rasulo
and many others started the Partnership last year to highlight the
unique role that travel can play in America's public diplomacy efforts
and to respond to a travel crisis that has resulted in a 17 percent
decline in overseas travelers to the U.S. since 9/11. According to the
Travel Industry Association, this decline has resulted in a loss of
nearly 200,000 jobs, $90 billion in spending and $15 billion in
Federal, state and local taxes.
The Discover America Partnership believes that travel is a critical
component of America's economic security and public diplomacy efforts.
It's time to address this growing crisis and to see international
travel for what it is: an opportunity.
To help the U.S. welcome millions of more visitors annually, we
have developed a three-step plan that can repair America's visa policy,
entry procedures and perceptions about the travel process. This plan is
based on months of research, including analyses of how other countries
address these important issues and in-depth conversations with
officials in the Departments of Homeland Security, State, Commerce and
Transportation. We also spoke with more than 2,000 international
travelers to gain their perspective on obstacles to travel and what the
U.S. might do to regain their business.
There are several key characteristics of this plan that I would
like to bring to your attention:
1. Our plan enhances the security of our visa and entry process
in significant ways by making needed investments in personnel
and technology and by focusing human resources on travelers
that pose the greatest threat.
2. Our plan outlines a holistic and user-focused approach to
travel policy.
3. Our plan calls for relatively modest investments and changes
to achieve revolutionary results. An annual investment of
approximately $300 million would cover the bulk of these
proposals. Many of these proposals will actually achieve
savings in other areas, by allowing government agencies to re-
deploy resources elsewhere. The potential return on this
investment is tens of billions of dollars for the economy,
billions of dollars in added tax revenues and hundreds of
thousands of new jobs.
Please allow me to focus on one step in this plan: entry
procedures. My colleagues will discuss visa policy and the need to
change perceptions.
For many international travelers to the United States, a long
flight is followed by a daunting experience: navigating the scrutiny of
the U.S. Customs and Border Protection process. Policies implemented
over the past 5 years appear to have strengthened America's border
security. Lost, however, have been efficiencies and a semblance of
customer service.
I am here today to offer our commitment to work with Congress and
the Administration to assure international travelers a speedy and
hassle-free entry process; to turn our top inbound airports into world
models; to bring the considerable expertise of the travel and
hospitality industry to providing foreign travelers with a positive
first impression of the United States; and to develop an effective
international registered-traveler program. The specifics of how we
propose to implement these steps are included in the ``Blueprint to
Discover America'' which I have submitted to the Committee along with
my statement. I ask that it be made part of the hearing record. *
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* The information referred to has been retained in Committee files.
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The hotel industry has a track record of stepping up to lend its
expertise to managing the challenges facing our Nation. During the
gasoline shortage of 1973-1974, Holiday Inn drew on the local knowledge
of its hotel managers across the country coupled with its then-unique
HOLIDEX national reservation system, to compile information on the
availability of gasoline and to serve as a central data collection
point for the Federal Government. Likewise, when Hurricane Katrina hit
the Gulf Coast, IHG and other hotel companies were quick to respond,
providing housing and meals for rescue workers, refugees, and those
working to restore critical infrastructure to the area.
The Discover America Partnership seeks to continue that record of
service by lending the travel industry's expertise to assuring that
foreign visitors to this country find their initial entry experience as
welcoming and positive as the rest of their stay. We hope that Congress
will join with us in making this a priority issue.
Thank you for the opportunity to testify before this Committee
today. I would be happy to answer any questions you may have.
Senator Dorgan. Mr. Porter, thank you very much for your
testimony.
Next we will hear from Jonathan Tisch, who is Chairman and
CEO of Loews Hotel. He has been involved in the effort that has
just been described.
Mr. Tisch, you may proceed.
STATEMENT OF JONATHAN M. TISCH, CHAIRMAN,
TRAVEL BUSINESS ROUNDTABLE; CHAIRMAN/CEO, LOEWS HOTELS
Mr. Tisch. Mr. Chairman, Senators Dorgan, Stevens, and
Lautenberg, thank you very much for the opportunity to speak
with you and discuss the issues that are important to the
travel and tourism industry, and more importantly, to our
entire country.
I am, as the Senator mentioned, Jonathan Tisch, the
Chairman and CEO of Loews Hotels, and I also serve as Chairman
of the Travel Business Roundtable, a CEO-driven organization
whose mission is to raise the visibility of the travel and
tourism industry here on Capitol Hill, and around the country,
and to discuss the economic and social contributions which are
vast, that our industry makes to this country of ours. And I
also serve as Chairman of NYC & Company, which is New York
City's travel, tourism, and visitors' agency.
Along with our strategic partner, the Travel Industry
Association, we represent all sectors of the U.S. travel and
tourism industry, as Steve just mentioned, an industry that has
in excess of $703 billion in expenditures, and employs about
7.5 million Americans directly, and about another 10 million
more Americans indirectly.
As a member of the Discover America Partnership leadership
group, I thank you for allowing my colleagues and me the
opportunity to present before this Committee today.
Steve has just articulated the challenge, and has described
the second part of our Blueprint for change. If I might, let's
take a step back and review step one--reforming America's visa
issuance system.
The State Department has put in place new programs and
added staff to facilitate the visa process since September 11,
2001. However, the U.S. inbound travel market from overseas
still lags behind the pre-9/11 levels, so that shows us that
more can, and should, be done.
Before they ever have the opportunity to set foot on
American soil, most international travelers--those that are not
living in countries that are part of the Visa Waiver Program--
must obtain a non-immigrant visitor visa. Two hurdles are large
in this process--the distance from consular posts, and wait-
times for interviews. And they have all too often made
obtaining a visa cumbersome, and in some cases are re-directing
travelers to other destinations.
Following September 11th, every visa applicant was required
to have an in-person interview with a U.S. consular official.
In places such as Brazil and India, with a total land mass
equal, or in excess, to the United States, there are only four
consulates in the entire country.
In these cases, potential visitors to the U.S. must take a
trip, just to be considered for the right to visit us here in
the United States. In 2005, the National Foreign Trade Council
estimated that U.S. businesses lost $30 billion between 2002
and 2004, because of America's visa system.
According to the U.S. Government Accountability Office,
during a recent 6-month period in 2006, 97 of the 211 visa
issuing posts were reporting wait times in excess of 30 days,
and 9 posts had wait times of over 90 days. Clearly, this is
unacceptable. Especially when the State Department's own goal
is to have wait times of 30 days or less.
As recently as November of last year, the wait times in
India were as high as 184 days. Due to additional staffing
resources, the State Department was able to process the
backlogs and reduce wait times to under 1 week in three of the
four consulates. We're pleased to see the progress has been
somewhat sustained. This model should be applied to other
problem locations, such as Mexico and Brazil. For all of the
reasons Steve just laid out, we need more international
visitors, not fewer, to come to the United States. We have the
capability of welcoming more visitors, while at the same time,
strengthening our security.
In our Blueprint, we lay out four recommendations for
improving the visa process, while enhancing--enhancing--
security. Number one, reduce wait times at all consular posts
to less than 30 days. Number two, use technology for visa
processing where distances are excessive. Number three,
strengthen and expand the Visa Waiver Program; and, number
four, enhance security and efficiency upon entry into and exit
from the United States.
First, we are challenging the State Department to meet
their own standard, and cut the wait times down to 30 days or
less at consular posts. And we suggest several ways to do that.
For those posts with recurring problems, ``rapid response''
teams could be deployed. Consular officials and trained experts
should be sent to handle the demand, similar to State's
response in India.
We also believe that Congress should take an active role to
assess the needs of consular offices overseas, and adequately
fund staffing demands.
Our second recommendation is adapting 21st century
technology, which is videoconferencing and Internet
applications to better facilitate the visa process, and to
lessen the hassle for visa applicants in geographically large
countries, as I mentioned, such as Brazil, China, Russia, and
India.
In fact, videoconferencing for visa interviews was one of
the initiatives outlined in Secretary of State Rice and
Secretary Chertoff's Secure Borders and Open Doors Plan, which
was announced a year ago, in January of 2006.
For these plans to succeed, we ask that Congress enact
legislation that allows for the use of technology and new
methods of collecting information, when the appropriate
security controls are in place, to facilitate interviews and
other background checks.
Additionally, the reemergence of using American Chambers of
Commerce overseas to expedite visa issuance for business
travelers has been successful, and that progress should
continue.
The third element for visa reform is strengthening our Visa
Waiver Program, which allows travelers from lower-risk
countries--our best trading partners--to come here without
obtaining a visa. The VWP is essential for keeping our doors
open to international travelers. Two-thirds of all overseas
travelers to the United States come from Visa Waiver countries.
By expanding the program, we can welcome more travelers, while
consular resources can better be prioritized for higher risks.
The President recently announced that his plan is to do
just that. By opening the Program to more of our allies, while
requiring more personal information from travelers for security
purposes, we boost our economy, our diplomacy, and our security
all at the same time.
