In the face of serial bad news about the economy, the Travel Industry Association is in the unenviable position of saying "Not so fast!" after a cabinet secretary announced data that appeared to hold encouraging signs for the travel industry.
The TIA's response to the release of statistics showing that inbound traffic has increased is to stay focused both on loss of market share to other countries and on visitors who never arrive because they're intimidated by our Fortress America mentality (see report, Page 10). This response is right-minded, but it risks being viewed as an argument about the degree of success the industry is enjoying, between "very good" and "potentially better."
A recent e-mail I received reminded me that not all travel industry lobbying battles turn on such apparently nuanced arguments. I was reminded that 60 years ago, regulators for the U.S. Interstate Commerce Commission ruled that tour operations were illegal.
My recent e-mail didn't say that exactly. It announced that Arthur Tauck Jr., chairman of Tauck World Discovery, would be given the Pioneer Award in April by the National Tour Association at its Spring Meet.
But Tauck's company inadvertently triggered the ruling that made his own business illegal, embroiling it in a 10-year fight that ultimately involved both the Supreme Court and Congress. And in order to prevail, it had to learn a thing or two about lobbying, creating the NTA along the way.
Back in 1948, most transportation was regulated by the ICC, including the buses Arthur Tauck Sr. chartered for his tour operations. At the time, he had a "tour brokering" license that allowed him to operate tours in 21 states, and he wanted to expand it to include all 48.
To Tauck's dismay, the hearing examiner reviewing his application ruled that he and other tour brokers should never have been granted a permit in the first place. In effect, the escorted tour as we know it today became illegal.
Though Tauck World Discovery is a powerhouse in 2008, at the time it only had four employees -- five when, in 1951, Arthur Jr. joined the company after being discharged from the Air Force. Opposing them and supporting the ICC's new interpretation was a 384-member bus operators' association, which saw an opportunity to take over all motorcoach tours.
On the advice of Thomas Cook, which sympathized with Tauck's position, Tauck Sr. gathered 13 other operators to join him under the banner National Tour Brokers Association to fight the ruling. ASTA supported the group as an "associate," but American Express, after being approached by Tauck Sr. to join his effort, decided to support the opposition.
The subsequent 10-year battle, known as the Tauck Case, went all the way to the Supreme Court. When the justices looked at the ICC closely, they not only ruled in Tauck's favor but threw out aspects of the law that regulated airlines through the Civil Aeronautics Board.
The airlines then went to Congress to argue that a case involving motorcoaches should not form the basis for airline regulation. Congress, however, agreed with the court.
That was 50 years ago, in 1958. It was the beginning of the deregulation of several transportation industries, which has had a remarkably positive impact on the travel industry, consumer happiness and the economy in general. Subsequently, "tour brokers" became tour operators, and the NTBA became the NTA.
It's not an exaggeration to say that the Tauck Case saved an industry segment that today helps keep travel agents economically healthy and offers great value to travelers.
There are more differences than similarities between what the TIA is trying to accomplish (promotional funding and lowering the barriers suppressing travel) and what Tauck faced (the life or death of his company and industry segment), just as the venues for their battles also differ (Tauck's battle was largely before the courts, whereas the TIA is focused on Congress).
But the reality is that, broadly speaking, both hinge on the same outcome: job creation and economic growth. Given the small number of tour operators at the time and the increased scale of the industry as a whole, it's likely that what the TIA seeks now will have an even greater positive economic impact than the Tauck Case had.
And it's coming at a time when the economy needs all the help it can get.
My guess is that today, if American Express had the chance to re-evaluate its stance in the Tauck Case, it would side with the tour brokers.
Let's hope it doesn't take the perspective of 60 years for the government to realize that monthslong waits for visa applications, intimidating immigration policies and a comatose approach to travel promotion are absurd stances, regardless of whether inbound numbers are increasing. The new visitor numbers represent good news, but the cheering is muted when opportunities to repair America's image are squandered and the chance to stimulate job creation and economic growth are ignored.
E-mail Arnie Weissmann at [email protected].