Will a New Bill to Boost U.S. Tourism Help or Hurt?

March 1, 2010— -- The U.S. travel industry is hoping to get a face-lift with the help of a government bill that creates a national tourism board, funded in part by a new fee on foreign travelers, but some are questioning whether the measure will inadvertently hurt the tourism industry.

President Obama in the coming days is expected to sign the "Travel Promotion Act," a bipartisan bill that passed the Senate last week by an overwhelming majority.

The bill would impose a $10 fee on travelers who do not need to pay for a visa to enter the United States.

That money, along with private sector funding, would be used to fund the non-profit "Corporation for Travel Promotion," an 11-member board that will develop ad campaigns to encourage tourism to the U.S. Many foreign countries have such boards that try to lure visitors with exotic campaigns -- think "Incredible India."

In the United States, all states have their own tourist boards but it's never been tried nationally.

"The United States is the only industrialized nation without a comprehensive outreach effort," said Caroline Beteta, chair of the U.S. Travel Association and president of the California Travel & Tourism Commission. "This truly is the most comprehensive broad reaching piece of legislation that just won't affect the travel industry, but the entire economy of America."

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But others are unsure if the program -- and the $10 fee -- will have the kind of impact that the tourism industry is banking on.

"It's absolutely counterintuitive," said Steve Lott, a spokesman for International Air Transport Association, which represents the airline industry.

"To us, we're saying we'd love to see more people visit the United States, but we're going to charge you more for the privilege of entering the country," he added. "We are in favor of increased tourism and visitation... but let's look at our priorities. We don't think that videos and billboards are necessarily a priority. Instead, we should be focusing on how to make customs and immigration easier for people."

Critics charge that at a time when international travelers are hesitant to visit the United States because of stringent security measures, the legislation is unnecessary. Tourism professionals counter by saying the program is essentially designed to spread more awareness about security and travel procedures, and it will help rather than deter visitors.

"The problem is the United States has the reputation of being among one of the most unfriendly countries when it comes to international visitors, so this almost seems like one more way we are unwelcoming," said Bjore Hanson, an associate professor at New York University. "But I also think it's well understood, if there were ever a fee to be charged ... every country understands the need of budgets."

Other critics say are opposed to the idea of a national tourism board, given that states have their own boards.

"You already have very strong chambers of commerces and tourism groups for destinations, and those, I think, do a very good job... in general, of promoting their destination," said Brett Snyder, president of Cranky Concierge air travel services. "In a way, this is going to be duplicating some efforts on things that are already happening at the local and regional level."

But the program's supporters say the new board will promote cooperation rather than competition.

"We need an umbrella approach. The U.S.A. brand is silent in this effort. By leveraging a U.S.A. brand, we are going to be that much more effective," Beteta said.

International travel to the United States remains below 2001 levels. Last year was the eighth straight year in which overseas arrivals fell short of pre-Sept. 11 levels, according to the U.S. Travel Association.

Canadians remain the top international visitors to the United States, but with the new program, the tourism industry is hoping to tap into burgeoning markets, like Brazil, China and India.

New Tourism Bill Practical or Political?

Republicans who held up the bill in the Senate argue that it is nothing more than government interference in the tourism sector. Senate Majority Leader Harry Reid, who is locked in a tough re-election campaign and represents Nevada, a prime destination for tourists, billed it as legislation that would spur jobs.

With health care and now jobs on the forefront, the current Congress has largely sidestepped legislation related to travel. The FAA Reauthorization Act, which passed the House in May, is stuck in the Senate. The bill calls for modernizing the air traffic control system by funding the "NextGen" system, improving aviation safety and capacity, and adding more passenger rights.

"As far as we're concerned, there's more work to be done," said Colin Tooze, vice president of government affairs at the American Society of Travel Agents.

Not to mention, the Transportation Security Administration (TSA) is still missing a chief. Obama's nominee, Erroll Southers, withdrew his name from the post after heavy criticism from Republicans.

It remains to be seen whether the new tourism bill results in a significant upturn in tourism. The domestic travel industry, which has tirelessly pushed for the bill's passage, estimates that it would draw an additional 1.6 million new visitors and $4 billion in consumer spending annually.

For politicians, it's the other math that counts more. The program is estimated to create new jobs -- although the number hasn't been specified -- and reduce the federal budget by $425 million. At a time when the deficit is at a record high and lawmakers are struggling to come up with ways to reduce the budget, this bill sinks in well for campaign posturing.

The fee is expected to raise $100 million per year from foreign travelers and a matching amount from the private industry for a total of $200 million to fund the board and its promotional campaign.

"This is an easy thing to sell to your constituents because it costs you nothing. It costs foreigners something," Snyder said.