Our last visa recommendation is already being addressed by
the Federal Government, and that is creating an effective exit
tracking system. Today, our government is wary of letting more
visitors into the country, because we are not sure if they will
ever leave. The US-VISIT program has been an excellent example
of using 21st century technology to protect our borders, but
the exit component is still incomplete. We must build on this
technology to carefully monitor the entry and exit of
travelers, but to do so in a way that does not hinder travel.
It's time we use the resources at our disposal, and execute
the same concept at our visa posts, and at our ports of entry.
In conclusion, Senators, this Blueprint lays out a
comprehensive plan that strengthens our national security, at
the same time, bolsters our economy, and creates more jobs here
at home. By taking these actions, and communicating such
progress to the public, we will also help turn around the
negative perceptions of America. Thank you very much.
[The prepared statement of Mr. Tisch follows:]
Prepared Statement of Jonathan M. Tisch, Chairman, Travel Business
Roundtable, Chairman/CEO, Loews Hotels
Introduction
Good afternoon. Chairman Inouye and Ranking Member Stevens, I would
like to thank you and Senator Dorgan for your attention to the travel
challenges America is currently experiencing and for holding today's
hearing.
I am Jonathan Tisch, Chairman and Chief Executive Officer of Loews
Hotels, and Chairman of the Travel Business Roundtable, a CEO-based
organization whose mission is to educate policymakers about the
important social and economic contributions of the U.S. travel
industry.
Along with our strategic partner, the Travel Industry Association
(TIA), we represent all sectors of the U.S. travel and tourism
industry--an industry that has $703 billion in expenditures, employs
7.5 million Americans and has untapped potential for winning hearts and
minds of people from around the world.
Along with this testimony, I would like to submit the ``Blueprint
to Discover America'' as part of my statement for the record.
Need for a 21st Century Visa System
As a member of the Discover America Partnership's Leadership, I
thank you for allowing my colleagues and me the opportunity to present
before this Committee today. I would like to describe for you step one
of our blueprint for change: reforming America's visa issuance system.
The State Department has put in place new programs and added staff
to facilitate the visa process since 9/11. Some progress has been made.
However, the U.S. inbound travel market from overseas still lags behind
pre-9/11 levels. More can and should be done.
Overseas travel to the U.S. has declined 17 percent since 2001
while travel worldwide is steadily on the rise. A recent survey
conducted by the Discover America Partnership showed that international
travelers are 74 percent more likely to have a favorable opinion of the
U.S. if they have actually visited here. In addition, those 2,000
travelers surveyed indicated they were 61 percent more likely to
support the U.S. and its policies after having visited. Clearly, we
need more international travelers; they strengthen our economy, our
diplomacy and our security.
Before most international travelers (those not part of the Visa
Waiver Program) ever have the opportunity to set foot on American soil,
they must obtain a non-immigrant visitor visa. Two hurdles in this
process--distance from consular posts and wait times for interviews--
have all too often made obtaining a visa cumbersome, and in some cases
are redirecting travelers to other destinations.
Following 9/11, every visa applicant was required to have an in-
person interview with a U.S. consular official. In places such as
Brazil and India--with a total land mass equal to or in excess of the
United States--there are only four consulates in the entire country. In
these cases, potential visitors to the U.S. must take a trip just to be
considered for the right to visit the U.S.
According to the U.S. Government Accountability Office (GAO),
during a recent six-month period in 2006, 97 of the 211 visa-issuing
posts were reporting wait times in excess of 30 days, and nine posts
with wait times over 90 days. This is unacceptable, especially when the
State Department's own goal is to have wait times of 30 days or less.
As recently as November of last year, the wait times in India were
as high 184 days. Due to additional staffing and resources, the State
Department was able to process the backlogs and reduce wait times to
under 1 week in three of the four consulates. We are pleased to see
that progress has been mostly sustained. This model should be applied
to other locations with lengthy wait times such as Mexico and Brazil.
Hurdles in the visa process have had an economic toll as well. In
2005, the National Foreign Trade Council estimated that U.S. businesses
lost $30 billion between 2002 and 2004 because of America's visa
system. We need more international visitors, not fewer, to come to the
U.S., and we have the capability of welcoming more visitors while at
the same time strengthening our security.
In this ``Blueprint to Discover America,'' we lay out four
recommendations for improving the visa process while enhancing
security:
1. Reduce wait times at all consular posts to less than 30
days;
2. Use technology for visa processing where travel distances
are excessive;
3. Strengthen and expand the visa waiver program; and
4. Enhance security and efficiency upon entry into and exit
from the U.S.
Reduce Wait Times
First, we are challenging the State Department to meet their own
standard and cut the wait times to 30 days or less at all consular
posts. We suggest several ways to do that. For those posts with
recurring problems, ``rapid response'' teams should be deployed.
Consular officials and trained experts should be sent to handle the
demand--similar to State's response in India. We also believe that
Congress should take an active role to assess the needs at consular
offices overseas and adequately fund staffing demands.
Bridge the Distance for Interviews
Our second recommendation is adapting 21st Century technology, such
as videoconferencing and Internet applications, to better facilitate
the visa process and to lessen the hassle for visa applicants in
geographically large countries such as Brazil, China, Russia, and
India. In fact, videoconferencing for visa interviews was one of the
initiatives outlined in Secretary of State Condoleezza Rice and DHS
Secretary Michael Chertoff's ``Secure Borders and Open Doors'' plan,
announced in January 2006.
For these plans to succeed, we ask that Congress enact legislation
that allows for the use of technology and new methods of collecting
information--when the appropriate security controls are in place--to
facilitate interviews and other background checks. Additionally, the
re-emergence of using American Chambers of Commerce overseas to
expedite visa issuance for business travelers has been successful. That
progress should continue.
Strengthen and Expand Visa Waiver Travel
The third element for visa reform is strengthening our Visa Waiver
Program (VWP), which allows travelers from lower-risk countries--our
best trading partners--to come here without obtaining a visa. The VWP
is essential for keeping our doors open to international travel. Two-
thirds of all overseas travel to the U.S. comes from VWP countries.
By expanding the program, we can welcome more travelers while
consular resources can be better prioritized for higher risks. The
President recently announced his plan to do just that. By opening the
program to more of our allies while requiring more personal information
from travelers for security purposes, we boost our economy, our
diplomacy and our security all at the same time.
Expand Upon US-VISIT
Our last visa recommendation is already being addressed by the
Federal Government, and that is creating an effective exit tracking
system. Today our government is wary of letting more visitors into the
country because we are not sure if they are going to leave. The US-
VISIT program has been an excellent example of using 21st Century
technology to protect our borders, but the exit component is still
incomplete.
We must build on this technology to carefully monitor the entry and
exit of travelers, but do so in a way that does not hinder travel. It
is time we use the resources at our disposal and execute the same
concept at our visa posts and at our ports of entry.
Conclusion
In conclusion, this blueprint lays out a comprehensive plan that
strengthens our Nation's security and at the same time bolsters our
economy and creates more jobs here at home. By taking these actions and
communicating such progress to the public, we will also help turn
around the negative perceptions of America.
Senator Dorgan. Mr. Tisch, thank you very much.
Next, we will hear from Mr. Jay Rasulo, who is Chairman of
Walt Disney Parks and Resorts, and Chairman of the Travel
Industry Association, and Chairman of the U.S. Travel and
Tourism Advisory Board.
Mr. Rasulo, thank you for joining us. You may proceed.
STATEMENT OF JAY RASULO, CHAIRMAN, WALT DISNEY PARKS AND
RESORTS; CHAIRMAN, TRAVEL INDUSTRY
ASSOCIATION; CHAIRMAN, U.S. TRAVEL AND TOURISM
ADVISORY BOARD
Mr. Rasulo. Thank you, Mr. Chairman.
On behalf of the Nation's travel and tourism industry, I
appreciate the opportunity to appear before you to discuss our
plan to increase the economic and diplomatic benefits of travel
to the U.S.
I speak from three perspectives: First, as National
Chairman of the Travel Industry Association, which represents
the $600 billion U.S. travel industry.
I also serve as Chairman of the U.S. Travel and Tourism
Advisory Board. This is a panel of the industry's top CEOs that
is charged with advising the Department of Commerce on the
creation of a national strategy to compete for greater market
share of the growing world travel and tourism market.
And finally, I'm Chairman of Walt Disney Parks and Resorts,
which operates 11 theme parks on three continents, a top-rated
cruise line, and 32,000 hotel rooms. Here in the U.S., our
vacation businesses are responsible for creating 175,000 jobs,
while contributing nearly $9 billion in economic revenue each
year to the local economies.
The challenge that has been described today is not merely
an industry challenge, or even a private-sector challenge, it's
America's challenge, one that both government and the private
sector must address together.
When it comes to security and ease of travel, people
sometimes mistakenly believe that we must choose one or the
other--that we can't have both.
The Blueprint we've created shows that it is well within
America's reach to be both more secure, and more welcoming. As
my colleagues have described, the solution proposed must unfold
in three steps. First, we must keep the visa process secure,
but make it more user-friendly. Second, we must strengthen the
security of our entry process, but make it more welcoming, and
efficient.
But it's not enough to fix the problem. We must also tell
the world that we've done it, because negative perceptions have
a funny way of lingering long after the reality has changed.
