UNITED STATES TRAVEL AND TOURISM ADVISORY BOARD

Room 4832

DOC Building

14th & Constitution Avenue. N.W.

Washington, DC

Wednesday,

April 12, 2006

Gilmour

93 pp.

The meeting was convened, pursuant to notice,

at 3:07 p.m., MR. JAY RASULO, Chairman, presiding.

APPEARANCES:

MR. JAY RASULO

Chairman

Walt Disney Parks and Resorts

MS. MARILYN CARLSON-NELSON

Chairman and Chief Executive Officer

Carlson Companies, Inc.

MS. NOEL IRWIN HENTSCHEL

Chairman, Co-Founder and Chief Executive

Officer

American Tours International

MR. REX JOHNSON

President and Chief Executive Officer

Hawaii Tourism Authority

MR. LARRY KATZ

President and Chief Executive Officer

Dot\'s Diner Restaurant Chain

MR. JONATHAN LINEN

Vice Chairman

American Express Company

MR. J.W. MARRIOTT

Chairman and Chief Executive Officer

Marriott International, Inc.

MR. MANNY STAMATAKIS

Chairman

The Greater Philadelphia Tourism Marketing

Corporation

MR. ANDREW TAYLOR

Chairman and Chief Executive Officer

Enterprise Rent-A-Car

THE HONORABLE CARLOS GUTIERREZ

Secretary of Commerce

THE HONORABLE FRANKLIN LAVIN

Under Secretary of ITA for Commerce

THE HONORABLE ALBERT A. FRINK

Assistant Secretary for

Manufacturing and Services

MR. MIKE FULLERTON

Department of Homeland Security

MS. JUNE KUNSMAN

Department of State

MR. ROB GLUCK

Disney

MS. HELEN MARANO

Department of Commerce

MS. JULIE OETTINGER

United Air Lines

I N D E X

[PAGE]{.underline}

[AGENDA ITEM]{.underline}

MEETING CALLED TO ORDER

Jay Rasulo, Chairman 4

WELCOME/INTRODUCTORY REMARKS

The Honorable Carlos M. Gutierrez

Secretary of Commerce 7

GULF COAST STRATEGY 11

NATIONAL TOURISM STRATEGY 34

SUBCOMMITTEE REPORTS

RETURN ON INVESTMENT SUBCOMMITTEE

Rex Johnson 37

EASE OF TRAVEL AND PUBLIC DIPLOMACY

SUBCOMMITTEE

Julie Oettinger 60

PROMOTION SUBCOMMITTEE

Andy Taylor 71

[P]{.underline} [R]{.underline} [O]{.underline} [C]{.underline}
[E]{.underline} [E]{.underline} [D]{.underline} [I]{.underline}
[N]{.underline} [G]{.underline} [S]{.underline}

[MEETING CALLED TO ORDER]{.underline}

CHAIRMAN RASULO: I want to officially open this meeting of the U.S.
Travel and Tourism Advisory Board. I don\'t have a gavel this time, so I
really feel good about that.

So I think you know that we are holding this meeting in the midst of a
pretty exciting week and a lot of momentum in travel and tourism, and I
personally couldn\'t be happier. I am sure that all of you in this room
will share that same feeling.

I want to say that earlier today, when the U.S. Travel and Tourism
Summit wrapped up, organized by the World Travel and Tourism Council,
everyone felt that it came to an incredibly successful conclusion.

They told us that there were 900 people on record for that conference,
and we are absolutely thrilled that it took place here in Washington,
DC. Actually, many of us in this room worked hard to make that happen,
and I think it was well worth it.

We had tremendous participation by members of the administration and, in
fact, the Secretaries of Commerce, State, Homeland Security, and
Transportation all presented, and presented, I think, exactly the
picture that we wanted of the attitude toward travel and tourism here in
the U.S. to what was largely a collection of international delegates.

Having been there, I can say that it was the perfect tonality, the
perfect message, the perfect balance that we are trying to seek. I think
it is a real sign of the administration\'s support of our industry, of
everything that all you folks in this room are working hard to do all
the time.

Of course, with Secretary Gutierrez we have no better champion, and not
only an important voice for us in the private sector, but also has
contributed his time and leadership to guiding us. Your presence at our
meetings, Mr. Secretary, is fantastic. It gives us a sense that we\'ve
got the full backing of the administration at all times.

Let me re-summarize. The last time we were together, the Secretary had
asked us, really, for two things to take on in short order. The first,
was for an engaging travel and tourism industry action in the Gulf Coast
region, and, second, a national strategy for enhancing America\'s
competitiveness in the growing world tourism market. We are going to
discuss both of those, I\'m happy to say, in today\'s meeting.

But before I do that, I want to take a moment to first introduce Frank
Lavin, Under Secretary for International Trade Administration. I had the
opportunity to chat with Frank earlier, and I\'m glad you\'re here,
Frank.

Now I\'d like to introduce Secretary of Commerce, Carlos Gutierrez, the
35th Secretary of the U.S. Department of Commerce and the voice of
business in government.

[WELCOME/INTRODUCTORY REMARKS]{.underline}

By Carlos Gutierrez, Secretary of Commerce

SECRETARY GUTIERREZ: Thank you. Thanks, Jay. Appreciate it. I want to
welcome everyone back to the Commerce Department. I thought what I\'d
do, is there are three points I wanted to make this afternoon, and then
open it up. I know you have a presentation, or the strategy document
that you want to communicate back. But three things.

One is, first of all, congratulations, because once again the tourism
industry growth hit, I understand, the \$1 trillion mark. It is
interesting, on the one hand, because we are back to, or we have
exceeded, the pre-9/11 levels, which is great.

The flip side is, we\'ve been flat for four years, so we\'re just barely
getting back to 9/11 levels, even though the worldwide market, I
understand, has grown a lot faster.

But having said that, what a great base to start with. I would much
rather be back to the \$1 trillion than saying we\'re still catching up.
So, congratulations. You should feel pretty good about that.

One of the great things, ironically, is we have a trade surplus in
tourism. So even though we have a trade deficit as a whole, we have a
very important trade surplus in tourism, so tourism is a positive export
for us.

As we step back and think about the deficit, and where can we make it
up, where can we close the gap\--and close the gap is probably a better
way of thinking about it\--tourism would have to be a major strategy, a
major opportunity. So, I would just leave you that as kind of the first
thought.

Yesterday, we had what we call the annual JCCT meeting, the Joint
Commission on Commerce and Trade with China. We get together once a
year. We talk about trade issues, the big issues we have. We try to
solve them. Each side asks the other for certain gives or has certain
petitions.

Their number-one ask this year was tourism. So, the Chinese want to do
more work with us on tourism. Ironically, we have a trade deficit with
China tourism, so a huge opportunity.

And one of the things we talked about was, and this comes from Secretary
Chertoff, that Homeland Security is very willing to look at visas for
groups of tourists, which is what the Chinese want to be able to
advertise, package tours. They\'ll do that if we can negotiate with the
Chinese Government a return of illegal immigrants who are in the U.S. to
China.

It looks like the Chinese Government is very willing. But I thought that
was a great opportunity to think about doing something with China on the
tourism front that would include visas and that would say, let\'s go
after China in a bigger way.

So that\'s the second thought. Everybody knows what China is, how big
China is, and what it could be in tourism. Granted, their per capita
income is still not where we\'d like it to be, there are a lot of
people, but eventually they\'re going to get there.

The third point, is we appreciate all your help on the reconstruction of
the Gulf States. We are going down on the 4th and 5th of May. We are
taking a business mission. I think today is the day we can announce
who\'s going, although I have nothing here. I understand that some of
you will be going.

This is, again, another big opportunity for the tourism industry,
because on the one hand you have New Orleans, where one-third of the
people are back, but 10 percent of the businesses have reopened, so
there is a need for everything, and then you have Baton Rouge, where
their population has grown by 100,000 over the past six, seven months,
and they need everything. They don\'t have enough restaurants, enough
hotels, et cetera.

Then, as you well know, Biloxi seems to be taking off because they
liberalized their gambling laws. Apparently a lot of people from Las
Vegas are going in. So we\'re going to an area that is very tourism
friendly. I would hope that this is an opportunity to have the private
sector really kick-start that area. So, thank you for your leadership in
that regard.

I\'ll stop there and I\'ll listen to you now. Bill Marriott, thank you
for your comments yesterday. I don\'t know if you caught Bill
Marriott\'s comments on immigration. Very courageous, very much on
target. I thought they were great.

MR. MARRIOTT: Thank you. Thank you very much.

SECRETARY GUTIERREZ: Good. All right.

MR. MARRIOTT: It\'s a huge issue.

SECRETARY GUTIERREZ: It\'s a massive issue. Yes. Thank you.

CHAIRMAN RASULO: Thank you.

[GULF COAST STRATEGY]{.underline}

CHAIRMAN RASULO: I thought we would start with the Gulf Coast strategy
and the work that\'s been done there. I\'d like to really kind of just
kick off a summary of something all of the board members have already
received, which is a draft of the document that was worked on, and then
just facilitate a discussion between whatever comments we have, the
board members and the Secretary.

When we met in New Orleans in January, the Secretary challenged us to
apply what was our best thinking towards a strategy designed to tap into
our industry\'s ability to drive the recovery of the Gulf Coast region.

Over the last several months, we\'ve canvassed a wide range of experts
and officials, both in that region locally as well as nationally, to
assess the state of travel and tourism in that region. There were
several things that came out resoundingly.

First, the economic recovery of the areas affected by Katrina must begin
with the recovery of travel and tourism. It is really obvious that that
is the driving force of that region. Travel and tourism is probably the
most important economic engine for that region and really needs to be a
locomotive to pull forward.

Secondly, the role of the Federal Government should really be to
stimulate the ability of the private sector, particularly travel and
tourism, to serve as that engine. We\'ve identified two primary barriers
that get in the way of the industry\'s ability to lead that recovery.

Once these barriers are addressed, I think we can start moving forward
with the state and local governments\' help to renew the region, the tax
base, to get the cultural attractions back up and running.

I will say that the first issue is perception. This is a particularly
knotty issue, I think. Lots and lots of areas in New Orleans, and we saw
them when we were down there, are open for business, they\'re ready to
receive visitors, but the images that most people see on TV do not
convey that reality very well. That, in fact, is costing the region
millions of dollars a day in lost business.

I think we can all understand that, while there\'s a recovery under way,
that is a lot more interesting media story than the fact that the
convention center is ready to welcome people, hotels are ready to
welcome people. So there\'s a duality there that is quite difficult for
people to understand.

We\'ve recommended in our paper a mix of actions, including funding for
a targeted marketing campaign, tax incentive to bring particularly
meetings and conventions back to the region, and expedited grants to
build the cultural attractions back and activities designed to focus
media attention on the areas that are ready to welcome visitors.

