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Expecting President Barack Obama to sign the Travel Promotion Act into law Thursday, the U.S. Travel Association planned this week to meet with Commerce Department executives to discuss priorities for implementing the legislation. The U.S. Senate last week passed the act, which creates a “nationally coordinated travel promotion campaign through a private-public partnership that will seek to reverse the slide in tourism to the United States,” according to Sen. Byron Dorgan (D-ND), who sponsored the bill and worked for three years to get it approved.
With bipartisan support, the Senate in a 78-18 vote approved the act, added as a rider to a bill to fix capitol police powers. The Travel Promotion Act previously cleared both houses of Congress, but due to rules about revenue generation measures, legislation identical to the House version had to be approved by the Senate and then sent to the president to become law.
The law creates a “multi-million dollar, public-private partnership to promote the United States as a premier travel destination and better explain travel security policies to foreign travelers,” according to USTA president and CEO Roger Dow. The initiatives could be funded with up to $100 million in private sector contributions, matched by as much as $100 million in revenues collected from a new $10 feeon those from visa waiver countries.
Topping the priority list now are “getting the board in place” for the newly created, nonprofit Corporation for Travel Promotion and “the fee” to provide an initial $10 million budget, according to USTA public affairs senior vice president Geoff Freeman. In addition to the CTP, the act establishes a new Office of Travel Promotion within the Commerce Department, whose director will serve as liaison to the CTP. The existing Office of Travel and Tourism Industries would “expand and continue its research,” with appropriate budget allocations to do so.
Incorporated under the District of Columbia’s nonprofit corporations act, the Corporation for Travel Promotion is designed to “develop and execute a plan” to market the United States to overseas visitors. Among its responsibilities are to provide useful information to the visitors, identify and correct misinformation about entry policies and maximize the economic and diplomatic benefits of travel to the United States.
ESTA Fees To Apply
Half of the funding for the CTP would come from a new $10 fee to use the U.S. Department of Homeland Security’s Electronic System for Travel Authorization. As of January 2009, ESTA requires visitors from 35 visa waiver countries to use a U.S. Customs and Border Protection Web site at least 72 hours in advance of a trip to the United States, or when they book the trip to submit information required on paper forms distributed aboard flights. Based on current application levels, the $10 ESTA user fee could generate about $8 million a month, Freeman said.
The act also allows Homeland Security to charge an administrative fee to recover the "full costs of providing and administering the system,” and implement it, along with the $10 fee for CTP “no later than six months after the date of enactment of the Travel Promotion Act.”
Freeman said the administrative cost is "not written in stone. We will obviously fight to keep that fee to a minimum, but we’ve been told something in the $2 to $3 range.”
The other half of CTP funding is to come from matching funds from the travel and tourism industry. The act gives the new corporation the authority to “impose an annual assessment on United States members of the international travel and tourism industry,” of no more than $20 million, provided members approve of the plan in a referendum. The U.S. treasury is allowed to release to the CTP user fund amounts matched by private funds raised. The CTP budget in fiscal years 2011 to 2014 could gain as much as $100 million in fees, provided matching funds are collected from the industry assessments or donations.
The ESTA fee would only be charged when citizens of the visa waiver countries apply or reapply once every two years, Freeman said. Once approved, frequent business travelers may travel to the United States as often as necessary with no need to apply or pay additional fees.
The fee rankles some, including the International Air Transport Association and Association of Corporate Travel Executives president Richard Crum. “It’s like inviting people to a party and presenting them with a cover charge,” said Crum, who works as AirPlus International president. “The majority of Europeans are completely unaware” of the impending fee, said Crum, who referenced results from a November AirPlus International survey. Those who are aware of it “are disappointed that this is what the U.S. would do,” he said.
IATA has “no problem with the idea of a national effort to increase tourism,” according to a spokesman. “The issue is the fee. It’s a bit counter-intuitive to say come to a country, but make it more expensive to visit.” Increased taxes, fees and costs also are a concern to the National Business Travel Association, but a spokesman said, the ESTA fee is “not something that has come up” as a member priority.
“While we understand the concerns, the fact is that far more significant fees are in place in countries around the world,” Freeman said. “Many of those fees help to fund promotion programs that are used against the United States. The United States needs to promote itself. To promote yourself costs money. The United States needs to be in the game. This was the way of getting it done.”
In the past Congress appropriated funds to pay for such promotions, Freeman said. But “political realities” forced supporters to find more unique funding mechanisms. “They achieved that with 50 percent coming from the private sector and 50 percent coming from those who don’t pay $131 for a U.S. visa. Obviously the U.S. travel industry is only supporting policies that it is confident will increase travel.”
In a report issued last month, USTA said “the failure of the United States over the last decade to simply keep pace with the growth in international, long-haul travel worldwide has cost our economy 68.3 million lost visitors, $509 billion in lost spending, 441,000 lost jobs, $270 billion in lost trade surplus and $32 billion in lost tax revenue.”
Citing the latest figures from the United Stations, USTA said international tourist arrivals worldwide grew to “880 million in 2009, up by nearly 200 million since 2000.” But “overseas visits to the United States have fallen 9 percent from 2000 to 2009,” in what USTA calls the lost decade for jobs and economic development growth depending on international travel.
An 11-member Corporation for Travel Promotion board of directors is to be appointed by the Secretary of Commerce, after consultation with the secretaries of Homeland Security and State. The board must include one representative with expertise in each of the following sectors: hotel, restaurant, small business or retail, travel distribution, attractions or recreation, convention and visitors’ bureau, state tourism office, passenger air, immigration law and policy, and intercity passenger rail. The non-paid board seats will have three-year terms, except for the first year. The secretary will appoint three members to one-year terms and four members to serve two- or three-year terms.
Seating the board, Freeman said, will take four months "on the short end" but perhaps as long as “nine months. There are background checks and a lot of processes,” he explained. “Without a board you can’t hire or make decisions,” Freeman said. “You have to have the fee in place because it’s the fee that creates the first $10 million for the corporation in the first year."
The board and its executive director are expected to hold open meetings, establish annual objectives and budgets, submit annual reports to Congress and publish results of an annual audit.
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