That's why the third step of this process must be the
creation of a nationally coordinated program that communicates
these changes to the world.
In preparing the Blueprint to Discover America, we
conducted quite a bit of research to understand why people are
avoiding traveling to the U.S. And it was very clear to us that
the confusion and misperception about the entry experience are
significant deterrents to international visitation.
The Western Hemisphere Travel Initiative is a perfect
example. This new law requires a passport from and to--for
travel to and from Canada--and is causing considerable anxiety
and confusion among travelers. Their confusion is unnecessary,
and it's amplified because the U.S. has no dedicated resources
to communicate these changes, to counter misperceptions, and to
help people understand and navigate the process.
The government agencies are, individually, doing what they
can on their existing budgets, and so is the private sector.
Many companies, like Disney, are dedicating marketing and sales
resources toward getting the word out. The Travel Industry
Association has even set up a website called ``get a passport
now'' which has been visited more than a million times.
But none of this is any substitute for a well-funded,
nationally coordinated program that communicates these policies
with a single voice. In fact, this is something that virtually
every other industrialized country in the world is already
doing.
Australia, for instance, spends $113 million a year
communicating and promoting itself to travelers. Canada spends
$58 million a year. But, the U.S. currently has no such
program.
We envision the creation of a new federally chartered
public-private entity. It would combine the expertise of the
private sector with the oversight and coordination of the
Federal Government. It would serve as the primary voice for all
travel-related policies, and it would also coordinate our
national strategies to maximize the benefits of travel to
America.
This program would fill a vital gap in our current
strategies to attract more visitors, and it would pay for
itself many times over.
We estimate that almost all of the recommendations in our
Blueprint could be implemented at a total cost of under $300
million a year. If these changes resulted in an increase of
only one million visitors, the additional tax revenue would
cover the investment.
If we recaptured 10 million new visitors, which represents
little more than one additional share point of world travel,
the added tax revenue would be ten times what we invest, and
that doesn't include the tens of billions of dollars added to
the economy, and hundreds of thousands of new jobs.
But this effort also serves a larger national purpose. It
would advance America's public diplomacy--the public face we
present to the world.
Where I work, we often talk about the magic of Disney, but
there is also a magic to America. People simply need to visit
here to feel this magic. Our research has found that traveling
to the United States makes a visitor 74 percent more likely to
feel extremely favorably about this Nation. If we can get
people through the gate, we can change their perceptions of
America.
Imagine the goodwill that will result if we simply let
people know we want them to come. Imagine the benefits that
will flow to our Nation if peoples around the globe know that
America remains an open, friendly, pleasant place to visit.
Again, I thank you for the opportunity to speak here today,
and I look forward to addressing your questions.
[The prepared statement of Mr. Rasulo follows:]
Prepared Statement of Jay Rasulo, Chairman, Walt Disney Parks and
Resorts; Chairman, Travel Industry Association; Chairman, U.S. Travel
and Tourism Advisory Board
Mr. Chairman, on behalf of the Nation's travel and tourism
industry, I appreciate the opportunity to appear before you to discuss
our plan to increase the economic and diplomatic benefits of travel to
the U.S.
I speak today from three perspectives.
First, as 2006 Chairman of the Travel Industry Association, which
represents the $600 billion U.S. travel industry.
I also serve as Chairman of the U.S. Travel and Tourism Advisory
Board. This is a panel of the industry's top CEOs that is charged with
advising the Department of Commerce on the creation of a national
strategy to compete for a greater share of the growing world travel and
tourism market.
And finally, I am Chairman of Walt Disney Parks and Resorts, which
operates 11 theme parks on three continents, a top-rated cruise line,
and 32,000 hotel rooms. Here in the U.S., our vacation businesses are
responsible for creating 175,000 jobs, while contributing nearly nine
billion dollars in economic revenue each year to their local economies.
The challenge that has been described today is not merely an
industry challenge or even a private sector challenge--it is America's
challenge--one that both government and the private sector must address
together.
When it comes to security and ease of travel, people sometimes
mistakenly believe we must choose one or the other--that we can't have
both. I believe this is a false choice. And the blueprint we have
created shows that it is well within America's reach to be both more
secure and more welcoming.
As my colleagues have described, the solution we propose must
unfold in three steps.
First, we must keep the visa process secure, but make it more user-
friendly.
Second, we must strengthen the security of our entry process, but
make it more welcoming and efficient.
But it's not enough to fix the problem. We must also tell the world
we did it, because negative perceptions have a funny way of lingering
long after the reality has changed.
That's why the third step in this process must be the creation of a
nationally coordinated program that communicates these changes to the
world.
In preparing the Blueprint to Discover America, we conducted quite
a bit of research to understand why people are avoiding traveling to
the U.S. And it was very clear to us that confusion and misperceptions
about the entry experience are a far bigger deterrent than the
processes themselves.
The Western Hemisphere Travel Initiative is a perfect example. This
new law requires a passport for travel to and from Canada--and it is
causing considerable anxiety and confusion among travelers. Their
confusion is unnecessarily amplified because the U.S. has no dedicated
resources to communicate these changes, to counter misperceptions and
help people understand and navigate the process.
The government agencies are individually doing what they can with
their existing budgets, and so is the private sector. Many companies--
including Disney--are dedicating marketing and sales resources toward
getting the word out. The Travel Industry Association has even set up a
website called ``get a passport now,'' which has been visited more than
a million times.
But none of this is any substitute for a well-funded, nationally
coordinated program that communicates these policies with a single
voice.
In fact, this is something that virtually every other
industrialized country in the world is already doing. Australia, for
instance, spends $113 million dollars a year communicating and
promoting itself to travelers. Canada spends $58 million dollars. But
the U.S. currently has no such program.
We envision the creation of a new public-private entity. We could
call it, perhaps, the Corporation to Discover America.
It would combine the expertise of the private sector with the
oversight and coordination of the Federal Government. It would serve as
the primary voice for all travel-related policies, and it would also
coordinate our national strategies to maximize the benefits of travel
to America.
This program would fill a vital gap in our current strategies to
attract more visitors. And it would pay for itself many times over.
We estimate that almost all of the recommendations in our Blueprint
could be implemented at a total cost of under $300 million a year. If
these changes resulted in an increase of only 1 million visitors, the
additional tax revenue would cover the investment.
If we recapture 10 million new visitors--which represents little
more than one additional share-point of world travel--the added tax
revenues would be ten times what we invest. And that doesn't include
tens of billions of dollars added to the economy, and hundreds of
thousands of new jobs.
But this effort also serves a larger national purpose. It would
advance America's public diplomacy--the public face we present to the
world.
Where I work, we often talk about the magic of Disney, but there is
also a magic to America. People simply need to visit here to feel this
magic. Our research has found that traveling to the United States makes
a visitor 74 percent more likely to feel extremely favorably about this
Nation.
If we can get people through the gate, we can change their
perceptions of America.
Imagine the goodwill that will result if we simply let people know
we want them to come.
Imagine the benefits that will flow to our Nation if other peoples
around the globe know that America remains an open, friendly, pleasant
place to visit.
Again, I thank you for the opportunity to speak here today, and I
look forward to addressing your questions.
Senator Dorgan. Thank you very much. I understand I
mispronounced your name, it's Mr. Rasulo.
Mr. Rasulo. Quite all right, thank you.
Senator Dorgan. Thank you for being with us, Mr. Rasulo.
Finally, we will hear from James May. Jim May is President
and CEO of the Air Transport Association.
Jim, thank you and welcome.
STATEMENT OF JAMES C. MAY, PRESIDENT/CEO, AIR TRANSPORT
ASSOCIATION
Mr. May. Thank you, Mr. Chairman.
My name normally isn't mispronounced, it's easy. How's
that?
Thank you, Senator Dorgan, Chairman Inouye, Vice Chairman
Stevens and Members of the Committee.
We've heard testimony about the ``Blueprint to Discover
America'' today. And the three main goals, which are a faster
and more secure visa system, more rapid processing of
passengers at airports, and creating a more welcoming
environment for international passengers. These are goals that
we can agree upon.
The good news is that, and I'm sure it is the result of a
lot of work by the Partnership members at this table and
others, many of these goals are, in fact, being addressed by
several Federal agencies.
A quick review tells us that there are many committed
people working together on these issues, both within the
Administration, the travel and hospitality industry, and
certainly, the airlines.
The Rice-Chertoff Initiative, the DHS/State Department
``Secure Borders, Open Doors'' initiative, the US-VISIT
program, and the Commerce Department's U.S. Travel and Tourism
Advisory Board have all focused on these same goals to improve
the international traveler experience.
These government initiatives, which include E-passports,
model airports, developing a ``single portal'' for transmission
of passenger information, adding new consular positions, and
decreasing the wait time for visa applicants, are all needed to
go a long way toward improving that passenger experience.
And as I compare the government's programs with the
objective of the Blueprint, I feel that those Blueprint
objectives are, in fact--although in a different way--being
addressed. Having noted the consistency of objectives between
the Blueprint and many government initiatives, I think there is
also one glaring inconsistency.