I would call those high-profile visits that are not about touring
devastated areas and how they\'re being rebuilt, but high-profile visits
that really point out that the tourist attractions are ready in the
region to welcome visitors.

The second major area, and it\'s pretty obvious when you\'re down there,
is housing, and the lack of availability for housing, which is really,
in an obviously labor-intensive business of hospitality, keeping hotels
from fully staffing at the levels they need.

In fact, staffs are taking up rooms because they\'re living in the
hotels. Both emergency recovery staffs and the hotel staffs themselves
are being housed in the hotel rooms that should be available for
tourists. So this results in lost business, even during peak
opportunities like the somewhat limited Mardi Gras that they had this
year, and the Jazz Fest.

The recommendation there, and in more detail, is to focus on doing more
to publicize existing tax incentives designed to encourage employers to
find or provide housing for their employees. Even though these
incentives are available, they\'re not widely known, we\'ve found. We
should focus our efforts on getting companies to take advantage of them.

All of these recommendations have been circulated through the board
members in more detail than I\'ve summarized here. I\'m eager to hear.
We haven\'t been able to have a session to get feedback on those
recommendations, but a small group of us have worked on them.

So I\'m really eager to hear your feedback about that. I\'m sure the
Secretary is, as well. I\'m ready to open up, before we\'d make a formal
submission of these recommendations, to discussion so we can refine it.
We have less than 20 days before May. You asked for it in May, so we
want to get it to you in May. So, with that, let me open it up.

MR. KATZ: A couple of things. The clean-up issue. I can\'t stress that
enough. Actually, the wording in here is probably not as strong as it
should be based on the situation that\'s down there. In my own
neighborhood of 24 homes, I am the only home that is complete. Two
people came back.

I live in New Orleans, for those that don\'t know. In the last two
weeks, two of my neighbors came back\--I\'m not sure where they were or
what they were doing\--and just start gutting their homes. So up until
then, my neighborhood looked fairly good. The grass was cut. On the
outside, you wouldn\'t have really known that we had been flooded.

Yet, this is going to continue, not just through June, but for years and
years, I would imagine. That\'s critical, the clean-up. Just,
multi-family housing has not been picked up at all, and the apartment
complexes in my area have mountains and mountains of debris. So I just
wanted to mention that. That\'s probably June, with a note to look at
extending it even further after that.

Marketing the region. This is suggesting grants. If that doesn\'t fly,
with a 14:1 payback, I would even be interested in a loan program, but
one that wouldn\'t be paid back for a few years as a possibility.

In Louisiana, you quoted 14:1. That would be something, if I was looking
at it as a business person, I would say, this is a good investment. They
have no dollars. They are in exactly the situation \--

SECRETARY GUTIERREZ: Fourteen to one? I didn\'t see that.

MR. KATZ: For each dollar that was spent on marketing, it had a 14:1
return of state tax dollars.

SECRETARY GUTIERREZ: Okay.

MR. KATZ: And their advertising budgets have been dramatically reduced.

Thank you. Those were the only two points I wanted to make. Other than
that, I thought the idea and the tax credits for bringing the meetings
and conventions back is terrific.

CHAIRMAN RASULO: Thanks, Larry.

MR. MARRIOTT: I was going to comment on the trash clean-up as well.
It\'s my understanding that they seem to reimburse dollar for dollar the
local expenditures for trash clean-up. So the next question is, why
don\'t they go out and get 10,000 trucks, waste management, get them in
there and get the place cleaned up? Who contracts for that? Must be
somebody locally.

But how do we get them energized? Because you want to show images of New
Orleans, and as long as there\'s zillions of tons of trash in the
streets, that\'s what you\'re going to see on television. Until we get
that cleaned up, you know, we\'re doing the Jazz Fest, we do all these
things, it isn\'t going to work if everybody still thinks that New
Orleans is nothing but a trash dump.

MR. JOHNSON: That was under the tourism.

MR. MARRIOTT: Yes. But they don\'t care what\'s good. They want to show
them what\'s bad. So that\'s a continuous drain. And I don\'t know what
legislation is necessary to get this extension beyond June 1, but
they\'ve got to get in there and clean that trash out.

CHAIRMAN RASULO: It is very evident, I agree.

MR. MARRIOTT: The other one is housing. We\'ve got 400 job openings
right now. We can\'t get people in to find a house to live in, to work.
Why can\'t we get them to declare flood plain areas, clean out the
houses, designate them as parks, decide where they\'re going to build
houses, and get on with it?

I mean, it just seems to be caught up in some kind of political
situation down there that just doesn\'t seem to get moving. It\'s been
almost a year and we\'re still talking about the same issues.

MR. LINEN: Well, just to piggy on that, if you can\'t get your workers
in to man the hotels \-- I mean, I think the 150 percent write-off is a
great idea, but if the hotel rooms aren\'t there to support it, we go
build a campaign together to get businesses to go down and try to book
and they get frustrated, I don\'t know what good it does, unless there
is a lot of availability there that\'s just not being used right now. I
don\'t know the situation.

MR. MARRIOTT: Well, there is no place to live. We\'re building houses.
We\'re working with Habitat for Humanity. We\'ve brought in carpenters
from Texas and we\'ve built a half a dozen houses.

But they\'ve got 4,000, 5,000 employees who need the houses down there,
and we don\'t have houses. Trailers aren\'t getting in, I guess. The
trash pick-up and the housing, I think, have got to come before we get
into spending a lot of money on promotion.

CHAIRMAN RASULO: Manny?

MR. STAMATAKIS: Just to follow up on that, really there needs to be some
type of a time line here because if you spend the money at the wrong
time, you\'re not going to \-- I was kind of shocked to see the
perception issues on the survey, what people think is going on down
there.

But at the same time, what is the actual situation? How far off from
what the survey came out with is the reality? Has anybody done an
assessment analysis of the actual issues? Because if the survey is wrong
and it\'s a lot better, then that\'s one course of action.

But if the survey is right, that\'s a different course of action. I know
some of the things in there probably aren\'t accurate, but I was
startled to see that people feel that way right now. It\'s evident why
people aren\'t going there.

CHAIRMAN RASULO: Yes. Yes. It\'s not good. You know we have staff
working on this. If I could ask Rob Gluck from my staff who worked
closely on this. The perception versus the actual situation. Tell us a
little bit about that.

MR. GLUCK: Well, I mean, the survey itself was conducted in January, so
obviously a lot has happened over the last three months. Mardi Gras has
happened, for instance. It will be interesting to see a follow-up
survey. I\'m sure it must have improved somewhat.

But over and over, what people talk about who are on the ground is, the
images you see on TV, even around Mardi Gras, I could just say
anecdotally, even though Mardi Gras was a huge success story, that was
largely framed up by the media in terms of what hadn\'t been fixed yet,
and what was happening in the Ninth Ward, and much less about the areas
downtown that were open for business and celebration, getting the city
back on its feet.

So people who are on the ground still see it and they deal with it every
day, and it\'s still a major issue for them. The numbers may have
improved a little bit, but they\'re really grappling with it.

CHAIRMAN RASULO: Yes?

MS. HENTSCHEL: If I could comment from the international market
standpoint. After 9/11, what we found was really a great way of
kick-starting New York, was we got CONY and British Airways to put
together, with the *Daily Telegraph*, a campaign, with Mayor Giuliani
being the first person to welcome the people and some celebrities to
also get involved with welcoming people back to New York within three
months after 9/11. And it kick-started because it was really a very
aggressive campaign in terms of how low the cost was to getting
everybody in the industry to participate.

Well, here, now, in the South, we are seeing a decrease in business, not
just for New Orleans and Mississippi, but for the southern region,
because of the perception that\'s there. On the other hand, there are so
many areas that haven\'t been affected and there is an opportunity with
these same tour operators in Europe. They are ready to, with their
money, put together a campaign to help bring people not only to New
Orleans, but also to Mississippi and to the surrounding areas, with the
support of some of \-- they just need the hook.

The *Daily Telegraph* in the U.K. is ready to do it with no cost, but
what they need is the hook. The concept that they came up with was, you
know, New Orleans has been in the blues. Get out of the blues. Come to
New Orleans and to Mississippi.

And to get, like, BB King, Morgan Freeman, and a lot of the celebrities
who came out to support it, to be able to invite them back to the area.
They\'re ready and waiting for a launch of this campaign with this kind
of support.

CHAIRMAN RASULO: So it\'s a publicity hook.

MS. HENTSCHEL: Yes. But it\'s also that they\'re ready to address
themselves \--

CHAIRMAN RASULO: Yes. But they need \--

MS. HENTSCHEL: Yes. I mean, they\'ve asked for, like with Giuliani, to
be able to promote it, those destinations.

CHAIRMAN RASULO: Yes.

MS. HENTSCHEL: On the other side, the domestic side, AAA \-- we took all
of the Travel Sections from AAA to New Orleans and they\'re ready to put
it on the cover of all of their travel \-- you know, the publications,
as a campaign to get people not just to New Orleans, but also to Natchez
and the Mississippi area that wasn\'t affected.

Those are just two areas that we can immediately start seeing \-- we\'re
already bringing groups into New Orleans and Natchez as a result of AAA
helping to bring those groups.

SECRETARY GUTIERREZ: Jay, we\'ve got this mission going down on the 4th.
I don\'t know how many people here are going. Four. I don\'t know if
I\'m allowed to talk about it yet. But we have the mission going down.
By then, elections would have been held, and that\'s going to be a key
factor in the future of the city. I think a lot of the decisions are
being held up today until the politics are sorted out.

We\'ll be able to ask during that mission, what is the status of the
clean-up? I understand the levees will be up on June 1, but we can ask
about whether that is the final set of levees, or if that is Phase I.

For all these questions, we can get a calendar, a time table, for. As
investors, people will be able to decide, knowing what we\'ll find out,
whether the timing is right, whether you\'re still in a situation where
you\'re early.

There\'s always going to be a risk. I don\'t think you\'re going to
eliminate the risk of investing in New Orleans. But hopefully the
information you\'ll have allows you to weigh that risk and it gives you
a sense of what\'s going to happen in the future.

So we talked about May 1. It\'s probably a better thing to just say, why
don\'t we do the mission, re-group, and then think about the strategy on
the basis of the information that we get on the mission. Because we are
going to be able to answer all these questions first-hand by the people
who are on the ground, including, hopefully, housing.

MS. HENTSCHEL: And the airlines. That was the other critical part that
the tour operators have said, is there need to be enough flights and
good fares to get into the areas.

SECRETARY GUTIERREZ: Yes. What do you think?

CHAIRMAN RASULO: I think it will certainly shine a bright light on the
face of it, because I agree, there\'s nothing worse than taking what
will be your one shot at saying things are great, and then having folks
come down and find out that they\'re not great, that the trash isn\'t
gone, that the hotels aren\'t staffed. Then trying to do it the second
time will be a heck of a lot harder.

