[Senate Hearing 117-708]
[From the U.S. Government Publishing Office]
S. Hrg. 117-708
REVIVING INTERNATIONAL TRAVEL AND TOURISM
TO CREATE AND RESTORE JOBS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON TOURISM, TRADE,
AND EXPORT PROMOTION
OF THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
MAY 18, 2021
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available online: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
53-092 PDF WASHINGTON : 2023
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
MARIA CANTWELL, Washington, Chair
AMY KLOBUCHAR, Minnesota ROGER WICKER, Mississippi, Ranking
RICHARD BLUMENTHAL, Connecticut JOHN THUNE, South Dakota
BRIAN SCHATZ, Hawaii ROY BLUNT, Missouri
EDWARD MARKEY, Massachusetts TED CRUZ, Texas
GARY PETERS, Michigan DEB FISCHER, Nebraska
TAMMY BALDWIN, Wisconsin JERRY MORAN, Kansas
TAMMY DUCKWORTH, Illinois DAN SULLIVAN, Alaska
JON TESTER, Montana MARSHA BLACKBURN, Tennessee
KYRSTEN SINEMA, Arizona TODD YOUNG, Indiana
JACKY ROSEN, Nevada MIKE LEE, Utah
BEN RAY LUJAN, New Mexico RON JOHNSON, Wisconsin
JOHN HICKENLOOPER, Colorado SHELLEY MOORE CAPITO, West
RAPHAEL WARNOCK, Georgia Virginia
RICK SCOTT, Florida
CYNTHIA LUMMIS, Wyoming
David Strickland, Staff Director
Melissa Porter, Deputy Staff Director
George Greenwell, Policy Coordinator and Security Manager
John Keast, Republican Staff Director
Crystal Tully, Republican Deputy Staff Director
Steven Wall, General Counsel
------
SUBCOMMITTEE ON TOURISM, TRADE, AND EXPORT PROMOTION
JACKY ROSEN, Nevada, Chair RICK SCOTT, Florida, Ranking
AMY KLOBUCHAR, Minnesota DAN SULLIVAN, Alaska
TAMMY DUCKWORTH, Illinois MARSHA BLACKBURN, Tennessee
JON TESTER, Montana RON JOHNSON, Wisconsin
KYRSTEN SINEMA, Arizona SHELLEY MOORE CAPITO, West
JOHN HICKENLOOPER, Colorado Virginia
CYNTHIA LUMMIS, Wyoming
C O N T E N T S
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Page
Hearing held on May 18, 2021..................................... 1
Statement of Senator Rosen....................................... 1
Prepared statement from the American Car Rental Association.. 3
Letter dated May 11, 2021 to the President from: Roger Dow,
President and Chief Executive Officer, U.S. Travel
Association; Geoff Ballotti, President and Chief Executive
Officer, Wyndham Hotels & Resorts; Ed Bastian, Chief
Executive Officer, Delta Air Lines; Nicholas E. Calio,
President and Chief Executive Officer, Airlines for
America; Anthony Capuano, Chief Executive Officer, Marriott
International, Inc.; Josh D'Amaro, Chairman, Disney Parks,
Experiences and Products; Christine Duffy, President,
Carnival Cruise Line; Robin Hayes, Chief Executive Officer,
JetBlue Airways Corp.; Peter Ingram, President and Chief
Executive Officer, Hawaiian Airlines, Inc.; Jerry Jacobs,
Jr., Chief Executive Officer, Delaware North; Peter Kern,
Vice Chairman and Chief Executive Officer, Expedia Group,
Inc.; Scott Kirby, Chief Executive Officer, United
Airlines; David Kong, President and Chief Executive
Officer, BWH Hotel Group; Elie Maalouf, Chief Executive
Officer, Americas, IHG Hotels & Resorts; Heather McCrory,
Chief Executive Officer, North & Central America, Accor;
Sean Menke, President and Chief Executive Officer, Sabre;
Christopher J. Nassetta, President and Chief Executive
Officer, Hilton; Patrick Pacious, President and Chief
Executive Officer, Choice Hotels International, Inc.; Doug
Parker, Chairman and Chief Executive Officer, American
Airlines; Scott Sibella, President, Resorts World Las
Vegas; Chrissy Taylor, President and Chief Executive
Officer, Enterprise Holdings Inc.; Jonathan Tisch, Chairman
and Chief Executive Officer, Loews Hotels & Co; Andrew
Wexler, Chief Executive Officer, Herschend Enterprises..... 5
Statement of Senator Scott....................................... 6
Statement of Senator Blunt....................................... 24
Statement of Senator Blackburn................................... 26
Statement of Senator Sullivan.................................... 28
Witnesses
Rosemary Vassiliadis, Director of Aviation, McCarran
International Airport.......................................... 7
Prepared statement........................................... 9
William D. Talbert III, CDME, President and CEO, Greater Miami
Convention & Visitors Bureau................................... 11
Prepared statement........................................... 12
Christopher L. Thompson, President and CEO, Brand USA............ 14
Prepared statement........................................... 16
Appendix
Response to written questions submitted by Hon. Amy Klobuchar to:
Rosemary A. Vassiliadis...................................... 37
Christopher L. Thompson...................................... 38
REVIVING INTERNATIONAL TRAVEL AND TOURISM TO CREATE AND RESTORE JOBS
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TUESDAY, MAY 18, 2021
U.S. Senate,
Subcommittee on Tourism, Trade, and Export
Promotion,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Subcommittee met, pursuant to notice, at 3 p.m., in
room SR-253, Russell Senate Office Building, Hon. Jacky Rosen,
Chairman of the Subcommittee, presiding.
Present: Senators Rosen [presiding], Scott, Blackburn,
Sullivan, and Blunt.
OPENING STATEMENT OF HON. JACKY ROSEN,
U.S. SENATOR FROM NEVADA
Senator Rosen. Good afternoon, everyone, and welcome to the
second hearing of the Subcommittee on Tourism, Trade and Export
Promotion. Today's hearing, reviving international travel and
tourism to create and restore jobs, will examine the economic
impacts of the COVID-19 pandemic and international travel to
the United States, and the ripple effects on related industries
such as hospitality and tourism.
We will also discuss regional impacts of the pandemic on
communities and workers hardest hit by decreases in
international travel to the United States. In Nevada,
international travel and tourism are the lifeblood of our
economy, and our airports have been the gateway to the Silver
State for millions of domestic and international tourists and
business travelers.
In 2019 alone, Las Vegas McCarran International Airport saw
over 50 million passengers, generated nearly $35 billion in
economic output, and supported approximately 25,000 jobs. Was
responsible for 18 percent of the region's gross domestic
product, so our tourism is pretty important to us. And that is
why the economic slowdown caused by the pandemic has been so
devastating. The international travel slowdown has meant job
losses not only in our amazing hotels and casinos and in our
world class convention halls, but also at the airports
themselves, from gate agents to concessionaires and other
related small businesses.
It has also devastated many of our restaurants, retailers,
live entertainment venues, tour bus companies, rental car
operators, street vendors and so much more. With such a
daunting challenge to overcome in order to fully recover from
the pandemic and turn the corner toward economic growth, we
must invest and promote tourism at a greater level than ever
before. And the numbers are staggering. According to the U.S.
Travel Association, international inbound travel to the U.S.
decreased by more than 75 percent in 2020--75 percent.
International travel to Las Vegas was hit particularly hard,
dropping nearly 80 percent.
That was a major driver of the nearly 30 percent
unemployment rate that Nevada faced in April 2020, and it is
one of the reasons why we still have one of the highest
unemployment rates in the Nation. And our recovery, while
underway, may not come as quickly as parts of the country
less--as some of those parts of the country that are much less
dependent upon tourism. Despite an overall 6 percent
unemployment rate nationally, the leisure and hospitality
industry still had a 13 percent employment rate--unemployment
rate, March of this year. We heard in our first hearing that
the Subcommittee held a domestic leisure travel will bounce
back more quickly while international travel and business
travel will take much longer.
Improved Federal guidelines could help ensure an expedited
return to economic growth to this sector. It is critical
because foreign travelers play a particularly important role in
tourism heavy economies. In 2019 alone, international visitors
to the United States spent over $250 billion in our country.
That statistic is all the more alarming when paired with the
analysis from Oxford Economics that a recovery to 2019
international travel levels to North America likely won't occur
until 2024. If we want to move that timeline up, well, we have
got to act now.
So we have an excellent panel of witnesses here today, both
virtually and in person, to share their expertise on this
subject to provide insight and recommendations for the best
path forward, and, of course, take questions from the members
of this subcommittee. I am particularly glad to have with us
today Rosemary Vassiliadis from McCarran International Airport
to share her perspective on how the Las Vegas airport system
dealt with the challenge posed by the depressed international
travel over the past year, and why bringing international
travelers back to Nevada and the rest of our country is just so
critical for our travel and tourism economy.
But for today's hearing, we also have representation from
Brand USA, the Nation's primary organization dedicated to
marketing the United States as the premiere destination for
international travelers. Of course, we also have the Greater
Miami Convention and Visitors Bureau. They add the perspective
of another world class American city, and following the
extremely helpful testimony, of course, we received from my
very own Las Vegas convention and visitors authority.
And this discussion is timely as just as last week the CDC
announced that individuals who are fully vaccinated may forego
mask wearing in most situations, however individuals traveling
on planes, trains, busses, other forms of public
transportation, and at transportation hubs such as airports and
train stations, will need to continue to wear masks. Despite
the pandemic continuing into 2021, the already successful
vaccination rollout will soon lead to the return of conventions
to our sporting events, live entertainment trade shows, and so
many more of the events that increase international travel from
all over the world to Nevada to Florida and to other tourism
hubs in the United States.
It is my hope that today's hearing of this subcommittee
will help us to better understand the challenges that
communities face from the depressed travel trends caused by the
pandemic and will provide the forum for a robust discussion on
how to encourage the resumption of international travel. To add
to this discussion, I would like to submit to the record a
letter from the U.S. Travel Association, which makes
recommendations for encouraging, excuse me, international
travel, including congressional support for Brand USA.
I would also like to submit for the record a letter from
the American Rental Car Association regarding the impact of the
pandemic slowdown in international travel on the domestic
rental industry, along with ideas for reviving international
tourism.
[The information referred to follows:]
May 11, 2021
The President
The White House
Washington, DC.
Dear Mr. President:
Thank you for your leadership to strengthen our Nation's response
to COVID-19 and put the United States on a path to defeat the virus.
Because of the progress your administration has made, we now have the
opportunity to safely reverse the devastating economic damage caused by
the pandemic. As leaders of America's travel and tourism industry,
which has been the hardest hit sector of the economy, we respectfully
urge your administration to seize this opportunity and quickly develop
a roadmap to safely reopen international travel to the United States by
this summer, starting with a travel corridor between the U.S and the
United Kingdom (U.K.)
While U.S. borders remain closed to much of the world, the
remarkable scientific advancements to combat the COVID-19 pandemic and
the tremendous vaccine deployment achieved by your administration have
allowed the safe resumption of many activities. For all its economic
and cultural contributions, international travel should be among them
and it will hasten the economic recovery we all desire. We also can
rebuild our leadership on the global stage, our position in the world
and bring people back together again--one of the great benefits of
travel.
Based on science and data, resumption of travel between low-risk
countries, and in particular among vaccinated individuals, should be
allowed to resume. The CDC has said as much regarding domestic travel.
International travel is projected to take the longest to recover--
at least five years--without significant intervention. Prior to the
pandemic, international inbound travel to the U.S. contributed $234
billion in export income to the U.S. economy, generated a trade surplus
of $51 billion, and directly supported 1.2 million American jobs.
However, the steep decline in travel in 2020 resulted in the loss of
$150 billion in export income and 1.1 million jobs. If nothing is done
to lift entry restrictions, the U.S. is projected to lose an additional
$175 billion by the end of this year.
A clear path forward, relying on current data and science, is
needed to ease entry restrictions and quickly and safely reopen this
critical segment of America's economy.
There are several steps your administration can take to get
started, including:
1. Starting with the United Kingdom, quickly establish public health
corridors (PHCs) between the U.S. and other low-risk countries.
We respectfully urge you to engage with Prime Minister Boris
Johnson to secure a commitment to quickly establish a travel
corridor between the U.S. and theU.K. The Federal government
should then expand similar PHCs to other low-risk countries.
Establishing a U.S.-U.K. public health corridor would be a
crucial step in our country's recovery. A recent study found
that restarting travel between the U.S. and the U.K. could
deliver over $4 billion in economic impact and support almost
300,000 jobs in the U.S. over the next several months.
2. Establish a public-private taskforce to develop a risk-based
roadmap, starting this May, for safely reopening inbound
international travel to the U.S. from countries in addition to
the U.K. Similar to our global competitors, the Federal
government should assign a public-private task force to develop
this roadmap using a risk-based data-driven approach to lift
international entry restrictions. The data and science show
that the right tools are now in place to mitigate risk and
safely begin to ease international entry restrictions by July
1, 2021. In particular, as we increase vaccination rates here
in the U.S., easing of restrictions should be enhanced.
3. Utilize the upcoming G7 summit to seek commitments from other G7
leaders to develop and implement a global framework for safely
and fully reopening international travel between countries. The
global framework should focus on leveraging COVID-19 testing,
vaccinations, recovery status and digital health credentials to
restart international travel as global conditions improve.
The U.S. must be a global leader in restarting international
travel. Using science and data as our guide, it is possible to reopen
our borders and establish these important public health corridors. It
would be incredibly productive if we could advance our dialogue and
partner with your administration to set a framework for the safe
restart of international travel.
We are grateful for your leadership and remain hopeful that all
segments of America's travel industry can soon be safely restarted in
order to contribute in significant ways to an overall recovery and
bring the U.S. back together with the rest of the world.
Respectfully,
Roger Dow, President and Chief Executive Officer
U.S. Travel Association
Geoff Ballotti, President and Chief Executive Officer
Wyndham Hotels & Resorts
Ed Bastian, Chief Executive Officer
Delta Air Lines
Nicholas E. Calio, President and Chief Executive Officer
Airlines for America
Anthony Capuano, Chief Executive Officer
Marriott International, Inc.
Josh D'Amaro, Chairman
Disney Parks, Experiences and Products
Christine Duffy, President
Carnival Cruise Line
Robin Hayes, Chief Executive Officer
JetBlue Airways Corp.