The Blueprint to Discover America runs counter to one of
the key recommendations set forth by the Travel and Tourism
Advisory Board which a couple of months ago, raised concerns
about imposing taxes on passengers. It explained how new taxes
can ``increase the cost of travel and can dampen demand for
inbound travel.''
The Partnership's Blueprint suggests that their new
objectives can be met with an investment of some $300 million
to underwrite such initiatives as training CBP and TSA
officials in ``customer service techniques.''
It goes on to suggest that all of the initiatives could be
paid for with a $5 fee for ``all travelers leaving the United
States via air,'' or with a charge of approximately $10 added
to the cost of ``purchasing the airline ticket.'' Now, in
fairness, the Blueprint also offers a third funding
alternative, which is the issuance of about $1 billion in tax
credit bonds.
In my view, these fee proposals are wrong-headed and
counter-intuitive. Why would we want to charge passengers more
at the very time we're trying to encourage more of them to
visit the U.S.? It simply does not make sense. I'd like to
remind the Committee that international airline passengers are,
today, paying approximately $50 in U.S. taxes and fees for each
and every trip to America. In 2006, that number generated
roughly $3.3 billion to $3.7 billion.
Now, what passengers should expect for that $50, is an
efficient system to get them through our airports, painlessly.
If more needs to be done to expedite handling airline
passengers, and processing visas--and I think it does--then the
Federal Government needs to underwrite these efforts, not
passengers.
The Blueprint also says that ``all foreign travelers to the
United States should be greeted at the inspection booth with
the words, 'Welcome to the United States'.'' While I appreciate
a warm welcome as much as the next person does, it's hard for
me to support charging passengers a $5 fee to purchase a smile
and a greeting.
The ATA strongly favors securing America's borders, and we
can do that by eliminating inadequate processes, and
transitioning to an electronic visa application form, making
visa appointments online, sharing data among government
agencies to avoid duplicative work, and adding even more
consular positions and locations, all efforts that are
underway.
Mr. Chairman, we are also quite sensitive to the need to
balance the sometimes competing interests of post-9/11 security
with ease of travel, something you mentioned in your opening
comments. Our airlines frequently comment on the so-called
``hassle factor'' that security presents. But at the end of the
day, we accept the reality that, in some instances, there are
necessary tradeoffs.
ATA has been working very closely with government agencies
to implement these initiatives. We have long been an advocate
for full coordination among government agencies, a problem that
exists at many different levels, and support a DHS-led ``single
face'' at U.S. ports of entry.
I want to reiterate, we support the fundamental objectives
in the Blueprint, to speed passengers through airports, to
expedite visa processing, and enhance security, and to make the
travel experience more enjoyable. For the most part, we think
these objectives are, in fact, being addressed by the State
Department, the Department of Homeland Security and the
Commerce Department, but they could clearly be done with more
vigor and with a greater sense of urgency, which we encourage
this Committee to enforce.
America must effectively compete for international
visitors, or millions of travelers will take billions of
dollars that they would have spent here, and go elsewhere. Our
airlines are eager to bring more international visitors to
America, so that they can experience firsthand what we already
know--America is a great country to do business with, and to
visit. Thank you.
[The prepared statement of Mr. May follows:]
Prepared Statement of James C. May, President/CEO, Air Transport
Association
Good afternoon, Chairman Inouye and Vice Chairman Stevens. I
appreciate being here.
We have just heard testimony about the ``Blueprint to Discover
America.'' Their three main goals--a faster and more secure visa
system, more rapid processing of passengers at airports, and creating a
more welcoming environment for international passengers--are goals that
we all agree upon.
The good news--and I am sure it is the result of the good work by
Partnership members, is that these are also goals that are already
being addressed by several Federal agencies.
The fact that we are sitting together today tells us that there are
a lot of committed people working together on these issues in the
Administration, in affected businesses, and in the airlines.
The Rice-Chertoff Initiative, the DHS/State Department ``Secure
Borders, Open Doors'' initiative, the US-VISIT program, and the
Commerce Department's U.S Travel and Tourism Advisory Board, have all
focused on these same goals to improve the international traveler
experience.
These government initiatives, such as E-passports, model airports,
developing a ``single portal'' for transmission of passenger
information, adding new consular positions and decreasing the wait time
for visa applicants, are going a long way toward improving the
passenger experience. As I compared the government's programs with the
objectives of the ``Blueprint,'' I felt that those ``Blueprint''
objectives were being addressed.
Having noted the consistency of the objectives between the
``Blueprint'' and the government initiatives, there is one glaring
inconsistency. The ``Blueprint to Discover America'' goes against one
of the key recommendations put forth by the government. The Travel and
Tourism Advisory Board raised concerns about imposing taxes on
passengers. It explained how those can ``increase the cost of travel
and can dampen demand for inbound travel.''
The ``Blueprint'' proposes to pay for all these initiatives with a
$5 fee for ``all travelers leaving the United States via air'' or with
a charge of approximately $10 to be added to the cost of ``purchasing
the airline ticket.'' To be fair, the ``Blueprint'' offered a third
funding alternative, the issuance of $1 billion in tax free bonds.
Why would we want to charge passengers more at the same time we are
trying to get more of them visit the U.S.? That just does not make any
sense.
I would like to remind the Committee that international airline
passengers are already paying approximately $50 in U.S. taxes and fees
for each trip to America. What passengers should expect for $50 is an
efficient system to get them through our airports.
Travel and tourism create spending of over $650 billion a year in
the U.S. and generate approximately $100 billion in additional taxes
for state, local, and Federal governments. If more needs to be done to
expedite handling airline passengers or processing visas, and it does,
the Federal Government needs to commit to use a portion of those
additional tax revenues to these efforts.
The ``Blueprint'' also says that ``all foreign travelers into the
U.S. should be greeted at the inspection booth with the words `Welcome
to the United States'.''
While I appreciate a warm welcome--it is hard for me to support
charging passengers a $5 fee to purchase a smile and a greeting.
The ATA strongly favors securing America's borders, and we can do
that by eliminating inadequate processes and transitioning to
electronic visa application forms, making visa appointments online,
sharing data among government agencies to avoid duplicative work, and
adding even more consular positions and locations.
ATA has been working very closely with government agencies to
implement these initiatives. We have long been an advocate for full
coordination among government agencies and support a DHS-lead ``single
face'' at U.S. airports of entry.
I want to reiterate--we support these fundamental changes in the
``Blueprint'' to speed passengers through airports, to expedite visa
processing and enhance security, and to make the travel experience more
enjoyable. We think they are already being addressed by the State
Department, the DHS, and the Commerce Department--but that they could
be done with a little more vigor and with a greater sense of urgency.
America has to effectively compete for those visitors or otherwise
millions of travelers will take the billions that they would have spent
here, and spend it elsewhere. Our airlines are eager to bring more
international visitors to America so they can experience firsthand what
we already know--that America is a great country to do business with,
and to visit.
Thank you.
Senator Dorgan. Mr. May, thank you very much.
Let me ask a number of questions, and then turn to my
colleagues.
First, if the recommendations that you suggest are
implemented, from what countries would you expect that we would
see the largest increase in travelers to the United States?
Does anyone have an estimate of that? Mr. Porter?
Mr. Porter. Yes, the Blueprint, as defined and described,
would focus on international arrivals from overseas travelers,
so we would see the largest amount of those coming--increasing
the contribution from England, we'd see an increased
contribution from Japan and from China, which are already big
contributors, but we have seen decline. Similarly, Brazil has
shown significant decline in the past 5 years, so that would be
another country of focus, as well.
Senator Dorgan. The Discover America Partnership has
provided a blueprint outlining objectives and tactics in a
number of very specific areas, which is helpful, it seems to
me, in terms of our evaluation of them.
I want to talk about the return on investment where we,
too, embrace these ideas. What would be the benefits of such a
program, and what do you believe would be the return on
investment for our country to pursue such a program?
Mr. Porter. Very, very fair question.
First, in the construct of this strategic plan, very
similar to the way we would pursue this inside any one of the
companies that we represent, this is a combination of a variety
of options among many that were evaluated. And these come
forward as being what we think of as some of the strongest, but
clearly open to review, discussion, and debate, sort of as
we're having here today.
That said, within the three component parts--improvement in
the visa process, we think, is an investment initially at about
$50 million, improvements in the entry procedures is about $50
million, and then the notion of improving perceptions is an
investment of about $200 million. And, as we would execute down
that path, clearly we think fixing the first two is the right
place to start with that resourcing.
Once that would be agreed to, having passed through some of
those objectives as benchmarks, thresholds we've laid out, then
you'd move into the communications component, and the return as
noted in there, we see as being sizeable.
And I think Jay did a nice job sizing that, it is to return
us to a market share position that reflects, first, covering
the decline--we've gone from about a 7.5 percent share to a 6
percent share--that one and a half points is roughly the 10
million visitors that we've described with the corresponding
economic benefits. And the pie has gotten bigger at the same
time.
So, not only have we lost position, but the pie has
improved, so it's sort of a double loss of position.
