With unemployment remaining high and concerns growing about a jobless recovery, Congress recently passed legislation that promises to jumpstart travel, a critical sector of our economy. Best of all, this "stimulus" plan won't cost taxpayers a single dime - in fact it will actually increase federal revenues and lower the federal budget deficit.
The bill is called the Travel Promotion Act, and it was enacted with strong, bipartisan majorities in both the House and Senate (78-18) and is on its way to the President for his signature. The Act establishes a new public-private partnership to promote the U.S. as a leading destination for international travelers and educate them about U.S. security procedures. This partnership will be funded by a modest $10 fee on overseas travelers who do not pay $131 for a U.S. visa and matched by the travel industry.
Despite its importance, few people understand the role travel plays in the U.S. economy. One in eight Americans is currently employed in the travel industry either directly or indirectly. Ninety percent of employers in the travel industry are small businesses spread across all regions of the country. Without a revival in the travel industry, it's hard to imagine a broad-based, sustainable recovery.
Of course, the travel industry has suffered along with other sectors throughout the recession. But it has also been plagued by widespread misperceptions that visitors are not as welcome in the U.S. as in the past and by the lack of coordinated action to compete in the travel marketplace.
When it comes to competing for international travelers, in many ways, the U.S. is playing catch up. Other countries have been quicker to recognize and support the role travel plays in their economies. The countries of the European Union, for example, spend a collective $800 million per year promoting travel to their countries. Mexico spends nearly $150 million annually; Australia over $113 million; Canada and China, about $60 million. The United States: $0.
Because of these efforts, global travel has grown dramatically over the past several years, with 46 million more international travelers taking long-haul trips in 2009 than in 2000. Yet during this travel boom, America has actually lost visitors, welcoming 2.4 million fewer overseas travelers in 2009 than in 2000. In fact, long-haul travel to the U.S. has never recovered to pre-9/11 levels.
When you consider that the average overseas visitor to the U.S. spends in excess of $4,000 when they visit, it's easy to see how the economic losses can pile up quickly. If the U.S. had simply kept pace with overall global travel trends, the industry would have created or sustained an estimated 441,000 American jobs in the years over the past decade, along with $32 billion in direct tax receipts.
Yet that math can be turned to the upside as well. The consulting firm Oxford Economics estimates that a well-executed travel promotion campaign - such as the one in this bill - would attract 1.6 million new international visitors each year. These visitors would spend an estimated $4 billion and generate $321 million in new federal tax revenue.
While the primary benefits of the Travel Promotion Act are stronger growth and more job creation, research suggests that drawing more visitors to the U.S. will have ancillary advantages as well. According to a 2006 survey by RT Strategies, people who have visited the U.S. are 74 percent more likely to have a favorable opinion of our country. The U.S. government spends millions every year on public diplomacy and outreach efforts, but we're neglecting what may be one of the most persuasive strategies for winning overseas hearts and minds: a visit to the U.S.
By putting partisanship aside, Congress has delivered a Travel Promotion Act that will generate jobs, increase tax revenues and enhance U.S. competitiveness in a vital industry. That's a win-win proposition for the U.S. economy and for American taxpayers.
Roger Dow is the President & CEO of the U.S. Travel Association
Jonathan Tisch is the Chairman Emeritus of the U.S. Travel Association and Chairman & CEO, Loews Hotels
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How much tax revenue would the US get from a typical traveler? If the average spend is really $4000 (seems high?), your figures suggest it's about $321 of Federal taxes, between direct taxes on airfare, corporate taxes on hotels, income tax on restaurant worker wages, etc., plus state and local sales taxes and hotel taxes, and it's pure gravy. Instead of adding yet another reason for potential visitors to view the US as unfriendly, if this promotion company is any good, that's a much more appropriate thing to subsidize directly than most of the stimulus pork-barrel.
The only way it makes sense is if you can use it to convince the other agencies to stop harassing travelers; I know way too many Europeans who not only won't visit the US any more, they even refuse to fly through US airports on their way to other countries, and consider it worth the extra cost to fly directly to Canada or Latin America instead of stopping here.