Peter Ingram, President and Chief Executive Officer
Hawaiian Airlines, Inc.
Jerry Jacobs, Jr., Chief Executive Officer
Delaware North
Peter Kern, Vice Chairman and Chief Executive Officer
Expedia Group, Inc.
Scott Kirby, Chief Executive Officer
United Airlines
David Kong, President and Chief Executive Officer
BWH Hotel Group
Elie Maalouf, Chief Executive Officer, Americas
IHG Hotels & Resorts
Heather McCrory, Chief Executive Officer, North & Central America
Accor
Sean Menke, President and Chief Executive Officer
Sabre
Christopher J. Nassetta, President and Chief Executive Officer
Hilton
Patrick Pacious, President and Chief Executive Officer
Choice Hotels International, Inc.
Doug Parker, Chairman and Chief Executive Officer
American Airlines
Scott Sibella, President
Resorts World Las Vegas
Chrissy Taylor, President and Chief Executive Officer
Enterprise Holdings Inc.
Jonathan Tisch, Chairman and Chief Executive Officer
Loews Hotels & Co
Andrew Wexler, Chief Executive Officer
Herschend Enterprises
______
Statement from the American Car Rental Association
The Board of Directors and members of the American Car Rental
Association (ACRA) respectfully submit this statement to the Tourism,
Trade and Export Promotion Subcommittee of the Senate Commerce, Science
and Transportation Committee on the occasion of the Subcommittee's
hearing on ``Reviving International Travel and Tourism to Create and
Restore Jobs.'' ACRA asks that this statement be included in the
official record of the hearing.
ACRA thanks you Chair Rosen and Ranking Member Scott for convening
this important hearing. ACRA's members look forward to working with you
and your staff as our industry--and the nation--moves toward reviving
both domestic and international travel and tourism in the wake of the
devastating COVID-19 pandemic.
The American Car Rental Association
The American Car Rental Association is the national representative
for over 98 percent of our Nation's car rental industry. ACRA's
membership is comprised of over 300 car rental companies, including all
of the brands you would recognize such as Alamo, Avis, Budget, Dollar,
Enterprise, Fox, Hertz, National, Sixt and Thrifty. ACRA members also
include many system licensees and franchisees, mid-size, regional and
independent car rental companies as well as smaller, ``mom & pop''
operators. ACRA members have almost 2 million registered vehicles in
service in the United States, with fleets ranging in size from one
million cars to ten cars.
The Impact of the Pandemic on the U.S. Car Rental Industry
The basic statistics regarding the impact of the pandemic on the
car rental industry since February 1, 2020 are simple and are not
unique to the car rental industry--but they are compelling nonetheless:
Car rentals at airport locations (which represent
approximately 50 percent of all car rentals each year in the
United States) were down between 50 and 90 percent when 2020 is
compared to 2019, depending on the location;
Car rentals at non-airport locations (again, about 50
percent of overall rentals) are down between 50 and 100 percent
from 2019 to 2020, with some locations shuttered due to lack of
rentals;
ACRA members laid off or furloughed approximately 60,000
individuals this year--approximately 35 percent of the
industry's U.S. workforce--in 2020;
Two of the Nation's top five car rental companies in terms
of fleet size sought protection under Chapter 11 of the
bankruptcy code in 2020 and other smaller ACRA members may have
taken similar actions; and,
In 2019, ACRA member companies purchased 1.74 million new
cars for their rental fleets--one of every eight new cars sold
in the United States that year; in 2020, purchases of new cars
by ACRA members declined by 50 percent to approximately 811,000
vehicles -- causing economic ripple effects through the entire
U.S. economy.
Near-Term Prospects for Recovery
The health of the American car rental industry will return as
Americans and international travelers return to the robust business and
leisure travel levels we witnessed in 2019. The second quarter of 2021
has seen an increase in car rental demand in some markets--particularly
in leisure destination markets during the Easter/Spring Break season.
And ACRA members are working hard to meet the increased demand after
selling vehicles from their fleets in 2020 when travel came to a
virtual standstill. However, ``refleeting'' will not happen overnight,
particularly given vehicle manufacturers have had to slow down their
production of vehicles in 2021 due to supply chain shortages--
particularly with respect to semi-conductors.
ACRA's Recommendations for Federal Government Actions
ACRA concurs, with respect to the revival of international tourism,
with the recommendations contained in the May 11, 2021 letter to
President Biden from the leaders of some of the Nation's leading travel
tourism (attached). A large percentage of car rentals at our Nation's
airports involve international business and leisure travelers and the
sooner international travel can be restored to pre-pandemic levels, the
sooner America's car rental industry will experience a sustained and
widespread increase in demand for rentals, which will lead ACRA members
to increase their purchase of new vehicles and to hire or rehire
employees to serve these increased car rental customers.
* * *
Thank you for your attention to ACRA's views on the promotion of
international tourism. If this statement raises questions in the minds
of Committee members or if there is additional information we can
provide, please do not hesitate to contact Greg Scott, ACRA's
government relations representative, at 202-297-5123 or at
[email protected].
Senator Rosen. So I thank you all again for being here
today. I look forward to hearing each of you share your
experiences and expertise with us. Now, I will turn it over to
Ranking Member Scott for his opening statement and then
introduce our witnesses so they can provide testimony to the
panel. Senator Scott.
STATEMENT OF HON. RICK SCOTT,
U.S. SENATOR FROM FLORIDA
Senator Scott. I want to first thank Chair Rosen for
hosting this meeting today, this hearing today, and I want to
thank each of you for being here. I want to recognize Chris
Thompson. Chris was running and Visit Florida when I got
elected at the end of 2010, and we started a path of continued
investment. And over an eight-year period of time, we took the
number of tourists in Florida, which had sort of stagnated
around 80 million tourists to 126 million tourists by the time
I left office. In Florida, every 87 tourist is another Florida
job. So I ran on jobs, and Visit Florida did a great job and
tourism really grew. So I want to thank Chris for that.
I want to recognize Bill Talbert. Bill, as the President
and CEO of the Greater Miami Convention Visitors Bureau, you
cannot find much more of an advocate for tourism than Bill. We
have had the opportunity to work together the entire time I was
Governor and since I have been Senator, and he is a true
champion for our state's travel industry, I want to recognize
Ms. Vassiliadis. All of us have enjoyed flying into Vegas. The
Vegas airport does a great job and I told Chair Rosen, my first
year in office, we went to Rio de Janeiro, and it was, I think,
the biggest tourism conference in the world every year.
And the group that the biggest--and a really nice spot
there was Las Vegas. And they do a really good job of promoting
Las Vegas and creates a lot of jobs. So I know the pandemic has
impacted each of us differently, and we have all had to adjust
to make sure our families, our businesses, and employees stay
safe. I want to thank everybody for your hard work. Florida is
a global travel destination and of course as Governor I tried
to make it the number one travel destination in the entire
world, and my biggest competition, of course, was Vegas. People
from all over the world come to enjoy our beaches, attractions,
and all our state has to offer. When I was Governor, we worked
hard to grow our tourism industry. By the way, you can win the
best State parks every 6 years.
There is only one state in the United States that has ever
won it twice. There is only one state that has won it three
times. And it is the great state of Florida. So, it is
unfortunate what has happened with the pandemic because I think
it has had the biggest impact on travel and tourism of any
industry in the country. And it has hurt a lot of people that
rely on--they don't have a guaranteed salary. They are relying
on people showing up in tips and things like that. I have had
the opportunity to work across the aisle on several bills, help
try to keep our family safe and be able to try to get us back
to work as quickly as possible.
Last week, my bipartisan Fly Safe and Healthy Act with
Chair Cantwell of the Commerce committee, which passed, would
create a temperature check pilot program at the airports and
passed the Commerce committee. We have a bipartisan bill called
Fly Safe K-9 COVID Detection Act with Senator Sinema, which
directs the TSA to conduct a feasibility study on the use of K-
9 units to detect COVID and provide an additional level of
passenger screening. Also introduced my Cruise Act, the cruise
industry is pretty big in Florida, with Senator Sullivan,
another state that is pretty big, to help the cruise industry
restart and support the many businesses in our communities that
rely on the success of the cruise industry.
It looks like we are finally making some progress with the
CDC, which was pretty frustrating for quite a while. As our
Nation works to recover from the coronavirus and get our
economy back on track, I along with Chair Rosen are doing
everything we can to support the travel industry in Florida and
Nevada and all across the country. So we have got to figure out
how to get people back to work, and I look forward to hearing
from the witnesses today. Thank you, Chair Rosen.
Senator Rosen. Well, thank you, Senator Scott. And now I
would like to introduce our first witness who is testifying
remotely today. Rosemary Vassiliadis, Director of Aviation at
McCarran International Airport. Ms. Vassiliadis is an industry
expert with over 20 years of experience in aviation leadership.
She directs all operations at Clark County's airport system,
which include McCarran International Airport and four general
aviation facilities in southern Nevada. Clark County's airport
system directly employs more than 17,000 people, and in 2019
handled in excess of 50 million passengers. Ms. Vassiliadis,
you are recognized now for your opening remarks.
STATEMENT OF ROSEMARY A. VASSILIADIS, DIRECTOR OF AVIATION,
McCARRAN INTERNATIONAL AIRPORT
Ms. Vassiliadis. Well, thank you and good afternoon. To
begin, let me thank Senator Cantwell as Chair of this
Committee. But Senator Rosen, who is presiding over this
subcommittee, I really do appreciate your kind remarks and
really setting the story for us along with Ranking Member
Scott. I am really glad that you enjoy those conferences in Las
Vegas and we can't wait for you to come back. And of course, I
appreciate all the other Committee members present here today.
You know, this is a great opportunity to share the airport
perspective, encouraging the resumption of travel, especially
international tourism, which is so vital to Las Vegas, as well
as to many other U.S. airports and their communities.
Restarting international air travel is a critical step to
supporting recovery of our tourism based economy. Prior to the
pandemic, nonstop international service was a wonderful success
story for Las Vegas. The number of passengers these flights
carried increased each year for nine consecutive years, tapping
out at 3.8 million in 2019.
These are remarkable numbers for a point to point
destination such as Las Vegas, which differs greatly from
traditional U.S. gateway hubs like Atlanta, Chicago, L.A., or
Miami. At our 2019 peak, Las Vegas enjoyed nonstop service to
and from 11 different countries around the globe. Now that
number is down to one, Mexico. Over the first 4 months of 2021,
our international volume has amounted to less than 80,000
passengers. However, there is hope on the horizon. Almost every
week I or members of my team hear from representatives of
international air carriers expressing interest in quickly
resuming flights to Las Vegas, many sites' strong pent up
demand with customers who can't wait to return to the United
States once current travel restrictions, particularly those
affecting non-essential leisure and convention visitors, are
finally lifted.
These airlines ask us point blank, what is the U.S. doing
to reopen travel? When will our airline be able to resume
bringing vacationers and conventioneers to Las Vegas? So to
take advantage of this opportunity, ideally in time for the
2021 summer travel season, we need immediate active leadership
from the U.S. Government. We must develop a risk-based roadmap
to allow global travel to return in earnest while still
protecting the health and safety of the traveling public and
our communities. In the written submittal of my testimony, I
have mentioned some examples of risk-based approaches that are
occurring elsewhere around the world. For the sake of time all,
I will only summarize those points today.
The International Civil Aviation Organization, or ICAO, is
a specialized agency of the United Nations, and with support of
the FAA, it recently put forward a testing and cross-border
risk management measurements manual. ICAO advocates for a
flexible approach to opening borders, adjusting for real time
conditions such as vaccination rates and the severity of COVID-
19 outbreaks at both the destination and point of origin. The
United Kingdom has put in place its own risk-based measures
that have opened its borders to select countries, but notably
not the United States. The European Union is expanding a
digital certification process to open movement among those who
have been vaccinated, have received a negative test result, or
have recovered from COVID-19.
These approaches differ greatly from the United States,
where a Presidential proclamation presently bans nearly all
travel from specific countries, including United Nations and
the United Kingdom. This blanket approach is unnecessarily
crippling our economic productivity. There is a better way, and
our Nation must move quickly to implement existing solutions
for safely admitting international travelers. I ask that we
engage in the worldwide discussions on guidelines and standards
for authenticating testing and the vaccination status for
international travelers.
Once guidelines are established, the U.S. Government must
then recognize and accept other countries' digital health
credential programs. Reciprocity is critical. You know, we all
know America has been recognized as the world leader in
commercial aviation, and this is a critical time for it to lead
the world back to global connectivity and economic growth. And
finally, Congress must enable the necessary investments to make
essential changes to our airports infrastructure, including
many health related considerations that have come about from
the pandemic. We cannot do this without an increase in the
amount of funds airports can collect from the passenger
facility charge, or PFCs.
The PFC cap has not kept pace with rising construction
costs or inflation since it was last adjusted to $4.50 more
than 20 years ago. Since then, its purchasing power has eroded
by more than 40 percent. Adjusting this Federal cap on local
PFCs would reduce financial pressure and give airports the
option of using more local funds for their infrastructure
needs. Such investments will then help airports to attract new
carriers and entice existing ones to expand, thereby promoting
competition and lowering fares into their communities.
And this would all be done in a manner that promotes
safety, health, and increased traveler confidence. So I
sincerely appreciate the opportunity to speak with you today on
behalf of airports across the United States, and I will be
pleased to answer any questions you may have at the appropriate
time. Thank you, Senator.
[The prepared statement of Ms. Vassiliadis follows:]
Prepared Statement of Rosemary A. Vassiliadis, Director,
Clark County Department of Aviation
Chairwoman Rosen and members of the Committee, thank you for this
opportunity to share my views on ways to encourage the resumption of
travel, especially international tourism which is so vital to Las
Vegas. Restarting international air travel is a critical step to
supporting the recovery of our tourism-based economy. Prior to the
pandemic, nonstop international service was a wonderful success story
for Las Vegas. The number of passengers who came to Las Vegas via
foreign-flag air carriers increased each year from 2011 through 2019,
topping out at nearly 3.8 million annual passengers in both 2018 and
2019. These are remarkable numbers for a point-to-point destination
market such as Las Vegas, which differs greatly from traditional U.S.
gateway hubs such as Atlanta, Chicago or Los Angeles. At our 2019 peak,
Las Vegas enjoyed nonstop service to and from 11 different countries
around the globe; now that number is down to one, with Mexico
representing our lone international market currently in service. Over
the first four months of 2021, our international volume has amounted to
less than 80,000 passengers.