Senator Dorgan. Mr. May seemed to suggest that the Rice-
Chertoff joint vision has created some progress in a number of
areas, and that perhaps it could be improved a bit, but I
think, I think you seem to suggest that there has been
substantial progress in these areas.
Do all of you agree with that, or is, or do--? I mean, I
assume that the reason you've put this together is you believe
much more needs to be done, is that correct?
Mr. Rasulo. If I may, Senator.
I think that we all agree that progress has been made, and
Rice-Chertoff, in fact, was used as an input to this blueprint
in many ways, and gave us a vocabulary that we could share with
both the State Department and the Department of Homeland
Security in really trying to secure the very same goals.
I think the Blueprint pushes a little further in the use of
technologies in specific reviews of staffing, and tries to
isolate the problems with specific answers.
It also speaks to the area of promotion, to which the Rice-
Chertoff initiative did not speak. And, if I may, just add on
the issue of return, we have some information about valuable--
the value of promotion in terms of return, both in terms of
spending, and in terms of taxes.
The input here comes from a number of things--sort of an
academic study from a group from Oxford, an Oxford
organization--I don't remember the exact name, it's in the
Blueprint--that showed that well-executed programs can return,
in terms of spending, up to 75 to 1, but probably on average,
35 to 1, if you look at programs around the world.
In my home state, the State of California, we had a bit of
a control experiment in that we promoted California
internationally for a number of years, and then the funding was
cut off and we lost it, we saw the effect down, and when it was
reinstated, we saw the effect back up, and that was about 14 to
1. On average, we think in terms of tax revenue, the average is
probably around 6 to 1.
Senator Dorgan. You're correct that the Rice-Chertoff
initiative did not deal with the issue of promotion, but just
one final point--other countries that are involved in promotion
and a greater activity here to try to get a better share for
their countries of the international travelers. Are they paying
for these initiatives through--the public sector? The private
sector? Or a combination? Do you have any information about
that?
Mr. Rasulo. Most are public, public funding. There are some
that are public/private partnerships, with some matching.
California is an example of that. There's contribution from the
private sector, which is more than equally matched, but as a
substantial contribution from the State of California. So,
there are many public/private partnerships, but most have
substantial government funding, as part of them. Canada, as an
example, I believe is completely publicly funded.
Senator Dorgan. I'm going to have to ask other questions at
another go round.
Mr. Tisch. Senator, if I can just add to that, we have
released, today, this document which is the 1-year review of
Rice-Chertoff. And it is appropriate that it is the day that
we're talking to you about extending some of the ideas here,
but then adding the Blueprint to it.
What the Blueprint does is put aside parochial concerns of
various aspects of the travel and tourism industry, and works
together toward a greater good. And when you ask about return
on investment, I think you can look at the financial return,
which my colleagues have discussed a bit, and it really focuses
on some of--all of the Senators' opening comments, about
helping us with the positive balance of trade.
Our industry is uniquely poised to be a vehicle for job
creation, and for economic development. I serve, as I mentioned
in my comments, as Chairman of New York City's Convention of
Visitor's Bureau, and our industry is growing and we continue
to create jobs.
To give you a sense of how important that international
traveler is, we had a record year in 2006--44 million people
visited New York City. Of that, only 18 percent were from
international destinations, but they were responsible for 45
percent of all the visitor spending. That's why we need the
international traveler. They stay longer, and they spend more
money.
Now, you switch to the intangible results, and as we all
know, and we're all deeply concerned about the image of
America, Americans, and American brands overseas is at an all-
time low. The results show that when you come to this country,
you leave with a more positive image of us as a Nation. And
when you combine the tangible and the intangible, we think that
the Blueprint becomes the path to help our country on many
fronts.
Senator Dorgan. Mr. Tisch, thank you.
Senator Inouye?
The Chairman. About 25 years ago, Ireland, the government
of Ireland, spent more money promoting the Blarney Stone than
the United States did for the whole country. What improvement
have we had? Are we spending more than Ireland?
Mr. Rasulo. Well, let me--let me answer that. From a
nationally coordinated perspective, overseen by a Federal
agency of any sort, or a centralized message, we spend zero. So
we haven't, I guess, if they're spending anything on the
Blarney Stone then it's more than us. And Ireland, in fact, is
one of the many nations that spends against national tourism.
Needless to say, Senators, we as private entities, do
invest in promotion overseas, but we cannot fill the essential
role that a centralized, federally overseen program can do.
Particularly, now that we know the biggest inhibitors are the
entry process and the visa process, there is no private entity
or state entity, that would be either a trusted source of that
information, or the appropriate source of that information.
So, I think, to answer your question, there hasn't been an
improvement.
The Chairman. Well, what countries have been the most
successful in attracting international visitors?
Mr. Porter. We have that detailed within the Blueprint.
Australia certainly jumps to the top of that list as having
been highly effective in focused programs in spending, Canada
would be another example of a country that has done quite well
on that front, some of the European countries have stepped into
that, as well. So they are wildly, most all countries for whom
this industry is a significant contributor, are significantly
ahead of the spending patterns of the United States.
The Chairman. What sort of visa and security processes do
these countries have, as compared to the United States?
Mr. Porter. You'll find in there, again, details on that.
We know, and many of us travel frequently, England, Israel and
others have been far more advanced in using technology to
advantage entry into those countries. Those are good models.
Australia has also been advanced in using technology to make it
fast through the booking process to get access to that country.
So, I think they are definitely good models that we can emulate
in this country, for certain.
Mr. Tisch. And if you look at the historic competitors of
the United States--Australia, and Japan, Italy--what we're now
seeing is a big push by Middle Eastern countries, such as
Dubai, Abu Dhabi, to grab a larger market share of conventions,
conferences, by building enormous meeting halls and hotel
facilities, restaurants--the whole travel and tourism
infrastructure. They are throwing hundreds of millions of
dollars to attract U.S. business that might now go to Las
Vegas, New York, or Orlando, to their shores.
The Chairman. There's one thing in common with these
countries--the government is involved.
Mr. Tisch. It is my understanding that the government is
absolutely involved, sir.
The Chairman. Last September, I think the organization
submitted recommendations to the Secretary of Commerce? What
has happened? Have they been implemented?
Mr. Rasulo. Senator, it just so happened that yesterday,
the U.S. Travel and Tourism Advisory Board had a meeting with
the Secretary, and reports are out from the Department of State
and Homeland Security on some of the recommendations. And I
think there--there is no, no doubt there has been incremental
improvement in the processes.
The model airport program from the Rice-Chertoff Initiative
has had some advancement, there has been some improvement on
the visa side, but I think that we've only scratched the
surface in finding the efficiencies that technology and
appropriate staffing levels can provide, and haven't scratched
the surface at all, although it was not a recommendation of
the, of that particular paper--have not scratched the surface
at all on the area of promotion and communication.
I would like to add, by the way, that since it's
referenced, and I do chair that committee, it was referenced
that the committee argued against the collection of fees or
taxes from travelers.
Actually, what it recommended was against fees that don't
benefit travel. And clearly, the aspects of the Blueprint we're
discussing today are to the benefit of travel.
The Chairman. We have just implemented the new visa
requirements in the Western Hemisphere. What will be the impact
on visitors from those countries?
Mr. Rasulo. Well, it's hard to know, and I'll defer to my
colleagues, but right now, a very small percentage of our
travel from Canada and to Canada is by air, relative to ground
crossing. So far--we heard yesterday from a Director of
Homeland Security, Michael Jackson, that 90 percent of the
passengers arriving in the U.S. or going to Canada by air--do
have passports. And that those who didn't have been
accommodated, to date, in the early days, in ways that no one
has been turned around, yet.
I think the real test against the WHTI is how efficiently
we can implement the border crossing. Which is--which are
frequent, are often not what you and I would think of as
travel, but a trip to a movie, a trip to go shopping, a trip to
a drug store that's at the end of town can be a border crossing
in a lot of our border states.
And so, we've yet to see the impact of the ultimate
implementation. We're all working quite hard to be sure that
that is implemented with a deadline of--thanks to some of you--
of mid-2009 to be sure that that gets implemented in a way that
won't affect our flow from Canada which, of course, is our most
important trading partner, and our most important travel
partner in the world.
Mr. Porter. And Chairman, if I may, just give some further
illustration to that. Jay has pointed out at the outset of
WHTI, with regard to air arrivals, we knew going into the
penetration of passport holders for those arrivals is pretty
high, so that has been borne out to be the case, and it has not
had significant negative impact.
As we move to land arrivals--whether from Mexico or from
Canada--lodging alone, we have roughly 50,000 hotels in the
United States, and about 25 percent of those are within a
hundred miles of either the Canada or the Mexico border. And it
is not an uncommon thing to have significant cross-border
travel to enjoy many of the amenities of the United States, a
broad array of industries. Penetration of passports in the
population at large is sub-30 percent in the United States,
similarly, sub-40 percent in Canada, so we think the potential
for dramatic impact is significant, which goes back to the need
to have coordinated communications on these initiatives, so we
get the security right, but also make sure the doors stay open.
The Chairman. I notice my time is up, I thank you very
much, Mr. Chairman.
Senator Dorgan. Senator Stevens?