MR. MARRIOTT: You can\'t do it. If you don\'t get it right the first
time, you\'re not going to have a second chance.

CHAIRMAN RASULO: Yes. Exactly.

Rob, was there any insight into the process behind the trash clean-up,
and to answer Bill Marriott\'s question about who was responsible for
it, and if there was credit, how come credit\'s being offered, how come
it just didn\'t happen straight up?

MR. GLUCK: I can\'t say that we dug inside of that. We got insight into
the fact that it\'s a problem and we got insight into the fact that the
incentive is in place to encourage trash removal was set to expire soon,
but in terms of getting resources from FEMA to accelerate that, that\'s
a wrinkle. We probably should have put in more than just encouraging
people to remove the trash. I think it\'s maybe more than we\'ve gotten

SECRETARY GUTIERREZ: My understanding is that there\'s an insurance
issue, in the sense that people are waiting to either \--

CHAIRMAN RASULO: Get their claim.

SECRETARY GUTIERREZ: Yes. If FEMA is going to give them money or if the
insurance is going to deem it a flood.

MR. KATZ: The FEMA flood maps have not been released yet.

SECRETARY GUTIERREZ: The flood maps. Right.

MR. KATZ: So you don\'t know if you can get insurance until those flood
maps are released.

SECRETARY GUTIERREZ: Right. And they don\'t want to clean up because
they want to have the proof.

MR. KATZ: If you have a mortgage, you have to have flood insurance.
You\'re required if you\'re in a flood zone. So unless you\'re willing
to rebuild without insurance.

But very quickly, getting back to the trash, all the low-hanging fruit
has been picked and I\'m hearing it\'s not profitable for these people.
There were millions of trucks initially, and now you hardly see a truck.

That\'s because they have to set up the safety requirements. They have
to have extra people. They set up. Then if they have to move to the next
street, it\'s not as profitable as it was. I think a lot of those people
have left town.

SECRETARY GUTIERREZ: Were these private trucks?

MR. KATZ: Yes. Shaw Group and other groups like that got contracts. But,
yes. People came from all over the region to haul trash. You don\'t see
them any more. It\'s going on, but it\'s very, very, very slow.

MR. MARRIOTT: Is the trash still as big a problem as it was?

MR. KATZ: It\'s never-ending, is what it is. No. I mean, it\'s a lot
less in total, it looks like. It\'s just, you go down a street and it\'s
clean, and two days later, you know, there\'s stuff out again.

SECRETARY GUTIERREZ: I think part of it, too, my understanding is that
the city used to pick up the trash twice a week.

MR. KATZ: Right.

SECRETARY GUTIERREZ: And because of their finances, now they\'re picking
it up, when I was there, once a week. But who knows if it\'s once a
week?

MR. KATZ: They\'re picking up household items all the time, but not
debris. You could put your household trash out. That will go twice a
week.

SECRETARY GUTIERREZ: Right.

MR. KATZ: But if you have sheetrock or carpet, that will sit there
indefinitely.

SECRETARY GUTIERREZ: Well, look. Again, I think we can use the mission
to get answers to this. That\'s what the mission is for, to go down and
ask these questions as investors.

CHAIRMAN RASULO: Right.

SECRETARY GUTIERREZ: And decide whether the time is right, or whether
you want to see some more. And some will decide that you want to take
the risk, and some will decide that you need more information. But at
least we can take a look at it and ask the questions of the right
people. By then, importantly, I think we\'ll know, too\--I hope we\'ll
know\--about the election.

MR. JOHNSON: That\'s just the mayoral elections. Is that correct?

SECRETARY GUTIERREZ: Yes. Yes.

MR. JOHNSON: What about their local legislature, their city council?
Weren\'t they at loggerheads with the mayor?

SECRETARY GUTIERREZ: I think who is mayor can have a good \-- so without
getting into the political aspects, maybe Nagen is reelected, maybe
he\'s not, and I\'m sure that will make a difference. What do you hear?
What\'s your forecast?

MR. KATZ: He\'s running, probably, second. He\'ll probably make the
run-off. I wouldn\'t expect him to win.

SECRETARY GUTIERREZ: Landrieu is?

MR. KATZ: Probably anybody who makes the run-off form, or Landrieu, most
likely. Landrieu will have a better shot than Foreman, because he\'ll
have biracial support.

SECRETARY GUTIERREZ: I have to assume a lot of things are just on hold
until that\'s figured out. The city is either bankrupt, or close to it.
So that\'s also going to be a factor.

CHAIRMAN RASULO: Rex, did you want to say something?

MR. JOHNSON: Just, it sounds like we\'re dealing with perception,
whichever way we go. And May 4th, I believe it is, the situation where
you\'re taking a trade mission down, was meant to deal with the
perception that areas are open and you can come back to New Orleans, and
the town is functioning, and so on, and so forth.

But as Bill and Manny say, if the only news that you\'re going to get is
the trash news and you\'re not going to get the good news side of it, I
don\'t know if you want to do the show on the good news side of it,
going to Jazz Fest and all that, until you really get to the heart of
the problem, which seems to be identified as, the trash is one of the
big things you\'ve got to take care of.

Again, the news media\--and please forgive me if we have any news media
in here\--are not usually putting out the good news, the warm and fuzzy
stories. They\'re usually putting out the uglier stories. That\'s what
sells papers.

SECRETARY GUTIERREZ: Yes. That\'s why I think the trade missions work. I
don\'t think that any one thing is going to change the perception. I
think it has to be a series of things.

So if there were to be an announcement by a couple of companies that
they are investing in the area, if there were an announcement by a major
development company that they were investing in the area, if there were
an announcement on the trash, announcement on the levees, a series of
things that point to New Orleans going in the right direction, I think
that will start to do it.

MR. MARRIOTT: And the land planning.

SECRETARY GUTIERREZ: Yes. The map survey.

MR. MARRIOTT: They\'re going to put a park in, and if it\'s flooded,
it\'s just grass, or whatever. And here\'s where we\'re going to be
building homes. The venue of the tract, people say, well, I\'m building
there if I\'m sure that it\'s going to be safe the next time we have a
hurricane.

SECRETARY GUTIERREZ: Right.

MS. CARLSON-NELSON: I\'d like to second the fact that the mission is
important. I understand the question of the outcome. But in an area that
is that devastated, continually showing concern, interest, the
perspective is extremely important. Also, coming before the hurricane
season, because we can\'t go later.

MR. MARRIOTT: I think it\'s extremely important to get down there, get
the facts, and start getting something done.

MS. HENTSCHEL: And possibly do pow-wows, which is good for being able to
share with the delegates that are coming to Orlando, is the day before a
pow-wow starts, we\'ll be able to tell the 5,000 tour operators around
the world the latest update of what\'s happening in New Orleans.

MR. TAYLOR: If I could comment on the housing situation. I think the
question should be asked when down there, I think a lot of people \--
Mr. Katz might speak more to this. Private insurers say, is it wind or
flood, and a lot of people are not getting their houses repaired because
there is this debate about the coverage. Just some kind of positive
announcement on that gets some momentum for people to move ahead with
their repairs and get the housing capacity back.

SECRETARY GUTIERREZ: Right. It seems like there are a lot of things
standing still because of all these unanswered questions. A couple that
will be answered over the next month will be the election and the
levees. I think during the trade mission we can push to get some of
these things out. That\'s also part of the role of being down there with
investors at the same time.

CHAIRMAN RASULO: Okay.

MR. STAMATAKIS: One more comment on that. Just listening to everything
here, it looks like this is going to take a while. Fixing the city\'s
finances, solving the housing and the trash problem, these aren\'t going
to happen overnight. If we think they are, we are going to get way
off-base.

But we may want to think about a two-phase approach where there is more
of a crisis plan put in place to promote what can be promoted in a way
where you\'re not forgetting the place, because while these long-term
issues have to get addressed, the place still has to survive.

To the extent that it\'s possible, if they\'re developing a program to
get people there for the short term and then develop a longer term
strategy, because I think some of these issues are going to take a year,
and then we\'ll be back here next year talking about it.

SECRETARY GUTIERREZ: And some may take more. The question is whether
it\'s going in the right direction, whether it\'s developing the way we
like to see it. But I do think we will all have a better sense of the
future after the trade mission.

Those who are going will be able to see it first-hand, and those who
aren\'t going, you can get a report back from those of us who are going.
But I do think we are probably better off just holding the report till
after that, regrouping, and seeing, what did we hear, what did we see,
and now how do we feel about the future?

MR. LINEN: I would wholeheartedly support that, and also add that,
personally, I have no concept of what we mean when we say what will be a
recovered New Orleans. I do not know. What will it be in the future? How
much of its former self? What kind of an institution? That\'s a huge
question for people who are making investments in any kind of
infrastructure or industry down there.

SECRETARY GUTIERREZ: There are some investments that may not rely on New
Orleans, but there are some that will be totally dependent on New
Orleans. Adding to a national plan may not depend a lot on what New
Orleans is, but I\'m sure putting a new hotel in will.

CHAIRMAN RASULO: Okay. I think we\'re all in agreement. We\'ll be
working closely on this and we\'ll talk after the mission and look at
phase-in.

SECRETARY GUTIERREZ: And if I could suggest, we could get a conference
call after the mission and have those who are on the mission report
back, and just make sure that we\'re all on the same page.

CHAIRMAN RASULO: Terrific.

[NATIONAL TOURISM STRATEGY]{.underline}

CHAIRMAN RASULO: On to the second issue, which is a national tourism
strategy, which has a little longer lead time.

Essentially, what we understood we were asked for, was to answer a
question: in order for the U.S. to compete for greater market share in
the world for the world travel market, what are the elements that must
be put in place?

I think that what we\'ve taken as our task by July is to really answer
the questions of why and the questions of what. I don\'t think we\'ll
get to the implementation questions of how by July.

I don\'t know, Mr. Secretary, if you want to comment on that, if our
understanding is correct, because we\'re going to give you a little bit
of a report-out on from the different subcommittees that are working on
this.

SECRETARY GUTIERREZ: Where are you on this?

CHAIRMAN RASULO: We\'re on the promotion campaign.

SECRETARY GUTIERREZ: Oh. Okay.

CHAIRMAN RASULO: Which I wouldn\'t have actually put on as that item.
But it is this national tourism strategy that you asked us to look at. I
wouldn\'t have named it that.

SECRETARY GUTIERREZ: From our standpoint, and I guess what you\'d like
to know, is what can the Federal Government do that you can\'t do on
your own? It would be interesting to hear thoughts from you as to what
the Federal Government can do to create an environment.

I can\'t tell you that the Federal Government will be able to come in
with funds, but it would be interesting to hear from you what you need
that you\'re not getting today to be able to capture the market share
that we lost.

