[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
VACATION NATION: HOW TOURISM BENEFITS OUR ECONOMY
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COMMERCE, MANUFACTURING, AND TRADE
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
MAY 7, 2013
__________
Serial No. 113-39
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
82-192 WASHINGTON : 2013
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
RALPH M. HALL, Texas HENRY A. WAXMAN, California
JOE BARTON, Texas Ranking Member
Chairman Emeritus JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania GENE GREEN, Texas
MICHAEL C. BURGESS, Texas DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee LOIS CAPPS, California
Vice Chairman MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana JIM MATHESON, Utah
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington JOHN BARROW, Georgia
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey DONNA M. CHRISTENSEN, Virgin
BILL CASSIDY, Louisiana Islands
BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida
PETE OLSON, Texas JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia JERRY McNERNEY, California
CORY GARDNER, Colorado BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas PETER WELCH, Vermont
ADAM KINZINGER, Illinois BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
Subcommittee on Commerce, Manufacturing, and Trade
LEE TERRY, Nebraska
Chairman
JANICE D. SCHAKOWSKY, Illinois
LEONARD LANCE, New Jersey Ranking Member
Vice Chairman G.K. BUTTERFIELD, North Carolina
MARSHA BLACKBURN, Tennessee JOHN P. SARBANES, Maryland
GREGG HARPER, Mississippi JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky PETER WELCH, Vermont
PETE OLSON, Texas JOHN D. DINGELL, Michigan
DAVE B. McKINLEY, West Virginia BOBBY L. RUSH, Illinois
MIKE POMPEO, Kansas JIM MATHESON, Utah
ADAM KINZINGER, Illinois JOHN BARROW, Georgia
GUS M. BILIRAKIS, Florida DONNA M. CHRISTENSEN, Virgin
BILL JOHNSON, Missouri Islands
BILLY LONG, Missouri HENRY A. WAXMAN, California, ex
JOE BARTON, Texas officio
FRED UPTON, Michigan, ex officio
C O N T E N T S
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Page
Hon. Lee Terry, a Representative in Congress from the State of
Nebraska, opening statement.................................... 1
Prepared statement........................................... 2
Hon. Janice D. Schakowsky, a Representative in Congress from the
State of Illinois, opening statement........................... 3
Hon. Donna M. Christensen, A Representative in Congress from the
Virgin Islands, opening statement.............................. 4
Hon. Leonard Lance, a Representative in Congress from the State
of New Jersey, opening statement............................... 5
Hon. Gus M. Bilirakis, a Representative in Congress from the
State of Florida, opening statement............................ 6
Hon. Billy Long, a Representative in Congress from the State of
Missouri, opening statement.................................... 6
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 7
Witnesses
Roger Dow, President and CEO, U.S. Travel Association............ 9
Prepared statement........................................... 12
Kathleen Matthews, Executive Vice President and Chief Global
Communications and Public Affairs Officer, Marriott
International, Inc............................................. 17
Prepared statement........................................... 20
Brian D. Rothery, Assistant Vice President of Government Affairs,
Enterprise Holdings, Inc....................................... 26
Prepared statement........................................... 29
Lori Gaytan, Senior Vice President of Human Resources,
Intercontinental Hotels Group.................................. 42
Prepared statement........................................... 44
Hudson Riehle, Senior Vice President, Research and Knowledge
Group, National Restaurant Association......................... 50
Prepared statement........................................... 52
J. William Seccombe, President and Chief Executive Officer, Visit
Florida........................................................ 69
Prepared statement........................................... 72
Sharon Zadra, Board Member, Reno-Sparks Convention and Visitors
Authority, Councilwoman, City of Reno, Nevada.................. 76
Prepared statement........................................... 78
Gina Speckman, Executive Director, Chicago's North Shore
Convention and Visitors Bureau................................. 85
Prepared statement........................................... 87
Ralph Witsell, Executive Director, Discover Torrance Visitors
Bureau......................................................... 91
Prepared statement........................................... 93
Answers to submitted questions............................... 116
Beverly Nicholson-Doty, Commissioner, U.S. Virgin Islands
Department of Tourism.......................................... 96
Prepared statement........................................... 98
Submitted material
Letter of May 6, 2013, from the Tennessee Department of Tourist
Development to Mrs. Blackburn.................................. 111
Statement of the American Motorcyclist Association, submitted by
Mr. Terry...................................................... 114
VACATION NATION: HOW TOURISM BENEFITS OUR ECONOMY
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TUESDAY, MAY 7, 2013
House of Representatives,
Subcommittee on Commerce, Manufacturing, and Trade,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:32 a.m., in
room 2322, Rayburn House Office Building, Hon. Lee Terry
(chairman of the subcommittee) presiding.
Present: Representatives Terry, Lance, Blackburn, Harper,
Bilirakis, Long, Schakowsky, Butterfield, Sarbanes, Matheson,
Barrow, Christensen, and Waxman (ex officio).
Staff Present: Kirby Howard, Legislative Clerk; Nick
Magallanes, Policy Coordinator, CMT; Brian McCullough, Senior
Professional Staff Member, CMT; Gib Mullan, Chief Counsel, CMT;
Andrew Powaleny, Deputy Press Secretary; Shannon Weinberg
Taylor, Counsel, CMT; Michelle Ash, Minority Chief Counsel; and
William Wallace, Minority Professional Staff Member.
OPENING STATEMENT OF HON. LEE TERRY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEBRASKA
Mr. Terry. All right, I think we are ready to start.
Thank you all for being here. Good morning, and welcome to
this morning's hearing of the Commerce, Manufacturing, and
Trade Subcommittee.
And I am pleased to say that today we will be hearing from
two stellar panels, one composed of the private-sector leaders
and another composed of local and State leaders charged with
promoting tourism within their communities. Both groups will be
able to offer their firsthand knowledge of the importance of
tourism to our economy and why Congress should be paying
attention to this industry and finding ways to promote its
growth.
The travel and tourism industry provides good middle-class
domestic jobs almost by definition that can't be outsourced.
According to Marriott's testimony, a new hotel opening can
generate 1,000 permanent new jobs. For every five new hotel
rooms they build, three American jobs are created. This does
not take into account construction jobs or other indirect jobs
that go into the building and maintenance of the property.
The U.S. Travel Association will describe similar
statistics. For every 33 travelers who visit the U.S. from
abroad, one U.S. job is created, they claim. And as if these
numbers aren't convincing enough, we will also hear from the
restaurants about how their members employ 13.1 million
Americans thanks in large part to 25 percent of their sales
coming from the travel and tourism dollars.
These numbers are impressive. And as someone who once
worked in the service industry at an amusement park and in
restaurants, I can attest that the jobs created when
restaurants, hotels, and amusement parks grow are good, honest-
paying jobs that can help our young people find work and
perhaps open their eyes to a career of unlimited growth.
What is not impressive and what I am concerned with is the
current status of the U.S. when it comes to competing for
foreign travelers. In 2000, the U.S. had 17 percent of the
worldwide market for tourism. Today, we are somewhere around 13
percent. Why has there been a decrease? The average overseas
traveler that visits the U.S. spends around $4,500 and 18
nights per trip, though we are getting fewer of these travelers
to visit the U.S.
In 2010, Congress passed and the President signed into law
the Travel Promotion Act. This law, among other things,
authorized the public-private corporation known as Brand USA.
While Brand USA is not the main subject of today's hearing, I
can say with a high level of certainty that it will be the
subject of a future hearing. Now, however, as many Brand board
members and supporters are sitting before us today, I would
like to hear specifically in dollars and cents how you think
Brand USA has helped your businesses and, by extension, our
economy.
I would also like to hear from the local tourism directors
what role the Federal Government has in this type of program,
given that Visit Florida alone plans on spending $63.5 million
in fiscal year 2013-2014 on travel promotion.
So thank you to this panel and our next panel for traveling
to Washington, D.C., spending a night in a hotel, hopefully,
and spending some money in our restaurants. I look forward to
your testimonies and now yield the remaining minute to the
gentlelady from Tennessee.
[The prepared statement of Mr. Terry follows:]
Prepared statement of Hon. Lee Terry
Good morning and welcome to this morning's hearing of the
Commerce, Manufacturing and Trade Subcommittee. I am pleased to
say that today we will be hearing from two stellar panels-one
composed of private sector leaders and another composed of
local and state leaders charged with promoting tourism within
their communities. Both groups will be able to offer firsthand
knowledge of the importance of tourism to our economy and why
Congress should be paying attention to this industry and
finding ways to promote its growth.
The travel and tourism industry provides good, middle-
class, domestic jobs that, almost by definition, cannot be
outsourced. According to Marriot's testimony, a new hotel
opening can generate almost 1,000 permanent new jobs, and for
every five new hotel rooms they build, three American jobs are
created. This does not take into account construction jobs and
other indirect jobs that go into the building and maintenance
of the property. The U.S Travel Association will describe a
similar statistic--for every 33 travelers who visit the U.S.
from abroad, one U.S. job is created, they claim. And as if
these numbers aren't convincing enough, we'll also hear from
the restaurants about how their members employ 13.1 million
Americans -thanks in large part to 25 percent of their sales
coming from travel and tourism dollars.
These numbers are impressive. And as someone who once
worked in the service industry--both at an amusement park and
in a restaurant--I can attest that the jobs created when
restaurants, hotels and amusement parks grow are good, honest,
paying jobs that can help our young people get to work and
perhaps open their eyes to a career with unlimited growth.
What is not impressive, and what I am concerned with, is
the current status of the U.S. when it comes to competing for
foreign travelers. In 2000, the U.S. had 17 percent of the
worldwide market for tourism. Today we are somewhere around 13
percent. Why has there been a decrease? The average overseas
traveler that visits the U.S. spends around $4,500 and 18
nights per trip-but we are getting fewer of these travelers to
visit us.
In 2010, Congress passed and the president signed into the
law the Travel Promotion Act. This law, among other things,
authorized a public-private corporation now known as Brand USA.
While Brand USA is not the main subject of today's hearing, I
can say with a high level of certainty that it will be the
subject of a future hearing. However, many of Brand's board
members and supporters are sitting before us today, and I would
like to hear, specifically, in dollars and cents, how you think
Brand USA has helped your business, and by extension, our
economy. I would also like to hear from the local tourism
directors what role the federal government has in this type of
program, given that Visit Florida alone plans on spending $63.5
million in FY2013-2014 on travel promotion.
# # #
Mrs. Blackburn. I thank the chairman for yielding.
And I tell you, in Tennessee, we are pleased with what
happens with our tourism industry.
And, Mr. Chairman, I ask unanimous consent to insert into
the record a statement from the Tennessee Department of Tourism
commissioner, Susan Whitaker.
Mr. Terry. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mrs. Blackburn. And Commissioner Whitaker oversees a $15.36
billion industry in our State, employs 143,000 Tennesseeans,
and she is a true travel professional. We appreciate her good
work.
And I yield back.
Mr. Terry. Thank you.
I will yield back the last 44 seconds and now recognize the
ranking member of the committee, Jan Schakowsky.
OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A
REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS
Ms. Schakowsky. Thank you, Mr. Chairman. And thank you for
yielding and for holding this important hearing.
I welcome all our witnesses and look forward to hearing
from them, for me especially Ms. Speckman, who I am glad is
here today representing Chicago's North Shore Convention and
Visitors Bureau. Happens to be my home area.
Travel and tourism play a major role in our country's
economy, with almost 8 million Americans in jobs tied to the
tourism industry. It is important to determine how well the
United States is doing in comparison to other countries in
attracting foreign visitors. It is also important that we
evaluate best practices in attracting visitors, both foreign
and domestic, to different locations around the country. We can
learn a lot from our panelists about what strategies are
working and how they can be implemented.
Promoting travel and tourism is a national priority, and
the House has worked in a bipartisan effort to promote the
industry. The Travel Promotion Act of 2009, which established a
nonprofit corporation to promote travel to the United States
and of which I was a cosponsor, is just the most recent
example.
Last year, President Obama brought our national effort a
step further by designating a task force on travel and
competitiveness, which outlined a strategy to attract more
foreign travel. The strategy included coordinated promotion of
the United States as a destination of choice, efficiency
measures to facilitate easier travel to and from the U.S.,
enhanced customer service, and performance-based measurements.
It is a strong guiding document to help facilitate increased
travel and tourism to the United States.
From the greatest city in the world--that would be
Chicago--to the home of Abe Lincoln, to abundant activities in
the great outdoors, my home State of Illinois has something for
everyone. The State is actively engaged in advertising efforts
to attract new visitors, and it has made planning Illinois
travel easy with the EnjoyIllinois.com Web site. By ranking in
the top 10 States for both domestic and international travel
and with $32 billion spent by visitors to Illinois in 2011, the
effort to attract travel and tourism is paying off. My district
has benefited significantly from the travel and tourism
industry, and I look forward to hearing from Ms. Speckman about
what has made Illinois and the North Shore so successful in
attracting visitors.
I look forward to learning from the expertise of our
witnesses and leveraging their insight in order to enhance
national, regional, and local tourism.
And I will yield the remainder of my time to Dr.
Christensen.
OPENING STATEMENT OF HON. DONNA M. CHRISTENSEN, A
REPRESENTATIVE IN CONGRESS FROM THE VIRGIN ISLANDS
Mrs. Christensen. Thank you for yielding.
And thank you, Chairman Terry and Ranking Member
Schakowsky, for holding this hearing on the important role that
tourism plays in the U.S. economy. And it gives me a chance to
highlight the role it plays in the economy of my district, the
U.S. Virgin Islands.
Whether it is because of a natural or financial disaster,
many of the districts we represent are economically challenged.
This sequester is only exacerbating this crisis. Fortunately,
tourism, with some minor ups and downs, like health care, has
been what has continued to create jobs and keep many of us
afloat.
Today, it gives me great pleasure to introduce an
individual who can outline the importance of this sector to our
community and the person who with excellence and passion leads
our Department of Tourism in the U.S. Virgin Islands. And she
will be on the second panel, but let me just say a few words
about Beverly Nicholson-Doty, who was appointed our
commissioner of tourism in 2007.
Earlier in her career, Commissioner Nicholson-Doty served
as the executive director of the St. Thomas-St. John Hotel and
Tourism Association, and she was the president of the USVI
Hotel and Tourism Association in 2004. I had the pleasure of
being at the meeting when Mrs. Nicholson-Doty was elected the
chairwoman of the Caribbean Tourism Council of Ministers and
Commissioners in 2012.
Under her direction, the U.S. Virgin Islands has
experienced noteworthy growth in airline and cruise industry
travel, including the return of the cruise industry to St.