There is hope on the horizon, however. Almost every day I or
members of my team hear from representatives of international air
carriers expressing interest in quickly resuming service to Las Vegas.
Many cite strong pent-up demand among their customers who can't wait to
return to the United States once today's travel restrictions--
particularly those affecting ``non-essential'' leisure and convention
visitors--are finally lifted. These airlines ask us point blank: What
is the U.S. doing to reopen travel? When will our airline be able to
resume bringing vacationers and conventioneers to Las Vegas?
To take advantage of this opportunity, ideally in time for the 2021
summer travel season, we need immediate, active leadership from the
U.S. government to develop a risk-based roadmap that will allow global
travel to return in earnest while protecting the health and safety of
the traveling public and citizenry. One such approach is recommended in
the ``Testing and Cross-border Risk Management Measures Manual''
published by ICAO (with support from the FAA). If implemented, it could
enable global connections based on a flexible approach which adjusts as
the prevalence of COVID-19 changes on either end of a route. The EU is
gradually deploying methods to reopen its members' borders for
vaccinated passengers, and the United Kingdom has embraced an approach
similar to ICAO's as documented in its Global Travel Taskforce report
published in April 2021. These actions have opened the door for U.K.
residents to begin non-essential travel to select countries later this
month. I must note that the United States was not included among the
U.K.'s recent list of cleared destinations, creating a major hurdle
toward reconnecting Las Vegas with its top overseas visitor market.
The targeted, risk-based approaches we see in other nations are a
more effective strategy than the blanket, blunt approaches currently
employed here, where a Presidential Proclamation presently bans all
travel between the U.S. and specific countries. The 212(f) and 215(a)
immigration restrictions from the Immigration and Nationality Act
(INA), put in place by the Presidential Proclamation on January 25,
2021, do not necessarily achieve the goal of reducing transmission of
COVID-19, and unnecessarily cripple the ability for economic
productivity that could safely be supported through the aforementioned
recommended models occurring elsewhere around the world.
In addition to adopting a targeted, risk-based approach, the U.S.
government also needs to lead the world in establishing ways to safely
admit international travelers. To be clear, aviation industry members
are not advocating for a Digital Health Credential (DHC) mandate, but
we do need the government to set the parameters and criteria for
accepting solutions that are already being implemented in other parts
of the world. The U.S. should engage these worldwide discussions with
guidelines or standards for the use of DHC in authenticating testing
and vaccination status for international travelers. Establishing a
harmonized approach for the implementation of these DHCs will allow the
traveling public to understand the requirements for international
travel and reduce the occurrence of fraudulent documentation.
Once guidelines are established, the U.S. government needs to work
to recognize and accept other countries' DHC programs, such as the
European Digital Green Certificate. On 17 March 2021, the European
Commission presented a proposal to create a Digital Green Certificate
to facilitate the safe, free movement of its citizens within the EU
during the COVID-19 pandemic. Digital Green Certificates will be valid
in all EU Member States. A Digital Green Certificate is digital proof
that a person has either, (1) been vaccinated against COVID-19; (2)
received a negative test result; or (3) recovered from COVID.
The U.S. has long been recognized as the world leader in commercial
aviation, and this is an important opportunity for it to lead the world
back to global connectivity and the creation of economic vitality.
Finally, Congress must enable the necessary investments in our
Nation's airports to make essential changes to our health
infrastructure. These could include upgrading our ventilation and
filtration systems, installing more Plexiglas barriers, or building out
terminals to accommodate for physical and social distancing. We cannot
accomplish these needed airport modifications without an increase in
the amount of funds airports can collect from the passenger facility
charge (PFC). With the dramatic decline in passengers and PFC revenue
over the past year, many airports were forced to extend their
collection periods for current PFC-funded projects, depleting available
funding for other critical projects. Adjusting the Federal cap on local
PFCs would reduce this financial pressure and give airports the option
of using more local funds for their infrastructure needs. The PFC cap
has not kept pace with rising construction costs or inflation since it
was last adjusted to $4.50 more than 20 years ago. Since then its
purchasing power has eroded by 40 percent. Modernizing the outdated
Federal cap on PFCs would give airports the self-help they need to
invest in the terminals, gates and ramps necessary to build back
better, and once again attract new air carriers and entice existing
ones to expand, thereby promoting competition and lowering airfares for
their communities. Thank you.
Senator Rosen. Well, thank you, Ms. Vassiliadis. I really
appreciate that. And right now, I would like to recognize
Senator Scott to introduce our next witness, Mr. Talbert.
Senator Scott.
Senator Scott. Thanks, Chair Rosen. Well. Mr. Talbert, Bill
and I got to work--we traveled all over the world. We did a lot
of conferences to try to get more tourists. And Bill, he is a
great promoter for not just for the Miami area, but actually
for the entire state of Florida. And he works hard and is just
a great promoter. So Bill Talbert.
STATEMENT OF WILLIAM D. TALBERT III, CDME, PRESIDENT AND CEO,
GREATER MIAMI CONVENTION & VISITORS BUREAU
Mr. Talbert. Thank you, Governor--I mean, Senator. I
appreciate that. As you know, I was born in Jacksonville, I
went to school in Gainesville and in Boca Raton, have been in
Miami for a bit. And I want to thank you. I was also honored to
serve as your chair of the Visit Florida Board. On those great
days, the numbers went up and they kept going up. So you got
it. You always got it and we thank you for that.
Madam Chair, we appreciate--and by the way, your
presentation was kind of mine, so you haven't left much for me.
So it is--I am going to have to cut this down. But Ranking
Member, can I still call you Governor? We go that that far back
in traveling together. And distinguished members of this
subcommittee. You know, we are really excited about a
subcommittee that starts with the word tourism. I don't think
that's ever happened in Washington, D.C., so thank you----
Senator Rosen. Well, so I will just take a point of order
here. We actually thought, as we were trying to regroup and
reform committees this session, that we needed a tourism, trade
and export committee, but more importantly, that we wanted to
add a verb to that title. So I think we may have the
distinction of being one of the only committees that has an
active verb because tourism, trade and export, it needs
promotion to happen, and that is why we are that committee. So
thank you.
Mr. Talbert. Thank you all very much. My name is Bill
Talbert, William Talbert. Miami Bill, as I am known in the
industry. I am President and CEO of the Greater Miami
Convention and Visitors Bureau. Thank you for your leadership
in addressing the pandemic's devastating economic damage to our
Nation's hardest hit sector, travel and tourism. It is my honor
to provide his testimony on reviving international travel and
tourism and to create and restore jobs.
With your indulgence, I am going to be reading my comments
to ensure clarity of the important points presented for your
consideration. In the interest of brevity, my CV is in the
written testimony and Congressional record. Throughout my three
decades of stewarding our destination sales and marketing
efforts, Greater Miami has consistently posted record numbers.
Prior to 2020, 24.2 million visitors generated $18 billion of
economic impact and employed over 145,000 people. Travel was
our Nation's second largest export, generating $15.8 billion
non-exportable American jobs and a trade surplus of $51
billion.
Tourism is our number one job generator in Greater Miami.
It was responsible for 38 percent of all State sales taxes
collected, with international visitors paying a lion's share of
19 percent. There are critical dollars that directly fund
transportation, health care, and other vital public services.
This came to a screeching halt in March 2020. From April
through December, air travel to Miami dropped 76 percent. Port
Miami, the cruise capital of the world, shut down 7 million
passengers, 16 percent of which are international, unable to
sail. Hotel occupancy dropped dramatically, hospitality jobs
down dramatically, tourist tax collections funding, much of
what I have previously mentioned, down over 70 percent.
Miami is America's gateway, leading the country and the
percentage of international versus domestic travelers--one-
third are international. With our borders closed to much of the
world, the impact to our Florida economy and Miami's tourism
industry is especially staggering. In 1 year, international
travel dropped 64 percent, from 6.9 million to 2.5 million
international visitors. Seemingly overnight, Miami
International Airport, the Nation's third busiest for
international travel, lost more than two-thirds of its
passenger traffic.
More alarmingly, international visitor spending has
plummeted 70 percent. This is critical as one-third of our
visitors are international. They are responsible for 50 percent
of the visitor spending in Miami. How do we fix this? We see a
light at the end of the tunnel. We are now in a position where
we can restart international travel and restore jobs without
compromising safety. We need to act quickly to implement the
appropriate measures to lift travel restrictions and restore
demand. We have the right protections to safely restart
international travel but lack a clear public health benchmarks
or a definitive timeline to reopen.
We ask the CDC, Department of Transportation, and Homeland
Security, and other Federal agencies to come together and
develop a data-driven, risk-based roadmap to facilitate inbound
international travel. We need uniform Federal standards that
can be effectively communicated to international audiences.
Vaccine rate among U.S. adults rose rapidly each day. As we
begin to reach a saturation point, vaccinated individuals
should be allowed to visit the U.S. without having to have
proof of a negative test.
Additionally, recently, the need for quarantines has
effectively been eliminated, as international passengers must
now provide proof of a negative COVID test within 72 hours of
departure. We believe the resumption of travel between low risk
countries can safely resume and the U.S. should be a global
leader in this restart. We can begin by establishing public
health corridors between the U.S. and other low risk countries
such as the UK and Canada.
The CDC could then use clear benchmarks such as infection
and vaccination rates to determine when entry restrictions can
be lifted for other countries. We must allow the cruise
industry to safely sail again, one of Florida and Miami's most
important and powerful economic engines. We lost a projected 7
million passengers, 16 percent international. It is essential
we restart this critical tourism sector.
Finally, we must ensure that Brand USA, which promotes the
U.S. as a destination globally, be fully funded. They will play
a key role in our recovery and helping revive international
travel. I am grateful for your leadership and remain hopeful
that all segments of American travel can very soon be safely
restarted. The visitor industry depends on it, as do American
jobs. Thank you very much for listening.
[The prepared statement of Mr. Talbert follows:]
Prepared Statement of William D. Talbert, III, CDME President & CEO,
Greater Miami Convention & Visitors Bureau
Good afternoon Chairwoman Rosen, Ranking Member Scott, Chairwoman
Cantwell, Ranking Member Wicker, and distinguished members of the
Subcommittee. I thank you for your leadership in addressing the
pandemic's devastating economic damage, specifically to our Nation's
hardest hit sector, travel and tourism.
I would also like to thank U.S. Department of Commerce Secretary
Gina Raimondo for her recent comments expressing the Administration's
commitment to the recovery of the U.S. travel and tourism industry.
This is a welcome and positive sign as we work to restart all sectors
of travel.
My name is William D. Talbert, III--Miami Bill as I'm known in the
industry--and I am President & CEO of the Greater Miami Convention &
Visitors Bureau.
It is my honor and privilege to provide testimony on Reviving
International Travel & Tourism to Create & Restore Jobs.
With your indulgence, I'll be reading my comments to ensure clarity
of the important points presented for your consideration. In the
interest of brevity, I'll also limit my CV to my written testimony and
congressional record.
I represent all sectors of the hospitality industry--our 1,100-
member organization includes airports, airlines, hotels, cruise lines,
transportation, attractions, restaurants--and prior to the pandemic,
the nearly 145,000 jobs our industry represents in Greater Miami.
Among the many industry, business and civic organizations I have
served--and specific to this discussion--I was on the U.S. Department
of Commerce's Travel & Tourism Advisory Board--named by both previous
Republican and Democratic Administrations--and in leadership capacities
with the U.S. Travel Association, Destinations International, Brand USA
and Visit Florida, where I worked hand-in-hand with then-Governor Scott
to protect and grow our state's primary economic generator--travel and
tourism.
I also assisted with the passage of the United States Travel
Promotion Act in 2009, helping establish Brand USA, our Nation's first
public-private partnership promoting the U.S. as a premier destination
globally.
I'm well-known for my mantra--Jobs Jobs Jobs--and I work daily to
build consensus locally, statewide and federally on behalf of the
visitor industry, always emphasizing the critical role tourism plays in
creating jobs, and our Nation's economic health.
Our industry has faced significant challenges throughout my
career--9/11, natural disasters, fluctuating economies, a global
recession and endemic health hazards. Each time, through deft crisis
management and recovery efforts, we have been able to successfully
guide the safe return of business, restore consumer confidence and
drive customer demand.
Never before though has the challenge been greater than this one--
COVID-19. Yet we are now leading the world in successfully addressing
the pandemic's devastation and I am confident our resilient industry
will once again spur our Nation's economic recovery.
Throughout my three decades stewarding our destination's sales and
marketing efforts, Greater Miami has consistently posted record-
breaking numbers. Prior to 2020, 24.2 million visitors generated an $18
billion economic impact and employed nearly 145,000. Travel was our
Nation's second largest export, generating 15.8 million non-exportable
American jobs and a trade surplus of $51 billion.
Tourism was our #1 job creator. In Greater Miami, 167 visitors = 1
tourism job. It was also responsible for 38 percent of all state sales
taxes collected, with international visitors paying the lion's share--
19 percent. These are critical dollars that directly fund
transportation and healthcare services, also helping pay for schools,
public safety, environmental and infrastructure projects, local arts
and culture, and programs to combat homelessness and domestic violence.
This all came to a screeching halt in March of 2020. From April
through December, air travel dropped 76 percent. PortMiami, the Cruise
Capital of the World, shut down. Seven million passengers, 16 percent
international, unable to sail. One of Miami and Florida's most powerful
economic engines, PortMiami contributes $43 billion to the economy and
generates 334,500 direct and indirect jobs.
Hotel occupancy down dramatically. Hospitality jobs down
dramatically. Tourist tax collections, funding much of what I've
previously mentioned--down almost 70 percent. Throughout the country,
5.6 million hospitality jobs were lost--65 percent of all jobs lost in
the US.
Miami is America's gateway, leading the country in percentage of
international vs domestic travelers--one-third are international.
With our borders closed to much of the world, the impact to our
Florida economy and Miami's tourism industry is especially staggering.
In one year, international travel dropped 64 percent--from 6.9 to
2.5 million visitors. Seemingly overnight, Miami International
Airport--the nation's 3rd busiest for international travel--lost more
than two-thirds of its passenger traffic.
More alarmingly, international visitor spending has plummeted 70
percent. This is critical as, while one-third of our visitors are
international, they're responsible for 50 percent of spending.
How do we fix this? We see light at the end of the tunnel.
We're now in a position where we can restart international travel
and restore jobs without compromising safety.
