Federal Budget Outlook for Inbound Tourism Is a Mixed Bag

By: Stephen B. Richer

A federal budget recommendation made by the Homeland Security Subcommittee was approved by the House Appropriations Committee this week –and it is very good news for inbound travel! The recommendation was to not transfer any ESTA (Electronic System for Travel Authorization) fees for other departmental uses, as was recommended in the Trump Administration Budget.  This would have zeroed out the funding for Brand USA. It is now on its way to the House floor.

Brand USA has a large bipartisan support and will likely being funded into fiscal 2018.

It is imperative to continue to monitor circumstances, including the Senate’s budget proposal, and remind key members of Congress how our favorable balance of trade in tourism is impacted by the operation of the national parks and other public lands, as well as the excellent promotional work of Brand USA.

In other budget news, working late into the night on Tuesday evening, July 18, the House Appropriations Committee marked up the bill addressing Interior and Environmental Protection Agency appropriations.

The result was not as drastic as the recommendations in the Trump Administration budget proposal, but still a further cutback in funding for both Interior and the EPA with the latter agency receiving the more dramatic reduction.

The overall funding in the bill for the two agencies was $31.5 billion, which was $824 million less that fiscal 2017, a reduction far less than recommended by the Trump Administration.

Among the reductions for the Interior appropriation of direct interest to inbound operators were an overall cut to national parks of approximately $64 million below fiscal 2017, including a $15 million cut in operations, and a 5% reduction in the new Centennial Challenge program.  A slight increase for funding in the construction budget is anticipated, which will very modestly help to address the $6 billion infrastructure backlog.  The $64 million cut was far less than the $183 million recommended in the Trump budget proposal.  Nevertheless, national parks will sustain a 7% cut under this proposal.

While a catastrophic result was avoided, the committee reported out the bill on a 30-21 split with Republicans in favor and Democrats opposed.  Budget Committee Chairman Rodney Frelinghuysen of New Jersey commented that it was a responsible recommendation in a tight fiscal year.

The bill goes to the House floor next week with action anticipated in the Senate on its version of the appropriations very soon.

The impact of the cuts will see further reduction in staffing and some discretionary programs.  The reduction in Centennial Challenge funding will have some impact on programming and staffing reductions as well.

On a related matter, Interior Secretary Ryan Zinke held a meeting with recreation association leaders on recommendations to increase visitor access and public lands utilization, while attracting an additional $80 million in private sector funding to boost National Park Service fees received by $20 million annually.  A report on this meeting and its proposals should be out shortly and will be of significant interest to inbound operators.

IITA will continue to monitor the progress of the budget for the national parks and work with our partners to advocate for the appropriate staffing, programming, maintenance, and operations of the parks. IITA will continually work to ensure that our international visitors have the best experiences possible.