Travel Promotion Act nears reality

National Report–The Travel Promotion Act is a signature away from finally becoming law after passing the Senate yesterday. Industry leaders are optimistic for this long-awaited pro-travel legislation.

Loews Hotels CEO Jonathan Tisch, who has worked as an advocate for travel legislation for 15 years, said Friday he anticipates the president will sign the bill.

“The congress passage is a watershed moment for the travel and tourism industry. We are now being recognized of the significant economic and social contribution that our industry makes to this country,” Tisch said. “With the availability to promote ourselves, we’ll continue to provide opportunity for our coworkers and the many thousands more that we will now create positions for.”

The legislation, which would establish a multi-million dollar, public-private partnership to promote the U.S. as a premier travel destination and better explain travel security policies to foreign travelers, gained final passage by a vote of 78 to 18 in the Senate.

The Travel Promotion Act now sits on President Obama's desk. From there, the marketing campaign—the main component of the bill—should be rolled out in the second half of 2010, according to Geoff Freeman, SVP of public affairs at the U.S. Travel Assn.

It is hoped that this new marketing effort will increase international travel to the U.S., therefore generating more money in the industry. By year three of the marketing effort, Oxford Economics estimates anywhere from $1.8 billion to $4 billion of new revenue will be brought to the U.S. These estimates are based on the revenue that was generated in comparable campaigns in other countries.

“I think it’s very much what everyone envisioned,” American Hotel & Lodging Assn. president Joe McInerney said as the bill passed through the Senate a previous time. “It’s a no-brainer. It’s a win-win situation; doesn’t cost the government anything. It attracts more people and creates more jobs.”

“Australia, in a recent campaign, measured $64 for every dollar spent,” said Adam Sacks, managing director of the tourism economics division at Oxford Economics. Sacks noted the United Kingdom returned $47 for every dollar and Canada’s campaign in the U.S. generated $11 for every dollar. There is a range of results, but each country’s marketing campaign returned more revenue than dollars spent.

Will a U.S. travel marketing campaign show similar results? Sacks cited one particular example: Three years ago, the government allocated federal funds for targeted marketing purposes. The amount was supposed to be $10 million, but ended up at only $4 million. After analyzing the data when the campaign ended, a third-party analysis showed a return of $117 for every dollar spent, Sacks said, also noting all of these campaigns happened in a much better economic time.

“Many of us have been working on legislation that would encourage inbound travel for close to a decade,” said Jonathan Tisch, CEO of Loews Hotels. “The passage of the Travel Promotion Act is a clear signal that our elected officials understand the significance of the travel and tourism industry.”

TPA at a glance

— The bill (s. 1023) will establish a non-profit corporation and the Office of Travel Promotion within the Department of Commerce. Both will work to increase travel to U.S.

— The funding will come from 1) a $10 fee for visa waiver travelers and 2) a dollar-for-dollar match from the private sector—20 percent of which needs to be cash from contributors. The other 80 percent can be goods and services contributions.
Source: U.S. Travel Association