At NYU Conference, Jonathan Tisch calls hospitality industry to action

Photo credit: Jena Tesse Fox

NEW YORK — At last year’s NYU International Hospitality Industry Investment Conference, speakers expressed concern about the way President Trump’s then-new immigration and inbound travel policies would affect the tourism and hotel industries in the U.S. A mere 12 months later, new numbers are proving that those concerns were well-founded, and the tone of this year’s conference was an unmistakable call to action.

At the opening general session on Monday morning, held early at the Marriott Marquis in Times Square, Jonathan Tisch, chairman and CEO of Loews Hotels & Co., addressed four politically related challenges that face the industry, and spoke out about how hoteliers could help solve these challenges.

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Supporting Brand USA

First, the good news. Travel and tourism represents an $8 trillion market, and makes up roughly 10 percent of the global GDP. “Over the next decade, we’re projected to add another $3.5 trillion in growth—a 44 percent increase,” said Tisch as he began his speech.

But every cloud has a silver lining, and even though the global travel market is growing, the U.S. share of the market fell nearly 13 percent over the past few years, said Tisch. “That means we missed out on 7.4 million international visitors, $32 billion in lost spending at American destinations and businesses, and 100,000 additional jobs.”

The loss, he continued, sounding somewhat like the current President, meant that other countries were “winning” at the expense of U.S. hotels. “While we were losing visitors, China, Germany, Australia, the UK, Canada and many others saw their market share increase,” said Tisch. “Many leaders in our industry believe that right now, America’s message to the world is not very welcoming.”

This is, of course, a legitimate concern for everyone in the hospitality and travel sectors. “If people don’t feel welcome, they won’t visit the U.S.” Tisch said. “They won’t shop in our stores, eat in our restaurants, stay at our hotels and vacation at our destinations. Public policy as well as public rhetoric impact America’s image around the world and affect our ability to attract visitors.”

The country’s travel and hospitality industries have rebounded from challenges before. After the “anti-travel political climate” in the wake of 9/11, the “lost decade” of inbound travel to the U.S. cost the U.S. more than 68 million visitors, $606 billion in traveler spending and 467,000 jobs, Tisch estimated at last year’s conference. In response to that downturn, Congress passed the Travel and Promotion Act in 2009, which created Brand USA to promote the U.S. to international travelers. The private-public program has proven effective in increasing inbound tourism, bringing more than one million international visitors and generating $8.5 billion for the U.S. economy last year alone, Tisch estimated.

But now, he said, the Trump Administration may eliminate the program. The budget deal approved by Congress in February dealt Brand USA a “serious hit,” and while Congress ultimately extended the fees that fund the program, Tisch still sees cause for concern. “After 2020, those fees will be diverted to the U.S. Treasury instead of Brand USA,” he warned the attendees. “Unless this is fixed, the program will be in limbo as of 2020.”

It’s not all doom and gloom, however, and Brand USA has some “very effective champions” in hospitality leaders like Marriott CEO Arne Sorenson, Hilton CEO Chris Nassetta and Roger Dow, president and CEO of the U.S. Travel Association, the Washington, D.C.-based organization representing all segments of travel in America. These three men, said Tisch, are seeking a legislative fix to this problem with industry supporters in Washington., D.C. “The threat to Brand USA is a good reminder that even smart and effective programs need diligent advocates,” said Tisch. “The battle is never over. When it comes to defending travel, our industry must remain vigilant.”

Safety & Security

Of course, as evidenced by that post-9/11 lost decade, promoting a destination won’t do much good if people don’t feel safe traveling there. “As an industry, safety must remain our number one priority,” said Tisch, noting that travel and hospitality locations, including hotels, have been the targets of terrorist activities over the last decades.

In the name of security, the White House has called for “extreme vetting” of prospective visitors to the U.S. “Under the new rules, extreme vetting would apply to more than 14 million visa applicants,” said Tisch. “Right now, it applies to about 65,000 people per year.” Extreme vetting would apply to travelers from Brazil, India and China—three of the crucial BRICK markets that have proven so vital to boosting tourism spend.    

To balance the need for security and the need for inbound travel, Tisch proposed encouraging lawmakers to draw lessons from secure traveler programs like TSA Precheck. “It creates a secure, efficient, effective process by enabling security officials to stop dedicating resources to travelers who pose no threat,” Tisch said of the program. “Identifying security risks to the U.S. has been compared to finding a needle in a haystack. One way to improve our odds is to make the haystack smaller.”

A robust international travel security program, said Tisch, should require countries to share their best intelligence on suspected terrorists and criminals; upgrade their security standards to match ours; Require travelers to use hard-to-forge e-passports; and allow U.S. officials to review their security protocols to verify compliance and make sure they are meeting the necessary standards.

“As an industry, we need to push for smart policies that are secure, efficient and effective,” he said. “If people do not feel safe, they will not travel.”

Infrastructure Improvements

The calls for infrastructure improvements have been ongoing for years, but progress has been slow—and the country’s roadways, railways and airports aren’t getting any better. “We need federal leadership and investment to make our infrastructure world-class,” said Tisch, assuring the crowd that the industry needs to work alongside the President and Congress to build and improve infrastructure nationwide in order to keep up with demand.

Overcrowding at Top Attractions

It isn’t only the airports and roads that are filled to capacity. “Tourism overcrowding in cities themselves has become a serious problem at some of the world’s most popular destinations,” said Tisch, citing European cities that have already taken steps to limit the number of visitors—and hotels—that can be in any one area. In the U.S., national parks are feeling the strain of too many people at once, and are seeking solutions that will keep people coming, but limit the congestion.

“As an industry, we have a responsibility to help preserve the destinations where we operate,

to be good partners with local communities, and to leave them better than we found them,” said Tisch. To that end, industry leaders can leverage creative marketing campaigns to get travelers off the beaten path and encourage them to visit attractions all over the country; Identify areas in need of greater infrastructure investment to deal with heavy tourism traffic; and work with local leaders to preserve historic and cultural areas.

“As an industry, we are uniquely positioned to help solve these challenges while growing the U.S. share of the global travel market,” Tisch said as the opening session drew to a close. “The future is ours to win, but we must compete, we must invest, we must innovate.”

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