So we\'ve lost market share. What can the Federal Government do? It may
be that what we need to do is get our act together on visas as opposed
to doing a campaign. I don\'t know.

CHAIRMAN RASULO: Agreed. Let me tell you how we\'ve organized this, then
we\'ll hear some report-outs, if you want to comment after that.

We set up three subcommittees. They are the Ease of Travel and Public
Diplomacy Subcommittee, because we think those are two things that are
pretty linked, a subcommittee on promotion, and a subcommittee on return
on investment.

I am going to ask each of those subcommittee chairs for a brief update
of where they are on that. I\'d like to start with Rex, to talk a little
bit about the Return on Investment Subcommittee report.

[RETURN ON INVESTMENT SUBCOMMITTEE REPORT]{.underline}

By Rex Johnson

MR. JOHNSON: Mr. Chairman, first of all, I\'d like to thank Deborah
Diamond and Antonella for all the help that they have been as we\'ve
been trying to organize ourselves.

We have identified experts to assist the subcommittees, so we\'re well
on our way there. Now we can add Larry Katz to our subcommittee. We\'ve
identified experts to assist the subcommittees from externally, also.

That would be DMAI, the Travel Industry Association; Suzanne Cook, a
doctor of Economics from Hawaii is going to sit on that; Steve
Landfield, from the Bureau of Economic Analysis, and Helen Marano. I
thought I saw her here. She is also giving us a hand from the external
side.

We\'ve got our available research identified. Probably the most
important thing, we\'ve agreed on goals. We have three goals, and I\'ll
read them off. I\'d be happy to take input from anybody. I have a copy,
by the way, if anybody would like to peruse it of generally what I\'m
presenting to you.

So from our standpoint, we wanted to establish national measurements to
determine and track the impact of the travel industry on the U.S.
economy, balance of trade, and job creation. We think that\'s very, very
important to have those facts and figures down, and down right. That\'s
goal number one.

Goal number two, is to establish national accountability standards to
measure the impact of the industry promotion programs on travel trends
and market segments.

Then third, and maybe the most important goal, is to ensure that travel
and tourism impact and potential are understood by policymakers, both
inside government and in the private sector.

We, for some reason, have not been able to sell over the years the fact
that tourism is as important as we happen to believe it is. From my
standpoint, I think getting the Federal Government involved in tourism
on a much larger basis is very important.

I know, Mr. Secretary, you said we may not be able to deliver a lot of
dollars. However, if we\'re able to sell the fact\--and you mentioned it
earlier\--that the balance of trade and those types of things go along
with tourism in a very positive way, we expect that we\'ll get decision
makers on all government levels, and certainly on the private sector, to
play bigger roles in that. So those are our three goals. Again, we\'d
welcome input on those goals from anybody that may have it.

Then beyond that, you\'ll see our work plans. We had kind of planned to
be ready in July with a draft for the July meeting. So that\'s kind of
where we\'re heading, Mr. Chairman. We\'d be happy to \--

SECRETARY GUTIERREZ: How much of this do you have? Like, for goal number
one. Do we have most of that already?

MR. JOHNSON: Yes. I think we\'ve got a lot of stuff. We\'ve got a lot of
help from Helen. So we\'ve got a lot of stuff there. It\'s just
compiling it and getting it to a presentable level.

MS. CARLSON-NELSON: In number two, in terms of measuring the impact of
the promotion on some segments, will you be looking at other models?

MR. JOHNSON: Yes.

MS. CARLSON-NELSON: Having just returned from Australia, I was struck by
the fact that we all, a few year ago, used their model. We held them up
as an example because, leading up to the Olympics, they did a lot of
promotion.

Now the interesting thing is, they\'ve certainly had an increase in
travel. Not as much as they had hoped would come out of the investment.
But the interesting thing is, in terms of the public diplomacy, they\'re
just overwhelmed with the global attitudes towards Australia that have
come out of their promotion.

So I think that one was perceived to be less quantifiable, but has had
an enormous impact, to the point that now their next campaign is sort of
asking for the order in terms of travelers. We all have heard all the
excitement about their line, which is \--

(Laughter)

MS. CARLSON-NELSON: But in any case \--

MR. JOHNSON: Yes, we will be looking at that.

MS. CARLSON-NELSON: Good. Because I think that that is relevant, some of
the other experiences. Also the lag. What they had explained to me is,
they discovered about a three-year lag. So we have to be careful that we
don\'t expect some causality in too short a period in the planning
cycles, booking cycles, et cetera.

SECRETARY GUTIERREZ: And this is something that the Australian
government has done, they have made an investment?

MS. CARLSON-NELSON: Yes.

SECRETARY GUTIERREZ: It would be good if we could just get a summary of
how it works, what they\'ve put into it.

CHAIRMAN RASULO: We can. They\'ve put a lot into it.

MR. MARRIOTT: Hasn\'t the Canadian government done a similar
partnership?

CHAIRMAN RASULO: Yes.

MR. MARRIOTT: Canada, though, has been going for a long time.

MS. CARLSON-NELSON: And I think a stunning example for many of us of
having a strategy and working the strategy over a longitude period is
Singapore, because Singapore set goals, they created their resilience,
they got through the SARS.

Now they had quite a significant sort of self-analysis that\'s gone on
in their whole electorate about whether or not to develop gambling, and
they\'ve now got this new integrated resort area where they\'ve changed
their policy, recognizing the change in the trends of the consumer.

They are actively identifying with consumers, looking at what the
consumers are looking for. They\'ve identified who their competitors are
and they\'ve differentiated it. They\'ve been very strategic in their
investment and I think it\'s a great example.

MR. LINEN: Also, Rex, in terms of developing some basic metrics to use,
the Global Travel and Tourism Council has, of course, these travel
impact statements, of which there have been 173 produced to date.

I don\'t know when the last one on the United States or regions in the
U.S. were done, but they do provide a commonality of accounting and
metric comparability around the world which may be useful in terms of
\--

MR. JOHNSON: And we will look at their data.

SECRETARY GUTIERREZ: We should see what we have in BEA on tourism.

MR. JOHNSON: We are. Helen is moving us that way.

MS. MARANO: I\'ve given them a 101 on that.

SECRETARY GUTIERREZ: It\'s going to take a 103, 104 and 105, but she has
given us the 101.

MR. DOW: One quick question. This has two impacts. One, having accurate
information is one of the things that\'s so important for this industry
to be understood. When you see the *Wall Street Journal* talk about
energy, automotive, manufacturing, this becomes a forgotten industry. So
this is very, very, very important for understanding.

Second, state tourism dollars are put together based on this data they
get, so the more accurate data they have, then Florida will say, we\'ll
spend more in Europe, so it\'ll actually feed, if we have accurate and
good information, in two different areas. They\'re very critical.

SECRETARY GUTIERREZ: That\'s a good point. When we think about a country
like Australia, where most of their population is in two cities on the
coast, or Canada, where 90 percent is on the border, ours is a bit more
diverse, a bit more complicated. You\'re really talking about what
states will be interested. Not every state will be interested. Maybe
this is a state-by-state effort, ultimately.

MS. CARLSON-NELSON: With this recent trip where it seemed that I was
meeting with Ministers of Tourism, over and over the question is,
perhaps \-- will be used. Not having a cabinet position, not having
someone with whom these people can interface, not having a place to make
sure that we\'ve got the advocacy on things, like Korea says, how do we
talk to them, how do we get into the system, because we\'ve got so many
people who want to come to the United States, can you advocate for us
with the visa program.

There\'s a diffusion of how to enter our system that need clarity. I
think, whether you want to or not, you\'re going to end up becoming that
for us, because at this point I don\'t know where else it will be.

SECRETARY GUTIERREZ: I\'m beginning to feel that way.

(Laughter)

MR. JOHNSON: And that\'s one of the things that was brought up in the
other subcommittees, is how friendly are we to visit? We see the same
things in Hawaii that you\'re seeing. We happened to have the Chinese
delegation stop off in Hawaii for a couple of days before they came to
Washington.

They\'re excited to be able to get into the country and to be able to do
things. Now, I don\'t know what I would do in Hawaii with three million
Chinese people walking in. I don\'t have room for them right now.

MS. HENTSCHEL: We\'ll help you out there.

MR. JOHNSON: Thank you very much. But, yes. I guess it\'s a good problem
to have. But I don\'t know if your talks are going to get you to what
they call approved destination status, or anyplace along that line, or
just a visa issue. But I think they go hand in hand. I think we\'ve go
to try to loosen that up on a friend-to-friend kind of a thing, and
particularly South Korea.

MR. LINEN: I see your point, Mr. Secretary, about some places get it,
some don\'t. Just using the examples we\'ve talked about, Australia, I
think they spent \$5 million on Australia as a destination, promoting it
around the world. Hawaii spends, what, \$65 million, something like
that? And Las Vegas is \$135 million, just spent by the Las Vegas
Convention and Business Bureau on promoting that destination.

SECRETARY GUTIERREZ: It\'s \$135 million, versus Australia at \$5
million?

MR. LINEN: Yes.

SECRETARY GUTIERREZ: That\'s the thing. When someone decides to come to
the U.S., do they decide to come to the U.S. or do they decide to go to
Las Vegas? Do they decide, first, to go to Hawaii? Or is the decision
tree, I want to go to the U.S., I want to do these types of activities,
and that eventually gets to Las Vegas? My sense is that it\'s a little
more targeted than starting out with a broad \--

MR. LINEN: I think it\'s both.

MS. HENTSCHEL: I think it depends on how much is being spent in those
markets. Like, the Carolinas, a lot of people \-- because they do spend
money in the United Kingdom, the Carolinas do. It would surprise you.
How would they know to go to the Carolinas?

SECRETARY GUTIERREZ: Yes. That\'s a good point. They spend money as the
Carolinas, not as the U.S.

MS. HENTSCHEL: That\'s correct. The London taxis say \"Carolinas.\"

MR. LAVIN: Rex, can I just ask, do you foresee your ROI subgroup as ROI
promotion budget, or also for infrastructure or other elements?

MR. JOHNSON: We\'ll have to look at the whole works and try to come up
with an ROI that is salable to decision makers. Particularly, I think,
for the states\' part, we have been able to sell that there\'s enough
ROI in tourism, particularly in Hawaii, that tourism is that big a deal.
But I think we need to get all of these things plugged in. I don\'t know
if you\'d get to the infrastructure.

MR. LAVIN: Well, I think there are some jurisdictions where there might
be airport expansion or something of that nature. It might be particular
jurisdictions, a new runway, \$50 million.

MR. JOHNSON: Yes. We hadn\'t thought about that very much. But if it\'s
something that needs to be plugged in here \-- I would hate to plug
sticks and bricks into it, just off the top of my head, because I think
you get less of an ROI, from our standpoint.

MR. LAVIN: It\'s ROI promotion budget.