Croix. And under her leadership, we have seen our tourism
product improve to meet the changing demands and to remain
competitive. I am happy that she is here with us today to share
her insight and experience in the tourism industry.
I have is a lot more to say, but I will save it for my 5
minutes. So let me welcome all of our witnesses here this
morning and yield back my time.
Ms. Schakowsky. I yield back the remaining unless there
is--OK. I yield back my time. Thank you.
Mr. Terry. All right. Thank you.
At this time, I will yield to the gentleman 1 or 2 minutes,
Lance, Leonard.
Mr. Lance. One and a half.
Mr. Terry. One and a half minutes to the gentleman from New
Jersey, the vice chairman of this subcommittee.
OPENING STATEMENT OF HON. LEONARD LANCE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Lance. Thank you, Mr. Chairman.
Tourism is one of the top job- and revenue-yielding
industries in this country. And it certainly has a large
economic impact in New Jersey, which attracts tourists for work
and play to rural and urban settings alike. Whether for sports
events in the Meadowlands in northern New Jersey--and the Super
Bowl will be held there next winter--Federal area history in
central New Jersey, places including the Battle of Trenton and
the Battle of Princeton, important in our Nation's history, or
agricultural venues throughout the State, there has been
tremendous growth in the volume of visitors and in the size of
their economic impact. The industry generates $17.8 billion in
consumer spending in New Jersey and directly supports over
150,000 jobs.
Many will recall the JetStar, a much-beloved roller coaster
at the New Jersey shore in the town of Seaside Heights which
became iconic of damage from Superstorm Sandy when it was
submerged into the Atlantic Ocean last October. Despite Sandy,
New Jersey experienced a record-setting year, and we hope for
an even better year this year.
Concerns within New Jersey's tourism industry are familiar
to other States, as well. Struggles over seasonal or part-time
worker coverage within the Affordable Care Act make it
difficult to forecast business expenditures. Tax uncertainty
causes confusion for those who own small businesses, and I know
Congress is working on that in a bipartisan capacity this year.
Just last year, 2012, the U.S. recorded a $45 billion trade
surplus for travel and tourism, and international visitors
spent an enormous amount of money here in this country.
Bringing more tourists to the United States will improve those
figures and boost employment.
We owe our tourism-supported businesses clarity in
regulatory matters so they can focus on doing their job and
bringing revenue streams into their communities. And,
certainly, I welcome all visitors, domestic and foreign, to
this country and, indeed, to New Jersey.
Thank you, Mr. Chairman.
Mr. Terry. Thank you.
And I now recognize the gentleman from Florida, Mr.
Bilirakis, for his minute and a half.
OPENING STATEMENT OF HON. GUS M. BILIRAKIS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it
very much. Thank you for holding this hearing.
From my perspective as a Floridian, this is an excellent
hearing topic. Florida is a global hub for commerce and travel,
and the State is an exceptional attraction for tourism. Whether
you would like to enjoy a nice walk on the beach, some
sunshine, some excellent seafood, spectacular nature and
wildlife, roller coasters, or professional sporting events,
Florida has something entertaining and relaxing for everyone.
Tourism is the lifeblood of the Florida economy. More than
1 million Floridians are directly employed by the tourism
industry. Throughout our entire country, one out of every eight
American jobs depends on travel and tourism. Last year,
international travelers to the United States spent more than
$128 billion. Increased tourism means more for America and for
Floridians--more jobs for Americans and Floridians.
I look forward to hearing from our witnesses today about
the economic importance of tourism and how we can support it.
In particular, I welcome Mr. William Seccombe to subcommittee.
Mr. Seccombe serves as the president and CEO of Visit Florida,
the State of Florida's official not-for-profit tourism
marketing corporation. Visit Florida serves as Florida's source
for travel planning to visitors from across the globe. And I
look forward to his testimony, of course, his presentation
before this committee.
And I thank you, Mr. Chairman. I yield back the balance of
my time.
Mr. Terry. Perfectly timed.
And now the gentleman from Missouri, Mr. Long, is
recognized for your minute and a half.
OPENING STATEMENT OF HON. BILLY LONG, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MISSOURI
Mr. Long. Thank you, Mr. Chairman.
And it is indeed an honor to have you all here today and
talking about tourism in the United States. And, particularly,
I want to talk about tourism in my district, and that being
Springfield, Branson, and Joplin, Missouri, the southwest
corner of the State.
And there was a lady named Herschend, that her and her
family found a little cave, a marble cave down just south of
us, oh, probably 30 miles, back in the late 1950s and developed
the cave, felt people would like to take tours of this cave.
And then they decided, well, maybe they will build a little
theme park, an 1880s theme park around it, and that grew up
into Silver Dollar City. And now they just announced a year ago
that they are going to build the world's largest wooden roller
coaster with the steepest drop, 81-degree drop, 3 inversions.
When they announced that, to tell you the impact of tourism
in this country and internationally, when they announced that,
in Europe, they had people from Europe literally that bought
plane tickets, came over, got hotel rooms, and rode the little
train around Silver Dollar City where I used to ride with my
grandmother. I loved it when they would hold her up on the
train and rob her. But----
Mr. Terry. In 1880.
Mr. Long. Do you all hear static in the background?
But now those people came just to see where this was going
to be built, this large wooden roller coaster.
From that, I would also tell you that my hometown is
Springfield, Missouri, where a young college kid had a dream of
putting a few fishing lures in the back of one of his dad's
brown derby stores, and said, ``Dad, I think we can sell
discount tackle.'' That has grown into Bass Pro Shops, which is
headquartered in Springfield. Drew over 7 million visitors to
Bass Pro Shops in Springfield, Missouri, last year, and 1.9
million to Silver Dollar City, not to mention all the folks in
Branson, which is the leading tourist destination in the United
States, in my opinion anyway.
I rest my case.
Mr. Terry. Thank you, Mr. Long.
Now I recognize the ranking chairman of the full committee,
Mr. Henry Waxman.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you very much, Mr. Chairman.
I am pleased you are holding this hearing on tourism in the
United States. And I especially thank you for inviting Ralph
Witsell of the Discover Torrance Visitors Bureau to testify on
the second panel.
Discover Torrance has worked diligently to promote
Torrance, California, and the broader beach cities, South Bay
region, including Redondo, Hermosa, and Manhattan Beaches as an
attractive location for both leisure travel and business
conferences. These communities have stunning views,
exhilarating water sports, and incredible restaurants, and they
provide affordable lodging with access to two major airports
and attractions throughout the Los Angeles area.
Today, travel and tourism is one of our Nation's top
service industries. According to the Department of Commerce,
over 7 million people are employed in jobs related to tourism.
These jobs won't move offshore, and they often provide
Americans with significant opportunity for advancement.
My home State of California is a major tourist destination
for Americans from all over the country and is the transpacific
travel gateway. The tourism and hospitality industry is an
indispensable source of jobs and revenue, particularly in Los
Angeles, which welcomed a record 41.4 million visitors in 2012.
The congressional district I am proud to represent in Los
Angeles is the home of world-class tourist destinations like
Beverly Hills, Rodeo Drive, and the Santa Monica Pier. My
district also has lesser-known but wonderful destinations like
the Conejo Valley. And I applaud the city of Agoura Hills for
joining with Thousand Oaks to establish a tourism initiative to
attract more travelers to this beautiful region.
President Obama demonstrated he understands the value of
tourism promotion. One year ago, the administration released a
national travel and tourism strategy that created a blueprint
for effective Federal, State, local, and industry coordination
to promote travel to locations nationwide.
This strategy, along with other efforts, has had an impact,
particularly attracting greater numbers of international
visitors, who tend to travel for a longer period of time and
put more money into the economy. Just yesterday, the Department
of Commerce released data showing that international visitors
contributed $43 billion to the U.S. economy in the first
quarter of 2013, which is an increase of nearly 3 percent when
compared to last year.
I have long advocated for a national tourism strategy that
works for both internationally known attractions like Rodeo
Drive and those that are lesser known like the pristine beaches
of the South Bay. I also support efforts to ensure travelers
have a positive experience throughout their trip, whether
renting a car or booking a hotel room or dealing with
government entities like TSA and the National Park Service.
It is these insights in hearings like this that will enable
us to better understand tourism promotion so that we can work
together to maintain strong growth in travel and tourism
industries. I look forward to all the witnesses' testimony and
to our discussion at this hearing.
I just have to say, unfortunately, Mr. Chairman, there is
another hearing going on in another subcommittee on energy
policy that I also must attend, so I'll be back and forth. But
I thank you for holding this hearing. It's an important one.
And I am glad all of our witnesses are here today.
Whether you are hearing about California, which is the
primary, wonderful destination for people all over the country
or the world, or Chicago, which is called the second city for
good reason, all of us represent places you all want to see and
visit and spend a lot of money.
Thank you.
Mr. Terry. Then Omaha must be the third city. And we are
very proud of our pristine sandbars along the Missouri.
At this time, I am going to introduce our first panel. We
have Roger Dow, president and CEO of U.S. Travel Association;
Kathleen Matthews, executive vice president and chief of global
communications and public affairs for Marriott International;
Brian Rothery, assistant vice president, government affairs,
for Enterprise Holdings; Lori Gaytan, senior vice president,
Americas HR and global reward, InterContinental Hotels Group--
thank you; and Hudson Riehle, senior vice president, Research
and Knowledge Group, National Restaurant Association.
And some of you are familiar with this process. Each of you
will get 5 minutes. We will go from Mr. Dow to Mr. Riehle. You
have a light in front of you. When you see the yellow, that
means think about your conclusion.
So, Mr. Dow, we appreciate your testimony. You are
recognized for 5 minutes.
STATEMENTS OF ROGER DOW, PRESIDENT AND CEO, U.S. TRAVEL
ASSOCIATION; KATHLEEN MATTHEWS, EXECUTIVE VICE PRESIDENT AND
CHIEF GLOBAL COMMUNICATIONS AND PUBLIC AFFAIRS OFFICER,
MARRIOTT INTERNATIONAL, INC.; BRIAN D. ROTHERY, ASSISTANT VICE
PRESIDENT OF GOVERNMENT AFFAIRS, ENTERPRISE HOLDINGS, INC.;
LORI GAYTAN, SENIOR VICE PRESIDENT OF HUMAN RESOURCES,
INTERCONTINENTAL HOTELS GROUP; AND HUDSON RIEHLE, SENIOR VICE
PRESIDENT, RESEARCH AND KNOWLEDGE GROUP, NATIONAL RESTAURANT
ASSOCIATION
STATEMENT OF ROGER DOW
Mr. Dow. Thank you very much, Chairman Terry.
I have to say this panel is extraordinarily well-versed in
the facts. I could just leave right now because you have
covered all the pertinent facts, but maybe I could add a little
color. I have had the opportunity, I grew up in your State, and
I have lived in six of your States, thanks to this great
industry. So it is terrific to be here.
U.S. Travel is the nonprofit organization that represents
all of the travel industry. I had the pleasure of testifying
before this subcommittee last year on the economic impact, and
I return with some good news.
You have stated the numbers extremely well. We are $885
billion to the U.S. economy of people that get their paychecks
from folks like this, but another $1.2 trillion when you think
about all the people that make the vans and the signs and the
flowers, et cetera; $120 billion in taxes. So we are kind of a
darling of the economy.
When you look at, just as you said, jobs, Mr. Long, one in
eight jobs--and in Florida you have talked about jobs, how
important they are. And we are in the top 10 employers in all
48 States, territories, and the District of Columbia--two
states not, but 48 of the States. And that is terrific.
And I want to talk about one of the more lucrative sectors,
and that is overseas travel. Thirty million overseas visitors
came to the U.S. last year. They stay longer, 18 nights on
average. They spend more, $4,500 per person. And as you stated,
every plane that lands, 33 of them add 1 new American job that
can't be outsourced
We have been a very resilient group, restoring 85 percent
of the jobs lost in the downturn versus the rest of the
economy, 69 percent, and being the number-one service export,
with $160 billion to the U.S. economy. So every 1 percent that
we improve adds another $1.6 billion that wasn't here. These
folks leave their money, and they go home. It is a wonderful
thing for our economy.
Department of Commerce just said--their numbers are
released--we are growing three times faster than all other
industries. And enormous potential. You talked about 17 percent
share 13 years ago in 2000; now 13 percent. So it just shows
the opportunity.
I come with some good news today. First of all, Brand USA,
thanks to the support of so many of you, was enacted from the
Travel Promotion Act, which 3 years ago passed. And Brand USA
promotes the U.S. as a destination. It levels the playing
field. The gentlemen from California and Florida are blessed
with huge budgets to promote, but so many other States aren't,
and territories. And this gives an opportunity to level the
playing field across America, and I think that is one of the
important roles.
And even for Florida and California, until people decide to
come to the U.S., their dollars don't go very far. So this
Brand USA does a great job of getting people to understand U.S.
Just starting out, Brand USA has done a tremendous job of
improving that important statistic of intent to travel here,
double digits. In the countries where they are promoting,
double digits intend to come to the U.S. So it is going to be
is a huge opportunity. And, as you all know, not one penny of
taxpayer funds fund Brand USA.
The second thing is the visa wait times, a lot of good
things have happened. State Department has driven down the visa
wait times by 90 percent. It used to be over a 100 days to get
a visa interview in China and Brazil. It is now under 10 days
and actually about 5 days.
Adding visa-waiver countries, we went from 27 to now 37,
with Taiwan being added in as the 37th visa-waiver country in
November. And those countries do a tremendous amount already
improving travel. When South Korea went to the visa-waiver
program, in the last 3 years, South Korea is up 63 percent--1.2
million visitors, $4.2 billion, 34,000 jobs.
And there is legislation before you all, and one of my
colleagues will talk a little more about that, the JOLT Act,
which is very important to keeping these wait times down,
adding visa-waiver countries from low-risk countries like
Brazil, Chile, Argentina, Poland, very important to your area,
and Israel, so very important. It is also important that that
JOLT Act asks to test secure videoconferencing for interviews
in many remote areas. So we have 37 cosponsors on the JOLT Act.
I hope those that are not cosponsoring will do so.
But all this goes for naught if we don't do a better job of
getting people into the country through customs. We have got
this funnel that we built here, and Customs and Border
Protection are operating as best they can with the resources
they have, but they are resource-constrained. To me, it is just
like having two cashiers at Costco on a Christmas holiday or
during the holidays that just can't make it happen.
So there is legislation in the budget--the budget has been
presented--for 1,200 new CBP officers, and the Immigration Act
asks for 3,500. And we need those at our southern borders but
also at our airports that are very important. People tell us
they are avoiding the United States because of the fact it is
difficult to get through customs, a 4-hour wait sometimes,
which is just inexcusable and drives people to other
destinations.
