Industry splits over new plan to market U.S.

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WASHINGTON -- Airlines are bristling over a plan floated by other parts of the travel industry that would pay for a proposed campaign to promote travel to the U.S. by adding fees of up to $10 to certain airline tickets.

The 56-page, three-part plan, titled "Blueprint to Discover America," was developed by the Discover America Partnership, a group representing several travel companies and associations.

Travel industry representatives presented it to the Senate Commerce Committee on Wednesday, only hours after it was unveiled at the Travel Industry Association's annual State of the Industry luncheon. A day earlier, industry representatives had presented it to the Commerce Department.

A key aspect of the plan is the creation of a public/private entity that would promote the U.S. to international travelers.

The Blueprint estimated that the promotion, including international advertising, would cost at least $300 million. To pay for it, the partnership floated three possible funding schemes:

  • Tax credit bonds.
  • A $10 fee added to the airline ticket of travelers from countries in the Visa Waiver Program.
  • A $5 entry or exit fee added to the price of an airline ticket.
  • The Blueprint estimates that the $5 fee would raise at least $250 million a year. The $10 fee option would raise a similar amount. The tax credit option would involve issuing up to $1 billion in tax credit bonds to finance the effort over five years.

    While supporting the larger objective of encouraging inbound tourism, James May, president of the Air Transport Association, told the Senate committee that adding fees to airline tickets would be the wrong way to go.

    "Why would we want to charge passengers more at the same time we are trying to get more of them to visit the U.S.?" May asked. "That just does not make sense. I would like to remind the committee that international airline passengers are already paying approximately $50 in U.S. taxes and fees for each trip to America. What passengers should expect for $50 is an efficient system to get them through our airports."

    The architects of the Blueprint said they were open to other options and were not married to any one proposal.

    Industry leaders testifying at the hearing included Stevan Porter, president of InterContinental Hotels and chairman of the Discover America Partnership; Jay Rasulo, chairman of Walt Disney Parks and Resorts and chairman of the TIA; and Jonathan Tisch, chairman and CEO of Loews Hotels and chairman of the Travel Business Roundtable.

    Rasulo stressed that the marketing effort was an essential part of the initiative.

    "This is something that virtually every other industrialized country in the world is already doing," Rasulo said. "Australia, for instance, spends $113 million a year communicating and promoting itself to travelers. Canada spends $58 million. But the U.S. currently has no such program."

    The lack of an international promotional marketing effort on the part of the U.S. is at least partly to blame for a 17% drop in inbound visits to the U.S. from overseas since 9/11, Porter said.

    "This decline has resulted in a loss of nearly 200,000 jobs, $90 billion in [visitor] spending and $15 billion in federal, state and local taxes," Porter said.

    Commerce Committee Chairman Sen. Daniel Inouye (D-Hawaii) and ranking member Sen. Ted Stevens (R-Alaska), noting the importance of tourism to their states, indicated a willingness to craft legislation based on the plan. Rep. Sam Farr (D-Calif.) and Rep. Jon Porter (R-Nev.), co-chairs of the House Travel and Tourism Caucus, also voiced support for the Blueprint.

    The Blueprint, which has been in development for nearly a year, is designed to address an issue identified by travel industry research: Increasingly negative views of the U.S. by potential visitors, a market that represents billions of dollars to the U.S. economy.

    Among other things, it calls for speeding the visitor visa application process. According to the partnership, the wait time for a U.S. visa in Venezuela is as much as 58 days, and it is at least 184 days in India. Delays are due in part to staffing shortages at U.S. consulates, the Partnership said.

    Partnership research also said that visitors to the U.S. are put off by, or actually fearful of, U.S. customs and border patrol procedures. Among other things, visitors worry they will not be permitted into the U.S. as a result of a slight mistake or a misunderstood comment.

    Ambitious in scope, the Blueprint builds on "Secure Borders, Open Doors," a strategy to bolster border security while encouraging inbound tourism to the U.S. that was launched last January by Secretary of State Condoleezza Rice and Michael Chertoff, secretary of the Department of Homeland Security.

    Porter said the Blueprint was designed to "further guide Congress in concert with the Rice/Chertoff initiative [with] necessary reforms to continue to improve America's broken travel system." 

    To contact reporter Michael Milligan, send e-mail to [email protected].

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