We need to act quickly to implement the appropriate measures to
lift travel restrictions and restore demand.
We have the right protections to safely restart
international travel, but lack clear public health benchmarks
or a definitive timeline to reopen. We ask that the CDC,
Departments of Transportation and Homeland Security, and other
agencies come together to develop a data-driven, risk-based
roadmap to facilitate inbound international travel. We need
uniform Federal standards that can be effectively communicated
to international audiences.
The vaccination rate among U.S. adults grows rapidly each
day. As we begin to reach a saturation point, vaccinated
individuals should be allowed to visit the U.S. without having
to have proof of a negative COVID test. Additionally, the need
for quarantines has been effectively eliminated, as
international passengers must now provide proof of a negative
COVID 19 test within 72 hours of departure.
We believe the resumption of travel between low-risk
countries can safely resume, and the U.S. should be a global
leader in this restart. We can begin by establishing ``public
health corridors'' between the U.S. and other low-risk
countries such as the U.K and Canada. The CDC could then use
clear benchmarks, such as infection and vaccination rates, to
determine when entry restrictions can be lifted for other
countries.
We must allow the cruise industry to safely sail again. One
of Florida and Miami's most powerful economic engines, we lost
a projected 7 million passengers, 16 percent international.
It's essential we restart this critical tourism sector.
Finally, we must ensure that Brand USA, which promotes the
U.S. as a destination globally, be fully funded. They will play
a key role in our recovery and helping revive international
travel.
I am grateful for your leadership and remain hopeful that all
segments of America's travel industry can very soon be safely
restarted. The visitor industry depends on it, as do thousands of
American jobs.
Senator Rosen. Well, thank you, Mr. Talbert, and thank you
for that great segway to my next introduction of Christopher
Thompson, President and CEO of Brand USA, the Nation's public
private partnership, which is dedicated to increasing
international visitation to the United States through marketing
and promotional efforts. Mr. Thompson has over 30 years of
experience in the travel and tourism industry, and under his
leadership, Brand USA has nearly tripled its partnership
network and more than doubled its partner contribution program
offerings. Mr. Thompson, you are now recognized for your
opening statement.
STATEMENT OF CHRISTOPHER L. THOMPSON, PRESIDENT AND CEO, BRAND
USA
Mr. Thompson. Thank you, Madam Chairman, Ranking Member
Scott, members of the Committee. Thank you for holding this
very important hearing. Last, I also like to thank Senator
Blunt, Senator Klobuchar for their leadership of the Travel and
Tourism Caucus in the chamber. It is a privilege to be here
representing our Nation's destination marketing organization,
Brand USA. Our mission is to increase international visitation
and spend to fuel our Nation's economy and enhance the image of
the USA worldwide.
As a public, private partnership, we work with the travel
industry and the Federal Government to inspire the world to
explore our diverse destinations, our diverse experiences, and
our diverse people, and to communicate the entry and visa
policy. Our work provides vital marketing channels which
amplify the U.S. travel industry's efforts to reach potential
visitors and connect with international sales networks and
media around the globe. Since 2013, our activities have
generated 7.7 million incremental visitors, $25.5 billion in
incremental spending, $37 billion in taxes, and supported over
45,000 jobs per year.
We return $26 for every $1 of marketing that we invest in
the market. These benefits accrue to rural and urban
communities alike and support employment well beyond the travel
and tourism sector. Our reports to Congress for Fiscal Years
2019 and 2020, which are submitted as part of the record, are
the best reference for the detailed information on our
activities and our results. The pandemic has had a devastating
effect on travel and tourism in general, and especially on
those communities and those businesses and individuals reliant
on international visitor numbers, spending. Inbound
international travel has historically been our Nation's number
two export, and it has been our top services export. In 2019,
travel exports were $233 billion, delivering $51 billion in
trade surplus, directly supporting 1.2 million jobs.
But in 2020, even including the strong performance in the
first quarter, international travelers fell by 76 percent as
you promoted, chair. Travel exports plummeted by 64 percent to
just $83 billion, a year over year loss of $150 billion.
Without a recovery effort, travel exports will continue to
fall, and lost jobs will not return. Brand USA has developed a
comprehensive approach to help rebuild consumer confidence and
stimulate demand.
A national campaign is critical because of how slowly
international segment will recover in the years ahead, and
because of how little and how--both our destinations and our
brands will be able to invest in international marketing
compared to what they are having to do for the local economy.
Unfortunately, the pandemic has disrupted the funding model
established by the Travel Promotion Act, and it is jeopardizing
our efforts to be as helpful as we have been in the past. Brand
USA is funded by contributions from non-Federal sources and
matched by funds from the ESTA fees paid by international
travelers during the prior Fiscal Year. We receive a dollar for
dollar match up to $100 million for each dollar of contributed
cash or in-kind that clears the verification process from the
U.S. Department of Commerce. Three factors have challenged our
funding model.
First, ESTA collections are stagnant, resulting in only $62
million being available to us for the current Fiscal Year, and
maybe as little as $10 million in the next Fiscal Year. Second,
Brand USA partner base, and the travel industry more broadly,
continue to face significant hurdles to be able to reach pre-
COVID levels of contributions to Brand USA.
And third, the Brand USA Extension Act of 2019 raised the
minimum proportion of cash contributions from 30 to 50 percent,
which is a major hurdle for our cash strapped industry partners
to meet the contributions they have done historically. These
are structural impediments only Congress can solve. That is why
the Travel and Tourism Advisory Council recommended an
extraordinary $250 million appropriation to Brand USA, outside
the normal matching process, to provide the resources to hasten
the international travel recovery. The TTAB also recommended
temporary suspension of the 50/50 cash to in-kind ratio for
greater maximum matching flexibility.
As you have stated, Oxford Economics estimates that the
appropriation would lead to more than 1.7 million visitors who
could collectively spend $4.5 billion, generating over $700
million in taxes and 40,000 new jobs. It would allow us, as the
United States, to help return the levels of arrivals and
spending to 2023 levels as opposed to 2024 levels, a year
earlier than the forecast. These positive results will go
unrealized without action from Congress.
Fiscal 2020 will see historic growth rates in returns to
global travel as the world begins to move again. How our
country responds will determine the trajectory of our sector's
recovery and many other parts of the economy. The challenges I
have outlined must be addressed now in order for us to produce
and to launch campaigns in time to channel this demand to the
United States when the time is right. Thank you again, Madam
Chair, for the opportunity to testify. I look forward to
answering any questions anybody might have.
[The prepared statement of Mr. Thompson follows:]
Prepared Statement of Christopher L. Thompson, President and CEO,
Brand USA
INTRODUCTION
Chairwoman Rosen, Ranking Member Scott, and Members of the
Subcommittee:
Thank you for holding this important hearing. It's a privilege to
be here on behalf of Brand USA, the destination marketing organization
(DMO) for the United States.
This hearing is timely because the pandemic has had a devastating
effect on travel and tourism in general and especially on communities,
businesses, and employees that rely on spending by international
visitors. Inbound international travel has historically been the
country's number two export and its top services export. In 2019,
travel exports were $233 billion, delivering a $51 billion trade
surplus and directly supporting 1.2 million jobs. But from March
through the end of 2020, overall international arrivals fell by 91
percent and overseas visitation was down a staggering 96 percent
compared to the same period a year earlier. Travel exports plummeted by
64 percent to just $83 billion--a year-over-year loss of $150 billion.
Without a concerted recovery effort, travel exports will continue to
fall and lost jobs will be slow to come back--or may not come back at
all.
Brand USA was created to help address problems like this. Our
mission is to increase international visitation and spend to fuel our
Nation's economy and enhance the image of the USA worldwide. As a
public-private partnership, we work with the travel industry and
Federal government to inspire people from around the world to explore
and enjoy our diverse destinations and experiences and to communicate
visa and entry policies. We also influence tour operators and travel
agents to help them improve their storytelling about U.S. destinations,
expand the packages they offer, and stoke demand for travel to the
United States. Our work also provides vital marketing infrastructure
that improves and amplifies the U.S. travel industry's own efforts to
reach potential visitors and connect with international sales networks
and media.
Since 2013 these activities have generated 7.7 million incremental
visitors; $25.5 billion in incremental spending; $56 billion in total
economic output; $7.3 billion in federal, state, and local taxes; and
support for over 45,000 jobs per year. We return $26 to the U.S.
economy for every dollar we spend on marketing. These benefits accrue
to rural and urban communities alike and grow the economy beyond the
travel sector. In fact, nearly half of the Brand USA-generated economic
output and jobs accrue to non-travel and tourism industries such as
manufacturing, finance, insurance, and retail.
Unfortunately, the economic fallout from the pandemic has disrupted
the funding model established by the Travel Promotion Act and
jeopardized our ability to help restart international travel and
continue in our vital mission to create and restore American jobs.
NAVIGATING THE PANDEMIC \1\
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\1\ Brand USA's annual reports to Congress for FY 2019 and FY 2020,
submitted for the record, provide a comprehensive overview of how we
market the USA and measure success. These documents include detailed
descriptions of the methods, rationales, and tactics we employ to drive
incremental visitation and spend.
---------------------------------------------------------------------------
Impact on the travel and tourism industry
The past 15 months have been a stark reminder of the important role
the travel sector plays in the vitality of economies at the local,
state, and national levels. Towns and cities have seen their hotels,
restaurants, attractions, and small businesses suffer job losses that
have impacted families and communities.
Travel and tourism have long been a major driver of our Nation's
economy. According to the U.S. Department of Commerce, the industry
accounted for 2.9 percent of gross domestic product and provided 9.2
million jobs in the United States in 2019. The international segment is
particularly valuable because on average international visitors spend
more time and money, and visit more places, than domestic travelers.
U.S. travel and tourism exports were $233.5 billion in 2019, accounting
for 9 percent of all U.S. exports and 27 percent of services exports
and furnishing a $51 billion trade surplus.
COVID-19 brought international travel to a halt. Overall arrivals
dropped 91 percent, and overseas visitation fell by a staggering 96
percent from March 2020 through the end of the year compared to the
same period in 2019. Over the course of the entire year, including the
strong first quarter, international arrivals fell by 76 percent and
travel exports plummeted by 64 percent to just $83 billion. This caused
the U.S. travel trade surplus to fall by 31 percent to $35 billion.
The catastrophic drop in travel has had a devastating impact on the
industry. According to Oxford Economics, cumulative U.S. travel and
tourism losses are now approaching $600 billion after contracting 42
percent in 2020. This lost spending resulted in a cascading loss in tax
receipts of $64 billion across the federal, state, and local levels
last year. And the leisure and hospitality sector alone lost 19 percent
of its jobs and accounted for 37 percent of all jobs lost during the
pandemic.
In addition, from March through the end of 2020, international
inbound travel fell by 91 percent and overseas visitation was down a
staggering 96 percent compared to the same period in 2019. Over the
course of the entire year, including the strong first quarter,
international arrivals fell by 76 percent and travel exports plummeted
by 64 percent to just $83 billion. This caused the U.S. travel trade
surplus to fall by 31 percent to $35 billion.
The travel industry, and in particular international travel, will
play a major role in our country's economic recovery, but it will
involve building back from a deep hole.
Brand USA's response
Brand USA responded to the pandemic by pivoting to a ``state of
readiness'' framework to conserve resources while focusing on
foundational activities that only the national DMO can do.
We launched Brand USA Global Marketplace, a virtual B2B platform
that keeps U.S. destinations and travel suppliers connected with global
networks of tour operators, travel agents, airlines, and media. This
platform has played an essential role for many stakeholders that scaled
back their international presence, and it will continue to be an
important tool in the future. Market-specific programming has helped
put the United States in a competitive position for recovery once
travel resumes at scale.
One of Brand USA's unique value propositions is the ability to
conduct consumer and market research and produce critical analysis and
insights at the international level. As COVID-19 swept the globe and
scrambled attitudes toward travel as well as destination marketing
budgets, stakeholders looked to Brand USA for overall guidance and
tactical questions about everything from travel policies to cooperative
marketing plans. We increased our sharing of research to help navigate
these waters.
Brand USA suspended paid media marketing in March 2020, but kept
the drumbeat of inspiration alive through organic communications
channels. For example, as travel came to a standstill, Brand USA
developed novel ways to engage with audiences on social media, created
a dialogue with potential visitors, and embarked on a virtual, cross-
country road trip to sustain interest in destinations across the USA.
With the help of 7.5 million followers across its social channels,
Brand USA leveraged user-generated content, influencers, and local
destination partners to virtually visit all 50 states, five
territories, and Washington, D.C., showcasing the possibilities and
welcoming nature of the USA. And though we paused production for GoUSA
TV, we increased distribution of existing content through partner
platforms such as Samsung Plus UK and AirBnB Online Experiences. This
collaboration provided needed programming for the partner companies,
delivered compelling content to consumers, and extended Brand USA's
reach.
Brand USA remained focused on keeping the USA top-of-mind among the
global travel community. To engage the many travel agents and tour
operators who were stuck at home with their businesses disrupted, we
leaned into digital tools to keep them inspired and knowledgeable about
the USA. We accelerated participation in the USA Discovery Program,
Brand USA's award-winning online travel agent training program. We also
transformed in-person education programs that we carry out across all
markets during a typical year. By using informative and inspiring
webinars designed for the travel trade community, we dramatically
expanded the number of travel agents and tour operators reached.
Finally, public relations proved to be an effective strategy--and
one that highlighted the need to be nimble and adaptable in the face of
unforeseen developments. We found innovative ways to inspire travel
dreamers to keep the USA top-of-mind when it's safe to travel,
including online events, trade programs, strategic pitches,
partnerships, and storytelling assets (United Stories and GoUSA TV).
Gating criteria
Throughout the pandemic, Brand USA has been tracking a set of
gating criteria to determine when conditions are appropriate to
transition from a state of readiness into a proactive recovery
campaign. These criteria include source market conditions such as air
service, entry restrictions and consumer sentiment and behavior; as
well as home market conditions like viral spread, openness of
destinations and attractions, and financial position. These criteria
are tracked through a COVID-19 dashboard that Brand USA created and is
actively sharing with industry stakeholders to help inform their own
decision-making process.
Planning for recovery
As the world eyes the reopening of travel, our competitors will
actively seek to regain share of international travelers in what is
expected to be a year of explosive growth. In fact, Oxford Economics
forecasts the United States to lag other regions of the world in
returning to 2019 levels of visitation because of the relatively high
proportion of long-haul arrivals in our total inbound visitor mix and
due to the timing of airlines restoring on a global basis all at once.