Lastly, business travel is robust. For every dollar--we
just did a research study, came out today. Every dollar spent
in business travel yields over $12 in revenue and almost $3 in
profit. Those companies that travel more get more business,
simple as that.
And I ask you, when we think about the government travel,
that we really think about not having excess but important
travel and keeping that measure of what is the right travel,
where does it add value. And that would be very important.
I thank you for the chance to testify, and I appreciate all
you do to support this industry.
Mr. Terry. Thank you.
[The prepared statement of Mr. Dow follows:]
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Mr. Terry. At this time, we now recognize Ms. Matthews.
STATEMENT OF KATHLEEN MATTHEWS
Ms. Matthews. Chairman Terry, Congresswoman Schakowsky,
members of the subcommittee, thanks very much for this
opportunity to speak on behalf of my company, Marriott
International, and also our industry.
Marriott, as you may know, is a global hotel chain of 3,800
hotels, 3,200 of which are here in the United States, where we
got our start as a company 85 years ago. We operate in all 50
States, including many of your districts, and I hope we have
had a chance to host you at one of our hotels over the years.
Our company, I think, is a really good example of the
American dream. We started in 1927 as a nine-seat root beer
stand not far from here on 14th Street NW. This was the dream
of our founders, a young couple, J. Willard Marriott and his
wife, Alice Marriott. They traveled from Utah across the
country in a Model T Ford. That root beer stand became a chain
of restaurants known as the Hot Shoppes. And 30 years after
they had begun, they opened up their first Marriott hotel, also
here, just across the river on 14th Street--across the 14th
Street Bridge in northern Virginia. That was the first Marriott
hotel. And it was right near what was called Hoover Field,
which is now Reagan International Airport.
Today, we employ 325,000 people at our managed and
franchise hotels. These are across 14 different brands that
range from Ritz-Carlton at the top end all the way down to
Fairfield Inn at the budget category but include Renaissance,
Courtyards, and Marriotts.
We are proud to be part of the economic growth that Roger
Dow has just talked about, especially during this economic
downturn that we have just been coming out of. And as a
company, beyond our profits, we also have a company purpose,
and that is to open doors to a world of opportunity. Our
number-one core value as a company is to put people first. That
not only means taking care of our guests, but it also means
taking care of all of those employees that wear the Marriott
name tag.
So my hope today is to provide some information to the
subcommittee that will help you further consider and support
Federal policies that will help us as a company and as an
industry to open more doors to that world of opportunity we all
aspire to.
As the chairman referenced, every time we open up a new
hotel, we generate hundreds of construction jobs, and we can
generate in a large hotel as many as 1,000 permanent jobs. This
is also contributing millions of dollars in tax revenues into
government.
And our hotels become a focal point for so many things in
the community--community events, meetings. And they also spark
additional development. So a hotel going into a place like
Times Square can transform Times Square into a place that
brings tourists back again and again.
And just as a local example, several blocks from here, we
have construction cranes right near the D.C. Convention Center
on 9th Street. This will be the site of the new Marriott
Marquis, which is going to have 1,100 rooms, will spark tourism
to our Nation's capital, and will have thousands of jobs
associated with that new hotel.
Beyond the immediate jobs, we always like to talk about the
ripple effect or the multiplier effect in our industry because
the opportunities we provide boost disposable income that is
reinvested into the local economy. This is the disposable
income created by salaries but also by our supply chain as a
company.
And partnering with global researchers right now, we are
mapping that ripple or multiplier effect--specifically, what
any new hotel in any one of your districts would mean to the
local community and the local economy, from our suppliers, our
vendors, and all the people that we do business with. We are
just in the beginning stages of this research. We are really
excited when it is completed to be able to share it with you,
as we are sharing it with governments all over the world,
because this kind of a thing is happening everywhere around the
world where we are building hotels and where travel and tourism
is really growing.
But just kind of bottom line, we know that for every full-
service hotel, like a Marriott, we send millions of dollars of
buying power back into local communities through the salaries
and supply chain. And, as you said, Mr. Chairman, for every
five full-time full-service hotel rooms that went add to the
system, that creates three jobs. So, five hotel rooms, three
new jobs to the economy.
And we also like to stress that these are not low-wage,
low-opportunity jobs. Our jobs are a gateway to the middle
class for many people, particularly for individuals who may
have not had training, because they get the training at our
hotels. We cross-train. We promote, where possible. We provide
benefits for our employees. And at Marriott 90 percent of our
workforce is full-time, even though the perception may be that
these are part-time jobs.
And our industry, I think, is unique in this respect
because a housekeeper can become the general manager of a
hotel. A lifeguard can become the head of a major travel
association. Roger Dow, to my right, started as a lifeguard at
our Saddle Brook, New Jersey, hotel. It was our sixth hotel in
the Marriott system. When he joined that hotel, he was told
maybe Marriott will grow to 100 hotels. Now we are at 3,800
hotels in his lifetime. So this shows that incredible
multiplier effect.
And, of course, as people join the middle class, they
suddenly become travelers themselves, so you see this virtuous
cycle continuing again and again. And that is why in 2012 we
hit that amazing milestone, which was 1 billion international
trips made in the world. These were not 1 billion individual
travelers but 1 billion individual trips of people outside
their home country, many of them coming here to the United
States.
So, as a company, we want more people to see the world, and
this is a campaign we would love to have you join us as part
of. Because if we want to get to 2 billion trips, there are a
number of things that we want to do. I know my time is getting
short, so just to reiterate what Roger Dow had talked about, we
want to make sure that when people make that trip, that they go
to Orlando or to Branson and not just to Paris, which is what
the trend has been.
So we see other countries getting very competitive on this
front. There is a lot of competition, as you talked about, Mr.
Chairman. And so the number of things you could do would be to
support Brand USA. Marriott is very involved with that. Our
chairman is actually on the Brand USA board. Reauthorizing and
making permanent reauthorization for Brand USA is a critical
component for us to be competitive.
We also want to make sure that we continue to support the
President's travel/tourism strategy with things like the JOLT
Act. And that is another way that you really can support our
industry.
So thanks very much for your commitment to this. We heard
it in all of your remarks. And we look forward to helping you
in this campaign to get more people to see America. Thank you.
Mr. Terry. Thank you very much.
[The prepared statement of Ms. Matthews follows:]
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Mr. Terry. Mr. Rothery, you are now recognized.
STATEMENT OF BRIAN D. ROTHERY
Mr. Rothery. Thank you.
Good morning, Chairman Terry and Ranking Member Schakowsky
and members of the Subcommittee on Commerce, Manufacturing, and
Trade. My name is Brian Rothery, and I am the assistant vice
president of government and public affairs for Enterprise
Holdings, which operates the Enterprise, Alamo, and National
Car Rental brands.
Chairman Terry, thank you for holding this hearing on the
impact of tourism to our economy. The rental car industry plays
a vital role in the tourism industry, helping people get from
point A to point B, whether they are conducting meetings,
visiting family, or taking vacations, and particularly those
international visitors that Roger mentioned that spend more and
stay longer--very important.
But first I would like to point out the special meaning of
the name ``Enterprise.'' Enterprise Holdings' founder, Jack
Taylor, served as a decorated pilot in World War II while
stationed aboard the USS Enterprise. After the war, Jack began
with seven cars and one employee, what we now know as
Enterprise Holdings. More than 56 years later, our privately
held and still Taylor-family-owned company accounts for $15.4
billion in revenue and operated 1.3 million vehicles at 8,200
locations throughout the world. That was all in 2012.
So a bit about the rental car industry generally speaking.
There are more than 18,000 car rental branches in the United
States, operating a fleet of 1.9 vehicles, producing an
approximate revenue of $24 billion.
The simplest way to look at our industry is to divide the
nearly $24 billion industry into two equal parts: Approximately
$12 billion generate at the airport; the other $12 billion
coming from the neighborhood locations throughout the
communities that you represent. The revenue parity between the
airport and the neighborhood market continues to surprise many,
despite the fact that these two markets have been roughly of
the same size since Auto Rental News first reported that fact
in 2006.
The industry groups its transactions into three categories:
corporate, replacement, and leisure. So the $12 billion
neighborhood market is approximately 40 percent replacement, 40
percent leisure, and 20 percent corporate--I will explain this
in a moment--while the $12 billion airport market is
approximately 60 percent leisure and 40 percent corporate.
So let's take a closer look. The neighborhood corporate
rental accounts for $2 billion in annual revenue. Examples
include an architect renting a car to make a 150-mile roundtrip
to go visit a job site or a State employee making a 200-mile
roundtrip to visit the State capital for a meeting in lieu of
driving their personal vehicle.
It is also important to note the important role the
neighborhood corporate market plays following natural
disasters. The extensive network of locations throughout your
districts and across the country are able to put utility
companies, government agencies, insurance adjustors, and
catastrophe teams on the road to help stimulate and get
recovery under way as soon as possible.
Neighborhood replacement accounts for $5 billion in annual
revenue, consisting of rentals to consumers who need to rent a
car due to the theft or repair of their own car. Many of these
rentals are paid for by insurance companies as part of the
claims process or are provided as a courtesy of an auto
manufacturer while a vehicle undergoes warranty repair.
Neighborhood leisure accounts for $5 billion in annual
revenue. Examples include a larger vehicle to take a family
vacation, a cargo van to take a child to college, a luxury car
for a special occasion such as a wedding, or even a pickup
truck to facilitate a weekend project in the yard.
Some are surprised to learn the car rental industry caters
to the needs of many who do not own vehicles. For many urban
dwellers, it isn't practical to own a car, and some renters
simply can't afford car ownership. Whatever the reason, these
customers rent when public transportation can't meet their
needs.
Airport corporate rental accounts for $5 billion, which
serves the needs of those deplaning passengers needing a car on
government or business travel.
And, finally, last but certainly not least, airport leisure
accounts for $7 billion in revenue, which is the largest single
revenue category, and it is also the most fun, because most of
those folks are going on vacation.
So a bit about employment in the car rental industry,
picking up along what Kathleen just mentioned. The most recent
data shows the car rental industry supported close to 124,000
jobs in the U.S., generating payroll of more than $4.6 billion.
Like many of these jobs throughout the travel industry, even
entry-level positions in the car rental industry are often more
of a career than just a job. In the case of Enterprise
Holdings, nearly every member of our senior leadership team all
began their career with Enterprise Holdings, just as I did 16
years ago, as an entry-level management trainee. We learned the
business from the ground up. That is just the way we do it.
So now a bit about the car rental industry and its
connectivity to the American automotive industry. In 2010, U.S.
car rental companies purchased about 1 million vehicles from
the big three--about 16 percent of the output. Because rental
car companies purchase so many cars, the rental car industry
provides predictability for the auto manufacturers confronting
complex and costly scheduling and utilization concerns.
In order to sell used cars back into the consumer markets,
rental car companies and manufacturers use a variety of
channels, including auto auctions, auto dealerships, and some
direct retail operations. Auto dealerships rely on the steady
influx of reasonably priced, well-maintained, used rental
vehicles that are, on average, 1 year old with relatively low
mileage. Moreover, car rental companies purchase a diverse mix
of models, providing excellent exposure for new car
introductions. And as consumer studies reveal, consumers are
more likely to buy a vehicle after renting it. We play a role
in introducing consumers to new technology, including green
technology, hybrid vehicles and so forth.
And I want to mention one thing as I am getting a note from
the chair to wrap things up. We are here to present positive
information about our industry, and it is largely positive. I
would be remiss if I didn't mention the one thing that
continues to be an impediment to our success.
Unfortunately, many State and local lawmakers continue to
believe car rental taxes are a convenient way to export tax
burdens to nonvoters. It is a modern-day version of taxation
without representation. Senator Russell Long may have said it
best: ``Don't tax you. Don't tax me. Tax that fellow behind the
tree.'' Today, car rental customers are that fellow behind that
tree.
The problem of excessive taxation of car rental customers,
left unchecked, can and will harm our industry. And I encourage
this Congress to explore ways to address the problem, the same
way it did for trains, airlines, and buses in previous
Congresses.
So as the U.S. continues to emerge from the recession, it
is essential that Americans continue to travel and rent cars,
it is essential that car rental companies and the entire travel
industry preserve these meaningful jobs.
And I want to wrap up my remarks, and I would be happy to
answer any questions.
Mr. Terry. Thank you.
Mr. Rothery. Thank you.
[The prepared statement of Mr. Rothery follows:]
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Mr. Terry. Ms. Gaytan?
STATEMENT OF LORI GAYTAN
Ms. Gaytan. Chairman Terry, Ranking Member Schakowsky, and
members of the subcommittee, my name is Lori Gaytan, and I am
senior vice president of human resources for InterContinental
Hotels Group. Thank you for the opportunity to speak today on
how tourism benefits our economy.
IHG is the parent company for two of the most iconic brands
in the hospitality industry, Holiday Inn and InterContinental
Hotels. We are the largest hotel company in the world by number
of rooms. Our 676,000 rooms host 157 million guests each year
in 4,600 properties in nearly 100 countries and territories.
More than 3,100 of our managed and franchised hotels are right
here in the United States. IHG owns just five of those U.S.-
based hotels. The rest are owned by franchisees, many of whom
are small-business owners operating hotels in their local
communities.
As others have testified today, the travel industry is a
significant contributor to the U.S. economy. IHG asked Oxford
Economics to quantify IHG's impact on economic development, and
they found that IHG hotel operations and the spending
associated with those hotels support close to 2 million jobs
and $100 billion in sales.
In 2012, IHG hired 5,000 people in our corporate offices
and managed hotels in the U.S. Our managed and franchised
hotels employ approximately 220,000 employees in the United
States. Last year, we opened 133 new managed and franchised
hotels, and we are continuing to grow, with 1,250 hotels
currently in our U.S. pipeline. We expect to hire 32,000 new
employees to staff those properties.
Being hired by IHG is often the first step in a long and
satisfying career. More than half of IHG's managers and two-
thirds of our directors have been promoted internally. Paul
Snyder, who is IHG's vice president for corporate
responsibility, got his start as a line-level employee. He
actually was a bartender at the Holiday Inn in Rolling Meadows,
Illinois.
And Michel Chertouh joined IHG in Paris as a trainee in
1984. During the next 24 years, he worked in different jobs and
properties around the world for various IHG brands. In 2008,
Michel became GM of the InterContinental Hotel in Brazil. In
his own words, ``I have had a very rewarding career with IHG.
To progress through so many different roles in so many
different places has enriched my professional life and given me
a unique perspective on the global hospitality industry.''
