The industry's next big challenge


Jonathan M. TischThe calendar has turned to June, and the summer tourist season is under way. And it's not just the beaches that promise sunshine.

For the U.S. travel industry, there's a lot to feel good about. With the economic recovery taking hold, more Americans are vacationing. With the Travel Promotion Act signed and in place, we've reached a major milestone. In many ways, the future is bright.

But despite some short-term promise, there is a major challenge haunting the travel industry in the U.S. Our airports, roadways and public transportations systems are -- on a global scale -- second-rate. Even worse, our infrastructure can't accommodate the current levels of travel, much less the increases that many around the industry predict.

If the U.S. is going to maintain its standing as a world-class travel destination, we need a plan to modernize our aging travel infrastructure. It's simply not fit for the pace and volume of 21st century travel, and we risk losing our lion's share of tourism if we don't keep up with the rest of the world.

Of course, one question naturally arises: How can we pay for it? It's no secret that the U.S. has been through a tremendous financial crisis over the last couple of years, and we're not yet out of the water. How, then, can we justify investing billions of dollars in travel infrastructure?

Perhaps the better question is: What will it cost us not to do anything? According to a recent study by the Partnership for New York City, airport delays in the city cost the regional economy more than $2.6 billion in 2008 and will total a staggering $79 billion by 2025.

If these numbers seem incredible, consider too that five of the world's 10 busiest airports are in the U.S., and they serve a combined 324 million travelers each year. Yet for all the volume, the execution is only mediocre. In a recent study of the world's top 10 airports, not a single U.S. airport made the list.

So what can be done?

We can start by investing in smart, efficient technologies that will make traveling quicker and more efficient. Like the FAA's NextGen airspace system, a GPS-based communications technology that vastly outperforms the current ground-based system. Between now and 2018, the FAA estimates that NextGen can reduce delays by 35%, save 1.4 billion gallons of fuel and lower carbon emissions by 14 million tons. This would generate $23 billion in economic benefits and a countless number of happier travelers.

While NextGen can ease delays in the air and on the runways, U.S. airports need to upgrade in a number of other areas. We need technologies to ease the hassles of security and handle the higher volumes of passengers. We need cutting-edge technologies to meet business and communications needs. We're far behind Europe and Asia on these fronts, and we need to catch up.

It will be a challenge to raise the funds, of course, but there are ways.

Consider Los Angeles County's 30/10 initiative, a proposal to leverage local revenue and federal loans to fast-track construction of vital infrastructure. Under this plan, the county will be able to complete 30 years' worth of projects in just 10 years, creating thousands of jobs in the process.

Though this is just one small example, it shows how some innovative thinking can get us on the right track.

Even though sunny, beach-going months may lie on the horizon, the summer isn't endless, and we can't wait too much longer if the U.S. is going to remain a world-class destination as global tourism booms over the next century.

Jonathan M. Tisch is chairman and CEO of Loews Hotels.


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