With international travel expected to recover more slowly than
domestic, U.S. destinations and companies will focus on that market and
invest fewer resources in international markets over the next couple
years. A campaign to market the entire USA as a destination during this
critical period is essential to rebuilding our economy.
Brand USA has developed a comprehensive approach to help rebuild
traveler confidence and stimulate demand. The recovery campaign will
focus on three sequential tasks to jumpstart international travel and
help relieve some of the financial shortfalls in the industry. First,
rebuild traveler confidence by demonstrating the United States is ready
to receive them. Second, welcome the world back through an inspiring
creative approach that evokes the possibility awaiting in a trip to the
USA. Third, entice and convert the inspiration and pent-up demand into
booking a trip.
Unfortunately, the pandemic has disrupted the funding model
established by the Travel Promotion Act, placing these plans at risk.
DISRUPTION OF THE FUNDING MODEL
Brand USA is funded by contributions from non-federal sources, such
as state tourism offices and travel brands, and matching funds from
ESTA fees paid by visa waiver travelers during the prior Fiscal Year.
We receive a dollar in matching funds--up to $100 million per year--for
each dollar of contributed cash or in-kind that clears the verification
process at the Department of Commerce.
Nearly a decade into our mission, Brand USA has refined our value
proposition and accumulated sufficient carryforward to smooth over cash
flow challenges in each new Fiscal Year. Consistent access to funding
is critical to making the kind of capital-intensive investments in
marketing infrastructure that the domestic travel and tourism industry
rely upon while also creating and launching robust, integrated global
advertising campaigns.
Three factors have challenged this model. First, ESTA collections
are stagnant, resulting in only $62 million in available matching funds
this year and potentially as little as $10 million next year. This
means that for Fiscal Years 2021 and 2022, the available resources are
around $128 million short of the amount authorized by Congress. Second,
Brand USA's partner base and the travel industry more broadly continue
to face significant hurdles to making pre-COVID levels of
contributions. Third, the Brand USA Extension Act (2019) raised the
minimum proportion of cash contributions from 30 percent to 50 percent,
which is a major hurdle for our cash-strapped industry to meet.
ESTA collections
The Travel Promotion Fund at Treasury accrued only $62 million from
ESTA fees in FY 2020. Therefore, FY 2021 is the first year the account
has not had the full $100 million authorized by the Travel Promotion
Act. More critically, since ESTA fee collections remain depressed,
there will be significantly less than $100 million available in FY
2022--perhaps as little as $10 million. Until ESTA collections ramp up,
or unless there is extraordinary help from Congress, we will be
significantly constrained in our ability to bring forward recovery
campaigns to energize the economy and deliver desperately needed help
to communities of all shapes and sizes throughout country.
Partner contributions
The pandemic has had a major effect on the ability of Brand USA
partners to make their typical level of cash contributions. This
applies to the private sector, which has seen significant decreases in
sales, and to city- and state-level DMOs, which are dependent on
lodging taxes, state appropriations, and other traveler user fees.
In FY 2020, Brand USA achieved the full $100 million match earlier
than in any prior year, but cash contributions dried up after mid-
March. What was projected as an additional $23.7 million in cash
contributions that would have served as carryforward to begin FY 2021
came in at only $7.98 million. This dynamic has continued through the
first half of FY 2021 as new cash contributions have slowed to a
trickle. And though we may see an improvement in contribution figures
as domestic travel recovers, the priorities for most contributors will
likely continue to be closer to home--for example, rehiring staff,
refreshing infrastructure, retaining vendors, and promotional efforts
for domestic travel and convention sales.
New cash floor
The Brand USA Extension Act, signed into law in December 2019,
reauthorized Brand USA's access to ESTA fee-based matching funds
through FY 2027. However, the bill also raised the floor for the
minimum required proportion of cash-to-in-kind from 30 percent to 50
percent beginning in FY 2021. In a normal year, Brand USA now must
submit $50 million in cash contributions to receive the full $100
million match. In FY 2021, Brand USA will need to collect a minimum of
$31 million in cash contributions and a maximum of $31 million in in-
kind contributions to receive the full $62 million in available match
(minus sequestration).
A 66 percent increase in the proportion of cash contributions is a
challenge in the best of times. The new floor is an acute problem in
the current year because of the dearth of carryforward from FY 2020 and
the continued stagnation of contributions. As in the early days of
Brand USA, we anticipate a ramp-up period of one or two years to accrue
sufficient momentum to smooth over cash flow issues and ensure we
maximize the available matching funds each fiscal year.
The combination of these factors means that funds will not be
available to promote international travel and support jobs at the time
it is most needed. Due to effective budget management through the
pandemic, we have sufficient cash on-hand to either maintain business
continuity until revenue streams recover in FY 2023 or to bring forward
the recovery campaign to help boost the economy. But we cannot do both.
WHAT CONGRESS CAN DO
These are structural impediments only Congress can solve. That's
why the Travel and Tourism Advisory Board recently recommended an
extraordinary $250 million appropriation to Brand USA, outside the
matching process, to provide the resources to hasten the international
travel recovery. The TTAB also recommended temporary suspension of the
50:50 cash-to-in-kind ratio for greater matching flexibility.
Oxford Economics estimates that such an appropriation would lead to
more than 1.7 million more visitors who would spend $4.5 billion,
generating nearly $700 million in Federal taxes and supporting more
than 40,000 new jobs. It would also allow the United States to return
to 2019 levels of arrivals and spending in 2024 instead of the current
forecast of 2025. These positive results would go unrealized without
action from Congress.
Time is of the essence. Key source markets that account for a
significant portion of inbound travel to the USA are progressing toward
our gating criteria targets. And we are rapidly approaching domestic
readiness to receive these visitors. Brand USA is urgently making
preparations to launch a recovery effort, but we cannot initiate the
robust campaign we envision, and know is necessary, without greater
certainty that funds will be available to sustain it.
Fiscal Year 2022 will see historic growth rates in global travel as
the world begins to move again. We have a window of opportunity to
shape the trajectory of our sector's recovery and support recovery in
many other parts of the economy, too. The challenges I've outlined must
be addressed now in order to produce and launch campaigns in time to
channel this nascent demand to the United States, supporting tens of
thousands of jobs in communities around the country.
Thank you again for the opportunity to testify. I look forward to
your questions.
Senator Rosen. Well, thank you, Mr. Thompson. And I guess
we are going to go right into questions here. And I am going to
start by talking a little bit about McCarran International
Airport, because it is the gateway to Nevada's tourism driven
economy and is at normal times one of the busiest airports in
the country in the world. So Ms. Vassiliadis, as you well know,
before the outbreak of the pandemic, McCarran was on track to
surpass its previous record of 51.5 million passengers in 2019,
with traffic up more than 6 percent in the first 2 months of
2020.
This momentum, of course, as a result of COVID for the
first time since the assassination of President Kennedy in
1963, the Las Vegas Strip totally shut down. It brought air
travel to a virtual halt. International travel to Las Vegas hit
especially hard, with just over 780,000 international travelers
passing through McCarran in all of 2020, compared to about 3.8
million passengers in 2019.
So, Ms. Vassiliadis, how has a depressed international
travel really impacted America's airports in general would you
say, including McCarran? And what about the airport work force,
the small businesses that make up our concessionaires, you
know, our small businesses really the backbone of a lot of our
economy?
Ms. Vassiliadis. Thank you, Senator. I think you hit it
right on the head. It has such a--the tentacles of this has
such a huge effect. You know, McCarran International Airport
employs 16,000 people directly, but more importantly,
indirectly and directly we support 25 percent of all the jobs
in Southern Nevada. So that, of course, did take a big toll on
all the companies that do service the airlines, the airport,
and the concessionaires, you know, by furloughs and just some
of the smaller companies not being able to make it through.
You know, we have our international benefit is $6.2
billion. And what is really important is for our town, the per
capita spend for the international visitor is almost double
from that of the domestic. Domestic is very nice. It is $700
and I think $75 per, but our international is, you know, almost
$1,500 per visitor. So that is the stimulation that we
absolutely need to have back, you know, not only, of course,
for the airport, but for all of the companies in Southern
Nevada.
Senator Rosen. Yes, well those 17,000 jobs you support,
support more than 17,000 families and it goes on and on. But I
would like to move now toward international travel promotion
because, of course, the American Rescue Plan Act set aside $750
million in grants to assist states and communities that have
had jobs and GDP losses in travel, tourism, and the outdoor
recreation sectors. Congress allocated these funds, part of an
effort spearheaded by my colleague from Nevada, Senator Cortez
Masto, because we recognize that the pandemic
disproportionately impacted states like Florida, Alaska,
Nevada, Missouri--we have a Senator Blunt here in the room. And
their communities really dependent on travel and tourism.
In April, I joined Senators Cortez Masto and Klobuchar and
others in sending a letter to Secretary--Commerce Secretary
Raimondo requesting that the Department not only disperse these
funds expeditiously and responsibly, but also to make clear
that tourism, marketing, and promotion activities are eligible
for such funds so that we can increase safe travel that can
drive the economy. So, Mr. Thompson, you spoke about this in
your opening statement. These direct funds to communities will
supplement some of the international travel promotion work that
Brand USA does, but they won't go to every city and state in
need. And that is where you come in.
And so I am worried that with your funding tied to
international travel fees that are already down at Brand USA,
you just might not have the resources to support its mission
and enhance the efforts we really need coming out of COVID. So
talk to me about what you need. Are you financially equipped to
help the U.S. recover from the worst international tourism
drought in modern history? If you are not, what do you need us
to do to help?
Mr. Thompson. Yes, ma'am. Chairwoman Rosen, you are exactly
right. This pandemic brought our industry to its knees and
disproportionately affected the hospitality industry. You know,
we often talk about, Mr. Talbert and I talk about the things
that make the U.S. the U.S. is what we use to attract people to
the USA and to Miami. But it is actually the fabric of our
communities, and I think this pandemic and its impact on our
industry has brought that to the forefront. I think our
industry lost nearly 20 percent of its overall jobs, and that
represented nearly a third of all the jobs in the industry that
were lost.
So many of our partners, our most invested and engaged
partners are DMOs at the local level. Their funding source has
been bed taxes and those were pretty much cutoff. So although
it hit them right away, it was a delayed reaction to us because
our funding source is dependent on international visitation,
and it is dependent on what is collected in the year prior.
When we got into this current Fiscal Year, there was not
$100 million for us to match. As we are coming out of this
pandemic, as the domestic travel economy has come back probably
quicker than anybody had anticipated, a lot of what is
returning our travel and tourism industry to what it needs to
be in order to reach the levels in the past is great and that
domestic tourism has to come back before we can do our
international tourism, but we are going to be ill prepared to
be able to respond when the time is right. So our challenge is
the funding source. Our challenge is lack of funds in that
source. And so that is why in working with the Travel and
Tourism Advisory Board within the Department of Commerce, they
came up with the recommendation that in the interim, we would
need some help that is outside of what we would normally need.
Our funding model--there was nothing wrong with our funding
model, it just got its knees knocked out from under it. And we
need a bridge to get us from where we are now so that we will
be resourced when we have the opportunity, when the time is
right to start promoting international travel.
So the measures that we laid out, that they laid out
actually that I highlighted in my oral testimony and the
written testimony, were the ones that will be really helpful,
that will put us in the best position to be able to help the
industry when we need--when they need it and what they depend
on us for.
Senator Rosen. Wonderful, thank you. I would like to
recognize Ranking Member Scott for his questions.
Senator Scott. Thank you, Chair Rosen. Bill, can you talk
about right now we are seeing in Florida significant labor
shortages in the travel and tourism industry. Can you talk
about that and what you think is causing it?
Mr. Talbert. Well, some is you know, we shut down in Miami
on March 16. We all know the day, that magic day when you all
went home, and we said it was going to be a few weeks and it
turned out to be about a whole year. I think it is a
combination of things. Number one, some folks found other
opportunities. Number two, you hear maybe they are making more
money not working than working. And some have gone to different
industries. And you know what I have said, given this past year
of the fear we all had, people dying, and this is a pandemic
and are we going to have a vaccine, the fact that one of the
biggest problems we have is a labor problem, I think that, you
know, I think that it is kind of nice. I think we can solve
that.
But given what we were facing of not being open and having
no business, no domestic business, no international business
and more people out of work, I think that is something--some
companies we see are raising the salaries. And, you know, we
have got a very robust economy. We have built hotels, we have
added air service. Miami's economy has grown, you know, and
people are moving from other places I have heard. And they are
coming to Miami and Florida. But it is something that the
industry is looking at and going to solve. But it is better
than that alternative that was out there that we were facing.
Senator Scott. Thank you, Bill. Chris, can you talk about
what you said, for every $1 that is invested in Brand USA you
get $26 back. Can you explain how that works?
Mr. Thompson. Yes, sir. So as we deploy our marketing
channels around the world, we are influencing intent to travel.
And then that intent converts to actual bookings. And through
our partnership with Oxford Economics, they are able to look
across all of our marketing channels, all the points that we
touch in that process. We don't, I don't think claim to say
that we are the savior to international marketing for the
United States.
But we do say that the ways that we touch and influence
travel around the world from 11 major markets directed to the
consumer are probably a total of 40 plus markets in some way
really contribute to what is going on. And that direct
investment, that direct return from those bookings and then how
it ripples through the economy is what determines that $26 to
$1 investment
Senator Scott. And that $26 to $1 is $26 that we get back
in the Federal treasury?
Mr. Thompson. Yes, sir.
Senator Scott. So have you ever proposed anything that
would tie your funding? I mean, if you got $200 million of
funding, you could--you would feel comfortable being
responsible for getting this 26 times that money back.
Mr. Thompson. Senator, if we were given an opportunity to
be given resources tied to our production, I would welcome that
challenge.
Senator Scott. We think the numbers we had in Visit Florida
was 5 to 1, right? Visit Florida, we always used, I think, 5 to
1, right?
Mr. Thompson. I think the spending on the international
travel is so much larger and that is why the numbers get to be
larger.
Senator Scott. It is very difficult to get the legislature
to ever fund as much as we would like. We got up to $76 million
a year. But would be interesting if we could come up with a way
that we funded it and if you guys--and we could see the dollars
coming back because it would be something I think all three of
us would do if we could figure out how to do it because it
impacts all of our states, so----
Mr. Thompson. Happy to help inform that conversation.
