ACTE Commentary to the US Department of Commerce

I am writing on behalf of the Association of Corporate Travel Executives (ACTE), a not-for-profit education organization representing the global business travel industry. Our mission is to share best practices with our international members and educate them on a myriad of industry (e.g., data privacy, security, business resiliency and corporate social responsibility) issues as well as trade and policy issues. You can find information on ACTE at www.acte.org.

ACTE members are drawn primarily from global corporations, and supplier companies, such as airlines, hotels, car rental companies and from the credit card industry. Our global membership spans 49 countries with forty-seven percent of our members residing outside of the U.S. ACTE’s global membership is directly responsible for $150 billion of indirect spend annually. These expenditures cover airfare, hotel, surface transportation, restaurant, meetings, and conventions -- a substantial percentage of which is spent in the U.S market.  ACTE has offices in Virginia, London, Paris, Johannesburg, Singapore, and Buenos Aires to help support our diverse membership.

The U.S. Department of Commerce is to be commended for developing a national strategy to compete for international visitors. Reports indicating that the U.S. remains a strong destination for tourism, business, conventions, meetings, and medical travel are encouraging, but are offset by new figures that indicate the country has not captured any of the 20 percent growth in country-to-country travel since 2000.  In fact, it has been reported that the U.S. share of revenue from international travel has dropped 29 percent since 1992, totaling an estimated $43 billion in 2005 alone.

ACTE has been discussing the need for the U.S. to remain competitive for business and tourism dollars for the past several years. Our members from outside the U.S. are citing increased difficulties at crossing U.S. borders and questioning various U.S. security and identity procedures that are perceived to be in a constant state of flux.  In addition, as your report notes, many foreign travelers feel that they are not welcomed when they enter the U.S. and are considering taking their business somewhere more inviting.  ACTE has been sharing ACTE member concerns (including survey results) with U.S. government agencies and is interested in continuing to help the U.S. Government to help alleviate some of the impediments and perceptions that are affecting international travelers.  Since many of our members work for global companies that service both the tourism and business travel sector ACTE can help serve as a conduit for information to our international membership and their stakeholders that America is an inviting tourist and business destination. 

The choice for global companies and individuals to select venues for both business and tourism is expanding as globalization is making the playing field more level.  The proliferation of new destinations in previously remote parts of the world, improved infrastructure in these countries, and new communication venues to promote these destinations are competing with the U.S. as a business and tourist destination. The increased difficulties in acquiring visas, vacillating changes in travel document policy, and high-pressure security issues, are building the case for some companies and individuals to take their business elsewhere. The case for selecting other countries, is strengthened by increased U.S. taxes -- federal, state, or municipal -- on airline tickets, hotel tariffs, and rental car rates that are steadily driving up the cost of doing business in the U.S., while not adding anything to the return on the business travel investment.

Constantly announcing proposed changes to acceptable travel documentation, listing new exceptions to the rules, establishing deadlines and then reestablishing deadlines (as is the ongoing case of the Western Hemisphere Travel Initiative) only serves to confuse international travelers. Requiring sensitive information on travelers is counterproductive when these initiatives may be contrary to EU law and directives.  Also, the off-line development of programs like the Automated Targeting System (ATS) can be frustrating to international and domestic travelers alike.

In looking at the scope of the concerns of the non-U.S. traveling public, it becomes apparent that many of the issues that impact tourism and business destination revenues are intertwined and should not be left to a marketing strategy alone. The Association of Corporate Travel Executives recommends that a more encompassing and holistic national travel strategy be drafted. This strategy should address safety, security, infrastructure development, policy development, taxation, public health, and the environment -- in addition to a marketing component that promotes the U.S. as a positive business and tourism destination.  This is the best way to encourage growing tourism and expanded business travel to the U.S.

This strategy should include the following key points:

1) Creation of a ranking position (Assistant Deputy Secretary) empowering a government official to serve as a liaison between the travel community and various federal agencies (DHS, DOC, CBP, HHS, DOS etc.). The primary purpose of creating this office would be to ensure that when policies and regulations are developed (e.g., safety, security, health) that there are no unanticipated results when applied to the travel industry. In addition, this position would be able to provide more information to travelers about the regulations in place. As we all know, most people want to be informed and understand the reasons for rules and regulations. They do not like to be caught off guard.

2) Short-term economic gain should not take precedence over legitimate health and safety concerns.

Health: Some parties are advocating blockage of a proposed plan by the Centers for Disease Control and Prevention (CDC) requiring airlines to store data relating to the seating of passengers, who may be infected with a contagious disease. The reasoning behind this objection is to alleviate extra expense to the world’s carriers.

• The most significant financial damage to international air travel during this decade was inflicted by the SARS infection. As limited as the spread of this disease was, it cost the travel industry a conservative $9 billion (USD). This is far in excess to the cost incurred by the airlines.

• With government reports claiming that nearly 40 percent of the nation’s workforce could be affected by a pandemic, front-line detection and containment is crucial.

• Since contagion detection is so important to the nation’s interest, airline costs for maintaining seating data should be shared with the government.
  Safety:  The same is true for security issues. Calls to eliminate the TSA’s screening of all baggage arriving in the U.S. is premature, until a more reliable, sophisticated method of determining that biological and radioactive material is always prevented from being loaded on an aircraft

3) Realistic timetables are set for initiating, implementing, and managing new travel requirements for identification and for confirming the legality of security procedures stemming from 9/11. Examples include: Western Hemisphere Travel Initiative (WHTI), the Automated Targeting System (ATS), seizure of business proprietary information on lap tops, and the Radio Frequency Identification Passport (RFID) programs. We urge that the government provide more information to travelers regarding rules and regulations associated with these programs, such as redress, information on data storage, etc.  (Many of our members complain that not enough information is made available regarding redress and that the U.S. Government agencies are slow to respond to questions and/or complaints.)

4) New approach to taxation on travel products and services. The first issue that may require consideration entails taxation of the airline industry, and added on taxes to rental cars and hotel rates. Transportation taxes are now funding many non-transportation-related projects -- like stadiums. Rather than penalize travelers coming into the country or a particular city, user-taxes should be generated that apply specifically to consumers requiring a major municipal or state investment. (Such as ticket holders who want a new sports venue.)

5) Dramatically increased investment in consular and visa offices in Asia and Latin America. International business development in China, India, Brazil, Venezuela, and Mexico is growing at an exponential rate, offering the U.S. (and the world) vast new markets. Business travelers from many industrial cities in these countries are often subject to long (expensive) side trips and delays in applying for visas. ACTE strongly urges that a substantially increased budget for visa office infrastructure and personnel in these countries be made a priority in a proposed national travel strategy.

The need for a national travel and tourism strategy is clear. Yet that need can only be filled by incorporating authorities from the international travel industry into the planning, decision-making, and deployment processes. International travel to the U.S. will increase when services are improved, when excessive costs are reduced, and when global travelers are greeted by practical, seamless procedures.

The Association of Corporate Travel Executives has a distinguished history of working with every major travel agency, and travel service supplier. Our global resources -- as a global survey vehicle, industry sounding board, educational platform, and/or beta testing group -- are at the Commerce Department’s disposal.

Thank you for your time and consideration.

Sincerely,

Susan Gurley
Executive Director
Association of Corporate Travel Executives