Norman: Travel biz on verge of recovery

Laura Powell sat down at Pow Wow with William Norman, president and CEO of the Travel Industry Association (TIA), to discuss the 2004 travel forecast and issues affecting the inbound market.

Q: What is the outlook for the travel industry in the U.S. this year?

A: This is something that everyone is interested in, whether the long and elusive recovery is going to come. Given the key indicators, it is a fair thing to say that for the first time in four years we are projecting a recovery.

In terms of business travel, there has been a four-year decline. However, this year, for the first time since 2001, we are going to see an uptick of 4.2% in business travel. The statistic is very encouraging, as it indicates that we are on an upward slope. We are projecting a growth rate in the inbound market of 5% in 2004. That number shows us that we are on the verge of a worldwide recovery.

Q: What about the impact of the weakened dollar?

A: The favorable exchange rate certainly helps a bit. When people are deciding where to travel internationally, they will take into account where their currency buys more. It's not a key factor in the inbound increase, but it helps.

Q: Can you give us an update on security?

A: This is one of the more vexing issues we deal with at the TIA. Certainly, the world has changed, and what we would have considered intrusive before is now expected.

We want to facilitate travel to and within the U.S. and make sure that new security rules that are put in place do not negatively impact the process. When we see something that looks like a barrier to travel, that doesn't carry with it a security enhancement, we want to ensure such measures don't go into effect. And we have been relatively successful in this regard.

Q: Does the travel industry's voice get heard in Washington?

A: I really do give credit to the Department of Homeland Security and the State Department for trying to make certain that industry thinking is incorporated in government policy. There are always new proposals, and we are vigilant about keeping on top of them.

Communication between the industry and the federal government is good and getting better. For example, in January, we started fingerprinting all international visitors, and it's working well because winter and spring are relatively slow travel times for inbound travel.

But as we get close to the peak season, we are working with the federal government to see how we can avoid long lines. The real issue in the implementation of all of these regulations is that we have the necessary resources to make them work without inconveniencing the traveler.

Q: What is the status of the recent Department of Commerce appropriation to promote the U.S. travel industry internationally?

A: After years of trying, the industry, in 2003, got Congress for the first time to provide the Department of Commerce with a grant to promote and advertise the U.S. overseas as a destination of choice. The appropriation of $50 million was significant. The goal was to use the money in five countries and then show the government the return on investment tourism brings.

However, much of the grant money was rescinded before it was spent. Still, there is about $6 million left. And the plan is to target it for advertising and promotion in the U.K.

We hope it can still show a significant return on investment, with the idea that the government will see the value of future public-private partnerships. Certainly, the pilot campaign is on a smaller scale than initially intended. But it's still enough money to make progress.

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