There are thousands more stories of entry-level jobs at IHG
properties providing the first step to a long and rewarding
career.
I would like to address what Congress can do to assure that
travel and tourism continues to serve as an engine for economic
growth in local communities across the country. In 2010,
Congress enacted the Travel Promotion Act, establishing the
first-ever national program to attract more international
travelers to the United States. It is funded through a matching
program of up to $100 million in private-sector contributions
and a $10 fee on foreign travelers from visa-waiver countries.
We are extremely concerned that legislative proposals to
divert this fee to other purposes could derail what has been an
incredibly successful effort to attract foreign visitors to the
United States. We urge Congress to protect this funding source
from being co-opted by other interests.
As we attract new overseas visitors to the United States,
it is essential to assure that the process of obtaining a visa
and clearing through customs is a welcoming one. The JOLT Act,
introduced by Representative Joe Heck, would do just that, and
IHG strongly supports its speedy enactment.
And while we wholeheartedly support Congress' effort to cut
unnecessary spending and reduce fraud and waste, Federal travel
policies must recognize the need for Federal employee travel to
receive training, to meet with their peers, and to perform
their responsibilities efficiently and effectively.
In conclusion, by welcoming travelers from around the
world, hotels are taking the lead in growing our economy and
creating jobs within every State and congressional district in
this country. IHG is a significant part of that growth and
opportunity.
We urge Congress to act to remove obstacles that foreign
travelers face in coming to the United States, to continue to
provide the dedicated funding source that will allow Brand USA
to promote the United States to overseas travelers, and to
assure that responsible policies allow for legitimate travel by
Federal employees.
Thank you for the opportunity to testify today. I will be
happy to answer any questions you have.
Mr. Terry. Thank you very much.
[The prepared statement of Ms. Gaytan follows:]
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Mr. Terry. And Mr. Riehle?
STATEMENT OF HUDSON RIEHLE
Mr. Riehle. Chairman Terry, Ranking Member Schakowsky, and
members of the subcommittee, thank you for this opportunity to
testify before you today on behalf of the National Restaurant
Association. I am Hudson Riehle, senior vice president of the
Association's Research and Knowledge Group.
We use a simple phrase at the Association to tell our
industry's story: ``America works here.'' Restaurants are job
creators. We are an industry of predominantly small businesses,
but together we are the Nation's second-largest private-sector
employer. With more that 13 million employees, the Nation's
nearly 980,000 restaurants employ about 1 in 10 working
Americans. About half of all adults have worked in the
restaurant industry at some point in their lives, and one in
three got their first job in a restaurant. We employ more
minority managers than any other industry.
Although many of our members are still dealing with the
effects of the great recession, last year we added jobs at a
3.4 percent rate, double the 1.7 percent growth rate in the
overall economy. We are on track this year for our 14th
consecutive year of outpacing job growth in the overall
economy.
The fortunes of restaurants are obviously closely tied to
travel and tourism. The Nation's nearly 1 million restaurant
locations are starting to gear up for what we hope will be a
strong summer season. Our members are looking forward to
increased summer sales, but we are also proud of the thousands
of jobs we will create because of those sales.
NRA research shows that roughly one in four industry sales
dollars come from travel and tourism. The trend is even more
prevalent among fine-dining establishments where travelers and
tourists generate about 30 percent of revenues, on average. In
addition, restaurants are also the Nation's second-largest
creator of seasonal jobs during the summer months, with travel
and tourism fueling that job creation. In a typical summer
season, restaurants will add more than 400,000 jobs. That
figure trails only the construction industry. We expect that
restaurant employment during the summer months will be up about
7 percent above January levels. In some tourist areas,
restaurant employment will jump by more than 20 percent during
the summer months.
The restaurant industry benefits from growth in
international tourism. Restaurant operators in the casual and
fine-dining segments reported that travelers and tourists made
up a larger portion of their sales last year than in 2011. And
when restaurants do well, sectors from agricultural to
transportation feel the benefits. Every dollar spent at
restaurants generates $2.05 for the rest of the economy.
Considering our projections for restaurants to ring up sales of
$660 billion this year, that adds up to a total economic impact
of more than $1.8 trillion.
The implications for the economy are huge. Our industry is
in many ways America's training ground, and we drive careers,
entrepreneurial opportunities, and philanthropic contributions
in communities across America.
The Association strongly supports measures to deliver
stronger travel and tourism to and within the United States. In
particular, we support: one, reducing barriers to international
travel, including the JOLT Act reforms in the Senate
immigration bill; two, stepping up promotion of the United
States as an international destination through continued
public-private collaboration made possible through the Travel
Promotion Act; and, three, increasing business meal
deductibility.
Business travel is an important economic driver within the
travel and tourism industry. Many businesses of all sizes
depend heavily on restaurants as a venue for conducting
business. Currently, the business meal deduction is limited to
50 percent of expenses. Increased deductibility would bring the
business meal deduction in line with other ordinary and
necessary business expenses.
The National Restaurant Association looks forward to
working with this subcommittee and all of Congress on these and
other important issues to enhance the benefits of tourism for
the U.S. economy.
I welcome any questions you might have. Thank you.
Mr. Terry. Thank you, Mr. Riehle.
[The prepared statement of Mr. Riehle follows:]
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Mr. Terry. And that concludes our first panel's testimony
and starts the questioning of the first panel. And I will start
with a simple question, and we can go down the panel, from Mr.
Dow just on down.
I am just curious, when we want foreign travelers to come
into the United States and spend their foreign dollars in the
United States, where is our sweet spot? What are the countries
that we should be recruiting?
Mr. Dow?
Mr. Dow. The sweet spot is Western Europe, U.K., Japan,
France. The growth opportunity is in Latin America, Brazil,
China. China is up 44 percent over the past couple years; it is
a huge opportunity.
So Western Europe, very important. Asia, Latin America, the
future.
Mr. Terry. All right.
Ms. Matthews?
Ms. Matthews. I would agree with Roger Dow on those
opportunity states. The rising middle classes of China and
Brazil represent a tremendous opportunity. And right now we are
seeing a preference to visiting places like Europe because you
can get one visa to travel to all the 22 European countries.
And so, to be competitive with that, we really have to reduce
wait times. We have had tremendous progress in doing that.
I just got an email from Ambassador Gary Locke last night
who said that they have reduced the wait times for a visa
interview to 2 days in China even during peak season.
Mr. Terry. Wow.
Ms. Matthews. But there are more things we can do, such as
exploring visa waiver. When we see visa waiver for countries
like South Korea, we see a doubling in the number of visitors.
So reducing those barriers, making it easier, focusing on
trusted travelers really is the way we are going to get that
opportunity.
Mr. Rothery. I don't have anything to add.
Mr. Terry. All right.
Ms. Gaytan?
Ms. Gaytan. I don't have anything to add.
Mr. Terry. Mr. Riehle?
Mr. Riehle. Within the industry, the results are pretty
clear. In other words, if you look at growth in restaurant
sales on the west coast versus the east coast and the
proportion that comes from travelers and tourism, the growth
rates are substantially growing higher now on the west coast
versus the east coast because of the Asian growth in that area.
But, in the end, all restaurant sales end up being local.
And it is very important that we communicate to our members the
importance that international visitation brings. Because if one
is a fine-dining operator located in Miami, it is an entirely
different situation than being a quick-service operator located
on an interstate highway. And it is important for them to----
Mr. Terry. Good point.
Mr. Riehle [continuing]. Recognize those differences.
Mr. Terry. Thank you.
And, Mr. Dow and Ms. Matthews, Brand USA, is there any way
to quantify the impact of Brand USA?
Mr. Dow?
Mr. Dow. Yes. Brand USA is a startup. They began their
promotion in U.K., Canada, and Japan. And pre- and post-
measurement showed intent to travel here by 11, 12 percent and
higher from those countries. We will begin now measuring the
actual travel, but that is a great indicator.
So Brand USA has vehicles in place with the Department of
Commerce to measure the activity and show the growth. But it is
a no-brainer: If you promote America, they will come.
Ms. Matthews. I like to say, if the tree falls in the
forest and nobody is there to hear it, you know, did the tree
fall in the forest? I mean, you have to promote your country.
And we have seen the aggressive promotion of Incredible India,
Visit Britain. And we see the power of that in our own country
with destinations in States that market themselves.
And so for the United States not to be in that game,
really, basically can hinder the economic growth that we are
seeing. So that is why we are so supportive of protecting the
revenue stream to support Brand USA, so that we continue to be
part of that competition for travelers.
Mr. Terry. Mr. Rothery?
Mr. Rothery. Yes, I think it is important to remember that
it is a--the industry needs to match their own money in order
to----
Mr. Terry. That is a good point.
Mr. Rothery. And so if there is anyone that has their eye
on whether or not it is going to be successful, it is the
private industry that is going to be shelling out money.
So, as Roger pointed out, we can measure in these early
days based on their previous proclivity to go and look at that
versus on what actually happened. You know, we are at the very
early stages of this, and we are all, you know, eagerly
watching to see the results.
Mr. Terry. Ms. Gaytan?
Ms. Gaytan. Nothing to add.
Mr. Riehle. America is obviously the world's leader in food
service. And when we talk to members about the important of
getting visibility in the decision-making matrix of these
international visitors before they actually depart, in other
words, the planning of the itinerary, we are big advocates of,
obviously, placing food service options in front of these
travelers before they even depart their home.
Mr. Terry. All right. Thank you.
And now the ranking member, Ms. Jan Schakowsky, is
recognized.
Ms. Schakowsky. Thank you, Mr. Chairman.
Thank you for your excellent testimony, all of you.
As we know, the blunt and arbitrary cuts of the sequester
are now in effect, and Federal agencies, including those who
have been deeply involved in tourism, have experienced across-
the-board cuts. For example, the National Park Service issued a
sequestration planning memo that stated the National Park's
budget could result in, quote, ``reductions to visitor
services, hours, and operations, shortening of seasons, and
possibly the closing of areas,'' unquote.
Mr. Dow, do you have any concerns about the impact of the
sequester on your member companies? And if so, what are they?
Mr. Dow. We have many concerns that travel does not become
the face of sequester. With furloughs, FAA, fortunately, the
House and the Senate stopped what would have been a disaster.
To save $160 million, we put $9.3 billion and 83,000 jobs at
risk, and the Senate and the House stopped that last-minute.
We are concerned with the same thing with getting through
airports and the TSA. And as you so well stated, the National
Parks, our treasures, we are very concerned that it could hurt
there.
So we would love to see smart cuts in the right places
versus across-the-board cuts that will have disastrous impact.
Ms. Schakowsky. Thank you.
Has anyone else on the panel noticed impacts to the tourism
industry because of sequester? OK.
I wanted to ask--you know, we are all excited about the
stock market going way up, and it looks like in some aspects
the economy is improving. But, actually, middle-class America
hasn't seen a raise in a very long time, and a lot of people
are still suffering from the effects of the economic downturn,
the recession.
I am just wondering, over the last several years, if you
have seen any rebounding, any difference in tourism of ordinary
Americans, who, it seems to me, probably one of the first
things--not probably; I know--you cut back on is going out to
eat, taking that long weekend, planning your summer vacation. I
am just wondering how the economy feels to you. I would think
your industry would be a barometer of that, in many ways.
Anybody want to start with a crack at that?
Ms. Matthews. I can address that.
I believe that during the economic downturn we saw some of
the greatest losses in our luxury brands. But, really, across
all of our brands, we saw the impact of the downturn, and not
only among American families who were reluctant and couldn't
afford to travel, but also businesses that were reluctant to do
that.
We have seen across-the-board, across-all-tiers growth as
we have kind of rebounded from this. So whether you are talking
about a Fairfield Inn, which could be a family going on a
weekend, it could be a soccer team that is back on the road, or
it could be somebody who is a traveling salesperson, we are
seeing those rebounds in those lower tiers, as well.
Mr. Dow. One of the other things about this industry is
that it employs the underemployed. The number of people that
can start in this industry, as we are adding jobs 10 percent
faster, you can't do that at Microsoft. But you can go to work
down the street at the new Marriott hotel or one of these
restaurants and grow a career.
There is a myth that we are a bunch of ticket-takers and
hamburger-flippers. We have all flipped a hamburger in our
time; I am sure we all did take a ticket. But the bottom line,
we are not doing that anymore. And so it is a career builder,
where young, sharp Americans can be trained and grow. And we
can employ the middle class probably much better than most
other industries.
Ms. Schakowsky. OK.
True, but I am wondering if, in comparison to prerecession
days, if we are back or we are just climbing back or, you know,
how we compare to those times. I am wondering if we have----
Ms. Matthews. In the first quarter of 2013, Marriott
International exceeded our peak 2007 levels for our fee
revenues. So that shows that we are back at the level where we
had our peak production and growth.
Ms. Schakowsky. Is that the experience of everyone on the
panel?
How about the Restaurant Association?
Mr. Riehle. For restaurants, this year the total industry
sales will be up 3.8 percent. It is the fourth consecutive year
of sales growth.
Although the grow rates are definitely much more modest
than prior to the recessionary period, there is substantial,
substantial pent-up demand, in other words, what we call
unfulfilled demand, for restaurant usage among tourists as well
as residents. Almost one out of every two Americans report that
they are not using restaurants as much as they would like in
their daily lifestyle.
And when we talk to our membership about it, it is very
important to have a marketing promotional plan, both
internationally and domestically, to nudge those consumers into
that decision to patronage a food service establishment.
Ms. Schakowsky. OK.
Ms. Gaytan?
Ms. Gaytan. At InterContinental Hotels, which largely in
the U.S. we are a midscale brand, so very much servicing the
middle class, occupancy is up. We still have not recovered as
well with rate, but we have exceeded theprerecession levels in
terms of occupancy.
Ms. Schakowsky. Great.
Thank you so much.
Mr. Terry. The gentleman from New Jersey, vice chairman of
the committee, Mr. Lance.
Mr. Lance. Thank you very much, Mr. Chairman.
To Mr. Rothery--am I pronouncing that right?
Mr. Rothery. That is correct.
Mr. Lance. You discussed in your testimony the fact that
the taxes on car rentals is a growing challenge for your
industry. Can you tell us in a little more detail what is
happening, how widespread the practice is, and which of the
jurisdictions are the worst?
Mr. Rothery. So there are approximately 120 special taxes
that go above and beyond the sales tax in that particular
taxing jurisdiction. The problem really isn't unique to any one
geographic area or State or city; it is really throughout the
United States. I believe 43 States and the District of Columbia
have some form of extra car rental tax. Of course, not every
State has a sales tax, so there is a little bit of a difference
there.
