House to Vote on Tourism Promotion Effort — With Deficit Reduction Bonus
Posted at 1:49 p.m. on July 22, 2014
Tourists look at a map outside the U.S. Botanic Garden in Washington on July 19. (Brendan Smialowski/AFP/Getty Images)
The next time you overhear French tourists visiting your city or town, don’t forget to say “Merci beaucoup” to them for doing their part in deficit reduction.
On Tuesday the House will vote on a bill that in effect taxes certain visitors to the United States to pay for a marketing effort to encourage other foreigners to come visit. The Congressional Budget Office says the bill will reduce cumulative deficits over 10 years by $231 million, since the revenues would exceed the money to be spent on marketing.
The bill the House is voting would extend provisions of the 2009 Travel Promotion Act, which set up the Corporation for Travel Promotion, also called Brand USA.
This marketing effort is paid for by travelers to the United States from the 38 countries under the Visa Waiver Program. These travelers pay a $10 travel promotion fee.
The effort relies on matching funds from travel- and tourism-related companies such as rental car operators and hotels and from state and local tourism promotion agencies.
If the travel industry puts in $50 million, then $50 million is released from the pool of money garnered from those foreigners’ fee payments.
The fiscally conservative Club for Growth has put Tuesday’s vote on its scorecard, urging members to vote “no” and arguing that Brand USA is “a slush fund promoted and administered by companies in the tourism industry that are wrongly using the taxing authority of the federal government to help finance their profits.”
The Congressional Research Service reported in April that “there is a dearth of empirical evidence on the value of tourism advertising and uncertainty about the credibility of studies of tourism promotion.”
It also said, “It is difficult to isolate the results of tourism promotion efforts from numerous other factors that affect international travel to and within the United States, including general economic conditions and currency exchange rates.”
But the Patricia Rojas-Ungár, vice president of government affairs at the U.S. Travel Association, said the program is needed since countries are competing for the one billion worldwide annual travelers.
“After 9/11, we instituted a series of new security requirement for visas and entry that really created a perception that people were not welcome to come to the United States,” said Rojas-Ungár.
“So we needed not only to compete in the growing travel boom, but also to communicate these changing travel procedures” and let foreign travelers know “that the United States was open for travel and for business.”
Rojas-Ungár said Brand USA is “a public-private partnership that’s outside of government, but with the imprimatur of the government to welcome people to come to the United States. What we didn’t want to do was to continue to grow government.”
She said on average a foreign visitor spends $4,500 per visit to the United States – and that money of course goes to American restaurants, hotels, and other businesses.
“What we’re doing here is leveraging this resource – without taxpayer dollars – to actually deliver even more money to the U.S. economy and to local communities that are trying to lure international visitor to come to their cities and states,” she said.
A study by Oxford Economics and U.S. Travel found that in fiscal 2013 Brand USA marketing generated 1.1 million additional trips and $3.4 billion in additional spending by foreign visitors.