Travel Promotion Act Signed. What Does it Mean to Tourism, Timeshares, and the US Economy?

The US Travel Promotion Act, signed on Thursday, could have come just in time to turn the tide on shocking US losses in the tourism, travel, and timeshare industries.

According to research released by the US Travel Association, the decline of foreign travel to the US is hurting the economy far more than anyone could have predicted. Since the year 2000, the reduction in overseas travel to America has meant the loss of some 440,000 US jobs and over $500 billion in travel-related spending. Each individual visitor lost to US travel translates to a loss of more than $4000 that could be going directly into the US economy.

The $500 billion-plus lost in tourism dollars means a $214 billion loss in direct spending and another $295 billion loss in secondary spending. This includes retailers, restaurants, attractions, and other travel or tourism related goods and services.

And the lost jobs and lost revenues have a huge trickledown effect, resulting in an over $32 billion decline in tax revenue at local, state, and federal levels not to mention the resultant losses created when travel, timeshare, and tourism workers become unemployed. Presently, one in eight Americans depends on the tourism (or tourism-related) industry for employment.

Roger Dow, U.S. Travel’s president and CEO, explains, “We can’t afford another lost decade when we’re looking for ways to kick-start the economy and create jobs.”

A South African educator recently commented, “When America sneezes, the whole world gets ill.” The economic situation in the US has certainly felt like much more than a sneeze to most Americans with unemployment, foreclosures, and dwindling personal wealth still daily headline news. But when you look at the facts, the decline in US tourism is not solely tied to the current economy—this is a decade-long dip that incorporates the impact of 9-11, overall concerns about travel safety, and perhaps even the fact that we, as Americans, have not exactly been extending the welcome mat to worldwide visitors.

How the Travel Promotion Act Affects You

Until now, there has never been a government-backed promotion and communications program aimed at attracting international travelers to the US. On March 4, 2010, President Obama signed The Travel Promotion Act, in ceremonies at the White House. This effort will create a new public-private partnership campaign to aggressively market the US as a premier travel destination.

From this act, we will see the creation of the Corporation for Travel Promotion, a public-private corporation that will work with the State Department, Commerce, and Homeland Security to plan and execute comprehensive marketing, promotions, and communications campaign to draw more international tourists to the US.

And here’s the best news of all: no taxpayer money goes into the corporation. Instead, revenues for the new Corporation for Travel Promotion will come from private sector contributions (some $100 million) and a $10 fee on foreign travelers who do not pay for a visa in order to enter the US.

According to research by Oxford Economics, a $200 million marketing expenditure will attract 1.6 million new international visitors annually, add $4 billion to the US economy each year, create $320 million in new federal tax revenues annually, and result in some 40,000 new jobs here in the United States. Additionally, the Obama administration predicts that the result will also reduce the budget deficit by $425 million while increasing revenues by $135 million.