MR. JOHNSON: That\'s what we\'re trying to do. Or at least that\'s the
way we\'ve looked at it thus far.

MR. STAMATAKIS: When we did the last promotion in the U.K., right before
that there was a series of surveys and focus groups. Somebody did an
analysis of what the impact of that campaign could lead to. Is somebody
following up on what actually took place? I know it takes a while, but
it\'s been about a year now, hasn\'t it?

MR. JOHNSON: Yes. Helen?

MS. MARANO: Would you like me to answer that?

MR. JOHNSON: Yes.

MS. MARANO: We did a preliminary benchmark survey to determine, and
we\'ll provide those results to all of you in the June board meeting.
But we also have gone out now and they\'re now assessing what will be
re-interviews of those that intended to come in the next few years.
Again, thank you for pointing out that there\'s a good three-year lag.

We\'ve been finding out what\'s happened when people are asked to
consider the U.S. as a destination when they come, and if they do come,
then how much they spend once they have. So we\'re doing that right now.

We expect to have that, I believe, at the end of June and we\'ll report
out, to hopefully give us what would be that nugget that everybody
wants, all not down to one page, but one number. That will be a return
on investment. This will be an assessment against the \$6 million
investment that was on the first wave one of the U.K. campaign.

SECRETARY GUTIERREZ: So you\'re trying to isolate when people actually
came from the U.K.

MS. MARANO: Yes. We did a survey prior to the campaign, and then after
the campaign we went back to surveying the consumer. In that survey, we
collected who was intending to come to the U.S. in the next two years,
and we saved that as a database. This is through Longwoods
International, an independent firm, so it wouldn\'t look like we\'re
assessing ourselves.

Then we also went back now and have done what we call a re-interview, in
our language, and went back to talk to them and find out, did you come,
and if they say yes, we did, then how much did you spend. We get
estimates, but it\'ll give a sense of what that return might be.

SECRETARY GUTIERREZ: Do you do some kind of survey through Census?

MS. MARANO: No.

SECRETARY GUTIERREZ: Or Customs?

MS. MARANO: No. Are you asking me if we do?

SECRETARY GUTIERREZ: Yes. Do we?

MS. MARANO: We do a survey of international air travelers conducted
through our office. That\'s done on a monthly basis, to be culminated
through an annual report. That\'s what we use for our balance of trade
data. And, yes, that\'s distributed as people are leaving the country,
so it\'s a representative sample of the travelers.

CHAIRMAN RASULO: So the notion was here, because it was an advertising
campaign, we would first assess what you could in the short run, which
is awareness and intention, and then the second phase was to translate
intention into actual by going back and re-interviewing. Okay.

You said you were going. Did you go? Well, no, but I\'m intending to go
next year. Presumably you would ask them next year, okay, have you gone
then? Then you ask them, where the bloody hell are you, in the next
year.

(Laughter)

CHAIRMAN RASULO: The point is, that was to capture a longer term effect
of this pilot campaign. So we\'re kind of in process. The first results
were quite positive in terms of intention, but now we\'ll have to see if
the intention was followed up on.

MR. LINEN: Jay, it is a fair assessment, given that it wasn\'t as much
money as we would liked to have spent?

CHAIRMAN RASULO: Yes.

MR. LINEN: We\'re working on a sustained effort.

CHAIRMAN RASULO: I agree.

MR. LINEN: We survey both.

CHAIRMAN RASULO: Although someone today told me he saw it, so there\'s
an audience of one here.

(Laughter)

CHAIRMAN RASULO: A reporter from the *Guardian* told me he saw it and he
remembered it.

MS. CARLSON-NELSON: Mr. Secretary, I think a couple things. One, I want
to amplify what I was saying before with a little different view.
Certainly Las Vegas is speaking with a loud voice, but a couple things.
Just political right now.

I think TIA represents a huge public, as you said yourself, or somebody
said today. In 29 states, it\'s the first, second, or third largest
employer. These people are really longing to see our country expand some
of the kinds of messages we heard today, but in a smaller group.

I think that that then helps to generate state matches and the regional
matches because there\'s a sense of momentum and the sense that it is
going to be leveraged.

I think that TIA has to many grass-roots organizations that it\'s become
a bit cynical, frankly, because there\'s been hope so many times. I
think if something really happened, it would be such a powerful message
at this point in history, that we were caring about the diplomacy of it
and the implications beyond just the export, which is important. But I
think having this important industry affirmed is an opportunity for
somebody waiting to happen.

We had a great White House conference. President Clinton came. It was
terrific. But we had very little follow-through. People went home. There
was an agenda.

Now the press are calling us and saying, what happened to that list?
What happened to the follow-up? Some of it was private sector and some
of it was things that we want to collaborate with you on to help really
make happen now.

SECRETARY GUTIERREZ: Has anyone talked to Karen Hughes on diplomacy \--
public diplomacy?

CHAIRMAN RASULO: Yes, we have, an hour ago.

(Laughter)

SECRETARY GUTIERREZ: She was a speaker at

the \--

CHAIRMAN RASULO: She was a speaker. But I also went to her office. Mr.
Rogers met with her. A few of us have met with her.

MS. HENTSCHEL: And we spoke with her, Mr. Secretary, about Germany.
That\'s our greatest concern right now to \--

SECRETARY GUTIERREZ: Yes.

MS. HENTSCHEL: \-- those of us that are bringing inbound into the United
States. Having just attended ITB, I shared with you earlier, it\'s the
first time for me in 29 years and 29 ITBs that the general public and
the \-- are saying the same thing, that the imagine of the United States
right now has them very concerned. They don\'t feel welcome coming to
America. The Germans are traveling everywhere else. There were 1.2 to
1.4 million. They were more than 2 million coming to the U.S. before
9/11.

But in their words, it would only take a diplomatic effort of our
President shaking hands with Angela Merckel, and saying, please come to
America, we want to really reestablish our strong relationship between
both of our countries, or the Secretary of State, or whoever would
really reach out to welcome them.

SECRETARY GUTIERREZ: She\'s here in a few weeks.

MS. HENTSCHEL: If she\'s here in a few weeks \--

SECRETARY GUTIERREZ: You\'re going to get their handshakes. Put me down
as skeptical, but you\'re going to get your handshakes.

MS. HENTSCHEL: Then all the President needs to say, besides the
handshake, is we\'ve love to have more Germans to come to America, and
for more Americans to go to Germany.

SECRETARY GUTIERREZ: Doesn\'t the President have higher negatives than
the country as a whole?

MS. HENTSCHEL: That\'s part of the problem. But we can overcome that,
because to know him is to love him.

(Laughter)

MS. HENTSCHEL: Really. They just need to know him. They have this
perception that is not the right perception of the President. If they
had the right perception as we know, then I think that \--

SECRETARY GUTIERREZ: We do have numbers by country. You\'re saying that
was \--

CHAIRMAN RASULO: Yes. Yes, we do.

SECRETARY GUTIERREZ: So we have it laid out and we can see where we\'ve
grown.

CHAIRMAN RASULO: Yes. Absolutely.

MS. HENTSCHEL: It hasn\'t come back after 9/11 as one of the countries
that as really booming and coming here before 9/11.

SECRETARY GUTIERREZ: Do you have that?

MR. JOHNSON: Helen has it.

SECRETARY GUTIERREZ: Do you have the numbers by country?

MS. MARANO: Yes, sir.

MS. HENTSCHEL: See, they used to always say, we love the American
people, we love America. We just don\'t always agree with the politics.
But we\'re still coming because we love the country, we love the
Americans.

Now they don\'t say that any more. That\'s the first time the lights
went off. We said, we\'ve got to let people know about the public
diplomacy opportunity that there is now with the new Chancellor. I think
there\'s a really great chance to get it together.

SECRETARY GUTIERREZ: The other thing I\'d suggest, is on the basis of
these numbers, if we have measurements by country over the past several
years, if we can spot trends where we\'ve grown, where we\'ve declined.

Then I think the decision is, do you focus on countries where you have a
problem, like Germany, knowing that it\'s often more difficult to turn
that around than it is to focus on a country that\'s growing because you
already have the \--

CHAIRMAN RASULO: Yes. The \"fish where you are.\" \"Fish where the fish
are.\"

MS. HENTSCHEL: We just need the diplomatic effort.

SECRETARY GUTIERREZ: Yes. It could be a list of priority countries and
we decide how we address it. Maybe it\'s not marketing money. Maybe
it\'s something else. But that would be part of the strategy.

MS. HENTSCHEL: I mean, it\'s not that they don\'t like marketing money
in the future, but right now, this is \--

CHAIRMAN RASULO: Yes. Which is what we did last time, which is how we
wound up with a pilot in the U.K. We marked the highest opportunity and
it was already trying to show growth, and needed to be accelerated.

MS. CARLSON-NELSON: Jay, we can look at it that way if we\'re not
looking at public diplomacy. It\'s harder for the for-profit sector to
invest in places where there\'s an anti-American feeling than it is to
put our investment where we know people want to come.

So that may be where we need to partner in order to turn that around,
just because it\'s just not going to be as natural for Noel to spend her
time there right now as it is in a place where she thinks she\'s going
to get a higher yield until we get that adjusted.

MS. HENTSCHEL: It\'s not just about me. It\'s \--

MS. CARLSON-NELSON: No, no. I mean \--

MS. HENTSCHEL: \-- dependent on Germans coming here and they\'re not
anti-American, they\'re anti our political decisions. That\'s what I
really got in feedback from the tour operators there and the general
public. So if there would be this opportunity for diplomatic \--

SECRETARY GUTIERREZ: We need to look at the numbers and see what the
numbers say by country and just see what \--

MR. JOHNSON: Actually, we\'ve heard the same thing from our European
marketing contacts. The very same thing.

SECRETARY GUTIERREZ: So you would say that the decline in market share
has come out of Europe?

MR. JOHNSON: Some of it.

MS. HENTSCHEL: Out of parts of Europe.

SECRETARY GUTIERREZ: Parts of Europe.

MS. HENTSCHEL: So U.K. has been coming back.

SECRETARY GUTIERREZ: But, say, the E.U. as a whole.

MS. HENTSCHEL: Yes, for various reasons. But the biggest one out of
Europe besides the U.K. where there\'s the most fish, if we can turn it
around, is Germany.

CHAIRMAN RASULO: France doesn\'t leave France. At least they don\'t come
here when they do.

MS. MARANO: I think, overall, Mr. Secretary, that there\'s no empirical
evidence to indicate \-- the pattern so far has shown that, even when
our investment in the U.K. is slowing up, the returns, we got some
resilience back.

It helped to be in the marketplace because the noise is loud there, with
all the other countries having taken advantage and moved in to pull. So
the competitive positioning is among our top markets, so it was fruitful
for us to be in the market at a time when we may have lost even more.