Senator Scott. So I would love to do it if we can figure
out how to do it. So for Ms. Vassiliadis, is that close?
Ms. Vassiliadis. Yes. You said it very well.
Senator Scott. I said it right after you. It is easier.
Vassiliadis. So, what have you done to make people feel more
comfortable? You know, I have proposed a few bills to try to
get our airports to do more, to make people feel comfortable to
fly into airports. You got the same issue because we are
relying in Miami, in Orlando and international traffic. And so
you got you got the same issue. What are you doing to get
people to feel more comfortable to fly in?
Ms. Vassiliadis. Well, being the first and last look of Las
Vegas, we--my staff quickly came up with a campaign. We call it
LAS All In, and it is messaging all the different layers from
disinfecting to communicating, especially at the very beginning
of it, what this state, and since states were, had some
different directives and mandates, what was required in this
state. So it was a just a several layer approach of letting our
passenger, you know, as well as our employees that were there--
you know, we are essential, airports were essential service. We
had to stay open every day. And I wanted to make sure that our
employees felt comfortable from the disinfecting. Again, all
the messaging. Of course, we had Ambassadors going out and
reminding everybody of the social distancing. We took down
every other chair, made sure we had that six feet, you know.
We did mark it at baggage claim. And one thing that we have
discovered over and over again, whether it is 9/11, the
recession, no matter what, people want Vegas. So we always
message it out Vegas style. And when the mask mandate came up,
of course, what did we have? We had showgirls handing out masks
out in baggage claim. And it was a huge success. And we did all
of this for consumer confidence. You know, we know that along
with the airlines and everything that they are doing, it is one
experience, and we worked very closely with our airlines to get
that consumer confidence, that travel is going to be okay. It
is going to be just as safe as it is going to the grocery store
or a big box store or, you know, anything else where there
tends to be big clusters.
You know, be smart, but let them know. So messaging went
out everywhere. Our employees had fun t-shirts to wear masks.
And we are at the point now where we know we have to move
forward and have that flexibility, which is, of course, what I
asked for to you know--I mean, number one, we have to regain
that--our UK market. That is the United States' number one
market as well as Las Vegas. And so having this consumer
confidence and being that first part of it and having airlines
work with airports in each part of the experience, TSA, so that
flying customer does feel confident and will not only take one
trip but take more than one.
Senator Scott. Thank you. Thank you, Chair Rosen.
Senator Rosen. Thank you. Next, I would like to recognize
Senator Blunt.
STATEMENT OF HON. ROY BLUNT,
U.S. SENATOR FROM MISSOURI
Senator Blunt. Thank you, Chairman. Thanks for holding this
hearing. Thanks for naming the committee in such an appropriate
way and thanks for putting this great panel together. As Mr.
Thompson pointed out on the return from foreign travelers, they
just come--they stay longer, and they spend more money than the
individual American tourists for lots of reasons.
And, you know, the other thing is they almost always like
us better when they leave. Even if they thought they were going
to like us a lot, they like us more than they thought. So this
is--the investment in travel is also a great investment in
diplomacy as well, particularly that investment in foreign
travel. Chris, in the money, I think you said this year, the
visa waiver fee, produced about $66 billion?
Mr. Thompson. Yes, sir. $62 million.
Senator Blunt. Million. I mean. I am sorry. Have we been
dealing in such big numbers here? I get my millions and my
billions confused occasionally, but everybody else is too or at
least they must be based on the amount of money we are talking
about spending on other things. Of the $62 million, were you
able to match that?
Mr. Thompson. So, that is the biggest challenge we have at
the moment. Our partners that bring forward the cash and in-
kind matches, particularly the cash side, and with the 50/50
requirement, in order to be able to match income, we have to
have also have a dollar match in cash. And so we are very
challenged at the moment. We are way behind where we would
normally be.
Our board is meeting tomorrow, and I am bringing a plan
forward to tell them that we are going to do our best to match
that $62. But normally, as you well know, there is $100 in
there for us to be able to match and we have never not matched
it. So this would be the first year and again, no fault of our
business model. I don't think any fault of our partners. It is
just what the pandemic has done to us.
Senator Blunt. Well, I am sure you will keep us informed.
And I would like to personally be kept informed of how we are
doing on matching the money available this year. And----
Mr. Thompson. Yes, sir. And the real part is that next
year, they are projecting there may only be $10 million.
Senator Blunt. Right. Now, one thing we ought to think
about, I would say to my colleagues on the panel, you know,
part of what happened when we set this up and I sponsored the
original legislation, was that the amount over $100 million was
going to go into general revenue. That has never happened. So
there is $433 million in an account that has never been
transferred out, the travel----
Mr. Thompson. From the travel promotion fund----
Senator Blunt. Exactly, in the travel promotion fund
account. That is something we should look at. I will be
interested to see this year how close we get to matching the
$66 million. I would think my guess is that next year people
will be eager to match, if we can get the help we need. And I
know you were asked that question about just getting the help
that we need right now to run the facilities that need to be
run. I mentioned at our leadership press conference earlier,
Pete Herschend, who has Silver Dollar City and other tourist
locations around the country, who actually was the first person
that mentioned to me that we were not competing in this area
around the world where all kinds of other countries were
advertising here, we weren't advertising there, and we began to
look for a funding source.
But he told me 1 day last week if they could hire 150
people the next morning if they could just find 150 people to
hire. I was talking to another person in St. Louis who runs a
series of a number of hotels, he said they now have the
customers, they just don't have the people to get the rooms
ready. Said, we could fill more rooms if we had more people to
clean the rooms, and the other things that need to happen at
the hotel. So that is a clear shortage right now as well. I
think you have asked--have you seen this same problem?
Mr. Talbert. Yes, but Senator, I want to announce breaking
news here. Miami has match money for you, Chris.
Mr. Thompson. Yes, sir.
Mr. Talbert. And also that is number one, we have the match
money for one of the international gateways into the U.S. You
have got to come to and through us to get everywhere else. But
also, I got to say, as a born and raised in Florida and in
hospitality and near a beach, the fact that there is not
funding for this and every place in the world, other countries
are doing this, the money is available, I am just shocked that
this can't happen. And there must be a reason for it to unleash
the money. But we have got match money, Chris.
Mr. Thompson. Good. Thank you, sir.
Mr. Talbert. And we are ready to start tomorrow. We have
had a strong relationship for the years. We are the number one,
two, or three international gateway. Remember, got to come to
and through us, so. But thank you for listening.
Senator Blunt. And on the getting help--that is a problem?
Mr. Talbert. It is--you know, we had that question earlier
and we do have some hotels in Florida that aren't open because
they can't get the staff. And you see and they are big--we are
working on that. But once again, I think given the problem we
had a year ago, this is you know, this is manageable. Year ago,
we didn't know that could be managed. People were dying. This
is about can we find people to work? And we love to have that
problem all day long. We are going to solve it and it is
solvable. But thank you for asking.
Senator Blunt. And direct marketing organizations. I think
early on we didn't properly define, but we later were sure to
get you included in the COVID relief bills. Did you take
advantage of that?
Mr. Talbert. We absolutely did. We absolutely did. We have
somebody that as soon as you pass it, we have a CPA on staff
that spends all night going through every line, every word.
Senator Blunt. Exactly. Well, let's start looking
Chairwoman at that $433 million and see if maybe we could think
of something to do with it if the Treasury so far has never
transferred out the account. And I have talked to the Secretary
of Commerce about this. I think they are doing everything they
can to work with you within----
Mr. Thompson. She has been very supportive. Yes, sir.
Senator Blunt. See if we can't begin to get people thinking
about visiting us and sooner rather than later. Thank you.
Thank you, Chair.
Mr. Thompson. Yes, sir. Thank you.
Senator Rosen. You know, our teams have our work cut out
for them after this hearing. Next, I would like to recognize
via WebEx, Senator Blackburn.
STATEMENT OF HON. MARSHA BLACKBURN,
U.S. SENATOR FROM TENNESSEE
Senator Blackburn. Thank you, Madam Chair. Mr. Talbert, I
want to come right along there with some--behind what Senator
Blunt was talking about with getting people back in the
process. And in your testimony, you said we have the right
protections to safely restart international travel but lack
clear public health benchmarks or a definitive timeline to
reopen. Now in Tennessee, this is something that we hear a good
bit about. So my question to you is, why have CDC, DOT, DHS not
come up with a road map to facilitate international travel? Why
have they not come up with the protocols and the pathway for
this? And could you tell us when these agencies are going to
come together and develop this plan that would be effectively
communicated with international travelers, with the airlines,
with the interested parties?
Mr. Talbert. Senator, that is beyond my pay grade. That is
not one that I can answer, but I think the fact that we are
having hearings here, I think this is one of the byproducts of
the hearing is for the Government to hear from local officials
who are on the ground every day on needs. And that is something
that we are suggesting, the whole industry is suggesting----
Senator Blackburn. Then let me ask you this, if it is not
at your pay grade, whose pay grade is going to meet, assembling
different agencies so that we have clearly understood
guidelines?
Mr. Talbert. Well, I would say probably the White House's.
We always look to the White House in every Administration to
pull things together. This is--continues to be a crisis. This
is about jobs. So I would say that is probably a White House
responsibility.
Senator Blackburn. So this is another area where the White
House not taking a positive action is causing a problem. So
that is what----
Mr. Talbert. No, ma'am. I am saying that is something that
White Houses do. They may be doing it now, but it is--and I am
not taking sides, but I have been doing this for a long time.
And when you have a crisis of whatever, wherever it comes from,
you pull people together, you get the agencies together, and
you say what--you know, we need to solve this. So that is my,
you know, Florida born and raised response.
Senator Blackburn. OK. Mr. Thompson, your thoughts on that?
Mr. Thompson. Yes, ma'am. So our relationship with the
Federal Government is managed through the Department of
Commerce. There is two great resources there within the
Department of Commerce. One I already mentioned was the Travel
and Tourism Advisory Board, appointed by the Secretary across
section of the industry to inform decisions.
And then within the Department of Commerce, there is a
Travel Policy Council, which is representatives from all across
the U.S. Government that implement and otherwise inform
conversations about travel policy across all the U.S.
Government. So I would imagine that has been a tremendous
resource for us in the past as it relates to issues that have
affected the travel and tourism industry, and certainly as it
relates to navigating our relationship with the Federal
Government.
Mr. Talbert. And we have served on the TTAB in the past.
Senator Blackburn. Mr. Thompson, let me come to you on live
event venues because this is something that has a tremendous
impact on our state of Tennessee. And we have tried to work and
have worked tirelessly with the Administration on these
shutdowns and to get support for these businesses. You have got
a lot of support industry like lights, sound, catering, motor
coach companies. They have had to lay people off. They are
struggling to survive. One of the frustrations has been the
lack of awareness from this Administration to recognize the
entire ecosystem and how important that is to creating relief
programs and getting people to the point that they can get to
recovery. So what are you seeing with the live event venues?
Mr. Thompson. Senator, certainly those live event venues in
your state are a major attraction and tremendous benefit to the
economy. And as it relates to tourism opportunities--you know,
I think as it relates to where we are today, we first and
foremost have to follow the direction of our health officials
and our public policy officials tied to what the health
officials are saying. In our opinion, as soon as we can get the
venues open and as soon as we make all that is the United
States of America available, in the two--first and foremost,
our domestic audiences--it is getting our domestic economy up
and running again. It was mentioned in the testimonies here
that consumer confidence is critical.
I mean, everything can happen but if we don't gain the
confidence of our friends and visitors around a world that they
can come and experience the experiences they have here in the
United States, that is a big issue. So we are, I think, as
optimistic as we have ever been as it relates to our ability to
get on top of the pandemic. The vaccinations have certainly
moved us along that path. And we feel like that it is going to
be sooner than later, sooner than later. And certainly, as Bill
suggested, you know, this time last year, we didn't have a
whole lot of answers. So I think we are in a lot better shape
where we are now.
Senator Blackburn. There is a tremendous amount of
frustration with the lack of action in addressing the whole
ecosystem. So thank you all for your time. Thank you, Madam
Chairman.
Senator Rosen. Thank you. Next, I would like to recognize
Senator Sullivan.
STATEMENT OF HON. DAN SULLIVAN,
U.S. SENATOR FROM ALASKA
Senator Sullivan. Thank you, Madam Chair, and thanks for
the witnesses here, and a really important topic. You know, a
lot of people forget how big our tourism sector is for the
whole country. It is like one-eighth of U.S. GDP, $2.3
trillion, I think is the number, 1 in 10 jobs in America is
related to tourism. So I think the chair and the ranking member
know that. We know that in Alaska, certainly. Let me ask. Mr.
Talbert, I know that you agree with Senator Scott, and I
certainly do on the importance of the cruise ship industry.
And we have been working to get the CDC to kind of--you
know, we want to keep people safe, but we also don't want to
crush entire economies, small businesses. They finally started
to move, which is good. We are trying to salvage our tourism,
summer tourism season in Alaska, which unlike Florida, is not
so year round, let's say. Do you have any thoughts on that,
just how important that is to the economy and not just in your
state, but overall?
Mr. Talbert. Thank you, Senator. That was a major part of
my presentation, both verbal and written.
Senator Sullivan. Oh, OK. Good--sorry, I wasn't----
Mr. Talbert. But no, that is good. I like this. This is
like I planted this question----
Senator Sullivan. Your Senator told me not to.
[Laughter.]
Senator Sullivan. I mean, I am kidding. We are very in line
on this. You may have seen in our actions on the Senate floor.
Mr. Talbert. And by the way, I have cruised to Alaska.
Senator Sullivan. Good. And I have spent a lot of time in
Miami for vacation too.
Mr. Talbert. Miami is the cruise capital of the world,
which makes Florida the cruise capital.
Senator Sullivan. I thought Alaska was.
Mr. Talbert. No, we own that phrase. We bought the phrase.
Senator Sullivan. I am kidding.
Mr. Talbert. I am talking about the phrase.
[Laughter.]
Senator Sullivan. As a percentage of our GDP--thank you.
Mr. Talbert. But, you know, you talk about jobs. Right now
in Port Miami, the cruise capital of the world, 60 percent of
the passengers were international connecting to international.
There is $2 billion of development going on in Port Miami,
which is a downtown port. It is--and I do a fair amount of
cruising myself. But, and I can tell you that the local
Government has helped the cruise lines, and the Governor knows
this, he was there, to you know waive the fees for a while.
