WASHINGTON, D.C. — With a continuing economic crisis, increased scrutiny over spending and even a pandemic flu, perhaps the furthest thing from the minds of American consumers and businesses is planning a nice family vacation or a corporate trip to Florida.
But, that seemingly responsible reaction is actually worsening the economy and leading to more job loss, according to a panel of industry representatives and experts who testified today before a Senate Commerce, Science, and Transportation subcommittee panel that Minnesota Sen. Amy Klobuchar chairs.
“Travel is part of the fabric of our country,” Klobuchar said in her opening remarks. “As someone once said, ‘Americans have always been eager for travel, that being how they got to the New World in the first place.’
“But today, the tourism industry is feeling the impact of the economic downturn,” she said.
After recounting some of her own childhood trips camping in the Black Hills and bicycling up to the cabins and lodges of northern Minnesota, the Democratic senator highlighted a number of actions that the federal government could take to jump-start tourism and travel, including promoting the country to international travelers and encouraging close-to-home trips and businesses to travel again.
“The highly publicized excesses of a few bad actors have discouraged many companies from spending on meetings and events, even when they know it’s not in their best interests,” Klobuchar said. “There are ways for businesses to conduct meetings and events in a way that is responsible and productive.”
In Minnesota, travel and tourism are the fifth-largest industry. Meetings and events generate about $1.3 billion annually for the state.
Nationally, the travel economy employs one of every eight Americans.
Although 2008 produced record visitation levels in certain areas, fourth-quarter reports show deepening declines, according to Mary Sanders, acting assistant secretary for manufacturing and services international trade administration in the Department of Commerce.
“This trend continued with a 10 percent drop in visitation levels for the first two months of 2009, compared with the same time last year. This was met by a 13 percent decline in receipts,” Sanders said.
Sen. Mark Begich, D-Alaska, estimated a 30 percent decline in business in some areas of his state because of a decrease in tourism and travel.
Jay S. Witzel, president and CEO of the Minnesota-based Carlson Hotels Worldwide, also cited troubling numbers.
“The trend is ominous,” Witzel stated in prepared testimony before the committee. “According to estimates by Smith Travel Research and the U.S. Travel Association, meetings, events and incentives cancellations in January and February of 2009 resulted in more than $1.9 billion in lost travel spending and cost nearly 20,000 American jobs.”
Witzel announced that the Treasury Department is now reviewing industry-suggested business travel guidelines for companies that received federal cash.
“Business travel is not an optional luxury or a perk of well-paid executives,” Witzel stated. “Meetings mean business in the American economy.”
The Travel Promotion Act, which stalled in Congress last year, is also expected to be taken up again this session, according to Klobuchar, who is a co-sponsor of the legislation.
The act would create a nonprofit corporation, subject to federal oversight, to create a nationally coordinated travel promotion program similar to ones in other nations around the world. Voluntary private-sector donations would be matched by a small fee on travelers entering the United States from other countries.
You can go here and click on View Archive Webcast to watch today’s hearing.