Senator Stevens. In the nineties, there was an organization
called the U.S. Tourism Organization. Are you any of you aware
of that one?
Mr. Tisch. I was a member.
Senator Stevens. What happened to that?
Mr. Tisch. It lost its funding through the Commerce
Department.
Senator Stevens. It was federally funded to start?
Mr. Tisch. Yes, it was. And it was through the Commerce
Department, sir, and it lost its funding.
Senator Stevens. Are you of the opinion that there must be
Federal funding to initiate this new program?
Mr. Tisch. We are of the opinion that there are private
sector ways working with government, as Jay outlined, and we
threw a few ideas out there. But, we do feel that we need some
assistance in this, but the private sector understands our
role, and our responsibilities, and wants to work with
government to find ways to pay for the programs that we are
calling for.
Senator Stevens. We have initiated other programs such as
the Pitman-Robertson program that deals with firearms and
archery and activities like that--they're basically what we
call a user-pay benefit trust fund concept--have you examined
that concept?
Mr. Porter. I don't believe we did directly, no. And just,
again, going back to the intent behind the Blueprint--we
thought it important, as we bring this initiative forward--to
be honest about the fact that it requires resourcing. And we
felt that it was important to try to put a fine line on the
quantum of what that resourcing might be. And we also thought
it was a requirement to put forward a variety of options as one
approach to understanding how it might be resourced.
It would be our intent that this would advance into further
discussion to further validate alternate resources. We're not
necessarily committed to, or married to any one of these, but
we clearly know that resourcing is a requirement, and we think
there are a variety of options to sort that out.
Senator Stevens. Have you presented this plan to the
Department of Commerce now?
Mr. Rasulo. We did. We did present that plan yesterday at
the board meeting to Secretary Gutierrez and his staff, yes.
Senator Stevens. And this Discover America Partnership
Corporation--you envision that that would be authorized by
Congress to start with?
Mr. Porter. Actually, it could potentially be one approach
to putting funding forward and having some oversight body in a
relationship between the private sector and the government,
advance this initiative, yes.
Senator Stevens. Well, I want to make sure we understand
that, if we proceed to have such a corporation created and
implement a program through legislation, does that meet your
desire? Do you want to cooperate with that?
Mr. Porter. Yes, we do.
Senator Stevens. Now, Mr. May, I understand what you're
saying about exit fees and we've all had an acquaintance with
that sort of thing. Is your industry, though, prepared to work
with the travel agencies, the travel industry, to facilitate
the development of the Partnership program and otherwise?
Mr. May. Senator Stevens, we have endorsed the principles
of the Blueprint, and are happy to work with it. We have
questioned, as you might imagine, some of the funding formulas
that are attached to that, but I would suggest, in a manner
reminiscent of the opening comments of Chairman Inouye, there
are billions of dollars that are currently being spent on many
of these different programs--whether it's US-VISIT, visa exit,
Secure Flight, AQQ--we can go down a very long list. I would
hope that this Committee would undertake, at the outset, to
bring up representatives from the State Department, the
Department of Homeland Security, TSA, CBP, ICE, and the other
multiple alphabet soup organizations that are responsible for a
very diverse enforcement of issues.
And if the State Department suggests that they are going to
make significant progress with their programs--they've issued
recent press releases to that effect--I think this Committee
has an opportunity to hold their feet to the fire, and make
sure the programs we have today are cost-effective, efficient,
and are doing what they are intended to do, which is not to say
that we shouldn't have more promotion, but I think there's a
lot of work that needs to be done on making sure all of these
programs are coordinated, and that we have a command and
control structure that works effectively for the benefit of the
international traveler.
Senator Stevens. I think some of you were involved with the
funds that--when I was chairman of the Appropriations
Committee, we were able to get Congress to approve--those
monies weren't all spent. Was that because of a lack of
infrastructure in the Executive Branch to carry it out, or was
there just not an agreement within the industry of where they
should be spent?
Mr. Rasulo. I had the pleasure of chairing the advisory
committee that the legislation that you submitted called out
for the spending of $50 million that was appropriated for this
very purpose. And that was an advisory committee to the
Commerce Department.
Frankly by the time the effort was organized, by the time
the board members were named--and, in fact, two of us were on
that board--by the time it was named, it was already 6 or 7
months into the year, and it wasn't that we couldn't figure out
how to spend the money, we knew exactly how we were going to
spend it--we couldn't get through the Federal approval process
quickly enough before the money got swept up in an omnibus
bill, the omnibus bill at the end of the year. And we were left
with $8 million which we spent about $6 million-plus in what we
called a pilot program in the U.K., which I'm happy to say
seemed to have had very positive results.
Senator Stevens. Well, last--I see my time is up--the Duck
Stamp, you know, sticks in my mind as a hunter. Hunters have
supported the program which provides the money that assures
conservation of the species that they hunt. It has been totally
accepted by all involved in the hunting world of our country.
Have you examined the ability of the industry to start out and
raise money through some mechanism, such as a stamp or a
certificate of membership? There are literally hundreds of
thousands of people that are the periphery of your industry.
And it seems that that would raise money, and have a continuous
flow of money, if the program was successful. Have you looked
at that form of mechanism of funding?
Mr. Porter. That particular mechanism, no, we didn't.
That's a great suggestion as we advance this into the working
group, and think through what those broader options might be.
Thank you for that.
Senator Stevens. Well, I think Senator Inouye and I have
looked forward to working with you, because certainly our two
states are very heavily supported by the travel and tourism
industry. And we've seen the decline that you've mentioned, and
we'd like very much to work with you to try and sort of bring
back this industry, and have it bloom as it should, in terms of
our total economy.
Thank you very much, Mr. Chairman.
Senator Dorgan. Senator Thune?
STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
Senator Thune. Thank you, Mr. Chairman.
Panel, thank you for your testimony. I appreciate you
having this hearing--tourism and travel is a very vital
industry in my home State of South Dakota, and as the Senator
from North Dakota is also aware, there are a lot of folks that
come to our part of the world year in and year out. And, in
fact, in 2006, visitor spending in South Dakota was $864
million, so almost a billion dollars a year is being spent in
the state, and that's a 7 percent increase over the previous
year.
So, we've seen steady growth in tourism spending in South
Dakota, and with the exception of the downturn right after
2001, that has been a trend line that has been pretty
consistent. And, it's a big job creator. We have about 33,000
jobs in South Dakota that are related to our state's tourism
industry.
And I think it makes sense to think strategically about how
we can increase the number of international visitors who come
to the United States. The money that they spend here in this
country is money that we wouldn't otherwise realize in our
economy, and so I look forward to working with others here in
Congress, as well as with the Administration and industry
groups to make sure that we're effectively competing for that
share of international tourists.
And, I guess I just have a couple of questions for you. As
I mentioned, tourism constitutes about $900 million for South
Dakota annually, one of the proposals that you're talking
about--the Discover America Partnership calls for the creation
of a federally sponsored, nonprofit corporation to increase our
country's market share of international tourists. And I guess
one of my questions would have to do with how that would be
organized, and would that Board of Directors include
representation from rural tourism, from that part of the
industry, as well?
Mr. Porter. Yes, as conceived, it would be as far-reaching
as could be. And within my own accountability, while we're a
big corporation, I represent the voice of about 2,000
franchisees who are very much attached to business in their
local constituency. And we conceive this to be as broad a
representation as could be accomplished, and at the same time,
make it a group that could advance the initiative.
Senator Thune. Just as a follow-up question--and this is
for anybody on the panel--but what else can we be doing to
ensure that the rural destinations in our country are getting
good exposure among potential international travelers?
Obviously, we want people to visit Disneyland and Disneyworld--
which we know they will--we also want them to visit Mt.
Rushmore, and maybe to come through North America on their way
to South Dakota.
Mr. Rasulo. Well, Senator, in answer to your question, I
think the only vehicle by which we can imagine promotion of
places that don't have big, private-entity destinations, is
through a nationally coordinated program, that markets America
around the world. We, at Disney, are always going to have the
resources, my colleagues at this table will have the resources,
their companies will have the resources to promote our own
businesses and big destinations, so will Las Vegas, so will New
York, so will San Francisco, et cetera.
When you get to small--the Faulkner Museum, Mt. Rushmore,
the National Parks--the funds are simply not there, and there's
no entity large enough to speak to the world about South Dakota
or North Dakota, or Mississippi or Arkansas or many other
states.
So, the beauty of a nationally coordinated program that
hooks people on the idea of coming to America at all as a
destination, and allows local convention bureaus, with very
small funds after that, to come in on the Internet, when people
are not seeking, where am I going to go as a country? But, what
am I going to do when I get there? They typically go to the
Internet, and that allows, you know, kind of an even playing
field for all destinations.
So, I think that's one way to think about, how can we help
promote distant, small, rural tourism? This is one of the most
effective ways.
Mr. Porter. And, if I may just add to that, something we
spoke about earlier is the impact of the Western Hemisphere
Travel Initiative, which has potentially great impact for you,
being a close State to the border of Canada. And it would be an
organization like this that would lift up those issues, and put
that communication out.
