Keep America Meeting
Although anti-corporate travel rhetoric is starting
to subside in Washington, months of negative press have taken their toll on an
industry that employs 2.4 million Americans and generates $240 billion in
spending and $39 billion in tax revenue.
As
the chair of the U.S. Travel Association, I would like to set the record
straight about why business travel is still vital to our country’s bottom line,
and encourage you to take action to keep America meeting. A new Oxford
Economics USA study shows that for every dollar spent on business travel,
companies realize $12.50 in incremental value and $3.80 in profits. Just a 10 percent increase in business travel
spending will increase our gross domestic product (GDP) by between 1.5 and 2.8
percent.
Unfortunately,
too many CEOs these days see business travel as frivolous spending, when the opposite
is true. The data shows that companies would have to pay employees 8 percent
more to achieve the same level of motivation that business travel achieves for
less. And, although profits are driven by many factors, nothing enhances
business relationships better than face-to-face meetings.
Tell Your Congressman to Vote Yes on the Travel Promotion Act
I
want to applaud the U.S. Senate for taking a major step toward strengthening
the American economy by passing the Travel Promotion Act this week. This law,
if passed in the House, would create a public-private partnership to promote
the United States as a premier international travel destination and communicate
U.S. security and entry policies.
As mentioned in a
previous post, America’s travel industry is at a disadvantage because we are the only major country without a
national tourism promotion budget, putting us behind even so-called "third
world" countries that set aside funding for television advertising campaigns in
many parts of the world. The Travel Promotion Act would bring the U.S. into the
21st century of global tourism marketing, which will help raise our profile, ease
international concerns about perceived U.S. entry hassles and reassure visitors
that we are working hard to make it easier to get here while protecting our
borders.
Give the economy a boost by supporting California Wine Month
It’s not often that the responsible thing to do is eat, drink and be merry.
But this September, one of the most sensible things you can do to support the state’s tourism economy is to take advantage of more than 75 California Wine Month special offers. Whether it be enjoying a gourmet getaway at a California inn, a special winemaker dinner, a unique wine country tour or event, or a special menu at a local hotspot — you can enjoy the incredible lifestyle we often take for granted without stressing your wallet.
California is the leading destination in the U.S. for wine and food travel, which is not surprising. After all, the Golden State offers more than 2,800 wineries and 108 American Viticultural Areas, which produce more than 90 percent of American wine and are responsible for $18.5 billion in U.S. retail wine sales and nearly $1 billion in U.S. wine exports. This, combined with the fact that we’re one of the top agricultural producers in the U.S., makes us a playground for the culinary arts, which translates to a gourmet paradise for foodies yearning for a deeper connection with California’s great wine and fresh produce.
Growing Tourism a Blessing in a Struggling Economy
In the June 25th Los Angeles Times story “Tourism industry is L.A. County’s No. 1 job generator” the reporter asserted that this development is “not necessarily a good thing: Tourism and hospitality do not pay out as much in wages and salaries.”
While tourism may not pay as much as some other industries on average, there are many opportunities on the higher end of the pay scale as with any industry. For example, in the U.S., the average wage for managers in the “Arts, Entertainment and Recreation” sector was $86,960, and for CEOs, $160,090. In the hotel sector, the average wage for managers is $67,120 and for CEOs it’s $144,780. In the “Food Services and Drinking Places” sector, the average wage in the U.S. is $56,410 for managers and $132,030 for CEOs. Although comparative figures are not available for individual states and cities, we know that California salaries tend to skew higher than most areas of the U.S.
More importantly, during this recession we should be looking how tourism can help keep our state economy afloat while other industries are floundering. The bottom line is, tourism creates jobs across a broad spectrum of skill sets and educational levels – a resource sorely needed during these tough times. Additionally, tourism offers employment across a huge variety of economic sectors – from hospitality to retail, restaurants and attractions, to rental cars and other transportation businesses.
Silver Linings in the Tourism Industry
After months of doom and gloom news about major losses in the travel industry, there’s no better time to focus our attention on the light at the end of the recession tunnel.
There are encouraging signs that consumer confidence may be foreshadowing a better year than originally anticipated, which could mean positive news for tourism. According to the U.S. Conference Board, consumer confidence increased considerably in April and May. That confidence is reflected in travelers’ intentions for vacations and business trips in the next 12 months. In November 2008, only 10% of travelers foresaw increasing their travel in the next 12 months compared to the previous 12 months; in April 2009, that figure rose to 21%.
