Brand USA striving to qualify for federal matching funds

By Michelle Baran
As Brand USA continues its fundraising efforts, the country’s new national tourism campaign still needs to find $20 million in in-kind investments by Sept. 30 to qualify for up to $100 million in matching federal funding.

What’s more, those matching dollars are being challenged as part of heated government spending debates in an unusually contentious election year.

To date, Brand USA has enlisted 300 partners who have provided cash or in-kind contributions at various levels, according to Brand USA’s CEO, Jim Evans.

A group of founding Brand USA partners, including Walt Disney Co., Marriott Corp., Best Western International, Visit Florida, Universal Orlando, Visit California and NYC & Company, each made cash or in-kind contributions valued at $1 million.

Beyond those founding partners, Brand USA would not disclose the size of contributions from other entities. But examples of some of the other contributors include attraction marketing companies like CityPass, travel brands such as Starwood Hotels and Resorts and destination marketing organizations and convention and visitors bureaus, including those for Las Vegas, Pennsylvania, Philadelphia, Minnesota and Alaska.

JoelSecundy-BrandUSAAs a result, Evans said, Brand USA has exceeded its goal of raising $10 million in cash contributions, either received or in the pipeline, but it has only reached about half its goal of $40 million for in-kind investments, either received or in the pipeline.

Up to $100 million in federal matching funds are available this year on a 2-to-1 basis, which means the company must raise $50 million by Sept. 30. By law, at least 20% of the industry contribution must be cash; the remainder can be in-kind contributions of goods and services.

The available federal funds come from international visitor fees under the Electronic System for Travel Authorization (ESTA).

The apparent shortfall of in-kind contributions means that Brand USA might have to get more aggressive or more creative in its outreach efforts. One example of looking to creative avenues of funding is a recent partnership between the National Tour Association (NTA) and Brand USA to present the Discover America Pavilion at the China International Travel Mart, to be held Nov. 15 to 19 in Shanghai.

The event is produced by the China National Tourism Administration. Revenue from the destinations, suppliers and tour operators who choose to have booths in the pavilion will go to Brand USA. Neither Brand USA nor NTA would elaborate further on the details of the collaboration, how much revenue it is anticipated to produce, and whether the funding from the venture would be available in time for the Sept. 30 deadline for fiscal 2012.

In addition to the challenge it faces in raising private-sector funding, concerns about whether Brand USA’s access to federal funds could be jeopardized by partisan politics over budget issues during an election year were also raised in Washington last month during the Grassroots Congressional Travel Summit, an industry lobbying event.

The House on March 29 passed a budget for fiscal year 2013 that included a note recommending that the subsidies for Brand USA be ended and also recommending “eliminating the new agency because it is not a core responsibility of the federal government to pay for and conduct advertising campaigns for a certain industry. Moreover, the travel industry can and should pay for the advertising that it benefits from.”

NTA responded with a statement that while passage of the budget bill is viewed as unlikely due to opposition in the Senate, “any change in control of the Senate and the White House as a result of the November election would set up a scenario where the bill could become law in 2013.”

Jim EvansAsked whether he felt that Brand USA could be impacted by partisan politics, Evans wrote, “This is one effort that everyone can feel good about because it benefits the entire country. That’s one reason the Travel Promotion Act was voted on and signed into law in 2010 with overwhelming support from both sides of the aisle.”

Evans touted the economic benefits of the program, which should also rise above partisan politics. He noted that according to research conducted by the U.S. Travel Association, every 33 overseas travelers to the U.S. generate one American job.

“On top of that, those jobs are generated without using taxpayer dollars,” Evans wrote. “That’s a unique and unifying element — and one we can all rally behind.”

Last month, Joel Secundy, vice president of strategic outreach for Brand USA, met with representatives of the travel and tourism industry during the Grassroots Congressional Travel Summit to make the pitch for Brand USA.

He reminded the destinations and travel companies in attendance that Brand USA needs financial support if it is going to survive.

“People at times believe that Brand USA can write you a check,” Secundy said. “It’s quite the opposite.”

While the travel industry is broadly united in its praise of Brand USA, individual travel companies and destination marketing organizations are also looking closely at the potential return on their investment if they do decide to contribute.

“We are considering it,” Gavin Tollman, global CEO of Trafalgar, said when asked if Trafalgar plans to contribute. “It’s complicated. … I guess we’re not really sure how best to fit into it and that’s what we’re currently reviewing.”

But in the same breath, Tollman touted the content of the campaign and the domestic destinations it showcases. Which brings up another point about how those destinations are chosen given the vast array of travel companies and destinations investing in Brand USA.

Evans noted that the Brand USA ads that are currently running through July in Canada, the U.K. and Japan “are just the first of many that will be developed over the coming months and years.” He said that Brand USA will continue to vary the imagery it showcases as the campaign continues to evolve.

“As the campaign evolves over time, we will feature destinations — from the most well-known to the lesser-known areas of the United States,” Evans wrote.

Follow Michelle Baran on Twitter @mbtravelweekly. 
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