<B> Industry Efforts Open Eyes Of Gov't To Travel's Impact</B>
As many of you may recall, the Travel Business Roundtable announced a major coup last year. In July 1998, Gene Sperling, assistant to the President and director of the National Economic Council, was named by the Clinton Administration to oversee travel and tourism issues and policy. The appointment of Sperling and of Dorothy Robyn, special assistant to the President for economic policy, was a direct result of TBR's efforts to educate elected officials at all levels of government on the important economic contributions that travel and tourism makes to the nation's economy. At that time, Sperling requested a White Paper that would serve as a formal document on key policy issues affecting the industry's future.
In response, the TBR joined with the World Travel and Tourism Council to create this report that would contain specific data that underscores the impact travel and tourism has on global, national, state and local economies. As a result, Jonathan Linen, vice chair of American Express, and I traveled to Washington, D.C., on Sept. 21 to make the presentation to Sperling and his staff.
As the country's third largest retail industry, second largest employer, and a business that annually generates more than $500 billion in economic activity and more than $71 billion in tax revenues, travel and tourism has long been overlooked by Washington, as well as by state and local governments.
Further evidence of its financial contributions to the nation's economic vitality is the recent announcement by the Department of Commerce of the industry's $19 billion trade surplus, making it the only industry to provide a positive surplus as the country's balance of trade continues to grow.
Concurrent with the industry's growth is the significant progress that groups such as the TBR and WTTC have made in helping educate elected officials on our important contributions.
To give you a brief overview of what the White Paper cites as priorities and challenges, following are some of the legislative issues it addresses:
<B>Visa Waiver Pilot Program:</B> Allows for expedited booking, reservations and planning by travelers visiting the United States. President Clinton signed into law a temporary extension of the program through April 2000, but permanent status is needed to help improve bilateral relations and opportunity with more than 20 nations that benefit from the program.
<B>Taxation:</B> Because the travel and tourism industry is frequently the recipient of additional and often unfair taxes that have an adverse effect, the industry is working to achieve the gradual phase-in to 80 percent deductibility of business meals for small businesses, removal of a tax on frequent flyer miles and reduction of airline fees that have a significant impact on the number of international visitors to the United States.
<B>Welfare to Work:</B> As a growth industry that has the potential to create jobs, travel and tourism companies have taken a lead role in the country's efforts to move people from welfare to work. Comprehensive and effective programs have been initiated by Marriott Hotels, Loews Hotels, Delta Air Lines and others. These programs have proven to be effective models for placing former welfare recipients into wage earning career positions with potential for advancement.
And, as many of you already know, while travel and tourism is one of the fastest growing sectors of the economy, the United States has lost 17 percent of its international travel share since 1992--a loss of $57.3 billion, which translates into 230,000 jobs. Most recently, the United States dropped from second to third place, behind France and Spain, among most visited countries.
On a global level, travel and tourism represents nearly 12 percent of the world's GDP, generating more than $3.5 trillion in economic activity and providing more than 192 million jobs worldwide. Travel and tourism is projected to be the world's largest industry next year. To that end, the TBR's global partner WTTC has cited several issues as a priority in its Millennium Vision. These include:<ul><li>Making travel and tourism a strategic economic and employment priority by encouraging governments to adopt Travel and Tourism Satellite Accounting, which helps measure the economic impact of travel and tourism<li>Moving toward open and competitive markets by urging governments and industry to participate in the General Agreement on Trade in Services; improve travel-related infrastructure; promote fair taxation policies; encourage positive policies for human resource development; and increase marketing and promotion budgets<li>Promoting sustainable development by encouraging the adoption of Agenda 21 for Travel & Tourism, and continuing involvement in forums such as the United Nations commission on sustainable development and the Green Globe program<li>Eliminating barriers to growth by encouraging aviation reform, privatization of airlines and airports to improve competition, lower fares and create jobs</ul>
In keeping with the global policy framework of that vision, TBR is pursing a legislative agenda that is focusing on:<ul><li>Stimulating an increase in international arrivals through the Visa Waiver Pilot Program<li>Eliminating onerous taxation that will hinder further growth<li>Encouraging Welfare to Work programs by providing tax credits and models of successful programs within the industry<li>Increasing the business meals deduction from 50 percent to 80 percent, and eventually securing the return to a full 100 percent</ul>
TBR also will continue to work toward securing an extension on the Work Opportunity Tax Credit, which is available to employers who hire individuals from one or more of eight targeted groups. As the long-term goal is to achieve a full restoration to the previous level of 100 percent deductibility, TBR plans to continue its efforts to lobby toward this goal.
Our industry's alliance with government is at the heart of what I often refer to as "the power of partnerships," and is ultimately what will result in achieving both the long-term vitality of our industry, as well as the commitment to doing what is right for our communities.
We can be proud of the progress we have made over the past year, but we must continue to work together in order to ensure that our message does not get lost. That is why I continue to urge all of you to continue meeting with your senators and congressmen when traveling to Washington, and to forge ongoing relationships with your elected officials on a state and local level as well.
Together, we can, and must, continue to reinforce the important contributions our industry makes to the economy both on a domestic level, as well as a global one, and to its potential for future growth.
<I>Jonathan Tisch is the president and CEO of Loews Hotels and chairman of the Travel Business Roundtable.