Industry Research

COMMENTARY: Message On Travel Needs New Direction

Posted on April 7, 2009 by LCT Staff - Also by this author - About the author

ATLANTA — Hotel occupancy in downtown Atlanta — a major convention city — fell 20% in December. In Orlando — a favored spot for business gatherings — the number of conventions and trade shows during the last six months of 2008 declined 25% from the year before.

With an 11% decline in visitors in December, cab lines in Las Vegas have all but disappeared. These are some of the bellwethers of the U.S. travel economy. They reinforce the fact that travel and tourism, which accounts for 10% of U.S. GDP, is in the worst recession since 9/11.

Yet even in this challenging environment, members of Congress and the administration have made statements critical of business travel. Although directed at a handful of companies receiving emergency federal loans, their comments have had a chilling effect on all businesses, betraying a poor understanding of the role that travel plays in the American economy.

The U.S. Travel Association reports business travel alone generates $240 billion annually in spending, 2.4 million jobs, and $39 billion in federal, state and local tax revenue. The beneficiaries of this economic activity are not just the airline and hotel industries but also cab drivers, waiters, and waitresses, cleaning staff, bellmen, flight attendants and travel managers. Their wages support local economies.

The travel and tourism industry is one of the most important engines of economic activity in the U.S. Travel-related employment totaled 8.6 million in 2007, according to the U.S. Department of Commerce. Department data show that every two direct tourism jobs generates an additional indirect tourism job.

Actions that discourage travel will only add to the revenue and job losses that have hit all segments of the travel industry. The Department of Labor reports that the U.S. lost nearly 200,000 travel-related jobs in 2008. The Department of Commerce predicts 247,000 more job losses this year.

The debate in Washington should not be between business travel and no business travel. Instead, it should be about responsible business travel.

Businesses, including our own, already have taken steps to reduce business travel and meetings in order to save costs. We find great value in business travel, particularly when it enables our business leaders and employees in far-flung offices around the globe to work more effectively together and with our customers and suppliers. It’s an investment in our business. But in a deep recession, cutting back on travel is the prudent thing to do.

The debate around business travel raises an even larger point, and that is the federal government’s role in promoting travel to the U.S.

Even in the midst of a global recession, Washington can do more to encourage international travelers to visit America.

Today, the U.S. is one of the few developed nations without a national organization responsible for promoting travel and tourism, and it shows in our travel statistics. Although our travel economy is the largest in the world, it could be larger.

U.S. Travel estimates the decline in travel to America since 9/11 has cost 46 million visitors, $140 billion in lost visitor spending, and $23 billion in lost tax revenue. Had we tracked global travel trends during this time, the U.S. economy would have created 340,000 more jobs in 2007.

To reverse this decline, Travelport and our industry organizations are aggressively supporting the “Travel Promotion Act.” It would create a public-private partnership to promote travel to the U.S. and communicate U.S. security and entry policies. It would be funded through private sector contributions and a fee on international travelers who use the Electronic System for Travel Authorization (ESTA) — that is, citizens of countries whose travelers do not need a visa to enter the U.S.

We also need to make travel easier by developing more effective, efficient air travel security. Increased funding for technology and staff at U.S. air and land points of entry is another important step in making it easier to travel to America.

What happens in Vegas — or Orlando, Atlanta, Chicago and New York — affects the entire U.S. economy.

The efforts we make today to promote responsible business travel along with travel and tourism overall will protect and create jobs while ensuring a robust recovery once the economy improves.

Source: Jeff Clarke, CEO and president of Travelport, for the Atlanta Journal-Constitution

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