Travel Execs Push For Gov't Help

Washington - Fifteen travel industry CEOs met with Commerce secretary Donald Evans on Sept. 25 for more than an hour and pressed for the Administration's support for immediate tax relief for companies hit hard by the Sept. 11 terrorist attacks and the resulting sharp decline in travel.

Following the meeting, Evans released a statement expressing the Administration's commitment "to bringing back tourists." Evans described his meeting with industry officials as "a great chance to listen," and added that, "We will continue to monitor our economy and take necessary action when appropriate."

Attending the briefing with Evans were Vic Abbey, chairman and CEO of Busch Entertainment Corp.; Marilyn Carlson Nelson, chairman and CEO of Carlson Cos.; Frank Gallagher, chairman of Coach USA; James Goodwin, chairman and CEO of United Airlines parent UAL Corp.; Noel Irwin-Hentschel, chairman and CEO of American Tours International; Samuel Katz, chairman and CEO of Cendant Travel Distribution; Jonathan Linen, vice chairman of American Express Corp.; J.W. Marriott Jr., chairman and CEO of Marriott International; Christyne Nicholas, president and CEO of NYC & Co.; William Norman, president and CEO of Travel Industry Association of America; Barry Sternlicht, chairman and CEO of Starwood Hotels and Resorts Worldwide; Andrew Taylor, president and CEO of Enterprise Rent-a-Car; Jonathan Tisch, chairman and CEO of Loews Hotels; George Warrington, president and CEO of Amtrak; and Dick Knodt, president of Vacation.com.

Tisch, as chairman of the Travel Business Roundtable, had urged Evans to meet with industry leaders to discuss economic remedies to the crisis. He pointed out that the massive layoffs in the airline industry and dramatic reductions in flight schedules are sending a shock through all sectors of the travel business. Evans agreed and his staff assembled the group of TBR members and other CEOs.

"We've got to get people moving again," Tisch told BTN. "If we don't, America's second largest employer, the travel and tourism industry, will have an economic disaster on its hands. There are a number of things that the government can do to help. In the near term, we need to work with the government on tax policies to address business liquidity and we need to respond to workforce disruptions by exploring unemployment coverage and health benefits. And as Washington contemplates an economic stimulus package, anything done to prime the pump must include initiatives that encourage people to travel and provide incentives for that travel, including restoring the business meal and entertainment deduction to 100 percent."

Congress has yet to craft an economic stimulus package, although support for a broad-based bill is growing. Indications so far are that this legislation may earmark large sums of federal dollars to improve the nation's infrastructure as a way to stimulate economic activity, including expanding passenger rail service. Tax cuts aimed at businesses also are likely to be included in the mix.

The Travel Business Roundtable is designing its lobbying campaign to see that the travel industry win critical backing from the Administration and key congressional committees to be included in a stimulus bill. The window for Congress to consider an economic stimulus bill is narrow, since both chambers could recess for the year in November.

During the meeting with Evans, and in meetings with key members of Congress later that day, the travel industry executives outlined several key elements of an immediate tax relief package that would include:

• An extension in making federal tax payments, since liquidity will be a major issue for travel companies.

• Amendments in the Small Business Administration loan program to extend eligibility for the SBA's Economic Injury Disaster Loan Program to otherwise qualified small businesses that are unable to meet necessary financial obligations as a result of the Sept. 11 terrorist attacks.

• A refundable tax credit for business and pleasure travel expenses and restoration of the 100 percent business meals deduction and spousal travel deduction to encourage people to travel.

• Expedited or specialized unemployment benefits and claims processing for workers out of a job due to the terrorist attacks.

• Tax incentives, such as credits and acceleration of depreciation, for companies required to enhance security.

Nelson said the members of Congress were receptive to the industry requests. "Our industry, in fact, the entire U.S. economy, faces a major shakeout if travel continues at the current anemic levels," Nelson said. "It's our hope that Congress will take measures that will allow us to get Americans moving again."

For the long term, industry CEOs in the Travel Business Roundtable are promoting creating a presidential advisory council on travel and tourism that could make recommendations for further action; and convening a presidential summit with industry leaders that would focus on the difficulties facing the travel industry. That symposium could be held before the end of this year, according to one official.