Mr. Lance. Are there States that do not have a sales tax
and yet have taxation on car rentals?
Mr. Rothery. Yes, there are. I am going to behard-pressed
to come up with that off the top of my head, but I know there
is at least one.
Mr. Lance. Uh-huh.
Mr. Rothery. And they range on a variety of different
projects. You know, most notably, sports stadiums is kind of a
popular one. But it is not unique to one particular area, to
answer your question.
Mr. Lance. And could you provide the committee with a list
of what these levels of taxation are across the country?
Mr. Rothery. Yes, absolutely.
Mr. Lance. Thank you.
And how will Obamacare affect your industry?
Mr. Rothery. You know, I don't know that we have a stance
on it, you know, that we have formally taken. You know, we
provide, you know, health insurance to our employees.
Mr. Lance. And are most of your employees full-time
employees?
Mr. Rothery. Yes, a large majority of our employees are
full-time.
Mr. Lance. Marriott indicated 90 percent of your employees
are full-time. And would that be a similar rate in your
industry?
Mr. Rothery. You know, I would want to be serious about
studying the facts before I respond to that question. But
intuitively to me, you know, I would think that would be pretty
close to be true. But I can get to the committee an exact
answer.
Mr. Lance. Thank you.
And also the same question to the Restaurant Association. A
number of significant restaurant chains have made public
announcements about the need to cut their employees' hours
because of Obamacare. And if you would update the committee on
your views on that and where you think we might be headed.
Mr. Riehle. A typical restaurant pretax operating margin is
about 3 to 5 percent of total sales. It is an extremely
competitive industry. It has been and continues to be even more
so now. When one thinks about operating costs for a restaurant,
labor costs constitute about a third of a traditional
restaurant industry sales dollar.
And the legislation--I am just the research guy--the
legislation is, obviously, extremely complex. The industry is
extremely fragmented. There are almost 70 distinct restaurant
segments that roll up into that $660 billion.
So it is a complex piece of legislation overlaid an
extremely complex industry, and so the outcomes are obviously
very different for different types of operations and
ownerships.
Mr. Lance. Generally speaking, what percentage of your
employees are full-time?
Mr. Riehle. OK. From a research definition, the difference
between full-time and part-time, it is important to think of
part-time in four different categories. In essence, you can be
full-time part-time, you can be part-time part-time, part-time
full-time, you can be seasonal.
Mr. Lance. I am sorry, I am not smart enough to understand
that.
Mr. Riehle. Well, for the industry--in other words, the
industry is seasonal. In other words, sales in different--there
are certain locations that are only open for, say, 3 or 4
months of the year.
Mr. Lance. Yes.
Mr. Riehle. There are individuals that work part-time in
the industry full-time. And then there are full-time people
that work part-time, you know, for a certain period of the year
only.
Mr. Lance. I see.
Mr. Riehle. So the one hallmark of the restaurant industry
really is its extreme labor-intensiveness.
Mr. Lance. Yes. Well, as we move forward, obviously, we are
interested to know how the new healthcare legislation will have
an impact on the various industries, particularly in tourism
and, within tourism, related to your fine work in your
industry.
Mr. Riehle. And I will make sure our policy people get back
to you on that.
Mr. Lance. Thank very much.
Mr. Chairman, I yield back the balance of my time.
Mr. Terry. Thank you.
And now the gentleman from North Carolina, Mr. Butterfield,
is recognized for your 5 minutes of fame.
Mr. Butterfield. Thank you, Mr. Chairman.
And thank all of you for your testimony today.
I will try to do this in less than 5 minutes. And let me
start with you, Mr. Rothery, if we can.
Mr. Rothery, I appreciate the integral role that the rental
car industry plays in tourism. Whether a family is renting a
minivan or an SUV for a short weekend or trip, ready access to
transportation options is a key to a successful tourism
industry.
Mr. Rothery, there has been some discussion about the lack
of Federal regulation of the industry. In December of last
year, at the end of the 112th Congress, stakeholder discussions
produced a bipartisan bill, S. 3706. It is my understanding
that there is now broad support for 3706 by both the rental car
industry and key consumer advocacy organizations.
So I want to get you on the record today. Does your company
support Senate bill 3706?
Mr. Rothery. Yes, we support--Enterprise Holdings supports
the effort to codify the practices of the industry, which is to
make sure that vehicles that are declared recalled by the
manufacturers and NHTSA, that they are safe. And there is an
agreement between rental car companies and also consumer
groups.
Mr. Butterfield. And why is it important for the industry
to be regulated by uniform standards?
Mr. Rothery. Well, I think it is important that consumers
have a degree of confidence when they rent a car that it is
safe and it is safe to operate that vehicle. You know, I think
it just fairly speaks for itself.
Mr. Butterfield. All right.
Finally, to you, Mr. Dow, I have served on this
subcommittee for some time now. I was involved in the drafting
of the Travel Promotion Act and supported its passage. The TPA,
as we call it, created a public-private partnership known as
Brand USA to promote U.S. Tourism to people around the world.
It is clear that Brand has been a success, with international
visitors to the U.S. continuing to increase rapidly.
What can States and the Federal Government do together to
make sure we have the resources needed to accommodate more and
more international tourists?
Mr. Dow. Well, first of all, Mr. Butterfield, I thank you
for your support. You were there from the get-go and helped
make it happen, so we appreciate that.
What can be done is to make sure that the money for Brand
USA stays in place. That has been said several times. And
States can work together. What Brand USA does is, as I
mentioned earlier, it levels the playing field. So let's say
that North Carolina wants to promote just in Scandinavian
countries or Italy. You can do that through them, which you
almost couldn't afford to do on your own before.
So it brings you the opportunity to take your dollars in
your State and make them very scaleable to go after direct
markets you want to go to and with matching funds that will
come in. So it really stretches your dollars, and it can bring
people specifically you want to get to.
So it is a huge opportunity. And the most important thing
is we must reauthorize this when it comes up because, as I say,
it primes the pump, and it will build a great number of jobs
and revenue for this country.
Mr. Butterfield. And we want our visitors to make repeat
visits to the United States, not just once in a lifetime.
Mr. Dow. You got that right.
Mr. Butterfield. And that is going to require flexibility.
Do you agree?
Mr. Dow. I think it certainly is. And one of the challenges
we have is, when visitors come into this country, is there are
not enough people in Customs and Border Protection. So you see
in areas like Miami, L.A., New York, some of the bigger
airports, O'Hare, where lines can be 3 and 4 hours. And these
people--I saw one just the other day, she said, ``Our
exhibitors are not coming back to this convention ever again.
We are going to the conventions in Germany or Shanghai.'' We
can't afford to let that happen.
So we need to get the resources, that these good men and
women are just stretched to the max. And that will ensure they
come back. And we have done a lot of research that says, if you
fix it, we will come.
Mr. Butterfield. Thank you.
I yield back, Mr. Chairman.
Mr. Terry. Thank you.
And if I am correct, 2015 is the year that TPA must be
reauthorized, but we will probably start working on it late
this year and into 2014.
Mr. Dow. If you want to start right now, we are with you.
Thank you very much.
Mr. Upton. I thought you would be.
The gentleman from Florida, Mr. Bilirakis, is recognized
for your 5 minutes.
Mr. Bilirakis. Thank you, Mr. Chairman. I appreciate it
very much.
Mr. Dow, one of the aspects of tourism that I am interested
in is pushing tourists out beyond the typical tourist
destinations. How can we either attract international visitors
to new locations or capture and push those traditional-
destination visitors out beyond those locations to new cities
or destinations for an extra day or 2?
In other words, we want them to visit Disney, but we want
them to stay a couple extra days and visit our sandy beaches on
the east and the west coast of Florida. So do you have any
ideas on how we can do that?
Mr. Dow. I have many ideas.
First of all, when those visitors come to an Orlando, a
Miami, a New York City, a Chicago, an L.A. For the first time,
that is where they stay. The next time, they take--and they
will stay maybe 7 days there and 7 days elsewhere. The third
trip, 2 days there and elsewhere.
And I think Brand USA allows you to promote those areas,
because the travelers today are looking for the authentic
destination, the real America, the history, to get out to the
Nebraskas, the Tennessees, places like that, and to other areas
in Florida that have the real life of America.
So this is a huge opportunity. And if you look at what
Brand USA's advertising is doing, it is showing those areas. It
is not pushing the Las Vegases and the New Yorks that are part
of the travel, but it is pushing people to those areas who
don't have the wherewithal to attract those markets.
Mr. Bilirakis. Very good. Thank you.
Mr. Riehle, I was pleasantly surprised to learn from your
testimony about the enormous impact that tourism has on the
restaurant industry. Florida has a large array of unique
culinary attractions, such as seafood, Cuban food, Greek food
from Tarpon Springs, where I am from, just to name a few
examples.
Can you expand on how tourism has a multiplying economic
factor and how that benefits the restaurant sector and local
economies?
Mr. Riehle. Absolutely. Culinary tourism, which is the
industry term, is a rapidly growing area for the industry. In
other words, both domestically and internationally, certain
regions are obviously famous for certain cuisines. And in terms
of the marketing mix to potential travelers, it is very
important, because dining is such an important, integral
experience associated with travel, that the operators and the
visitors and convention associations market specifically the
cuisines for which these different regions are know.
That is not to say other cuisines aren't important, but it
is true when you do the culinary research that certain
travelers to certain areas expect to have certain cuisines
highlighted in those travel experiences in those areas.
Mr. Bilirakis. Thank you.
Mr. Dow, we touched on this a couple times, but this is so
very important. Canadian visitors are an enormous source of
tourism to Florida. As you know, we have the Blue Jays in
Dunedin, Florida. Last year, Canadians made more than 3 \1/2\
million visits to Florida and spent more than $4 billion in the
State. Seasonal Canadians visitors are integral members of our
local communities and economies. Thank God for them.
Canada is one of the countries in which the Customs and
Border Protection operates preclearance customs facilities.
Understandably, CBP is cautious about discussing resource
levels, of course, for security reasons, as you know. However,
airlines are regularly denied additional precleared transborder
flights from Canada to the United States because of capacity
issues.
Can you speak to the benefit of the preclearance customs
program, particularly from Canada? And I know you touched on it
a couple of times, but it is so very important.
Mr. Dow. Well, I think the preclearance is extremely
important in the areas it is going on right now because it
allows you to look at the traveler in their area, and if you
want to isolate certain people, it gives you that capability.
But it takes the logjam off the Customs and Border Protection
people, who, as I said, are overstressed, and I think that is a
huge opportunity.
I was just yesterday in Tampa, just down the road from you,
and they are building a brand-new international terminal. They
could only handle 300 passengers. Now they can handle 1,200.
And when you promote in Greece to Tarpon Springs, the great
area there, through Brand USA, those people can now get in.
So if we can get them precleared in other areas, it will
certainly add to the capability and capacity of Customs and
Border Protection.
Mr. Bilirakis. Well, thank you very much. I appreciate it.
I yield back, Mr. Chairman.
Mr. Upton. Thank you.
And now, Dr. Christensen.
Before I start your 5 minutes, though, some people have
wanted to take pictures of your person up here testifying. And
since this is a tourism hearing, we encourage photos. So feel
free to just come on. Just don't stand in front. Do what you
want to get your photo.
Dr. Christensen, you are now recognized for your 5 minutes.
Mrs. Christensen. Thank you, Mr. Chairman.
And we have been really lucky to hear from some of our
greatest experts on the importance of tourism to our economy
and what you think Congress can do to make a good thing even
better. So I want to thank you again for coming to share your
ideas and your suggestions with us.
And I have many questions. I want to use at least part of
this time to put a few issues on the record that are pertinent
to my district.
First, all of you have worked within the territories. And
we are often left out, so I am just going to ask for your
support, whenever legislation is being written, that you always
remind everyone to include the territories, where it is
beneficial to us.
And on the Visa Waiver Program, of course, we talked about
the bill. The President has his initiative, as well, addressing
improving and expanding the Visa Waiver Program. And while we
support also expanding it to China and to South America--I know
my commissioner is very interested in expanding it to South
America--we have long wanted to at least have it extended for
the Virgin Islands and the CARICOM countries.
And we have legislation that we are about to reintroduce
that would create a demonstration program. There is a precedent
in Guam already for a visa waiver. We have never had one, but
our economy could really use the lift. And it would be helpful
to some of the smaller islands in the Caribbean, as well. So we
hope that we can get the industry and the committee's support
for that when we introduce it.
St. Croix has been very hard-hit, as we have lost our
largest private employer for the territory. We have been on an
almost, I think it is about, 10-year journey to National
Heritage Area for St. Croix. It brings increased branding,
funding support, and a longer-staying tourist that spends more.
It is a designation that is fully in sync with what our
commissioner has envisioned for tourism in St. Croix. And her
department has actually participated in this study on which we
are hoping to base our designation. St. Croix has so many areas
and events that are connected to the Nation and to the world,
and it really would be a great designation.
I am wondering, what has been your experience with National
Heritage Areas? We have about 40 of them in the country. What
has been the experience of each of you? Maybe you would want to
comment if you have had that experience of working with the
National Heritage Areas in tourism.
Mr. Dow. This is an extremely important area. And, as I
said, people want to see these areas, and they are so
important. And you mentioned some visa-waiver opportunities.
These are low-risk countries and certainly should be included.
And that would certainly help these areas that are hard-hit,
because you have such a beautiful destination.
So I think the more we can push the natural beauty and all
the things that are important--and, again, Brand USA can
surgically allow St. Croix to promote where they need the
business and make their dollars really work much harder than
they have been able to on their own. So I think it is a
critical opportunity before you.
Ms. Matthews. Many of Marriott's select service brands are
located near some of the National Heritage sites that you talk
about. We opened up our first hotel on an Indian reservation in
the southwest USA. We have hotels throughout the Virgin
Islands.
Mrs. Christensen. You do.
Ms. Matthews. And, really, they are some of our----
Mrs. Christensen. Even one on St. Croix.
Ms. Matthews [continuing]. Most beautiful properties.
And so, as Roger said, we would be very supportive of visa
waiver for those territories. They are low-risk travelers. And
security is a very important concern. As we talk about, sort
of, greater mobility of people, we are also very concerned
about security and being smart about that in this visa process.
And I think that, you know, infrastructure is so critical.
So whether it is investing in our airports--because our
airports are not competitive with some of the best new airports
in India and in China, and that is a deterrent. So investing in
airports, continued pressure on airlift, which is critical to a
place like the Virgin Islands, and rapid rail is another area
of critical importance and investing to get to these tertiary,
secondary markets. Because if you have rail and good roads in
addition to newer airports, you are going to really get much
more broader benefit to all parts of the United States and our
territories from the travel and tourism opportunity that we
see.