As Jay has pointed out, all of us as independents spend a
lot of money for specific venues, brands, offers--what we don't
have is this comprehensive voice on behalf of America, and what
it means to come here and reinforcing a balance between policy
and opening the doors.
Mr. Tisch. Senator, your question is very appropriate,
especially coming from your state, because it's important to
understand that travel and tourism is not just about corporate
America, it's not just about the names that are represented at
this table. It's about the Mom and Pops, who have been in this
business for many, many years, who need the traveler to bring
the income so that they can raise their families and educate
their kids.
It is interesting to note that we met with Congressman
Porter and Congressman Farr of the House Travel and Tourism
Caucus this morning and Congressman Porter raised an idea that,
I think, maybe it's time for us to give some thought to.
In 1995, there was the first-ever White House Conference on
Travel and Tourism. And it brought together about 1,500
individuals that represented all 50 states in every aspect of
travel and tourism.
And it really was the first time that the--once thought of
as disparate entities--travel and tourism were able to meet in
a setting to talk about issues that affect all of us--not just
hotels, airlines, cruise lines, or the smaller operators.
And maybe now the time has come for us to have another
White House conference on travel and tourism. The issues have
changed, the industry has gotten bigger, the contributions that
we make to this country are now more understood. And what
struck me to your question, Senator, was that at this
conference, now 12 years ago, every state sent a
representative. So, the smaller operators were able to voice
their concerns, and look at ways that we can all work together
to promote the industry.
Senator Thune. I know that marketing, clearly, is the name
of the game, and you all do it very well. We've got some
success stories in my State--I don't know if you've ever heard
of a place called Wall Drug, but if you travel anywhere in the
Midwest, you probably see signs.
But, Mr. Rasulo, you mentioned in your testimony that
Australia and Canada spend about $113 million a year, and $58
million a year, respectively, on marketing their countries to
international travelers. And I'm wondering if there's evidence
that these expenditures have been effective--have they seen an
increase in international travel as a result of that?
Mr. Rasulo. We believe, and of course this is, you know,
the old adage about marketing, half of it I don't know where it
goes, I don't know which half works.
But, we have seen--when you look at the results that these
countries get, and we look around the world, and people often
say, ``Well, of course, you know, the U.S. share is dropping,
there are new destinations being added to the map, and they're
sucking away shares of travel,'' but in fact, when you look at
the statistics--all of the competitive nations to the U.S. are
beneficiaries of the world travel growth. It is only a few--and
mostly the U.S.--that are the net losers in share in the growth
of travel. And in the case of overseas travelers to the U.S.,
the absolute numbers are declining.
So, I have to, I have to assume that that is in part due to
their marketing out there, and their ability to attract.
Academic studies say that this, the ratio of investment against
spending in those countries is on the level, on average, of 35
to 1; tax revenue on the level of 6 to 1; so, I think the
evidence indicates that they are, but I couch what I say--and
all of my colleagues can understand this well in the private
sector--measuring the value of marketing is an art, as much as
it is a science.
Senator Thune. Thank you, and I see my time is expired, but
I appreciate your testimony. I look forward to working with you
and trying to get a bigger share of that international traveler
dollar here in the United States.
Thank you, Mr. Chairman.
Senator Dorgan. Let me just make a point on the Western
Hemisphere Travel Initiative. I share a very long border with
Canada in North Dakota, and we've been very concerned about
this issue. I believe when I was chairman of an Appropriations
subcommittee, just prior to 9/11, 2001, I had offered a
Northern Border Initiative, which really dealt with security.
And I brought to a committee hearing an orange cone, and placed
it on the desk and said, ``This is security at a lot of our
border checkpoints, and the polite drivers actually stop and
move it as they walk in after the border's closed, or as they
drive in, and the impolite drivers will just shred it at about
60 miles an hour.'' But that was border security. That has
changed at all of those border ports of entry.
But the proposition that there should be a passport for
everyone driving back and forth across the border was very
troubling. A family of four going up to Winnipeg for the day,
getting passports for $400 or so for the family--I've been very
concerned about this, on the Northern border and in all of our
circumstance. We need--there is a kind of a tension between
security and tourism and travel, and we need to resolve it in a
way that's thoughtful and serious.
For example, right now, we have the new cards that are
being proposed. But, my understanding is, the Postal Service is
wanting $25 per card, to process the card. So, we're trying to
understand what that's all about.
Let me ask you this--I understand about the Initiative that
has been offered by the State Department and the Department of
Homeland Security and I want it to succeed. I've seen some
evidence that there has been some improvement. But, it seems to
me, not nearly enough improvement. And the fact is,
government's a big bureaucracy, these agencies are big
bureaucracies, nobody's ever accused them of speeding. It's
very hard for them to change, and turn and adapt.
What if the Congress decided, based on the testimony of you
here today that we don't have to do anything. This Rice-
Chertoff Initiative, that's fine, you think it's pretty decent,
moving in the right direction, that's enough. Is that what
you're saying to us?
Mr. Porter. No, it's not.
Senator Dorgan. Or do you think much, much more needs to be
done?
Mr. Porter. We clearly think much, much more needs to be
done. And not dissimilar to any of our individual
accountabilities, we all recognize, this is a journey that we
are on. Our world changed on September 11th, we respect that.
The world continues to change, and we respect that.
We think Rice-Chertoff was a great step in the right
direction, and many of us were part of the discussions that led
to that activity. But it's not as comprehensive as we think it
needs to be. We don't think it has been resourced as
effectively as it could be, and we've called that out here. And
it doesn't allow for what, we think is one of the most
important components, which is communication. So, clearly, we
are suggesting that we need to advance that initiative beyond
where we are today.
Senator Dorgan. Let me make another point, and ask a
question. You want to promote our country--and, I think, for a
lot of good reasons. You know, people come to this country.
They think well of what they've seen here and what they
experience here. It's very important at a time when our image
is suffering around the world.
Senator Stevens talked about the Duck Stamp, or Ducks
Unlimited--it was enormously successful as a fundraising
device. Maybe there are ways in the private sector to do that.
If not, there are calls for suggestions that the public sector
finance it.
Let me ask a question about what other countries are doing.
Those that are engaged in more aggressive promotion through
advertising--``Come to our country, see our country,'' those
countries that are doing that, are most of them using public
sector funding? Is that how they're enhancing their ability to
do that?
Mr. Tisch. Yes, they are using public sector financing.
Senator Dorgan. And, let me ask about the issue of an exit
fee. I understand the concern about that from Mr. May, but
having traveled some around the world, it's not unusual to
discover on the way out, you have to stop at a kiosk someplace,
and they want a few bucks from you, for one thing or another.
These exit fees, if exit fees were, in fact, implemented,
how could they be implemented in a way in which they did not
become a part of an airline ticket?
Mr. Porter. Yes, I would imagine--as you've pointed out--
there are a number of mechanisms that could be explored. And, I
think, again, we are very open to exploring those mechanics. I
think the key thing is to understand the benefits of any use of
any kind of funding, and to make sure that we clearly have
enumerated those, and have support behind those.
And that aside, not--just so much of the resourcing
challenges each one of us faces every day, that you face every
day--our sense is we can find a collective way to get there,
and make it work.
Senator Dorgan. Senator Inouye, do you have any additional
questions?
The Chairman. Just a note.
Hawaii's major industry, as you know, is tourism. It's a
multi-billion dollar industry. But, what most people are not
aware of is that in order to make this a successful industry,
we spent a ton of money promoting Hawaii. And that's the only
way to do it.
And right now we're in the midst of a promotion program of
promoting our rural areas. Five years ago, very few people knew
where Hana was, or Haiku, or Kohala. These places are now
booming because of promotion and advertising.
So, I'm with you, and I'm most grateful to you for your
testimony, and I hope we can get together to figure out--as the
Chairman indicated--how to implement your recommendations?
Thank you very much.
Senator Dorgan. Senator Stevens?
Senator Stevens. Thank you very much, gentlemen. I
appreciate your appearance and your comments.
Senator Dorgan. Your suggestion that we also visit with the
agencies that are involved in this is well-taken, and we will
have those discussions, and we have actually had contact with
them. And I think it is in our interest to--certainly Senator
Inouye, and Senator Stevens, and myself, and others on this
Committee--to try to see if we can put together some kind of
legislation that advances the interest of the type we've
discussed here today, and of the type that you've described
today.
Again, the travel and tourism industry is an enormous part
of our economy. And it creates many jobs which is very
important; so, too, is security. You've all recognized that
today in your testimony, and if we can find a way to work with
you and engage with you on this--the work you've done on the
Discover America Partnership--which I'm very impressed with--if
we can continue to work with you and others, we'd like to find
a way to put together a piece of legislation that we can offer
here in the Congress.
And, Senator Inouye makes the point that all three of us
are on the Appropriations Committee, as well.
[Laughter.]
Mr. Porter. Very good.
Mr. Tisch. All the better.
Senator Dorgan. At any rate, we thank you very much for
your testimony.
Mr. Porter. Thank you, Senator. Thank you very much.
Senator Dorgan. This hearing is adjourned.
