The travel industry reacted swiftly to the Trump administration's proposal to slash funding for Brand USA in its 2018 budget, warning that cutting off the industry's largest marketing arm would do irreparable harm to the economy at large, particularly during a challenging time for inbound travel. 

"With all that's going on in the world, unilaterally disarming the marketing of the U.S. as a travel destination would be to surrender market share at the worst possible time," Roger Dow, CEO of the U.S. Travel Association, said in a statement.

"With international visitation being the country's No. 2 export supporting 15 million American jobs, we're struggling to understand how cutting Brand USA squares with this administration's stated priorities," he added.

Brand USA is a public-private partnership created by Congress in 2010 under the Travel Promotion Act, with the mission to market the U.S. as a tourist destination. Unlike many countries, the U.S. has never had a national tourism office or minister of tourism, making Brand USA its first global marketing effort. 

"We've always advocated and been of the belief that the U.S. travel industry is more successful when the nation's brand is well represented out in the world," said Fred Dixon, CEO of NYC & Company, the city's marketing organization and a founding partner of Brand USA.

"If you go back to the days before Brand USA, all the states and cities were left to our own resources out in the world competing with huge national brands like Incredible India, Wonderful Malaysia; you can just pick one. They all had such a presence in the marketplace," Dixon said. "Without Brand USA the U.S. travel message will be really fragmented once again. So [it would pull] us backward and makes us less competitive on the global playing field."

Brand USA's backers noted that besides being funded equally by its partner organizations, its public funding does not come from taxpayers: It is supplied by the fees paid by international travelers who come to the U.S. via the Visa Waiver Program. Partners include destination marketing organizations from Florida to Oregon, as well as companies including Marriott International, Universal Studios and Enterprise Holdings.

"Brand USA isn't funded with a dime of taxpayer money, reduced the deficit by $50 million and by the [Office of Management and Budget's] accounting, eliminating it would put the federal budget further in the red," Dow said.

According to a return on investment study Brand USA commissioned last year from Oxford Economics, each dollar of Brand USA's marketing generated $21.20 in visitor spending.

The study found that the $160.7 million Brand USA spent on marketing in 2015 generated $3 billion in incremental visitor spending for the U.S. When the indirect impact is included, the economic activity impact climbed to $6.6 billion, sustaining 44,533 jobs.

The Oxford study also said that Brand USA contributed $457 million in incremental federal taxes, more than double its funding, plus an additional $410 million in state and local taxes.

Travel groups said they are benefitting from Brand USA's efforts.

Lisa Simon, executive director of the International Inbound Travel Association, said that since the establishment of Brand USA, the U.S. has seen "dramatic increases in arriving visitors from all key markets."

"We are particularly pleased that Brand USA has leveraged its funding to help grow international inbound business to every corner of the United States, including all states and territories," she said.

"This ill-advised zeroing out of this important organization, which has demonstratively grown jobs, trade revenue and economic impact for the United States, will be our major focus until it has been reversed by both houses of Congress and funding restored in the [2018] federal budget."

A critical mandate

The proposal to cut Brand USA's budget comes at a precarious time for the inbound travel sector.

Foursquare, which measures and tracks the locations of more than 13 million smartphone users who have opted into its global research panel, last week said that its research indicated that the market share of international leisure tourism to the U.S. declined an average of 11% between October and March, with the largest dip coming from travelers in the Middle East and Latin America. Its data showed that visits to the rest of world are up, making the U.S. an anomaly.

The Global Business Travel Association, meanwhile, projected a loss of more than $1.3 billion in overall travel-related expenditures in the U.S. due to political uncertainty.

Dixon noted that the second part of Brand USA's mandate, to communicate entry policies and procedures to international travelers, has become critical in recent months due to the confusion surrounding the first and second iterations of the attempted "travel ban" by the Trump administration.

"It all points to the fact that they are as needed as ever," Dixon said.

Katherine Lugar, CEO of the American Hotel and Lodging Association agreed and said the group was "concerned."

"With travel season upon us, it is important for lawmakers to understand the benefits of this program," she said. "We need Brand USA's strong marketing message to remind visitors that the U.S. is open for business."

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