Brand USA Threatened, Trump Budget Proposal Unites Travel Industry

By: Stephen B. Richer, CTP

In an unanticipated move, the Trump Administration proposed in its FY 2018 budget the defunding of Brand USA, the national tourism marketing organization, by moving the $100 million per year of available Electronic System for Travel Authorization (ESTA) fees to a use for Customs and Border Patrol instead.

The lack of availability of these fees, $10 of the $14 charge biennially to international visitors to the United States from visa waiver countries would crush Brand USA, as their main source of income is the matching user fees and the funds raised from the private sector to earn the $100 million in annual matches.  All of these funds are currently controlled by the U. S. Department of Commerce, which also appoints the Travel Promotion Board, which manages Brand USA through its executive staff.

After more than a decade of no national tourism marketing organization addressing international marketing, the travel industry, led by US Travel, pressed successfully for the Travel Promotion Act of 2009, which established Brand USA.  Its success of increasing market share after the “lost years” with no United States marketing presence worldwide saw dramatic gains in economic impact, travel industry employment, and international visitor numbers, all of which made tourism the second leading export and the one with the most favorable balance of trade.  Last year alone, the increase in international tourism receipts saw $8.9 billion relating to the work of Brand USA.

The entire travel industry has had an immediate and vociferous response to this budget proposal, which is more distasteful, as it is being generated by an administration led by a travel industry executive.

Brand USA has been very effective through its employment of representation services and advertising in all the key inbound markets, pavilions of US partners at numerous trade shows, sales missions, the funding of an IMAX film on U.S. national parks, and special promotions, such as US-China Tourism Year in 2016 and US-India Tourism Year in 2017.

The zeroing out of Brand USA came was quite a surprise.  Last month, Gary Schluter, IITA Chair, who sits on the U.S. Travel and Tourism Advisory Board, reported that the new Secretary of Commerce Wilbur Ross had asked the board for recommendations on marketing the United States and other policy ideas moving forward.  Neither he nor the board members seemed to anticipate this budget proposal at that time.

Of course, the closure of Brand USA would be extremely difficult for inbound tour operators in particular, as its work helps to expand the market our members translate into business.

As Schluter pointed out in IITA’s May 23 press statement, Brand USA has two basic functions in its legislative mandate. The primary one is the marketing of the United States as a top travel destination. The other one, however, is to explain and publicize the policies and procedures for international visitors to gain entry into the United States.

In the face of two different, although unimplemented, travel ban executive orders and anecdotal reports of other difficulties obtaining visas in countries not cited in either travel ban, now is not the time to have neither marketing of the United States nor a global effort explaining visa policies and procedures.  More local destinations and private sector companies working the international market do not have the resources or strategic coherence to replicate the work of Brand USA.

In just two weeks, IPW will be coming to Washington with thousands of international buyers and U.S. sellers, including many of IITA’s members on hand. It is anticipated that members of Congress, as well as the Trump Administration, will be on hand to see the buying and selling activities up close. Inbound operators must be well prepared to talk with any visiting policymakers. In fact, it would be useful to sneak over to Capitol Hill during the week and let your Senators and Representative know how you feel on this issue.

It is for certain that all major trade associations. major travel industry corporations, destinations, local and state governments, and small businesses will all line up to support the continued funding of Brand USA.  Several have already issued strong statements of support to the media.

We know this is going to be another struggle for the travel industry, but with the leadership of inbound operators and the IITA community as part of the broader coalition, it certainly will be successful in the long run. There is a broadly based bipartisan coalition of members of Congress who have supported Brand USA in the past and are likely to do so again—with a little friendly reminder.

Let’s make sure they get lots of reminders.  See everyone at IPW.