Germany is one that has shown some good growth through 2005. It
represents a third or fourth market, overseas market, top overseas, and
Mexico being first and second. But I think that, in line with what
they\'re both saying here, is that it\'s showing a slowing approach.

And although we wouldn\'t be able to get an empirical answer, the
overall world market share is very regionally driven by a culmination of
what maybe some of the diplomacy issues, and competitive positioning of
the economy, how they\'re doing, and other choices of destinations, from
Asia through South America.

SECRETARY GUTIERREZ: So you can answer, where have we lost share? We\'ve
got that information?

MS. MARANO: Yes. We can do an assessment. There is a market share
indicator that was performed by TIA for you, so we\'ll have some of
that.

SECRETARY GUTIERREZ: Great.

CHAIRMAN RASULO: Okay.

If we can maybe get a report-out from the second subcommittee, which is
on Ease of Travel and Public Diplomacy. I think that Julie Oettinger is
here, representing Glenn Tilton, who couldn\'t be with us.

Hi, Julie.

[EASE OF TRAVEL AND PUBLIC DIPLOMACY SUBCOMMITTEE REPORT]{.underline}

By Julie Oettinger

MS. OETTINGER: Hi. Thank you. Yes. I\'m sorry that Mr. Tilton was unable
to make it today, but I\'m pleased to give you an initial report of our
subcommittee activities.

We\'ve had some initial discussions. The truth is, we still have a lot
of work to do. We are very pleased to be involved in this effort and to
contribute to the national tourism strategy.

As you mentioned earlier, we have identified two broad goals at this
point. The first, is the broad category of enhancing U.S.
competitiveness for international inbound travel.

As you noted, the United States competes with other countries who are
international visitors, yet we pose fairly high barriers to
international visitors to the United States.

So in our committee we need to take a close look at these barriers and
consider ways to improve and simplify the travel experience so as to
encourage more travel to the United States.

As I said, we have only sort of begun our evaluation of these issues,
but some of the initial concerns that we\'ve identified that we need to
delve into more deeply include such issues as confusing, burdensome, and
often duplicative visa and travel document requirements, the Western
Hemisphere Travel Initiative, which imposes new requirements for
identity documents on Canadian and other travelers through land borders
to the United States. That requirement is in effect, but we need to look
at ways to ease the burdens associated with implementing it.

Another issue, is the shortage of equipment and personnel needed for
efficient arrival and departure processing for international travelers
and visitors at U.S. airports.

The need for coordination of security and privacy requirements that are
imposed by the U.S. and foreign governments, so as to avoid redundant
and confusing requirements imposed on both companies and travelers. I
think these are only a few of what could be a very long list of specific
objectives.

I think one of the challenges for our subcommittee is going to be
identifying what the highest priorities are and focusing our attention
on those things where we can make the most difference, because there
certainly are a lot of potential concerns in this area.

The other area, which you\'ve spent quite a while discussing today
already, is public diplomacy, and how do we improve the image of the
United States. As you have said, the image of the United States has
taken a severe beating recently.

It\'s not just the United States, but I think most recent surveys, as
you mentioned, show that it\'s also the Americans. So within the charge
of our subcommittee, I think these issues are connected.

If we can ease the burden and travel experience, simplify that, make the
United States more welcoming to people who travel to the United States,
surveys show that people who travel here leave with a much better image
of the United States than people who have never been here.

So, these two goals, ease of travel and public diplomacy, are really
very interrelated and mutually reinforcing. If we could make the
experience of travel to the United States more welcoming, people will
leave with a better image of the United States and hopefully generate
even more travel to the United States.

We have also talked about some other broad topics, and I think we need
further discussion to determine exactly how many goals we will have and
where we\'ll focus our attention.

One other topic that has, for example, been thrown out that we need to
discuss further is the impact of taxes and fees on the industry as a
whole. So we obviously have a lot of work to do in this area, and we\'re
looking forward to developing more specific proposals for the board\'s
consideration.

SECRETARY GUTIERREZ: Have we received any information back from Homeland
Security on plans to improve ease of travel? What do we know about that?

MS. OETTINGER: Actually, that\'s a very good point, and one that I
forgot to mention. One of the initiatives that the Federal Government
announced earlier this year, the Rice-Chertoff initiative, has the goal
of enhancing the image of the United States as a destination, and
through removing burdens and complications of travel to the United
States, making the U.S. a more welcoming place.

We are, within our subcommittee, trying to understand that initiative
better, the specifics of it, and determine whether we can make some
recommendations that would enhance and complement the activities that
are already under way within those agencies.

MR. MARRIOTT: It seems one of the biggest opportunities is not having to
re-interview somebody who got a visa in the last year or two years.
Right now, every time you get a visa you have to be interviewed.

I think they\'re setting up a process, at least in one or two countries,
where they do not have to be re-interviewed. That would knock off about
a third of the work and simplify the whole situation. That, to me, would
be the whole single thing that could be pushed the hardest.

If they\'ve already got a visa within the last year, year and a half,
then they don\'t have to be re-interviewed. They can reapply, get
another visa, and continue on. They have to show that they are the same
person, and that kind of thing. But once they get a visa, why do they
have to come back and get another one?

CHAIRMAN RASULO: Yes?

MS. CARLSON-NELSON: Do we have guest staff from Homeland Security and
Public Diplomacy here?

CHAIRMAN RASULO: They are guests and staff.

MS. CARLSON-NELSON: No. But, fantastic. Because it feels like we have so
much to corroborate. The other question I had is, maybe each of the
subcommittees should consider taking a look at their report regionally,
just as we mentioned for the first one, that it\'s where we get more
granular that we can target some attention.

I would guess that ease of entry \-- something\'s come up today about
China, other issues. So if we looked at it regionally, we may have
different issues, language issues, visa waiver or not. That might help
us with the granularity to be more targeted.

MR. MARRIOTT: The biggest problems seem to be India, China and Brazil
right now for getting a visa. There are four offices in Brazil. With the
size of the country, you have to travel 500 miles to be interviewed.

MR. LAVIN: And they have to be in person right now.

MR. MARRIOTT: They have to be in person. You have to be fingerprinted.

MS. HENTSCHEL: They said in Japan they were going around. Part of the
talk was whether the Brazilians would follow what the Japanese are
doing, actually going to the different cities.

MR. MARRIOTT: The consular office would send somebody to the \--

MS. KUNSMAN: Where the consular offices already exist but are not able
to issue visas, they would send an officer there to be able to issue
visas on a circuit rider type of basis.

MR. MARRIOTT: Yes.

SECRETARY GUTIERREZ: Can you tell us a little bit about the
Rice-Chertoff plan? Or if this isn\'t a good time, maybe you can come
back.

MR. FULLERTON: Yes. Certainly. One of the things that we\'re working on
right now in the \-- and the Homeland Security Advisory Council is the
advisory committee for the Rice-Chertoff initiative.

So currently at the moment we are reviewing all the recommendations on
membership that have come in, and we\'re working with our State
Department colleagues to come up with that list of members for that
advisory committee.

I know that the State Department has some various entitlement programs
in place at the moment with teleconferencing for the application process
that they\'re doing in the United Kingdom.

We also have a model port of entry program at Dulles Airport and
Bush-Intercontinental in Houston that will help to welcome visitors,
make it easier as they go through the process, and sort of simplify it
as much as possible, while keeping it secure.

MR. LAVIN: Mike, do you participate in this subcommittee, or does
somebody from Homeland Security participate?

MR. FULLERTON: No, sir. Not that I\'m aware of.

MR. LAVIN: That might be useful. I should point out, there are seemingly
trivial matters, such as forms, where there might be good reasons why we
have the form, but it might be good just for historical reasons, and
maybe we can consolidate.

MS. OETTINGER: I agree. We are very interested in learning more about
the initiative. We would welcome participation in the subcommittee. At
the very least, we would certainly be interested in a meeting and
learning a lot more about the details of the program.

MR. FULLERTON: Sure. I\'d be more happy to find, if it\'s not our
office, the relevant office of DHS.

MR. LAVIN: May I make another observation just on this set of issues
that Julie raised very well in her presentation? It\'s striking to me,
and I imagine to many people here, in our own experiences, that the
whole arrival and processing part of international travel seems to be
without performance metrics.

I mean, it\'s very striking, in the service economy we\'re in. If you go
into a Marriott, you\'re greeted in a certain way, in a certain fashion,
and processed in a certain way. There\'s a time element and a service
quality element to that. If you don\'t hit it, the management of the
Marriott knows that they\'re unhappy about it and they\'ll make sure
it\'s fixed.

If you go to a Disney park, they\'re acutely aware of the lines, how to
move people through, what they can expect, and how to treat people the
right way. For gosh sakes\', if you go into Safeway, they\'ll bump a new
register, or a bank.

It\'s just very striking that there do not seem to be performance
metrics for quality control, management feedback, or any of the kind of
routine elements in a modern service economy that ought to help the
system work together.

This is, of course, is the nature of government sometimes, but it seems
to me it wouldn\'t hurt to have a management overlay in our system so
people can move through lines quickly and be treated the right way, and
there can be feedback if they\'re not.

MS. OETTINGER: That\'s a very good suggestion. From the airline\'s
perspective, I can tell you that we hear these sorts of complaints all
the time from our airports.

The challenges that they face in trying to work with the Federal
agencies with their mandates, and certainly the security objective is
number one and needs to be number one, but also, we believe, there needs
to be a balance with the customer service orientation that we need to
provide to inbound travelers. So, that\'s a very good suggestion.

CHAIRMAN RASULO: Maybe the model airport experiments, we ought to push
to have metrics included. In every other aspect of our society, in
addition to treating people right, there\'s metrics. What was the
average wait time? How long did it take the average person to get
through? I guarantee you, there are no metrics today.

But I think that would be an excellent suggestion, as part of these two
model airport suggestions. I just heard from Karen Hughes that, so far,
her experience, even within two airports, at Dulles and Houston, has
been radically different in terms of what they\'re already doing in
Houston and what they\'re not doing at Dulles, and say, is it possible
to do. Here are two points of entry that should be under the same
restrictions.

For instance, evidently in Houston they have people speaking a combined
total of 30 foreign languages on the pre-immigration side to direct
people. In Dulles, they\'re saying we can\'t possibly do that, they have
to come through Immigration. So we can\'t have people over there. So
there\'s a lot.

It\'s going to be a very interesting experiment, but I definitely agree
that metrics should be part of that. Because how in the world will we
measure whether the situation is improving if all we rely on is
anecdotal experience of somebody who got behind somebody that took and
hour and a half to get through Immigration?

Thank you, Julie.

The last subcommittee is Andy Taylor on Promotion. So, Andy, let me ask
you to summarize that.

[PROMOTION SUBCOMMITTEE REPORT]{.underline}

By Andy Taylor

MR. TAYLOR: Yes. Thanks, Jay. Mr. Secretary, this discussion has been
nibbling around at my notes here, so I\'ll try to keep it as succinct as
I possibly can.