[Whereupon, at 4 p.m., the hearing was adjourned.]
A P P E N D I X
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to
Jonathan M. Tisch
Question 1. Current law caps the number of aviation security
screeners that the Transportation Security Administration may hire at
45,000, regardless of the agency's budget. I've suggested the first
thing we need to do in order to fully staff the TSA and keep airline
passenger security lines to a minimum is to remove this arbitrary cap
of 45 thousand security screeners. Do you agree Congress should remove
the cap and fund the agency's staffing needs to an appropriate level?
Answer. Concerning TSA staffing at airport security checkpoints, we
believe there should be sufficient staff at each airport in order to
screen business and leisure travelers in an efficient and effective
manner. Reducing lines at peak travel times is especially important in
order to ensure travelers do not miss their flights, and this requires
a flexible workforce that can be scheduled to meet these hours of peak
travel demand. This is especially important for millions of
international travelers who land in the U.S., but must switch to
domestic flights in order to reach their final destination. After being
screened (inspected) by Customs and Border Protection, they must then
be screened by TSA agents before boarding a domestic flight. Having the
requisite number of screeners helps make the screening process more
effective and ensures enhanced safety of air travel within the U.S.
Often times, fully staffing an airport can be met by shifting the
number of screeners between airports and adequately staffing during
peak arrival times. It is important we find a way to stabilize this
workforce, which has been characterized by high turnover, low morale
and a high rate of on the job injuries. We should closely evaluate the
number of screeners at all our airports and staff according to
individual airport needs, and it is fundamentally important to find the
balance between staffing and technology to make the system as secure
and efficient as possible.
Question 2. Would you agree that more investment in passenger rail
nationwide is critical to the future of tourism? Would the U.S. tourism
industry be more interested in economic development opportunities
spurred by transportation infrastructure projects like railroad
stations if there were both a Federal policy and Federal funding for
such projects, like there is for highways and airports?
Answer. The U.S. travel industry has long supported a well-funded
intermodal transportation system in this country in order to provide
true national mobility for business and leisure travelers. When we are
not housing, feeding or entertaining visitors, various segments of our
industry are helping travelers reach their intended destination safely
and on time. Travel by air, rail, sea, or on the road are all essential
elements for a prosperous travel industry now and in the future. We
believe all levels of government (especially including the Federal
Government and the states) must make significant investments in all
modes of travel (including rail) in order to provide for safe and
efficient movement of travelers to every corner of this great nation.
Question 3. Has your company invested in economic development
opportunities surrounding intercity passenger railroad stations in
other countries? If so, please explain how the presence of such a
station has affected your business.
Answer. Loews Hotels are located principally in the U.S. (with the
exception of two properties in Canada). We have no existing investments
surrounding intercity passenger railroad stations in other countries
nor plans for such currently. However, in looking at new investments,
we do recognize the importance of passenger railroads in bringing
people to and from destinations and the important role railways play in
the travel and tourism experience.
______
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to
Stevan Porter
Question 1. Should Congress remove the cap and fund TSA's staffing
needs to an appropriate level?
Answer. As I discussed in my testimony before the Committee, the
Discover America Partnership believes the United States needs to invest
in personnel and technology in order to enhance our Nation's safety and
security and to assure that the process does not discourage
international travel to the United States. The TSA screening process is
a key link in the system, both for international and domestic
travelers. The Partnership supports efforts by Congress to assure that
the TSA workforce is sufficient to assure an efficient and effective
screening process at airports across the country and that it is
flexible enough to meet hours of peak travel demand.
Question 2. Would you agree that more investment in passenger rail
nationwide is critical to the future of tourism?
Answer. With hotel properties in 100 countries and territories
around the world, InterContinental Hotels Group understands that our
country's ability to safely and efficiently move travelers from point
to point is essential to a robust travel and tourism industry. The
Discover America Partnership believes that significant investment by
states and the Federal Government in all modes of travel, including
rail, should be a national priority.
Question 3. Has your company invested in economic development
opportunities surrounding intercity passenger railroad stations in
other countries? If so, please explain how the presence of such a
station has affected your business.
Answer. As president for the Americas, I am not aware of any such
projects. However. we are surveying the other IHG regions, and I will
submit to the Committee any examples identified in that survey.
______
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to
Jay Rasulo
Question 1. Current law caps the number of aviation security
screeners that the Transportation Security Administration may hire at
45,000, regardless of the agency's budget. I've suggested the first
thing we need to do in order to fully staff the TSA and keep airline
passenger security lines to a minimum is to remove this arbitrary cap
of 45 thousand security screeners. Do you agree Congress should remove
the cap and fund the agency's staffing needs to an appropriate level?
Answer. Concerning TSA staffing at airport security checkpoints, we
believe there should be sufficient staff at each airport in order to
screen business and leisure travelers in an efficient and effective
manner. Reducing lines at peak travel times is especially important in
order to ensure travelers do not miss their flights, and this requires
a flexible workforce that can be scheduled to meet these hours of peak
travel demand. This is especially important for millions of
international travelers who land in the U.S. but must switch to
domestic flights in order to reach their final destination. After being
screened by Customs and Border Protection, they must then be screened
by TSA agents before boarding a domestic flight. Also, having the
requisite number of screeners can also help make the screening process
more effective and ensure enhanced safety of air travel within the U.S.
Question 2. I understand your company was interested in developing
a passenger rail system linking your theme park with the Orlando
International Airport. Would you agree that more investment in
passenger rail nationwide is critical to the future of tourism?
Answer. Providing for safe and efficient movement of travelers in
all regions of the country is certainly a worthwhile investment. When
we are not housing, feeding or entertaining visitors. various segments
of our industry are helping travelers reach their intended destination
safely and on time. Travel by air, rail, sea, or on the road are all
essential elements for a prosperous travel industry now and in the
future.
Question 3. Would the U.S. tourism industry be more interested in
economic development opportunities spurred by transportation
infrastructure projects like railroad stations if there were both a
Federal policy and Federal funding for such projects, like there is for
highways and airports?
Answer. As stated in response to the previous question, we agree
with the U.S. travel industry in that a well-funded intermodal
transportation system, including air, rail, road and sea, is essential.
Proper public investment in these areas can spur private sector
development opportunities.
Question 4. Has your company invested in economic development
opportunities surrounding intercity passenger railroad stations in
other countries? If so, please explain how the presence of such a
station has affected your business.
Answer. New train stations in France have supported new development
for Disneyland Resort Paris, and we believe these investments can be
worthwhile for spurring private sector development.
______
Response to Written Question Submitted by Hon. Frank R. Lautenberg to
James C. May
Question. Current law caps the number of aviation security
screeners that the Transportation Security Administration may hire at
45,000, regardless of the agency's budget. I've suggested the first
thing we need to do in order to fully staff the TSA and keep airline
passenger security lines to a minimum is to remove this arbitrary cap
of 45 thousand security screeners. Do you agree Congress should remove
the cap and fund the agency's staffing needs to an appropriate level?
Answer. The simple answer is that the Transportation Security
Administration should be given all the resources it needs to implement,
in the most efficient and effective way, the Congressional mandates in
the Aviation Transportation and Security Act (ATSA). In ATSA, Congress
very clearly required the Federal Government to provide for the
screening of all passengers and property, including cargo, carried on
passenger aircraft. In fact, Congress specifically required that the
screening ``shall be carried out by a Federal Government Employee.''
The security issues facing America and the Department of Homeland
Security are very significant. Indeed, the Comptroller General of the
United States submitted testimony on February 7, 2007, to the Congress
on the security challenges facing this country and the DHS. With
respects to all modes of travel, GAO complemented DHS by saying that
progress has been made ``particularly in aviation'' and that ``DHS and
TSA have taken numerous actions to strengthen commercial aviation
security, including strengthening passenger and baggage screening,
improving aspects of air cargo security, and strengthening the security
of international flights and passengers bound for the United States.''
That GAO testimony praised TSA for using covert testing and other
means to measure effectiveness of airport screening systems and for
working to enhance passenger and baggage screener training. GAO also
noted that TSA has modified airport screening procedures based on risk.
On the negative side, GAO said that TSA continues to face challenges in
implementing a program to match domestic airline passenger information
against terrorist watch lists and in ``fielding needed technologies to
screen airline passengers for explosives.''
The GAO did raise an across-the-board criticism of DHS for not
basing program investments on risk analysis. I believe the more
detailed answer to your question depends on a thorough risk-analysis of
all facets of the security problems facing this Nation. Since the air
transport industry represents only one segment of the full picture, I
would propose that the Congress undertake to hold hearings on the
matter you raised so that all the security needs of the U.S. could
properly be balanced before a decision is made as to whether to raise
that cap, or not.
TSA has come a long way in just a few years and is doing an
effective job of ensuring the security of our air transport system
within the budget provided by the Congress. TSA has been coordinating
with the Air Transport Association. The ATA and our member airlines
will continue to work with the TSA to address new security concerns and
to look for additional ways to improve the experience of airline
passengers.
______
Restoring America's Travel Brand--A National Strategy to
Compete for
International Visitors (September 5, 2006) has been retained in
Committee files.