The converse is true as well – the percentage of those planning to decrease travel in the next year compared to the prior year has fallen significantly between November (34%) and April (24%). (Travelocity’s Traveler Confidence Report)
Travel Promotion Act Passes in Senate, Bringing U.S. Closer into the 21st Century of Global Tourism Marketing
In late May, the U.S. Senate Committee on Commerce, Science & Transportation passed the Travel Promotion Act, bringing us a step closer to being a world-class contender for international travel. Most Americans would be surprised and embarrassed to know that we are the only major country without any kind of national tourism promotion budget. Even so-called “third world” countries have travel promotion budgets, including television advertising campaigns in many parts of the world.
After Sept. 11, the U.S. government was reluctant to bail out the travel industry, which lost billions of dollars, causing many destinations to cut staff and marketing budgets. Eight years later, with confusion over U.S. security and the recession in full swing, we have not yet recovered pre-9/11 visitation from international markets.
National Tourism Week and Swine Flu remind us we can’t take Tourism for granted
These days, we are getting constant reminders about how important tourism is to the state’s economy – as well as how vulnerable it is. With many consumers cutting back on travel due to the recession and ongoing issues like the swine flu “infodemic,” it is a constant battle to remind consumers about why they should still travel.
In honor of National Travel and Tourism Week, which runs through May 17, I’d like to remind everyone how tourism impacts our lives, and why we cannot take it for granted. We are lucky to have a governor who gets it and supports our efforts to keep this industry strong, which is not an easy task these days, and I urge legislators at the state and local level to do the same.
Governor Schwarzenegger supported this vital industry once again this week with a proclamation declaring this Travel & Tourism Week in California, to coincide with the national holiday. Why should you care? Travel and tourism expenditures total $97.6 billion annually in California, supporting jobs for 924,000 Californians and generating $5.8 billion in state and local tax revenues. These revenues help relieve our tax burdens and keep unemployment down. Also, some of these revenues benefit the state’s cultural and heritage assets, which attract more visitors and enhance our lifestyle in California.
International Tourism Marketing Critical to Boosting Industry and State Economy During the Recession
Despite gloom and doom travel predictions in the news, California’s tourism industry has an incredible opportunity to boost its economy by continuing to invest in lucrative international markets.
Preliminary statistics for 2008 confirm that although international travel is expected to be down 4% due to the global recession, and some markets will struggle in 2009, it strategically makes sense to think of these markets over the long term, rather than panic and just focus on in-state or regional domestic marketing.
Why? Because international long-haul travelers tend to stay longer and spend more money in California. And, even though there is a global recession, some markets are less affected than others. China’s economy, for example, is growing, and their visitation to the Golden State grew 24 percent. Additionally, the strength of the euro has helped visitation boom from the United Kingdom (+4%), Germany (+21%) and France (+29%). Closer to home, although Mexican travel was down 9% due to economic challenges, Canadian travel grew approximately five percent, boosted by a more stable economy and a relatively strong dollar against ours.
Stop the Rhetoric: Meetings Mean Business and Jobs
Because of the irresponsible actions of a few Troubled Asset Relief Program (TARP) recipient companies, there’s recently been a movement to prevent TARP recipients from hosting, sponsoring or paying for any conferences, holiday parties or entertainment events during the year in which they receive funds. Because I have built my career on promoting many aspects of sound public policy for the Golden State, I applaud efforts by the federal government to stop abuse of TARP funds. However, the ill-informed, anti-meetings rhetoric that is a popular bandwagon these days is seriously harming a legitimate and relevant industry. Now is not the time to stop holding meetings and events, as they can actually help spur more economic growth.
Now is not the time to scale back on marketing
During a recession, when everyone is bunkering down and cutting back, it’s very tempting for tourism agencies to scale back on tourism marketing. Some destination marketing organizations (DMO’s) across the country and in California are scaling back, for example, on international marketing and focusing more on drawing tourists from their own back yard – reminiscent of strategies used after 9-11.
As the Chair of the U.S. Travel Association, and President & CEO of the California Travel & Tourism Commission (CTTC), I believe it is even more critical than ever that we find ways to keep our investments in out-of-state domestic and international marketing going. As President Obama recently said in his State of the Union address, now is the time for long-term investing, an opinion shared in MediaWeek by Sir Martin Sorrell, chief executive of WWP Group. Sorrell said, and I agree, “When times are tough, it’s time to invest, not cut. This comes from years of research dating back to Ogilvy’s Alex Biel and Millward Brown interaction surveys. All show that if we cut marketing during such times, the impact is damaging and it can take you longer to get back to where you were.”