Governments alter ties to tourism By Michelle Baran / August 02, 2010 Share 1 -- The global recession has, in recent months, been testing the bonds between governments and the tourism sector. Some countries have chosen to expand government involvement as an investment in their national economy, while others have opted to shrink government involvement as a cost-cutting measure. Within the last month, Argentina established its first tourism ministry, while the Spanish government decided it could no longer afford a separate tourism secretariat. Prior to that, Mexico and Greece both replaced their tourism ministers and poured more government money -- money that some argue they don't have -- into tourism. All of this is reigniting the age-old debate over how important tourism representation at the government level is for countries' economic health. The United Nations World Tourism Organization clearly embraces the notion that government participation in the promotion and conduct of tourism is crucial, and it voiced strong concerns about Spain's recent decision to combine its tourism and trade secretariats into one department. "The most important thing we've been advocating -- and it's something that we've been doing for some time -- is that, first of all, we do need to have strong [representation in the] public sector, given [tourism's] weight on the economy," said Sandra Carvao, the UNWTO's communications manager. Spain's move was part of substantial, governmentwide budget cuts that resulted in numerous government positions being eliminated. Spain's former tourism secretariat, Joan Mesquida Ferrando, now oversees both tourism and trade. According to a Spanish government release, although the secretariat of tourism position is being combined with the secretariat of trade position, the country still plans on putting a great deal of resources, infrastructure and investment into its tourism sector. In the U.S., that kind of bureaucratic belt-tightening is exactly what caused a new undersecretary post within the U.S. Commerce Department to be eliminated from the Travel Promotion Act. An early version would have created such a position, but it was eliminated from later versions of the bill. While travel organizations such as the U.S. Travel Association and the National Tour Association have long lobbied for tourism industry representation at the federal level, the U.S. remains without. The undersecretary position in the first draft of the bill "was an obstacle to having the bill passed. When you have an undersecretary, you end up with a staff of 100 behind that person," said Geoff Freeman, senior vice president for public affairs at U.S. Travel. The travel industry, Freeman said, "has an identity problem here in the U.S., where travel is not seen as something that should be pushed at the government level. We may well earn a federal official over time, but the way you do that is to prove your value over time." Austerity measures taken to address a deficit crisis, such as Spain's government-wide budget cuts, are fully understandable, the UNWTO stated in response to Spain's recent decision, but "tourism is one of the most transversal economic sectors, requiring close coordination with other government areas, and therefore it is critical that it is represented in decision-making at the same level as other sectors." The debate revolves around whether a separate tourism department or ministry within the government merits the cost, especially as governments are faced with enormous budget shortfalls due to the global economic crisis. Clearly, Argentina's president, Cristina Fernandez de Kirchner, felt it did. "Tourism is well positioned to be a major generator of revenue and is fundamental for the generation of employment in the country," Kirchner said, following the announcement in late June that Argentina would create an independent ministry of tourism. Responsibility for tourism previously resided in the ministry of industry and tourism. After a challenging 2009 that crippled his nation's tourism industry, Mexican President Felipe Calderon also felt that government needed to play a greater role in the country's tourism economy. In March, Calderon appointed Gloria Guevara as secretary of tourism and also named her CEO of the Mexico Tourism Board, the country's tourism marketing arm. [See From the Window Seat: "Mexico rising."] "Tourism is a priority for the president, and he wanted a cabinet-level appointee overseeing tourism efforts," said Rodolfo Lopez Negrete, the board's COO. "The Mexico Tourism Board brings together resources of federal and state governments, municipalities and private companies to promote Mexico's tourism attractions and destinations internationally, now under the umbrella of the tourism secretariat." After a very difficult year, the relationship between tourism and the economy in Mexico became very clear. Tourism is the third-largest revenue generator for the country, responsible for 9% of gross domestic product, said Negrete, who added that Mexico will continue to invest in the segment to ensure its, and the country's, rapid recovery. The dilemma for countries trying to pull themselves out of severe debt is whether to spend more on tourism, in the hopes that the returns to the economy will merit the expense, or cut back on government-funded tourism ministries and departments. In Greece, a newly appointed deputy minister of culture and tourism is desperately trying to promote the country's tourism offerings to help bolster its ailing economy. But when violent protests against the government's budget-slashing austerity measures negatively affect tourism, what's a country like Greece to do? In a desperate attempt to improve its image, Greece's tourism minister earlier this summer pledged to cover the additional costs incurred by tourists stranded due to such incidents. In other words, Greece, a country on the verge of bankruptcy, spent more money in the hope that the investment would ultimately bring more tourists and thus more money back into the country and help, or perhaps even save, the Greek economy. This report appeared in the Aug. 2 issue of Travel Weekly.