Mrs. Christensen. OK.
I think I am running out of time, so thank you for the
opportunity.
Mr. Lance [presiding]. Yes, thank you, Dr. Christensen.
Next, we will hear from Mr. Harper from Mississippi
Mr. Harper. Thank you, Mr. Chairman.
And welcome to each of you. Thank you for taking the time
to share your input with us.
And, Mr. Riehle, if I could follow up a little bit with
some earlier questions, just to give you my experience, even
before Obamacare passed, I was getting calls from restaurant
owners in my district worried about the impact, because, as you
said, the profit margin is pretty thin. And I have had a number
of restaurant owners with multiple restaurants who said that if
they had to pay the penalty or provide health insurance, they
would be out of business.
And so we have seen a number of restaurants that are taking
people who were full-time people, turning them into part-time
employees, or maybe sharing them with other restaurants. Are
you seeing that, hearing that experience as perhaps an
unintended consequence of Obamacare?
Mr. Riehle. We, obviously, survey restaurant operators
every month, and we ask them about top challenges. And the top
challenge, obviously, now still remains the economy.
The second top challenge now from the restaurant-operator
perspective is government. Roughly about one out of five
restaurants operators reports that that is their top challenge.
And, obviously, part of that is related to the ACA and
sequestration. But in terms of their ability to plan----
Mr. Harper. OK, well, hold on. You are saying the
restaurants are saying sequestration is actually having an
impact on them?
Mr. Riehle. When you survey restaurant operators and ask
them what their challenges are----
Mr. Harper. Well, you said government, but----
Mr. Riehle. Yes. Correct.
Mr. Harper [continuing]. Are you saying that government
includes--and, of course, I can't call it ``ACA'' because it is
not affordable. So if I refer to it as ``Obamacare,'' you will
excuse me.
But are you defining it as Obamacare and sequestration? Or
is that how it is defined within this survey or this question
that you do?
Mr. Riehle. Well, there are basically four challenges for
the restaurant operator.
Mr. Harper. OK. Now, we are on very limited time, so I
apologize for that.
Mr. Riehle. OK.
Mr. Harper. But your industry is extremely important to
tourism, it is important to our economy. But the fact is, if
you provide health insurance or you have an additional cost,
perhaps a premium increase--and, Ms. Matthews, I will talk to
you in just a moment, with Marriott--if you have an increased
cost, that is going to get passed on to the consumer, will it
not? I mean, it would have to, I would assume.
And let me ask you, Ms. Matthews. I know that we all have
to be diplomatic, but the fact is, what we are seeing is a lot
of companies or chains are looking at this. If they have to
provide health insurance at a greater cost, then their choices
are really three: turn them into a part-time employee that will
not receive a benefit, or pay that additional cost out of the
corporation, or ask the employee to pay a bigger share. Am I
correct on that?
Ms. Matthews. So Marriott International as a company is
very committed to providing health coverage to all of its
employees. And, as I said earlier, 90 percent of our employees
are full-time. We actually during the downturn provided health
care to anybody who was working at least 30 hours. So while we
had to cut back hours on employees during the downturn to be
able to manage through the downturn, we did not take away their
health care, even if they were working under the hours that
normally would define full-time and part-time.
We have seen our healthcare costs go up, but they were
going up tremendously prior to the Affordable Health Care Act
being passed. So we have seen that trajectory of increased
healthcare costs. We will see additional costs as we take on
new enrollees, whether they are 26-year-old children of our
employees or people that maybe had decided not to take--people
who decided to take the risk of not taking healthcare coverage.
We are doing a number of things to control our costs, and
that has been our approach. So we are very focused on
prevention for our employees. We have aggressive programs on
nutrition, on exercise, things that can lower our costs. We
have a penalty if somebody is a smoker that they now have to
pay. So we are looking for ways to manage our costs as we see
them going up.
But we see this as a combination of just normal healthcare
cost escalation, in addition to some additional costs by virtue
of the pool of enrollees increasing.
Mr. Harper. And I think you hit on one of the things I
think is very important, having traveled abroad fairly
recently, is we are becoming to be at a greater disadvantage on
our infrastructure and the appearance of some of our
international airports in how we will compete. As some
explained to me in a foreign country, it is the coolness
factor, too, and how we compete on that and how we promote our
States and our country.
And for us, Mississippi, promoted as the birthplace of
America's music, very important, with the birthplace of Jimmie
Rodgers, the father of country music, B.B. King, and so many
others in our State.
So I think it is important that we all look at ways we can
promote good people into our country. And thank you very much
for your time.
I yield back, Mr. Chair.
Mr. Terry [presiding]. Thank you.
The chair recognizes the gentleman from Utah for your 5
minutes.
Mr. Matheson. Thank you, Mr. Chairman. I appreciate you
holding this hearing.
I come from a State where tourism has always during my
lifetime been the biggest industry in our State, between our
ski industry and our national parks. But it is important we
look from a national perspective, too, and figure out how we
compete with the rest of the world and make sure that we have
the opportunities to attract travel and tourism business in
this country. So I appreciate you holding this hearing.
I had a question for Ms. Matthews.
In your testimony, you cited a number of different
accolades that Marriott has received for its human resources
policies. And one I noticed is that you have been named one of
Working Mother Magazine's 100 best companies to work for in
this country. Can you tell me what policies have led Marriott
to being placed on that list for over 20 years?
Ms. Matthews. Marriott has a very inclusive policy. We want
the broadest array of talent to be able to work in our hotels,
and so that includes men and women and people of many cultural
and minority backgrounds.
As a company, we have always had very women-friendly and
family-friendly policies, whether it is onsite daycare at our
corporate headquarters in Bethesda, Maryland; whether it is
leadership programs that develop talent, whether they are men
or women, but we have women's leadership programs that granted
us these accolades, I would say.
I think you see women rising within the company. Our new
global officer for sales, marketing, and brand is a working
mother with three young children who started in an entry-level
position in our company. So you see those great success stories
within the company, as well.
So those are some of the reasons why we would have gotten
those accolades.
Mr. Matheson. That is great.
Mr. Riehle, I have a question that is a little off-topic
from what you have heard so far today, but to the extent that
restaurants need to avoid having cost pressures that make it
more difficult to provide service to tourists--and this is a
question that another subcommittee on this hearing may be
covering more, which is impact of government policy on food
prices with the renewable fuel standard and the fact that 40
percent of the corn produced in this country doesn't go to
food, it goes to fuel.
And I was wondering if the Restaurant Association has
researched this issue, if they have taken a position on this
issue about how it affects food prices for your members.
Mr. Riehle. Yes. Going back to this survey about operator
top challenges, the third top challenge now is food cost.
Roughly about a third of the restaurant industry sales dollars
goes to cover food and beverage purchases.
Wholesale food price inflation in 2011 was 8.1 percent. It
was the highest rate in over 30 years. And this year, it is
running about 2.6 percent, on top of another 2 percent increase
last year.
So, from the operator perspective, there is no way to pass
through those costs of dampened consumer demand, so it really
forces a very introspective look in terms of the operating cost
structure and where efficiencies can be achieved.
But the policy staff has a position on what you are talking
about, and I will make sure they get back to you. But, in
general, from the operator perspective, there is no substitute
for stable, predictable, wholesale food price inflation.
Mr. Matheson. OK. I appreciate that.
Mr. Chairman, I yield back.
Mr. Terry. All right. Thank you.
So that concludes the questions of this panel. I want to
thank you all. You did a wonderful job and were very helpful.
We thank you very much. So, panel number one, you are now
dismissed.
The second panel, if you will just give us a few seconds to
get sorted out here.
Mr. Riehle, I was thinking you had mentioned about food
tourism. So I was thinking about Nebraska, and I thought, we
are known for our beef and our steaks. So to add to added-value
tourism, maybe a tour of a slaughter plant?
Mr. Riehle. There are lots of different drivers for the
restaurant industry.
Mr. Terry. If we can get the second panel seated. If we can
get our witnesses to please take their seats.
Well, I want to thank the second panel. And most of them
have been introduced by their respective Members who requested
their presence.
We have Bill Seccombe and Sharon Zadra that was not
introduced because she didn't have somebody from Nevada here,
but she is a board member with the Reno-Sparks Convention and
Visitors Authority; then Gina Speckman, executive director of
Chicago's North Shore Convention and Visitors Bureau; Ralph
Witsell, Discover Torrance Visitors Bureau; and then Beverly
Nicholson-Doty, commissioner, U.S. Virgin Islands Department of
Tourism.
I thank you for being here.
And just like with the first panel, you will have 5
minutes. There is a clock right up here. Evidently, our lights
showing green, yellow, and red are not working, so you will
have to pay attention up here.
So Mr. Seccombe?
STATEMENTS OF J. WILLIAM SECCOMBE, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, VISIT FLORIDA; SHARON ZADRA, BOARD MEMBER,
RENO-SPARKS CONVENTION AND VISITORS AUTHORITY, COUNCILWOMAN,
CITY OF RENO, NEVADA; GINA SPECKMAN, EXECUTIVE DIRECTOR,
CHICAGO'S NORTH SHORE CONVENTION AND VISITORS BUREAU; RALPH
WITSELL, EXECUTIVE DIRECTOR, DISCOVER TORRANCE VISITORS BUREAU;
AND BEVERLY NICHOLSON-DOTY, COMMISSIONER, U.S. VIRGIN ISLANDS
DEPARTMENT OF TOURISM
STATEMENT OF J. WILLIAM SECCOMBE
Mr. Seccombe. Mr. Chairman, thank you, and, Members, thank
you for the opportunity to be here today.
As the president and chief executive officer of Visit
Florida, our State's destination marketing company, I probably
have one of the best jobs in the world: 825 miles of the most
beautiful beaches in the world, the theme park capital, home of
American golf, the home of American cruise lines, award-winning
State parks, and incredible communities, from Jacksonville to
Tampa to the Florida Keys.
And when you think tourism, when you think Florida tourism
especially, you think it is all fun and games. And, in fact,
the millions of visitors that come to Florida every day are
enjoying just that. But it is also the number-one industry in
our State, and it is a key economic driver, the biggest
industry in our State. And I can tell you that the travel and
hospitality industry in the State of Florida was the key
industry that led Florida out of the recession of the last
several years.
It is our vision to make Florida the number-one travel
destination in the world, and we are in pretty good place to do
that. Last year, we had our second consecutive record year of
89.3 million visitors to the Sunshine State. Over 500 million
vacation nights were spent in Florida. And those visitors spent
$71.8 billion on hotels and shopping and dining and attractions
around the State.
To put that into perspective, there are more people
visiting the Sunshine State today than live in 11 U.S. States.
It is a huge economic engine; it is a huge driver of Florida's
economy.
Those visitors will spend $196 million today in Florida,
and that generates $4.3 billion in State sales tax collections,
23 percent of all the State's sales taxes collected in the
Sunshine State. Those 1.6 million people that are visiting
Florida today are employing 1,053,000 Floridians. It is a huge,
huge driver of the economy. And that number has been growing
like the visitor numbers: 36 months of consecutive growth in
the hospitality sector in the Sunshine State.
As I look to the future of Florida tourism, I can tell you
our next major benchmark is trying to get from 89 million
visitors to 100 million visitors. And what does that look like?
I can tell you that the economic impact of reaching a goal like
that is significant. We would be able to create another 121,000
jobs. The average salary of those jobs, according to Florida
TaxWatch, would be over $43,000 per person. So they are, again,
big, real jobs for the Florida economy. It would generate an
increase in personal income in Florida of $5.3 billion a year.
So for Florida to be able to reach that kind of economic
number and be the number-one travel destination in the world,
we obviously continue to be very aggressive in our marketing
efforts, both domestically and internationally. And we are
fortunate to have a Governor and a legislature in the State of
Florida that recognizes the importance of tourism to our
economy and to job creation. And they just funded our
organization for the next fiscal year at an 18 percent increase
in our funding.
We know tourism marketing works. It works at the State
level, it works at the city level, and it works at the national
level as well. I can tell you, for us to achieve our vision,
the only way we are going to be able to do that is seeing a
huge increase in international visitation. Fortunately, in the
last 5 years, international visitation to the State of Florida
has more than doubled. So it is growing, and that is very, very
good news. Ten percent of all Canadians visited Florida last
year. We had a record 10 million overseas visitors.
But the only way we are going to be able to continue to
grow moving forward is with the help of Brand USA. I can tell
you that I very much, along with the entire Florida tourism
industry, appreciate your support of Brand USA and the Travel
Promotion Act.
Visit Florida was a founding partner of Brand USA. And our
organization, along with 50 other organizations in the State,
contributed over $8 million to Brand USA to help them be
successful. Again, destination marketing works. And we know
that if we help Brand USA promote the United States of America,
you know, a rising tide raises all ships, and Florida will be a
beneficiary. But the success of that organization is critical.
As we heard from Roger Dow earlier, a 12 to 14 percent
increase in intention to visit the United States as a result of
their initial campaigns, that marketing is working. Again, it
is not only good for United States, it is not only good for
Florida, it is good for all of the destinations around the
country.
And what they are during now with full funding is going
into really a second year of their kind of fully operational
marketing program. It is going to allow them to market in areas
and markets that are key and incredibly critical to Florida's
future success, marketing in Brazil, Canada, China, Mexico, the
United Kingdom.
So at Visit Florida and, I can tell you, not only our
organization but the entire Florida tourism industry is 100
percent committed to the success of Brand USA. And we believe
that with your continued support of Brand USA we will be able
to, again, see Florida tourism industry numbers increase but
also international visitation to all of the United States
increase, as well.
So thank you for your support, and we very much appreciate
it.
Mr. Terry. Wow, that was perfectly timed.
[The prepared statement of Mr. Seccombe follows:]
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Mr. Terry. Ms. Zadra, you are recognized for 5 minutes.
STATEMENT OF SHARON ZADRA
Ms. Zadra. Greetings, Chairman Terry and Ranking Member
Schakowsky, and Members. I am Reno Vice Mayor Sharon Zadra and
before you as a representative of the Reno-Sparks Convention
and Visitors Authority. And thank you for allowing me to be
here with you today.
The Nevada Commission on Tourism estimates that more than
50 million visitors come through Nevada each year, making
tourism Nevada's largest export industry, infusing more than
$56 billion into Nevada and providing 30 percent of the State's
employment, generating $2.7 billion in State and local tax
revenue, which represents roughly 26 percent of all tax
revenues in the State.
There are more than 425,000 residents in the greater
northern Nevada metropolitan area, which welcomes 4 \1/2\
million visitors each year. Studies show that visitors to our
area report spending more than $450 per person per day, which
at an average length of stay of 3 \1/2\ days translates into a
total impact of $7 billion in tourism-related spending each
year.