And these are huge companies. We actually had Arnold Donald
speak at our State of the Industry address a week ago. And
finally, as you said, there is movement. There seems to be a
light at the end of the tunnel, and it looks like people are
speaking. This is a huge industry. For Miami, in downtown
Miami, the cruise lines are probably the biggest purchaser of
hotel rooms all year.
Senator Sullivan. Yes. Well, look, in my state it is huge
for our small businesses. So many thousands really of
employees. So we are trying to salvage the season this summer
and we are getting there. But the CDC has got to keep the pedal
to the metal. The cruise ship executives need to make sure they
don't forget about the great state of Alaska as well and
salvage this summer. So we will keep working together. It has
been if you are watching the Senate, I think, in a bipartisan
way, it has been working very closely on this.
I appreciate Senator Cantwell's cooperation and many
others. Mr. Thompson, let me turn to you on this issue that,
again, now this goes more to the international side. But the
Canadians have--you know, they are normally our good neighbors.
Actually, they are my state's only neighbor, you know,
including Russia. But, you know, they have closed the borders.
We are talking about international travel here. People can't
even drive to my state. It has been very frustrating.
Do you have a message for our neighbors here in North
America about tourism? A lot of Americans go to Canada for
tourism. That obviously is not happening. But what is your
sense there? And then if you could also comment on my Visit
America Act. We are getting ready to introduce that again,
Senator Schatz, Senator King, welcome if the Ranking and Chair
here in this committee are interested.
But we think that is a really important bill to bring in
more international tourists too hot--to elevate tourism as a
real important component in our councils of Government here.
You know, there is not one Senate confirmed official in America
in charge of tourism and most foreign Governments have
ministers, cabinet officials.
We don't even have a Senate confirmed person in charge of
tourism. My bill would change that, of course. But you have a
thought on the Visit America Act and what is going on with the
Canadian border, which is hurting international tourism? And
certainly tourism in my state.
Mr. Thompson. Yes, Senator. We have nearly 80 million
international visitors in a normal year. A quarter of those
come from Canada. So it is a very important market for us. We
share our border, the largest border, and certainly we have a
great affinity with our neighbors to the North. But it is a
border issue and an opening of the of the border. We are
hopeful that our two Governments are working on that. And
certainly when that happens, your state, every border state and
actually the entire United States, I know Florida receives a
good portion of Canadian visitors.
So, again, it is not a demand issue. I think there is pent
up demand for them wanting to be returning to what they
normally do. But we have to get the border situation resolved.
As it relates to your Act, your Visit America Act, I would say
that anything that raises the profile of travel and tourism
within the Administration, within all of the U.S. Government,
is something that will benefit our industry. We have talked a
lot about the economic impacts. We talked about the soft
diplomacy that travel and tourism does as far as bringing
people and cultures together. So anything that would bring,
would raise the profile of that, I would applaud.
And thank Madam Chair for the naming of this subcommittee
and Ranking Member Scott. Certainly being able to bring the
profile of the industry to a group, a committee like this and
then up through the Commerce committee, I think is a great----
Senator Sullivan. So just to follow up on that. And I am
not a big Government guy. I think we are growing Government way
too much. But the fact that there is nobody really--I mean, the
Secretary of Commerce and she is doing a good job, I think, but
there is no one in the U.S. Government who gets up every day,
at a senior level, and says my job is to promote American
tourism and the giant component of American GDP and jobs
related to that. We don't have that person. And most countries
don't only have that person, they have an entire ministry and
cabinet officials focused on it. So we think it will help and
we are glad you guys support it.
Mr. Thompson. As far as the industry goes, I think you will
find a very receptive audience. Yes, sir.
Senator Sullivan. Thank you, Madam Chair.
Senator Rosen. Well, thank you, Senator Sullivan. I have
cruised in your state and in Senator Scott's state and have
found them both wonderful. And what I do want to say, we are
going to go to some second round questions. But I do want to
say is this, is that out of the 50 states and territories,
every single one of them has unique, unique beauty, from Alaska
to Florida to Maine, all the way out to the desert Southwest,
every state. That is why people come here and that is why it is
soft diplomacy and that is why people enjoy it. And they, as
Senator Blunt says, like us even more when they see the natural
beauty that is everywhere across the United States. I am going
to ask--open it for a second round. I guess, Senator Scott, do
you want to go first and then I will just take my question last
and then we will let Senator Sullivan, if he has another
question.
Senator Scott. You know, you do cruise in your state. You
just do it on lake----
Senator Rosen. Yes, we cruise on Lake Tahoe and Lake Mead.
Senator Scott. So, Bill, can you talk about how bad your
numbers were this last year and where they are now? And, you
know, the biggest thing you could do right now to change the
travel numbers?
Mr. Talbert. Open up----
Senator Scott. We didn't do--Senator Rosen just to put it
in perspective. You know, you guys were the biggest airport of
our tourism airports, but we didn't--Miami did what, $44
million in 2019?
Mr. Talbert. Yes. I mean, Miami International airport in
its peak was the only airport in the United States served by
more than 100 hundred airlines, 110. The only one. You know, it
is a hub, but it is--you know, our numbers went down. But it
has got a minority businesses. You know, we obviously come in
and out of that. So it is very, very successful in it. You
know, this infrastructure money--infrastructure money is needed
there, but our numbers went down and there is--but what can we
do is two things, open up international markets and get
cruising going again. Period.
Senator Scott. Who is traveling internationally into Miami
right now?
Mr. Talbert. Well, it has to do with lift. You know, I look
at the airport and the airlines, there is still service from
London, and they are still--and we got some service from
Israel. I guess that is an issue there. Some international
markets, not so much from the South, but the numbers are very
light because of some of this, you know, these health issues.
And some of it changes from day to day. You can come today. You
can't come tomorrow. So our airport, which is part of Miami
Dade Government, is, you know, it is a proprietary fund, once
again is coming back. It is coming back.
And we--also in the last 2 months, Miami International
Airport has added three carriers that were not in Miami before.
That is how robust our destination is, how much demand for
travel to Miami, to South Florida, if you will, and we expect
more. Some are the low cost, but it has stopped, and it is
coming back. But international tourism and get the cruise
industry going. It is a big, big, big market. But not only
for--you know, the global headquarters for the largest cruise
lines in the world are located in Miami, the corporate global
headquarters. You know, talk about diversifying the economy.
These are global headquarters. The number one trade show in
the world, Cruise Shipping Miami. You know, the number two
cruise show doesn't exist. Cruise Shipping Miami every year is
back in Miami, the entire world--you can't go to another city
in the world that has a port because the people are all in
Miami for Cruise Shipping Miami. So ships, global headquarters,
and meetings and conventions. So that is the answer.
Senator Scott. You know, if you think about it, what
Federal Government can do is what Senator Sullivan and I have
been working on, the CDC has been really slow. I mean, and it
is not just this year. It was horrible last year. I was at the
first meeting where CDC met with the cruise industry back, I
think--first week of April. It was really interesting. I mean,
it is really disappointing. Has been disappointing this whole
time. But the other thing is to, you know, open up these
markets as soon as they are safe and do it as quickly as
possible. That is two things the Federal Government can do. We
actually, we can sort of push it.
We don't need to make it happen. But those--I know for my
state and I know for yours, and I think for all three of us, it
would have the biggest impact. You don't have to deal with the
CDC like we are with the cruise industry. But if they would
just go out and say, open these markets quickly and talk about
it, that would help us. The CDC actually on the mask stuff has
probably been very helpful lately because that might speed it
up.
Mr. Talbert. Yes, that was breaking news, what, a few days
ago. And that is why, you know, maybe something has happened
now. So we might----
Senator Scott. Holding a hearing, maybe.
Mr. Talbert. Yes, maybe they are holding--yes, they are
watching the hearing. Good for them.
Senator Scott. Alright. Thank you, Chair.
Senator Rosen. Senator Sullivan, please.
Senator Sullivan. So let me get back to the Canadian issue.
I didn't know the numbers were so big with regard to cross
border, and I think that that is actually really important. We
want to continue that. I think everybody does in America,
whether it is Nevada or Florida or Alaska. Have you had
discussions with their ministries? You know, our Federal
Government has been trying to help them on the vaccines. I
think it is starting to change. But I can't imagine that the
communities in Canada that also rely on tourism are that
pleased. So what are you hearing? And is there anything we can
do?
Mr. Thompson. So I think we are all in the same boat. That
is a decision that is outside of our control, and it is not a
demand issue. As soon as the borders are opened, I think you
will see a return to travel like you have not seen before
because everybody has been sitting, shelter in place for 15
months. So, again, it gets back to the geopolitical
conversations between the two countries, the health related
issues that caused it, and then our ability to be able to
deliver a safe experience. And I think we are both--both
countries are in better shape than they were. But certainly
that is a decision that has to be made by the two Governments.
Senator Sullivan. Alright. Thank you, Madam Chair.
Senator Scott. So Senator Sullivan, my understanding, at
least where I live, there is a lot of Canadians who come down.
The issue wasn't that they couldn't come down, issue was that
they couldn't go home. Because if they went home, they had to
be two-week quarantined. And then on top of that, they didn't
have any vaccines. They had, they didn't do what we did. They
never bought the vaccines in advance. They bought--my
understanding is they bought, I think, the Chinese vaccine,
which didn't work.
And so that is the two things, at least what people,
Canadians I know were telling me. It was the biggest issue. And
then the problem we have with getting cruise ships going. And
this other issue you deal with is the fact that if you by law,
I guess if you go out of Seattle or an American port, you have
to stop in another----
Senator Sullivan. Yes, we are working that. That is--right
now the Senate has already moved to suspend that for several
months. And then it is in the House right now and we are likely
going to just read past the bill that we passed last week,
again this week. It is a little bit of a complicated issue and
shouldn't be an issue in the Senate at all since it has already
passed the identical bill. So that will be a waiver on the PVSA
issue, which matters to Alaska.
But, you know, it is something we might want to look at
more permanently, right. What I said on the floor last week, I
don't think any state in the United States should be dependent
in a huge way on their economy relative to tourism or other
things on another country. So we have a solution right now that
is working its way through the Congress, but we might be
looking at longer-term.
Senator Scott. Senator Sullivan can you bring up, why do we
have to stop?
Senator Sullivan. It is the Passenger Vessel Service Act,
which was passed in the mid to late 1800s. And it is one of
those bills that we are now re-looking at and I think it has
raised a whole host of issues on the very question that my good
friend from Florida just asked, which is why. And you know, a
lot of people in Alaska are asking why, and so we will see. But
right now it looks like hopefully, I don't want to jinx it, but
it is moving. And it will again move this week in the Senate,
identical bill, and hopefully the House moves on it, and we can
move beyond that challenge, particularly to cruise ships in
Alaska this summer. Thanks again, Madam Chair.
Senator Rosen. Of course. Thank you. And I want to say in
regards to Canada, one of our largest not just tourism
partners, trading partners, we need to get tourism, trade
exports going all around. And today is just one piece. We will
be talking about the others soon enough. I would like to ask
probably one of the last questions here, as we have talked
about all of these other things and one of the big drivers like
you spoke about, Mr. Talbert, is conventions, business travel.
We know how important it is for business travelers.
Those conventioneers that come may bring their families,
get a taste of going somewhere, and then they come back to
visit or whatever they want to do later. So these questions are
to Ms. Vassiliadis and Mr. Talbert both. You know, our trade
shows, international business travel, it is essential for
convention centers, not just the great ones we have in Nevada
and in Florida, but, of course, all around the country. And
they support our local Governments. They support a whole host
of small businesses that support them as well. They eat at
restaurants, local restaurants, for us they gamble in casinos,
they rent cars, they go shopping, all of those things.
So we will start with Ms. Vassiliadis. What strategies are
in place right now that you have going on that are going to
increase the number of conventions that we can hold in Nevada
or Florida, and which rely heavily on our international travel
business? And what do you think we might be able to help you do
in Congress to help you attract more international travelers
who studies show may be more willing? International travelers
may be more willing to get on a plane right now during the
pandemic, but there is such a slowdown in business meetings. We
have to get it back going.
So, Ms. Vassiliadis, what do you think we can do, what
strategies do you have in place, and what help do you need from
us?
Ms. Vassiliadis. Well, actually, just this morning, the
Board of County Commissioners unveiled their plan to reopen to
100 percent come June 1. So the Las Vegas Strip is actually
located in Clark County and the Board has that jurisdiction. So
that is a very positive sign going forward. But I think first
and going forward from that, it is opening the borders, you
know, especially the UK, especially overseas. We know that we
have demand. We know here for Las Vegas as a destination that
the passengers would respond to the international carriers
resuming. We know the international carriers, you know, want to
resume. Just as a side note, in Las Vegas, almost--well, under
about 1.6 million of our 3.8 million passengers come from
Canada.
So that is a huge, huge impact on us. You know that one is
a little bit different because that is Government, the Canadian
Government, as well as our Government. So what I would ask and
what I hope from this hearing is that it is a steppingstone
going forward to opening up that traffic again across, you
know, across the seas so that we could resume having
international travelers attending our conventions.
You know, we are going to have our first big one, start on
June 7, which is World of Concrete. It has an international
component not being able to come. CDS, of course, the largest
convention has, my goodness, about 60,000 delegates come
internationally. We hope by January we will be all ready for
that one.
Senator Rosen. Well, we will be ready to accept them. Mr.
Talbert, what strategies are in place for you so that you are
just ready to respond and greet all the travelers? What do you
need from us to be sure you are ready?
Mr. Talbert. Well, I am glad you brought up the
conventions, meetings and conventions. That is an important
component and sometimes we don't talk about it. We have talked
about the glitz and the glitter of vacations and all of that.
But we have a reimagined convention center on Miami Beach, $600
million investment in essentially a new convention center. And
we at the Greater Miami Convention Visitors Bureau like to lead
by example. So it was last October 21--October 21, we had the
first face to face, virtual, face to face annual meeting for a
convention center in the United States included a lunch. We had
250 people in that convention center. They were all spaced out
and we showed that it is safe to meet in Miami and that became
the gold standard.
What we did then is took that and showed all of the
customers, the potential customers that were out there, just
pent up demand we talked about, and said, listen, you can come
to Miami and Miami Beach and have a meeting, a convention
safely. Why? We showed it. What we do every single week, and
the staff is watching this as we speak, we bring meeting
planners face to face to Miami. Not a tough sell, but to look
at our hotels and look at our meeting space because the
meetings and conventions are important. None of the
destinations, not Miami, not Las Vegas, nobody can prosper
without a robust, healthy convention business. We have had an
investment.