But we have two issues on our plate here. The first, is the
recommendation for the current appropriation of \$4 million which is out
there, and I\'ll deal with that, I think, at the end of my report.

Second, is examining the factors critical to a successful long-term
destination marketing program or promotion program, if you will.

From our conference call and several e-mail and phone discussions with
the subcommittee members, at a high level, we\'ve identified some
questions we need answers to. You\'ve heard them before.

What\'s it going to take for the U.S. to be more competitive? How much
money are we going to need to spend? Where is that money going to come
from, and what are our target markets? It sounds familiar to our
previous discussion.

But we need to answer these questions, because if we\'re going to have a
really focused, effective program, it\'s just like many of your
businesses, and you need to have that information, those answers, first.

In fact, the independent of our board, the U.S. Travel and Tourism
Industry, is in the early stage of answer these and other important
questions to identify an industry response to the problems we are
addressing on this board. So I think the first thing we have to do as a
committee is to make sure that our board be aware of what the overall
industry is doing.

We don\'t necessarily have to reinvent the wheel again. We want to
complement the industry\'s efforts, if we believe that makes sense and
we are in a position to do so, in our recommendations to the Secretary.

So for this reason, our first step as the Promotion Subcommittee has
been to familiarize ourselves with the industry response. To start, we
have circulated to the subcommittee a document called \"The Power of
Us.\"

I think the name has changed, Roger, but this is what the current form
is as far as getting a blueprint from the industry to deal with the
problems we\'ve faced today. Again, Roger Dow will be talking to you
about this report in just a few minutes.

So, long story short, we\'re early in the process here. We have a lot of
serious questions to answer. You get those answers, then we can decide
just how we\'re going to approach this and how much money, firepower,
strategies we need to have an effective promotion program or marketing
program.

Back to the first issue, the subject of the \$4 million appropriation.
We see the following options, which we discussed on our call the other
day. This is a promotion, of course, for inbound U.S.

Split the funds between the Japanese and U.S. markets, increasing reach
and frequency this year in Japan, and doing a second media wave in the
U.K., which has been discussed. Use \$4 million to run a media campaign
in the U.K. next year. That\'s option two.

Number three, extension the reach and frequency in Japan and do a second
wave this year, or possibly a media campaign next year.

Number four, a public diplomacy World Cup campaign. Have I got you
confused yet? Number five, the See America web site. Several of yuo have
mentioned this to me as something that we really ought to seriously
consider, which is to spend a significant amount on revamping the web
site, and then putting some print out there promoting the web site or
other ways to get people to come to the site.

Number six has been called guerilla marketing. Wrap buildings with our
message, and maybe our web site, teams of people in the streets,
basically conduct a public relations assault on targeted markets. Okay.
Got enough there? Like on the right side of a restaurant menu.

We had a discussion of these alternatives in the subcommittee and there
are some pros and cons for each. I\'d like to open it up for discussion
among the board here, because we do want to make a decision today. Then
the Promotions Committee can go back and look at the top one, two, or
three.

So, for example, on the existing strategy, the advantage to staying with
our existing campaign is simplicity. We already have a relationship with
an ad firm. We could easily allocate the money, perhaps allowing more
time to consider the more important issue, and so on, and so forth.

One disadvantage is that we don\'t have any data to judge whether the
money spent thus far has been well spent, although there have been some
ideas on how we approach that.

The World Cup. The advantage, if we could pull that off, we would have
the opportunity to reach a lot of people quickly. The obvious
disadvantage could be timing, given the rapid approach of the date and
some of the challenges that may arrive out of the RFP process.

CHAIRMAN RASULO: Andy, can I interrupt?

MR. TAYLOR: Sure.

CHAIRMAN RASULO: Mr. Secretary, do you have any idea what we\'re talking
about?

SECRETARY GUTIERREZ: I\'ve got a sense.

CHAIRMAN RASULO: You do? You do? Because this is like in code. I know
we\'re speaking in code, because we\'re all familiar with these issues.

MR. TAYLOR: I apologize.

CHAIRMAN RASULO: No, that\'s not your fault, Andy.

In brief, remember, we did a \$6 million ad campaign in the U.K. that we
called the pilot. The following year, there was more money allocated by
Congress.

We had decided at that time we were going to spend it in Japan, and
there was some debate about that, and continue partially the U.K.
program. The issue has been raised now, what should we do with this \$4
million, because a lot of other options have been raised.

What Andy is talking about in terms of the World Cup, is that Karen
Hughes has decided that it might be useful to a public diplomacy
objective to do some kind of advertising in an event, the World Cup in
June and July, that is much more interesting to the rest of the world
than America, a sport that America doesn\'t dominate, it\'s not an
American sport, and might be a good start to building our reputation
from a public diplomacy perspective.

SECRETARY GUTIERREZ: So you\'d do an ad campaign within the World Cup
coverage?

MR. TAYLOR: Some kind of communication campaign. You\'d have to talk to
the experts \--

CHAIRMAN RASULO: Right. Our initial idea \-- first of all, you can\'t
advertise in the World Cup broadcasts unless you\'re a sponsor of the
World Cup.

So she\'s gone and talked to McDonald\'s, and Coke, and FIFA, and some
others who are sponsors of the World Cup and said, are you willing to
allocate some of the massive advertising buy that they have during the
World Cup program that broadcasts around the world to a message that we
will just give you to insert?

In fact, when I talked to her recently I recommended that, as they
don\'t have an insert to give them, that they do some local sports
figures\' testimonials that might speak to something about their
positive feeling towards America, because it will be an audience that
will want to hear from their local sports figures, soccer stars. That\'s
easy. It\'s cheap to produce, it\'s fast to produce. It\'s June. It
starts in June. So that was one potential recommendation.

As part of our first allocation of money, we did some work with \"See
America,\" the web site for the Travel Industry of America. It needs
more work. We could use this money to further our efforts, not on
television, but through, perhaps, print, perhaps other alternative
outdoor type of things, leading people to the web site that we would
enhance as a way to further our cause.

So Andy has gone through that list. And as I said, we\'re speaking in
code because we\'re all very fluent in these things. But I wanted to
stop and at least bring you up to speed on the issues.

SECRETARY GUTIERREZ: That\'s sort of separate from the strategy.

CHAIRMAN RASULO: This is separate from long-term strategy development.
This is completely separate. It\'s a short-time issue. If we\'re going
to do the World Cup, it has to be now. If we\'re going to have the web
site enhanced for this summer, it should be now. If we\'re going to do
Tokyo, the U.K. would wait, I guess, for January or December. And Tokyo,
I don\'t know what the time would be.

MS. OETTINGER: July.

MR. LINEN: Mr. Chairman, at the risk of further complicating the issue,
it might be instructive to think about, the outcome of Roger\'s
presentation will hopefully be, yes, we\'re on target, we need to go do
this strategy work, and so forth.

And I know this money is appropriated for advertising, but it could
create a situation where some of it could be coopted into a
public/private partnership opportunity to help fund the activity that
needs to be done to undertake the strategy work.

CHAIRMAN RASULO: We thought about that, John. The fact is, it can\'t be
spent that way. It\'s got to be spent on direct promotion, as it was
appropriated for the use of direct promotion. But we did all go there.
It\'s a good thought. It\'s just, we can\'t get there.

MR. LINEN: Forgive me.

SECRETARY GUTIERREZ: Why do you need a decision today? Is the money
going to go away?

MR. TAYLOR: When we had our committee meeting, I thought we concluded
that we needed to have a decision. I can\'t remember exactly what the
issue was.

CHAIRMAN RASULO: Well, we mostly wanted one if we wanted to go with the
World Cup, advertising on that.

MR. TAYLOR: It has to be made at some point, so let\'s make it now.

MR. LAVIN: But Jay, from an advertising perspective, don\'t you make a
decision on placement based on what your audience is, the gross rating
points that are going to hit that audience? You don\'t sit down and say,
this is my favorite show or my favorite \--

CHAIRMAN RASULO: Sure. Of course. Right.

MR. LAVIN: I mean, theoretically shouldn\'t we be agnostic as to whether
it\'s a basketball tournament in China or a soccer tournament in Brazil,
to say, what are the demographics we\'re trying to reach, and how do we
reach them?

MS. CARLSON-NELSON: I think, too, probably we\'ve done that, in that the
World Cup has so much global involvement, unlike a tournament. Germany
is gearing up for it. That does deal a little bit with that issue.

I have two observations. One, that seems to be \-- for part of the
funds, I\'ve love to see some of it go to the \-- web site. I am seeing
over and over much more granular kinds of marketing that the \-- the
best tool we have so far is what we have got invested in that web site.

And then at risk of further complicating, this Western Hemisphere
Initiative seemed to be rumbling around everywhere, and it\'s not on our
list, or any portion of it, to be utilized in some way to make that more
of an indication than a threat, or a promise than a threat. Those are
two big markets.

Well, Canada and Mexico are probably our biggest markets. So it hasn\'t
been brought up. And I wouldn\'t have brought it up until the last few
days, when I heard it over and over again.

So whether some piece of that \-- also look at that, because if we
can\'t neutralize that and turn it around from, you have to have, to we
want you to come, we\'re going to make it as easy as possible, and even
something that\'s almost a promotion in the beginning months to keep the
pattern.

SECRETARY GUTIERREZ: You need to decide if the World Cup is in what
countries?

CHAIRMAN RASULO: No. I think Karen Hughes and her staff have already
decided. And by the way, I\'m not sure how we\'ll use this money,
because you can\'t buy advertising in the World Cup. Either you have it
by virtue of being a sponsor, or you don\'t have it at all. So it might
be production costs. I actually think we won\'t spend a lot of money on
World Cup advertising.

Frankly, to answer your question, it would be nice to make this decision
today. It\'s not essential to make this decision today because, in fact,
I\'m not sure we\'d do anything that we couldn\'t do in a conference
call in a month, and it frankly doesn\'t sound to me like we\'re ready
to make this decision. I don\'t know.

SECRETARY GUTIERREZ: I don\'t know what \$4 million buys you in Japan. I
have a feeling, in the U.K., it barely buys you a campaign.

CHAIRMAN RASULO: Scratching the surface.

SECRETARY GUTIERREZ: It gives you an opportunity, but it\'s not a lot of
money.

MR. DOW: I\'d like to speak in favor of doing something with the
Internet. I\'m concerned that \$4 million, again, is like zip. It\'ll be
gone in 4 days, 10 days, and we won\'t even know what happened.

If we invest in the Internet, then we have the capability of doing a
co-op and we can feed the fund, so the companies will end up feeding
this. Then we\'ll have a fund that can go long term. So this is sort of
like jump-starting what we do.