Although we in northern Nevada are working to diversify our
economy with recent acquisitions such as a $1 billion Apple
data-processing center, there is no question that tourism will
continue to be the fuel of our economic engine.
The city of Reno has teamed with private entities to add
more than 600,000 square feet of convention and entertainment
venues downtown. And, certainly, the draw of Lake Tahoe, which
is recognized as America's greatest lake by the readers of USA
Today, cannot be underestimated.
But one of the attributes that truly sets us apart and
helps drive tourism is our 290-day special events seasons.
Thousands come from around the globe to watch the world's only
closed-course pylon air race at our National Championship Air
Races. We attract more than 50,000 ``burners'' from around the
world for the counterculture festival known as Burning Man.
More than 11,000 of them fly into the Reno-Tahoe International
Airport, and that air travel alone accounts for $10 million in
economic impact. Six thousand classic cars invade the area for
Hot August Nights, filling our hotels and streets. And new this
year, we are bringing the world-renowned car auction company
Barrett-Jackson to Reno for one of its four nationwide events.
Tourism is critical to northern Nevada because tourism
creates jobs. Leisure and hospitality leads job growth in our
statistical area. It added 1,500 jobs alone in the past year.
Tourism paves our roads and builds new ones to support our
growing population. Tourism builds schools and educates our
children, who will continue to direct us at all levels of local
government and in leadership roles.
Nevada is not alone in its reliance on the tourism
industry, and so I plead that every State representative
support tourism-related initiatives and to ensure that the
tourism industry sees sustained growth.
I encourage beginning now the reauthorization of the Brand
USA, as we have discussed earlier today. Making it easier for
tourists to obtain entry visas helps our Nation's economy.
Surely, there may be reforms that are needed, but I believe
Brand USA will continue to play an integral role in growing the
U.S. travel and tourism industry.
Also, please consider legislation that will end the
practice of prohibiting travel to locations perceived to be a
resort or vacation destination. As far back as 2009, some
Federal agencies have restricted travel to resort locations.
Unfortunately, these bans have been decided without
consideration for whether or not holding a Federal Government
event in the banned locale actually presents a savings or
better value to the American taxpayer. My representative,
Congressman Mark Amodei, soon will introduce legislation to
address this.
Lastly, if any Members of Congress wish to become more
involved in promoting travel and tourism nationwide, please
reach out to Congressman Amodei and anyone else on the Nevada
delegation. Each works tirelessly to support this industry.
Joining the bipartisan Travel and Tourism Caucus, chaired by
Congressmen Jo Bonner and Sam Farr, is also a great way to join
the solution.
To simply summarize, tourism creates jobs.
Thank you, Chairman Terry, for showing your leadership on
this very important issue and allowing me to share northern
Nevada's experience. And I look forward to answering any
questions you may have.
Mr. Terry. Well done.
Ms. Zadra. Thank you.
[The prepared statement of Ms. Zadra follows:]
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Mr. Terry. Ms. Speckman, you are now recognized.
STATEMENT OF GINA SPECKMAN
Ms. Speckman. Hi. Chairman Terry, Ranking Member
Schakowsky, and members of the subcommittee, thank you for
allowing me to testify about the importance of tourism to our
economy.
My name is Gina Speckman, and I am the executive director
of Chicago's North Shore Convention and Visitors Bureau. I have
worked in the travel and tourism industry for 25 years, and I
have had the opportunity to see the benefits of the convention
industry during my tenure at the Chicago Convention and Tourism
Bureau and the impact on smaller communities in my current
position representing the cities just north of Chicago.
The great recession inflicted damage on almost every sector
of the American economy, including travel. Travel, however, has
bounced back from the downturn far more quickly than any other
industry.
In the cities I represent, the local hotel tax that is paid
for by visitors is a trusted revenue stream made even more
attractive as it is not paid for by local residents. Even
during the economic downturn, when drastic cuts were made to
the budgets of the municipalities I represent, the dollars
invested in the convention and visitors bureaus remained
intact. Why? Because the investment in tourism promotion has a
proven track record of performance, and in tough economic times
the incremental revenue brought in by visitors is more
important than ever.
Dollars derived from tourism is also an important mechanism
for funding economic development initiatives. In the city of
Evanston, for example, the hotel tax funds the economic
development department and all the initiatives they undertake
to bring technology, retail, and manufacturing businesses to
the city. Thus, not only does tourism benefit the businesses
that count and only thrive with visitor dollars, but the taxes
derived by increased visitation is the backbone of these entire
cities' economic development plans.
Of all the revenue sources that flow into the State of
Illinois, the hotel tax revenue is growing faster than all
other State taxes, higher than liquor, sales, cigarette, motor
fuel, gaming, or income taxes. In 2012, the hotel tax in
Illinois increased 23.42 percent over the year.
The travel and tourism industry has rebounded back to the
levels we were at before the recession. In 2012, $2.3 billion
in taxes were created by tourists in Illinois, representing
93.3 million visitors. How many other industries can boast this
growth?
And, of course, one of the main metrics of economic health
is jobs. On Chicago's North Shore, 1 out of every 10 jobs is
related to hospitality and tourism. When the recession ended,
hotels and restaurants immediately brought on new employees to
meet the demand. Though many frontline jobs in our industry are
entry-level, many are not. And our industry is very proud of
the fact that we nurture, develop, and promote talent. Show me
a general manager of a major hotel, and I promise you he or she
started as a bellman or a front desk clerk. Our jobs cannot be
outsourced, and we immediately have the infrastructure to hire
staff quickly.
In 2010, the Travel Promotion Act was signed into law,
which resulted in the creation of Brand USA, allowing our
country to have a national advertising presence in the
international marketplace. Prior to its establishment, the U.S.
Had no cohesive international presence, and other countries
benefited from our absence by taking our visitors.
In a short time, Brand USA has established advertising
programs that have allowed States, convention bureaus, and
private tourism entities the ability to co-market our product
and be part of this big effort. For my area, it allows me to
finally market internationally in a way that was not available
to me previously or was cost-prohibitive. Partnering with Brand
USA in the State of Illinois, I will now have videos and online
marketing materials in different languages backed by the
advertising force afforded Brand USA.
My constituents are thrilled, and we finally feel that the
tide has turned in fighting for the international visitor
dollar. In April 2014, Chicago is hosting International Pow
Wow, which is the international convention of tour operators,
and we are very excited to be a part of it.
Now that Brand USA has established focus to position the
U.S. as a premier destination for visitors, we need to continue
the momentum of increasing the amount of visitors coming to our
country. Passage of the JOLT Act, House bill 1354, would allow
travelers from countries closely tied to the U.S.--Poland,
Israel, Chile, Brazil--to be part of the Visa Waiver Program,
expand the successful Global Entry program, and reduce visa
wait times. I encourage you to include provisions of the JOLT
Act in any comprehensive immigration reform package.
Also, the Travel Promotion Act, as you have heard, is
coming up for reauthorization in 2015, and we encourage you to
please promote that.
Thank you for allowing me to testify.
Mr. Terry. Well done.
[The prepared statement of Ms. Speckman follows:]
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Mr. Terry. Mr. Witsell, you are recognized for your 5
minutes.
STATEMENT OF RALPH WITSELL
Mr. Witsell. Thank you, Chairman Terry and distinguished
members of the subcommittee, and the Ranking Member Waxman
also, for having me here.
For the record, I am Ralph Witsell, the executive director
of the Discover Torrance Visitors Bureau. We are a 501(c)
nonprofit organization funded by the Torrance hotels of 50 or
more rooms.
And for logistics, Torrance, California, is situated about
12 miles south of the Los Angeles International Airport. And
our goals are designed to increase the economies of the city
through sustained growth in tourism spending, which results in
significant increases in the economic impact of the areas of
earnings, tax collections, and jobs.
We have come to Washington to demonstrate how tourism
impacts economic development. The U.S. Travel Association, in
March of this year, announced that travel and tourism generates
$2 trillion for our economy and supports one out of every eight
of our Nation's jobs. These results have been achieved with an
industry becoming more focused and unified while working
together.
And I would like to localize my approach to the subject of
tourism, collaboration, and jobs. Like so many working
Americans with me, my position was eliminated and I was laid
off in early 2010, and I became a statistic in regards to
unemployment. I was fortunate to land a tourism job and really
appreciated and respected a community that developed this
tourism organization and allowed me to be the next new job in
California. In turn, I needed an assistant and a sales manager,
and just like that, tourism created two more jobs. Wow, this
system is great.
The incremental room nights my staff has booked impacted
hotel revenue, as well as the dollars the visitors have spent
in my community have definitely been a plus. Here we are,
little Torrance, California, now getting our share of the
California drive market, plus a few meetings.
I know, small stuff when you look at the big picture
regarding tourism and all the discussion here today, but it
gets better. I am a huge supporter of collaboration and realize
that regional marketing creates even more economic development.
So I approached my neighboring cities, Manhattan Beach, Hermosa
Beach, and Redondo Beach, and we agreed to market the region as
``the Beach Cities, South Bay, Los Angeles.'' So now I am not
just promoting one city but my city, Torrance, as the gateway
to the South Bay's beach cities. This new recognition makes the
region much more marketable, accessible, and provides a true
southern California experience for the visitor.
Now, Discover Torrance is primed to be a player in the
international arena. But even with the partnership with the
beaches, it probably won't be enough of a factor to say to a
young middle-class Chinese couple searching on the Internet in
Shanghai to focus on the South Bay of Los Angeles for their
first visit to the United States. This is where we collaborated
with Visit California, our State's tourism agency, and, also,
we are soon going to collaborate with Brand USA, who both
regularly travel abroad hosting sales missions to promote
California. These cooperative opportunities allow smaller
communities to promote their respective regions right along
with well-known icons such as Disneyland, Universal Studios,
Hollywood, Beverly Hills, and Los Angeles.
In closing, I would like to state that California is
reaping the fruits of our labor, as international travel is
California's top export. According to Visit California, the
$19.1 billion spent in California in 2011 was equal to the
combined value of the State's top four product exports.
According to a January 2013 report by the Legislative
Analyst's Office, ``Employment in the leisure and hospitality
sector consistently outpaces almost every other industry. Even
during the great recession, while California was shedding 1.3
million jobs, travel businesses lost fewer than most. And
leisure and hospitality has recovered quickly, adding more than
100,000 jobs since February of 2010. And it is the number-five
employer with the State.''
And, with that, Mr. Chair, that concludes my testimony.
Mr. Terry. Well done. Thank you.
[The prepared statement of Mr. Witsell follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Terry. And, Ms. Nicholson-Doty, I appreciate your
attendance. You are recognized.
STATEMENT OF BEVERLY NICHOLSON-DOTY
Ms. Nicholson-Doty. Good afternoon, Chairman Terry and
subcommittee members. Thank you for this opportunity. I am
Beverly Nicholson-Doty, commissioner of tourism for the U.S.
Virgin Islands, and I bring you greetings from my home and on
behalf of the Caribbean Tourism Organization, which I chair.
The President's Executive order announcing a set of
initiatives to significantly increase travel and tourism in the
United States is a major step forward for the world's biggest
travel and tourism economy. It is also an opportunity for our
territory, the USVI, to look at how we might secure new
opportunities arising from this bold initiative.
We welcome the administration's goal of attracting 100
million international travelers by 2021. Since the
announcement, we are pleased to learn strong progress has been
made, both through the Executive order establishing a national
travel and tourism strategy and through a series of
improvements to the visa processing.
The government's comprehensive approach will benefit our
growing industry by drawing on the skills of different parts of
the U.S. Government. We respectfully urge you to ensure that
the Department of Commerce receives the support to enhance the
profitability of an industry which supports the direct
employment of more than 7.7 million Americans.
We are most encouraged by the launch of Brand USA's
international campaign to increase visitation to the United
States. The U.S. is seeing increased demand in the global
travel market, and we look for ways of attracting some of these
new visitors to our shores.
The President's strategy to expand the Visa Waiver Program,
coupled with increased funding for U.S. Customs and Border
Protection and TSA, strengthens national security while
encouraging legitimate overseas visitors. Full funding of the
FAA programs also strengthens our safety and security efforts.
Expanding the program will create jobs and bolster our economy
by welcoming millions of new international visitors to the
United States.
We urge our Federal authorities to review visa and entry
procedures for cruise passengers. Currently, some cruise lines
are avoiding U.S. Ports on their itineraries. One reason cited
is the extensive time to process foreign arrivals. This makes
disembarking a lengthy and costly process.
The development of the National Travel and Tourism Strategy
is critically important for smaller parts of the country like
the U.S. Virgin Islands because, among others things, it
stresses the need to focus on all our country's tourism
destinations in a more consolidated fashion. This is much
needed for offshore destinations like Puerto Rico and the U.S.
Virgin Islands.
It is critically important for island territories of the
United States to have a voice in the implementation of the
President's initiative to ensure our distinctive issues are
addressed. We can also bring a unique perspective to the design
of this plan.
In the U.S. Virgin Islands, the tourism industry is now
even more critical since the closing of the Hovensa oil
refinery on St. Croix.
This event caused the loss of thousands of jobs, with an
estimated 20 percent impact on our economy.
In addition, the extremely high cost of energy in the U.S.
Virgin Islands places enormous pressure on the tourism
industry's bottom line. As an island territory, we are
especially reliant on airlift, so the Department of Commerce
Survey of International Air Travelers is a particularly
valuable source of information.
We regard airlines as an integral part of our
infrastructure. Just like roadways and bridges on the mainland,
without these aerial highways, we cannot fly visitors to our
islands. Without reliable airlift, we would be confined to the
backwaters of the global economy and perhaps be a drain on the
U.S. taxpayers. We will all benefit from the information
collected, and we urge Congress to support the continuation of
this survey called for in the Travel Promotion Act.
Another critically important issue is devoting resources to
develop our sustainable tourism industry. This is especially
true for a territory, like ours, rich in natural resources and
cultural heritage. Working in partnership with Federal agencies
to conserve our natural resources while making them more
accessible to travelers is an important step in the enhancement
of tourism.
In closing, tourism sustainably developed and in harmony
with a national tourism strategy enhances our environment, our
culture, our wealth, our education, our health, and our
security, and a vibrant visitor industry keeps our people
gainfully employed.
Thank you.
Mr. Terry. Well done.
[The prepared statement of Ms. Nicholson-Doty follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Terry. I will start the first questions with you, Ms.
Nicholson-Doty. You had mentioned with the cruise industry
the--will you describe again the problems when they want to
pull into a port in the United States and the visas? You had
mentioned there is a problem.
