While domestic leisure travel will come back first, the rebound in demand will not be equitable. Research by McKinsey shows that low-to-middle income families, who have been hit hardest by the pandemic, are 29% to 16% less likely to travel in 2021 compared to high-income families. The HCJRA would focus on increasing travel demand among all households by providing targeted and temporary refundable tax credits for low-to-middle income families to take a trip, while simultaneously helping to boost spending, demand and rehiring.
The bill would also provide refundable tax credits to encourage the resumption of business meetings, conventions and events, and defray the costs of hosting these job-generating gatherings.
Together, with other targeted measures in the bill, Oxford Economics estimates that enacting the HCJRA would shorten the recovery timeline from five years to just three, while creating an incremental 1.5 million jobs and generating nearly $600 billion in spending.
Support and protect Brand USA
We are asking Congress to support $250 million in emergency funding for Brand USA, the United States’ destination marketing organization. Brand USA does the important work of promoting the U.S. to international visitors. Over the past seven years, Brand USA’s marketing efforts have generated 7.5 million incremental visitors to the U.S. who spent nearly $25 billion, supporting more than 50,000 incremental jobs each year
However, the drastic decline in ESTA fee collections (which fund Brand USA, in part) due to international travel restrictions and scarce private sector contributions amid the economic crisis has severely diminished the program’s funding. If Brand USA is unable to continue its work of promoting the U.S. once borders reopen, the international inbound travel segment’s recovery will be severely hampered. We cannot restore international travel or compete in the global travel market without Brand USA.
Advance the Visit America Act
There are also measures that Congress can enact to make America’s travel industry stronger and more globally competitive than ever before.
The Visit America Act, which was introduced by Senator Dan Sullivan in the last session of Congress, would strengthen the Commerce Department’s role in coordinating federal travel policies, setting consistent national goals to boost travel exports and developing clear strategies to achieve them.
The bill importantly creates the role of Assistant Secretary of Commerce for Travel and Tourism, who would be responsible for setting an annual goal for the number of international visitors to the U.S., providing support for improved visitor visa processing and promoting travel exports. Specifically, the bill directs the Department of Commerce to develop a 10-year travel and tourism strategy with the goal of achieving, by 2028, 116 million annual international visitors to the U.S. and $445 billion in travel exports.10 The U.S. is the only country among the top 30 destinations worldwide that does not have a cabinet- or subcabinet-level leadership for travel, putting the U.S. at a competitive disadvantage.
As travel exports declined 64% from $234 billion in 2019 to just $83 billion in 2020, afederal strategy to boost travel exports will be vital to the travel industry’s overall recovery.
Improve America’s travel infrastructure.
Finally, we are urging Congress to prioritize legislation to improve America’s travel infrastructure to facilitate domestic travel and to better prepare to welcome back visitors from around the world.
Even before the public health crisis, cities and towns were growing further apart due to aging, insufficient infrastructure and congested roadways. By prioritizing infrastructure investments that enhance the economic contributions of travel and improve passenger mobility, the U.S. can emerge from the pandemic and rebuild the travel industry with stronger, more connected infrastructure systems than ever before.
This committee has played a leadership role in establishing national strategies, networks and programs to improve the mobility of freight. It’s time to develop and fund the same type of national strategies and programs to improve the mobility of people. By ensuring discretionary grant and formula programs target investments towards projects that improve national travel mobility and achieve the goals of the National Travel and Tourism Infrastructure Strategic Plan,
this committee can help change the way America moves.
Closing
One thing is clear: there are both challenges and opportunities ahead. The travel industry
will not recover on its own. Travel has suffered more than any other industry throughout this crisis, and we need the federal government to enact the right policies to ensure all sectors of travel can recover as quickly as possible.
There is a great deal at stake, and any delay in restarting widespread travel will only hurt the economy further.
Thank you again for inviting the broader travel industry to testify on the devastating economic impact of the pandemic on our industry. We look forward to working with you on these solutions to restore this crucial economic sector and I welcome your questions. Thank you.