We can make our site much more actionable and we can hit more markets.
We can go very deep in Japan. We can be in their language. We can do so
much at a very cost-effective basis, and it\'s measurable. We can come
back and say, hey, this is what we did. But television advertising in
Japan \-- those of you who have advertised in Japan know that is a few
days, maybe a couple of weeks. That\'s nothing.

CHAIRMAN RASULO: Yes. Well, we can make a decision on part of it, if the
timing is \-- but is there a proposal on the web site for an amount of
money?

MR. TAYLOR: Jay, just to kind of make it clear, notwithstanding what
Marilyn said, because I don\'t know the issues on Canada and Mexico, but
our committee, on a phone call, if you\'ll recall, we kind of had some
of the same conversation and confusion about what is the focus, and so
forth.

But I have heard from the conversation before this meeting maybe some
very strong interest in the web site, as Roger well describes, rather
than just a quick shot in the arm on the media side. The World Cup seems
to be a really high profile in everything that you say, but Karen and I
totally agree in terms of being very oriented to that audience and
we\'ll move forward.

So our committee could take the web site, we can take the World Cup. I
know Marilyn wants us take the north/south. But we can get this list and
narrow it down a little bit, and I think the committee can hopefully get
something to you that makes some sense.

CHAIRMAN RASULO: Right. Then maybe we can follow the recommendation
that\'s a little more cogent than just making decisions \--

MS. CARLSON-NELSON: The north/south, I don\'t have a passion about.
It\'s just emerged in my mind the last couple days. And Roger is
nodding. If there was a way for us to help with that, there may be some
simple ways to use a portion of it against that that could really soften
that.

CHAIRMAN RASULO: Okay. I don\'t know what that would be.

SECRETARY GUTIERREZ: Just summarize some next steps.

CHAIRMAN RASULO: Yes.

SECRETARY GUTIERREZ: Just in terms of follow-up, we\'re going to get
back to you on the date for the conference call after the mission.

In terms of the strategy, I was thinking about just the format and how
we could do that. If we could \-- we\'ve got the data, so let\'s \--
someone go through it and see where it points us in terms of countries
where we lost a lot, what countries were gaining a lot, but at least
look at the numbers and see if it points us somewhere.

And to the extent that we could come up with some priorities, let\'s say
we come up with five, or six, or seven country, area, or regional
priorities, if we could link those up with the Rice-Chertoff plan, then
we\'re both working on the same thing and we\'re trying to solve the
same problem.

It would strike me, the promotion plan would not be able to be developed
until you had the answer to those two. So, for example, let\'s say if
China were a priority, I\'m thinking now of the strategy, not the
formula.

CHAIRMAN RASULO: Right.

SECRETARY GUTIERREZ: If China were one of the priorities and worked with
Rice-Chertoff to get that priority, it strikes me that maybe Chinese
tourists aren\'t interested in going skiing, but you think they would be
interested in going to Las Vegas. I\'m just guessing.

CHAIRMAN RASULO: You\'re correct. That\'s a very good guess.

(Laughter)

CHAIRMAN RASULO: A very good guess.

SECRETARY GUTIERREZ: So, you know, that would drive the promotion. But
it would start out with the data and linking it to Rice-Chertoff. That
strikes me that that could be sort of the format.

CHAIRMAN RASULO: Good. I think \-- and not to interrupt you, but we were
going to ask Roger to present the work that\'s going on around the TIA
blueprint for promotional strategy, a destination working strategy,
which, as I know it, as its first few steps, has a lot of this analytic,
where does it work, what\'s happening out there country by country, what
will we do country by country.

We are going to try to piggyback on what\'s happening at the Travel
Industry Association, because half the people in this room are involved
in it anyway, and what needs to be input on the promotional side of what
Andy is heading up in that subcommittee. So I think the timing is going
to work out.

In fact, Roger and I have met and are going to assign a quarterback,
hire a quarterback, to run this work within the Travel Industry
Association that can clearly land it \-- of course, this person would
drawn on all the data that Helen has on the trends, and so on and so
forth. So I think those things would dovetail. And I certainly agree
with you that we ought to link it up with everything else that\'s going
on.

So I don\'t know if you have further comments or you want to listen to
what I know Roger has.

SECRETARY GUTIERREZ: Sure.

CHAIRMAN RASULO: It\'s not his first time, so he\'s got the argument
down really well. I hope you\'ll feel a little better about the fact
that we\'re all heading in the same direction.

SECRETARY GUTIERREZ: Okay.

MR. DOW: We\'re being severely out-marketed. We understand it. We\'ve
lost \$250 billion. One share point is 8 million visitors, \$15 billion
in revenue, and 150,000 jobs.

What you hit on the head, is exactly what is the important thing. I
think we have a window of opportunity that coincides with diplomacy,
commerce, and homeland security.

What we put on the table, our association just levied \$500,000 to
jump-start this activity. We are going to, over two years, raise \$2.5
to \$3 million from the industry in small pieces from everyone in the
industry to create an organization, have a full-time quarterback that
will do all this, unite the industry.

The first thing we have to do, is we\'ve got to pull our industry
together. We\'ve got to get the restaurants, the lodging, all the pieces
of the industry together.

We\'ve been down this road before. It\'s not easy. But this is going to
be an unprecedented, big effort that we\'re going to put our money where
our mouth is behind what has to happen.

The elements in the blueprint are, first, identify potential funding. We
are talking, Mr. Secretary, here on the order of magnitude of \$200 to
\$300 million, and there are ways of getting this, when you look at what
the return will be. But there\'s many ways that we can look at it.

So we have to run to ground every one of those, the pluses, the minuses,
what the economic impact is, how we would get it, what the hurdles to
overcome are. Then benchmark to what other nations are doing, very
comprehensive so we\'ll know what every other nation is doing.

Then we\'ll analyze our top markets, know exactly where the business is
coming from, where we\'ve lost the business, where we\'re gaining the
business, where the potential is, how to market there.

Then what we\'ll do is determine the mix\--advertising, events, trade
shows\--of the media, and say, this is how we\'re going to spend it
exactly, so when someone says, where\'s the money going to go, we can
say exactly how we\'re going to spend it.

I\'d like to dovetail it with this committee\'s efforts because then
we\'re not having two dueling plans. We see this as a two-year effort.
We think if we get this done, it\'s going to happen during this
administration.

If it doesn\'t happen during this administration, then no matter who is
here, it\'s going to be a new Secretary of Commerce, a new Secretary of
Homeland Security, and we\'re going to start all over again and we\'ll
have this conversation again. So the industry wants to step up big, very
comprehensive, put the resources, put the money behind it.

We will spend \$2 to \$3 million of our own money to have a very
comprehensive plan that everyone can be nodding their heads and saying,
wow, that will deliver this, I can get behind it, and Karen Hughes can
say it, from a diplomacy standpoint.

The last thing I\'ll leave with you, is Australia actually spends \$120
million because their meetings market spends another \$40 million, is
the number-one desired location in the world. We\'ve slipped to number
six.

As you look around at all of Europe, Australia is number one, but only
like a quarter of a percent or a tenth of a percent of the people go
there. But they all want to go there.

This is where I think the play to Karen Hughes, to Condoleezza Rice,
when you get that attitude of people saying, I want to go to America,
it\'s a great place to go, and we\'re building the economics, we all
win. So that\'s what we\'d like to propose we do.

CHAIRMAN RASULO: So I think it\'s very consistent with everything else
that\'s going on. We used to be number three, by the way.

MR. DOW: Yes. We\'ve slipped to six.

CHAIRMAN RASULO: In terms of aspirational places to go, we\'ve slipped
to sixth.

SECRETARY GUTIERREZ: Do you have this \-- as well \-- consolidate \--
tourism.

CHAIRMAN RASULO: Yes. So we\'ll reconvene by phone and I\'ll ask Sarah
to take on the yeoman\'s duty of setting that up, which I know will be
fun. Then if we should get our minds around reconvening in July to
review where we are on this strategy, then I will take the
responsibility of getting to you a recommendation memo on the \$4
million allocation that\'s left, which sounds like it may have a few
parts and pieces, and then of course you ultimately, with your team,
decide.

Do we have a time limit on that, Helen? This calendar year?

MS. MARANO: Next year. It has to be spent by 2007.

CHAIRMAN RASULO: By September 2007. Okay.

MS. MARANO: It was signed in 2005, so it\'s the end of 2007. But it
takes longer than that to commit, so we want to \--

CHAIRMAN RASULO: Okay. Great.

If there are other comments \--

MR. MARRIOTT: One last thing.

CHAIRMAN RASULO: Yes, Bill.

MR. MARRIOTT: On this Western Hemisphere Initiative.

CHAIRMAN RASULO: Yes, sir.

MR. MARRIOTT: The State Department is considering an identification card
instead of a passport requirement. There\'s got to be something done on
that so when people go to buy their ticket at the airport or check in
for a flight, they can pick up an identification card so they can get
back in the country. That\'s being considered. But I don\'t know. It\'s
got to go fast because this is going to be, in 18 months, in place.

CHAIRMAN RASULO: Right.

MR. TAYLOR: Bill, can I ask you a question? Because you, right after
9/11, called a lot of us and put together that campaign to get people
traveling again, which I thought was handled just beautifully.

So this is kind of a longer term, little different challenge here. But
you had to get a lot of people in the various parts of the business
together. How do you feel about it, as a savvy guy, in a project like
this that Roger is describing?

MR. MARRIOTT: Oh, everybody buys into what Roger is doing, I think.
It\'s powerful. Got to be. Everybody is buying over the web, as you
know.

MR. TAYLOR: Yes.

MR. MARRIOTT: And it\'s continuing to grow very fast. So I think
everybody would be on board with that.

MR. DOW: Andy, we raised \$15 million the two times we did that, so this
is almost that campaign-like, so it should be very doable from this
standpoint, and then get the horses. But that\'s what we raised in those
two times we went after the money.

CHAIRMAN RASULO: Okay. There\'s three minutes for public comments. I
know it\'s part of our procedure. I know there\'s somebody that wants to
say something, but boy, if that person could be brief, it\'d be great.

Bill Hardman. Bill, are you here? Bill? (No response) Bill? Going once?
(No response)

SECRETARY GUTIERREZ: I would like to thank everyone for your commitment
and dedication. I\'m actually very excited about what we\'re doing and I
think we can come up with something that would be tangible and
meaningful. So I\'d really appreciate your time and energy. Thank you.

(Applause)

CHAIRMAN RASULO: Since the gavel is here, I\'ll adjourn the meeting.

(Whereupon, at 4:57 p.m. the meeting was concluded.)

C E R T I F I C A T E

This is to certify that the foregoing proceedings of a meeting of the
United States Travel and Tourism and Advisory Board, held on Wednesday,
April 12, 2006, were transcribed as herein appears, and this is the
original of transcript thereof.

WILLIAM J. MOFFITT

Official Court Reporter

My Commission expires: May 14, 2009