Ms. Nicholson-Doty. Yes.
Mr. Terry. Please state that again.
Ms. Nicholson-Doty. Yes. There is a movement among several
of the smaller but very upscale cruise lines where they are
avoiding U.S. ports. We find that they are homeported in other
places outside of the U.S., and the reason being is that if it
takes 2 or 3 hours for a cruise line to clear on embarking in a
territory, it affects our commerce, it affects their bottom
line. And, therefore, they are avoiding U.S. ports.
Mr. Terry. Is this something inherent to the Virgin
Islands, a territory, versus Miami?
Ms. Nicholson-Doty. I think that we are seeing some of the
smaller lines, where they indeed have a higher demographic,
that they are avoiding U.S. ports all together.
Mr. Terry. OK. That is interesting.
We actually invited the cruise industry to be part of this
panel, and they declined. I am not sure why. They are a big
part of it. So I am a little disappointed in that. But that is
interesting that you bring that issue up.
For Mr. Witsell and Mr. Seccombe, you come from big States
with big budgets for tourism. Some detractors of Brand USA
would say there isn't a need for a redundant Federal program.
Do you believe it is redundant? How do the two work together?
Mr. Seccombe, you first, then Mr. Witsell.
And, by the way, Mr. Witsell, I think it is interesting, in
your testimony you said that you were going to use Brand USA.
So I think you have a little slightly different perspective on
this than Mr. Seccombe from Florida.
Mr. Seccombe. Mr. Chairman, I believe it is important to
recognize that the global tourism industry is hypercompetitive,
and the United States and every destination within the United
States are competing against countries and destinations around
the world for precious, you know, vacation time and hard-earned
dollars. And, again, it is incredibly competitive. And the
United States having the opportunity through Brand USA to
compete at an international level will--again, from my
perspective, a rise in tide raises all ships. And Florida, as
a, you know, number-one travel destination in the world, it is
going to benefit from that.
However, I think we are also a microcosm of the United
States, as well. Florida has 19 million people. We have Miami
and Walt Disney World and some great businesses. But, also, as
we talk about cultural and heritage, this is our 500th year
since Juan Ponce de Leon landed in Florida. And we spend an
awful lot of time making sure that every destination within the
State has the opportunity to capitalize on what is our biggest
industry.
So I think Brand USA is faced with a similar challenge as
we have, is that it is not just the big destinations or the big
ports, but once we expose travelers from around the world to
the United States, they will travel across the United States,
and their money will follow.
Mr. Terry. Mr. Witsell?
Mr. Witsell. Thank you, Chairman Terry.
In regards to Brand USA or either Visit California,
basically our challenges as a smaller, say, secondary
destination is we need recognition. And so, by collaborating
with these two organizations and being able to take advantage
of their distribution channels, of their sales missions in,
say, Shanghai or China or Mexico or Canada, it just makes
sense, in regards to my smaller budget, for me to take
advantage of the expertise in the international market.
I have been with the Torrance Bureau, running it for the
last 7 months. And, basically, there has always been a feeling
within California to support Visit California. But if you look
at the opportunity to make sure that we are not missing
anything, I think it behooves us to look at every opportunity
available.
Mr. Terry. Quickly, for each of you, starting with the
gentleman from Florida, Mr. Seccombe, tell me what you feel is
the greatest barrier preventing or inhibiting in any way
foreign travelers from coming into your area.
Mr. Seccombe. I believe the single biggest challenge right
now is one of marketing and continuing to raise awareness of
the United States as a destination, certainly Florida.
We do have challenges that I think continue to be important
with our border control and making sure that we are providing,
one, security on one hand but also a welcoming experience on
the other, to make it easy so that visitors from around the
world are not coming to our airports and waiting 3 or 4 hours
to clear customs and to go through border security. So I think
that that would be the single biggest issue near-term.
And I think long-term our challenge is going to be to
continue to invest in the transportation infrastructures, that
we provide the kind of welcome that visitors are accustomed to.
Mr. Terry. Well, this is a little bit more of a lightning
round, with 1 minute left.
Ms. Zadra?
Ms. Zadra. The lightning-round or the easy answer would be:
Ditto, absolutely ditto for the State of Nevada. The
transportation piece is critical for us, as is the marketing
budget.
I would add to that a severe need still for the easier,
more timely issuance of the visas. It has had a remarkable, in
a negative way, impact on the State. We had an experience in
Reno alone where an international piece of business that we
sought and achieved actually performed at about 20 percent of
its international draw because of the visa issue.
Mr. Terry. Ms. Speckman?
Ms. Speckman. I think customs and the experience of the
traveler coming into Chicago O'Hare is an issue for us. We just
started and the city of Chicago is investing $5 million in
upgrading our airport, but it still doesn't address the customs
issue and the staffing of customs, which are not part of the
airport's control. You can have a plane landing and you will
have 300 people come off and only 2 people working. And it has
to do with issues of hiring and hours and union rules. But the
experience of the traveler is waiting in line for hours in a
very unwelcoming environment of an older airport.
So a lot of our gateway airports, you know--every time I am
in the airport in New York, there are buckets. Anytime it
rains, there are buckets on the floor. The infrastructure of
our airports compared to our competitors in the world is
lagging.
Mr. Terry. All right.
My time has expired. I apologize, Mr. Witsell and Ms.
Nicholson-Doty.
Now I recognize the gentlelady from Chicago, Ms.
Schakowsky.
Ms. Schakowsky. Thank you.
So, visits to the United States are highly concentrated in
five States. I am sure everybody knows them: New York, Florida,
California, Nevada, and Hawaii. I am sure that many visitors
also come to the U.S. Virgin Islands.
And it has always been sort of, I don't know, frustrating
to me, when I talk to international visitors, why more of them
don't come to the central part of the country, don't come to
Chicago, to the Midwest. I was encouraged by what Mr. Dow said
earlier about visitors looking for authenticity and wanting to
get a real feel of the United States. And there is no more
welcoming place, I think, than the Midwest and Chicago.
So I am wondering, Ms. Speckman, how do you broaden the
base? I certainly want visitors to go to all these other
places, too, to these five other States who depend so much on
tourism, but how do you broaden the base? And how has Brand
America helped do that?
Ms. Speckman. Well, Brand USA has----
Ms. Schakowsky. Brand USA.
Ms. Speckman. You know, it just started, too. And the State
of Illinois is now a partner with Brand USA. And, just last
week, it announced a program to all the convention bureaus in
Illinois which will allow us to co-op and market our areas and
produce collateral and video in different languages that is now
affordable to us. Through Brand USA and through the State
underwriting a major portion of it, we now can get involved.
And, really, now, what we do in trying to get the travelers
to come to the Midwest and Chicago is to market to what people
are looking for, and that is experiences. Yes, people know the
big-name cities, but people really want to come and see the
United States. And a big draw in our area is Route 66, which
starts in Chicago and goes to California.
We rely heavily, too, on some icons we have, like Lincoln.
The movie ``Lincoln'' premiered this year, won the Academy
Award. Well, they did a lot of promotion in the openings, the
State of Illinois did, in Europe when that movie opened.
So what we are really trying to do is show Chicago as a
city. A lot of times, it takes people coming to Chicago to see
how beautiful it is, and returning. And we----
Ms. Schakowsky. People are often shocked by that.
Ms. Speckman. They are always shocked by that.
Ms. Schakowsky. I know.
Ms. Speckman. Exactly. They are always shocked that they
always love it. That is why it is very important that we are
hosting all the tour operators from around the world in Chicago
in April 2014, because they will see our area. And I am
bringing them up to the North Shore, too.
Ms. Schakowsky. I wanted to ask you that, too. I saw you
kind of identifying it, it has felt like, with Mr. Witsell,
talking about, you know, Chicago is one thing, but then how do
you get people out of the city and come to the North Shore? I
mean, what are the messages that you want to convey, and what
are the conveniences or whatever? What is the attraction?
Ms. Speckman. Well, we work a lot with Choose Chicago,
which is the Chicago bureau. And we are in their visitors
centers, we take part in a lot of their advertising and
marketing programs, so that people that want to see the Chicago
Botanic Garden, which is actually not in the city of Chicago
but on the North Shore, or want to come to Northwestern
University or the Baha'i House of Worship, which is the only
one in the Western Hemisphere, let alone the United States----
Ms. Schakowsky. I just took some visitors there last
weekend, yes.
Ms. Speckman. Yes, I mean, that is on the North Shore. So
people think things are in Chicago when really they are in the
outlying regions. So we really try to work together to do that.
Also, I have collateral that I do that tells downtown
concierges to tell people how to take the city train: This is
the stop you get at, this is how many minutes it takes, here is
what you can do when you get off on the L or the metro station
in Chicago on the North Shore.
And then, also, we kind of try to work and we market to
people before they come to the area. You can take the Chicago
train from Evanston to a Cubs game quicker, easier, and cheaper
than you can from staying downtown, where it costs $50 a night
to park and $300 a night to stay in a hotel.
Ms. Schakowsky. And how are you funded? And how are these
travel organizations funded?
Ms. Speckman. Well, every State is different and every
bureau is different. But, in Illinois, half of the funding of
most of the bureaus comes from the State of Illinois. It has a
very aggressive tourism program.
Ms. Schakowsky. OK.
Ms. Speckman. So a 6 percent hotel tax goes to the State,
and we get a portion of it. So that is half of our funding, and
the rest is through municipality support and membership.
Ms. Schakowsky. OK.
Unfortunately, my time is up. Thank you very much.
Mr. Terry. Thank you.
And, by the way, according to our tourism, the most visited
place by Omahans is Chicago.
Ms. Schakowsky. Yes.
Mr. Terry. So, you are welcome.
Now, Dr. Christensen, you are recognized for your 5
minutes.
Mrs. Christensen. Thank you. We would welcome them to the
Virgin Islands, too. But thank you.
And thank you, Ms. Speckman, for mentioning the travel and
tourism task force that we have here, the steering committee. I
have been on it since coming to Congress, and I am glad that
they are becoming active again.
I would like to ask my commissioner a question.
2017 is a big year for the Virgin Islands that is probably
not well-known. Could you explain what it is and maybe some of
the plans of how we can use that time to expand on our tourism
product and what role maybe the subcommittee or Congress should
be playing in it?
Ms. Nicholson-Doty. Well, we have two important things.
First of all, it celebrates our transfer from--2017 will
celebrate 100 years of our transfer from Denmark to the United
States. So this is a major event for us in the U.S. Virgin
Islands.
Also, it represents 7 percent of our--7 percent of our
business is international business. Of that, a full half comes
from the Scandinavian countries. However, there are cities
within the U.S., like Solvang, California, where there is a
very heavy Danish population. What we are looking at for 2017
is how we make that entire triangle. We look at visits from
Denmark to the U.S. Virgin Islands, which we have been
extremely successful with, but also how do we tie it in and in
some cases to smaller areas in non-major cities in the U.S.
where we can have linkages.
Mrs. Christensen. Denmark, South Carolina. Minnesota, where
there are----
Ms. Nicholson-Doty. Absolutely.
Mrs. Christensen [continuing]. A lot of Scandinavians, as
well. Thank you.
I just wanted to make a couple of comments, as well, apart
from the fact that I wanted to highlight the fact that we will
be celebrating 100 years of being a part of the United States
family in 2017. But one thing that always troubles me, and I
notice that government travel is just a very small percentage
of U.S. travel, but any travel to the U.S. Virgin Islands by
Congress or by government agencies is always seen as a junket.
And, you know, I would like to invite this subcommittee to
begin to change that by perhaps having a hearing in the U.S.
Virgin Islands to discuss some of the concerns that we have--
some of the concerns that we have that come under the
jurisdiction of the subcommittee.
One other area that is important to us--and I don't know if
you wanted to comment on this. Well, I probably shouldn't ask
you to comment on it, as chair of CTO. But, you know, the
Virgin Islands adheres to all the minimum wage--the minimum
wage, all of the labor and other laws. And so that makes us
somewhat noncompetitive with some of our Caribbean neighbors
who don't have to pay the high wages or be in accord with some
of those laws.
We do have the benefit of duty-free. And, at some point, I
know this is not in the committee's jurisdiction, but we would
be asking to increase our duty-free allowance to make us more
competitive with our Caribbean neighbors. And we would ask for
the support of both the industry and the committee.
I heard Ms. Matthews talk about, in her response to me,
about airports. And are there any plans to improve on our
airports, to expand our airports? I don't know where you would
grade them on a scale of 1 to 10, but she seemed to put a lot
of importance on----
Ms. Nicholson-Doty. Absolutely.
Mrs. Christensen [continuing]. The airport experience.
Ms. Nicholson-Doty. Absolutely. And I think that it is a
critical area for the Virgin Islands.
We have two airports. The St. Thomas airport, which is
considered a medium-size airport, with approximately 700,000
visitors that come through that airport each year, is certainly
in need of an upgrade, especially if you compare it to the
region, the Caribbean region, in terms of the improvements that
are being made.
But as you look internationally, as well, at the airports,
airports are a significant source of--it is the gateway, it is
the gateway to a destination. And so, looking at our airports
is very critical, and the upgrade that is needed in comparison
to the rest of the world.
Mrs. Christensen. Well, thank you.
I don't have any further questions, but I look forward to
having a subcommittee hearing in the Virgin Islands in the near
future.
Mr. Terry. If we can drive there, we can have a field
hearing. That is, I think, a new rule.
Mrs. Christensen. Oh. Seriously?
Mr. Terry. Well, it is unstated at this point. None of us
have had the guts yet to ask for a field hearing.
So I want to thank all of our witnesses for being here
today. That concludes all of the questions that we have for
you. Thank you for coming here.
And this is a really important issue. This is about jobs
that can't be outsourced and hundreds of billions or even now
one gentleman said, when you put in all the indirect jobs and
money, it is a trillion-dollar industry. So I want to thank you
for being here.
And this won't be our last hearing on the subject. Maybe
the last for this month on this subject, but we will have more
because of its importance to our economy.
Now, a couple of housekeeping notes. I ask unanimous
consent to include in the record a statement from the American
Motorcycle Association. And it has been shared with the
minority, so----
Ms. Schakowsky. Without objection.
Mr. Terry. Without objection then. Hearing none, so
ordered.
[The information appears at the conclusion of the hearing.]
Mr. Terry. And I remind Members that they have 10 days to
submit their questions for the record.
And I would ask you guys, if you receive questions from any
of the Members, a prompt response is requested. And, by the
way, prompt for some, usually with more government agencies, is
not 6 months.
At this time, we are dismissed.
[Whereupon, at 12:55 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
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