We have had--we just had the Jewelers International
Showcase, March 22, a B2B, March 22. They had record
attendance. All they talked to us was, how can they bring more
business to Miami and Miami Beach--March 22. We have Art Basel,
you know, the top art show in the world in December coming
back. So I am glad you brought up meetings and conventions
because we sometimes forget it. But thank you. It is important
to jobs in our community,
Senator Rosen. I think to all communities, what you are
doing, what we are doing in Las Vegas can help set the
standards. And then, Mr. Thompson, of course, you can help us
market those around the world to let people know it is safe to
come and travel. So unless you have anything else you want to
add, Senator Scott, we are going to close this hearing for
today.
I want to thank you all so much for participating in
today's hearing. The hearing record is going to remain open for
two weeks until Tuesday, June 1, 2021. So Senators, there will
be Senators from this committee and others, will be submitting
questions to all of you. And if they want to do that there, for
the record, they will do that by Tuesday, June 1.
And so for those of you testifying today, we ask that your
responses be returned to the Committee as quickly as possible
and in no case later than two weeks after receipt. And I so
appreciate all the work that you are doing to promote our great
travel and tourism industry. And that concludes today's
hearing. Thank you.
[Whereupon, at 4:23 p.m., the hearing was adjourned.]
A P P E N D I X
Response to Written Questions Submitted by Hon. Amy Klobuchar to
Rosemary A. Vassiliadis
Airport Safety. As the Administration's rollout of vaccines
continues to exceed its targets, the development of safe travel
measures will play a critical role in restoring international travel
and helping the industries and workforce that have been hardest hit by
the pandemic.
Question. In your testimony, you highlight the need for testing and
a cross-border strategy to restore international travel. Can you speak
to what measures airports should be taking to contribute to safely
opening our borders for international travelers?
Answer. In the near term, I believe America's airports are now very
well-prepared to welcome back the robust return of international
travelers. Since the onset of the pandemic, airports across the country
have taken considerable action to protect the health of the traveling
public, as well as those who work at airports. These steps include
enhanced cleaning and sanitization procedures, reducing touch points,
upgrading HVAC systems to improve and filter air flow, plus so many
other actions as recommended by the CDC and local health authorities
throughout the pandemic. Many still offer onsite COVID-19 testing, as
well as vaccination opportunities for employees and travelers.
The CDC currently requires all air passengers arriving to the
United States from a foreign country to be tested no more than three
days before their departure, and to present negative results or
documentation of having recovered from COVID-19 to an airline before
boarding a flight into the United States. With these existing
requirements and any potential future requirements, it's the air
carriers--rather than airports--who are best suited to handle such
initial verifications, well before a traveler actually steps foot
within the United States.
With some modifications, these same processes could likewise be
utilized to ascertain a traveler's vaccination status prior to their
departure for the United States, should such information be required on
a voluntary basis. Verification of test results is already an airline
responsibility, and they are performing admirably in this area. This
sequence mirrors today's layered approach of security requirements used
by the airlines when a traveler books a ticket. For these reasons, I
would suggest that all current or additional pre-travel requirements
would and should be handled directly between air carriers and their
customers; airlines know who plans to fly from the moment a passenger
books a trip, whereas airports are not immediately privy to such
details.
In fact the industry is already moving in this direction, as
evidenced by the International Air Transport Association's smartphone-
based IATA Travel Pass, used globally by airlines such as British
Airways, Emirates, Japan Airlines, Qantas, and Virgin Atlantic; as well
as another option called CommonPass, in use with carriers including
Cathay Pacific, JetBlue, Lufthansa and United. Both enable travelers to
verify that their COVID-19 test results will be accepted at their
destination, and can be used to verify one's vaccination status when
checking in online.
The Federal government must play a role in the formation and
adoption of worldwide standards that would require interoperability of
any and all so-called ``digital health credentials'' to authenticate
testing, and potentially, the vaccination status for international
travelers. Such actions from the Federal government are necessary to
maintain international standards to expedite travel as well as
commerce. Airports could assist airlines as needed, though most of this
process would occur directly between a traveler and their air carrier,
all long before travel commences.
Looking long-term, airports will need to continue to make
investments in their infrastructure to better handle larger crowds,
modernize their air filtration systems, improve sustainability efforts
and address other improvements that will accompany the public's
widespread return to the skies. Access to more funding made available
by an increase in the Passenger Facility Charge (PFC) would go a long
way toward helping airports in offering a safer, healthier and more
convenient travel experience.
I am encouraged by the recent news that President Biden has tasked
the White House Covid-19 Response Team and National Security Council to
lead expert working groups that will determine when and how to lift
rules that now prevent many nations' travelers from entering the
country. There has been talk of movement on potential changes to travel
restrictions between the United States and Canada, as well as within
the U.S.-United Kingdom corridor. These are welcome developments that
hopefully will lead to more travelers very soon. Our industry and the
numerous American communities, businesses, individuals and families who
rely on open international travel eagerly await the outcome of these
and other related developments.
Support for the Air Travel Industry. In 2020, the airline industry
lost about 90,000 jobs as a result of the coronavirus pandemic. In
2019, my legislation with Senator Blunt to reauthorize Brand USA
through 2027 was signed into law. Before the pandemic, Brand USA
supported more than 45,000 jobs a year, and generated $56 billion to
our economy.
Question. Can you speak to how programs that promote the travel and
tourism industry, like Brand USA, can help contribute to the recovery
of the air travel industry and workforce?
Answer. International travel is a critical export for the United
States and I am supportive of efforts to make this industry more
competitive on a global basis.
According to the U.S. Travel Association, international travelers
spent more than $233 billion within our country in 2019 alone. That
figure dipped dramatically to around $83 million last year as a result
of the pandemic, but as we push closer to reopening it is vital that we
continue to broadly present the United States, its amenities and
attractions before would-be visitors across the globe. Brand USA has
been an effective means for achieving this goal.
As you can imagine, many of those 45,000 jobs you cited are in Las
Vegas, where international travel has taken on an increased importance
over the past two decades. In 2019, McCarran International Airport
enjoyed service from 11 different countries, and added new nonstop from
far-away destinations such as Amsterdam, Paris and Tel Aviv. We were
approaching 4 million annual passengers to and from international
markets. Then came COVID-19, and today Mexico remains the lone market
outside our Nation that enjoys nonstop Las Vegas service.
The rapid pace with which domestic air travel has resumed in recent
weeks speaks to the ongoing consumer demand for air travel. I can only
conclude a similar pent-up demand for international travel will exist
once restrictions are lifted and it's safe to move about across borders
once more.
Other nations around the world actively promote international
tourism. With many now smaller in size as a result of pandemic-driven
cutback and fleet reductions, the competition for visitors will be very
intense in the short term. There will always be some global familiarity
with the United States and its signature markets, be it a Los Angeles
or New York, Orlando, San Francisco or even Las Vegas. We must continue
to expand that familiarity to drive demand for air travel into U.S.
gateways, and Brand USA is one of many channels to help achieve this
goal.
______
Response to Written Questions Submitted by Hon. Amy Klobuchar to
Christopher L. Thompson
Brand USA. From December 2019 to December 2020, we saw a nearly 76
percent decrease in international visitors. My legislation with Senator
Blunt to reauthorize Brand USA--a proven public-private partnership
that promotes international tourism to the U.S., through 2027--was
signed into law in 2019. Before the pandemic, Brand USA supported more
than 45,000 jobs a year, and generated $56 billion to our economy.
Question 1. In your testimony, you note that the economic fallout
from the pandemic has disrupted Brand USA's funding model, jeopardizing
its ability to help restart international travel. Can you speak to the
importance of helping to fund the Brand USA program for the economy,
and can you elaborate on what resources are needed to maintain the
health of Brand USA?
Answer. The pandemic has had a devastating effect on travel and
tourism, and especially on communities, businesses, and individuals
reliant on international visitor spending. Inbound international travel
has historically been our country's number two export and its top
services export. In 2019, travel exports were $233.5 billion,
delivering a $51 billion trade surplus and directly supporting 1.2
million jobs. But from March through the end of 2020, overall
international arrivals fell by 91 percent and overseas visitation was
down a staggering 96 percent compared to the same period a year
earlier. Over the entire year, including the normal first quarter,
travel exports plummeted by 64 percent to just $83 billion--a year-
over-year loss of $150 billion. Without a concerted effort, travel
exports will continue to fall and lost jobs will be slow to return--and
some may not come back at all.
Brand USA has developed a comprehensive approach to help rebuild
traveler confidence and stimulate demand. A national campaign is
critical because of how slowly the international segment is expected to
recover, and because U.S. destinations and companies will invest
comparatively fewer resources in international markets over the next
couple years. Unfortunately, the pandemic has disrupted the funding
model established by the Travel Promotion Act and jeopardized these
plans.
Brand USA is funded by contributions from non-federal sources and
matching funds from ESTA fees paid by visa waiver travelers during the
prior Fiscal Year. We receive a dollar in matching funds--up to $100
million per year--for each dollar of contributed cash or in-kind which
clears the verification process at the U.S. Department of Commerce.
Three factors have challenged this funding model. First, ESTA
collections are stagnant, resulting in only $62 million in available
matching funds this year and potentially as little as $10 million next
year. Second, Brand USA's partner base and the travel industry more
broadly continue to face significant hurdles to making pre-COVID levels
of contributions. Third, the Brand USA Extension Act (2019) raised the
minimum proportion of cash contributions from 30 percent to 50 percent,
which is a major hurdle for our cash-strapped industry partners to
meet.
These are structural impediments only Congress can solve. That's
why the Travel and Tourism Advisory Board recently recommended an
extraordinary $250 million appropriation to Brand USA, outside the
matching process, to provide the resources to hasten the international
travel recovery. The TTAB also recommended temporary suspension of the
50:50 cash-to-in-kind ratio for greater matching flexibility.
Oxford Economics estimates that such an appropriation would lead to
more than 1.7 million more visitors who would collectively spend $4.5
billion, generating nearly $700 million in Federal taxes and support
more than 40,000 new jobs. It would also allow the United States to
return to 2019 levels of arrivals and spending in 2024 instead of the
current forecast of 2025.
Fiscal Year 2022 will see historic growth rates in returns to
global travel as the world begins to move again. How our country
responds will determine the trajectory of our sector's recovery and
many other parts of the economy.
Question 2. One report found that if international travel is not
reopened soon, the U.S. economy is projected to lose $175 billion in
spending by the end of 2021. Can you speak to the role international
visitor spending plays for local economies?
Answer. States and communities across the country rely on traveler
spending for economic development, job creation, and tax revenues. The
international segment of the overall U.S. travel and tourism economy is
particularly valuable because international visitors on average spend
more time and money, and visit more places, than domestic travelers.
In 2019, according to the U.S. Travel Association, travel generated
$2.6 trillion in economic output that supported a total of 16.7 million
American jobs across the economy, including 9 million direct jobs and
7.7 million indirect and induced jobs (travel drives output and
employment throughout the whole economy, including sectors like
manufacturing, construction, finance, and more). These figures make
travel the country's seventh-largest private sector employer; travel-
dependent leisure and hospitality is the largest small-business
employer in the United States. Importantly, some 1.2 million American
jobs were supported directly by international traveler spending.
In addition to its direct revenue and job creation effects, travel
provides essential support to state and local governments to pay for
public services like firefighters and police, teachers, water and
transportation infrastructure, and more. Without the incremental tax
receipts generated by travel, local residents would have to pay more in
taxes each year for these services. According to data from the U.S.
Travel Association, total tax receipts from travel in 2019 were nearly
$170 billion, of which $45 billion were state tax receipts and nearly
$44 billion were local tax receipts.
The past 15 months have been a stark reminder of the important role
the travel sector plays in the vitality of economies at the local,
state, and national levels. Towns and cities have seen their hotels,
restaurants, attractions, and small businesses suffer job losses that
have impacted families and communities.
The catastrophic drop in travel has had a devastating impact on the
industry. According to Oxford Economics, cumulative U.S. travel and
tourism losses have now surpassed $600 billion after contracting 42
percent in 2020. This lost spending resulted in a cascading loss in tax
receipts of $75 billion across the federal, state, and local levels
through April 2021. And the leisure and hospitality sector alone lost
22 percent of its jobs last year and accounted for nearly 40 percent of
all jobs lost during the pandemic.
The travel industry, and in particular international travel, will
play a major role in our country's economic recovery, but it will
involve building back from a deep hole.
Question 3. In January 2021, the total value of travel and tourism-
related exports was less than one-third of the amount compared to the
same time in 2020. Can you speak to how developing safe travel
measures, including coordination between the private sector and both
Federal and state governments, will help to boost travel exports?
Answer. While Brand USA does not have a role in policy formulation,
our market research tells us that restoring consumer confidence in
travel to the United States is key to recovery. The single most
important factor in rebuilding this confidence is getting on top of the
pandemic so that Americans are safe to travel around the country and
destinations are able to open up at full capacity. This will
demonstrate to the world that the United States is open for business
and ready and eager to receive visitors again.
At the same time, the pandemic caused governments to enact various
protocols, requirements, and restrictions around travel to curb the
spread of the virus. Multi-layered and evolving guidance has added to
traveler confusion and hesitancy. While hygiene and safety protocols
adopted by public and private entities are important factors in
restoring confidence in travel, there is a need for consistent and
transparent policies and procedures around testing, vaccinations, and
quarantines so international inbound travelers know what to expect. All
things being equal, the simpler and more harmonized the travel
experience, the more competitive the destination.
Brand USA will continue to communicate whichever protocols are
ultimately worked out by governments and the private sector to allow
for a safe resumption of international travel. We look forward to
welcoming international visitors back to our shores while maintaining
the health and safety of the traveling public.
Brand USA has developed a comprehensive approach to help rebuild
traveler confidence and stimulate demand. The recovery campaign will
focus on three sequential tasks to jumpstart international travel and
help relieve some of the financial shortfalls in the industry. First,
rebuild traveler confidence by demonstrating the United States is ready
to receive them. Second, welcome the world back through an inspiring
creative approach that evokes the possibility awaiting in a trip to the
USA. Third, entice and convert the inspiration and pent-up demand into
booking a trip.
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