U.S. TRAVEL AND TOURISM ADVISORY BOARD

Room 4830

DOC Building

14th & Constitution Avenue. N.W.

Washington, DC

Tuesday,

January 30, 2007

The meeting was convened, pursuant to notice,

at 3:35 p.m., MR. JAY RASULO, Chairman, presiding.

APPEARANCES:

[MEMBERS OF THE BOARD]{.underline}

MR. JAY RASULO

Chairman

Walt Disney Parks and Resorts

MR. LARRY KATZ

President and Chief Executive Officer

Dot\'s Diner Restaurant Chain

MR. J.W. MARRIOTT

Chairman and Chief Executive Officer

Marriott International, Inc.

MR. BRUCE BUSTAMANTE

President and Chief Executive Officer

Anchorage Convention and Visitors Bureau

MR. JEREMY JACOBS, JR.

Executive Vice President

Delaware North Companies, Inc.

[U.S. GOVERNMENT]{.underline}

THE HONORABLE CARLOS GUTIERREZ

Secretary of Commerce

THE HONORABLE MICHAEL P. JACKSON

Deputy Secretary of Homeland Security

THE HONORABLE FRANKLIN L. LAVIN

Under Secretary of Commerce

for International Trade

THE HONORABLE HENRIETTA FORE

Under Secretary of State for Management

THE HONORABLE ALBERT A. FRINK

Assistant Secretary of Commerce

for Manufacturing and Services

MS. ANA GUEVARA

Deputy Assistant Secretary of Commerce

for Services

MR. TONY EDSON

Deputy Assistant Secretary of State

for Visa Services

[ALSO PRESENT]{.underline}:

MR. GEOFFREY FREEMAN

TIA

U.S. Department of Commerce

I N D E X

[PAGE]{.underline}

MEETING CALLED TO ORDER AND WELCOMING REMARKS

Mr. Jay Rasulo, Chairman 4

TRADE UPDATE

The Honorable Frank Lavin, Under Secretary

for International Trade 6

Q&A 12

GULF COAST RECOVERY STRATEGY AND TOURISM

POLICY COUNCIL UPDATE

The Honorable Albert A. Frink

Assistant Secretary for Manufacturing and

Services 14

UPDATE ON EASE OF TRAVEL ISSUES

The Honorable Henrietta Fore, Under Secretary

of State for Management 19

The Honorable Michael P. Jackson, Deputy

Secretary of Homeland Security 28

Q&A 34

SECRETARY\'S REMARKS

The Honorable Carlos M. Gutierrez

Secretary of Commerce 45

DISCOVER AMERICA PARTNERSHIP BLUEPRINT

Mr. Geoffrey Freeman, TIA on behalf of

Mr. Jay Rasulo, Chairman 51

NEXT STEPS FOR THE BOARD AND OTHER BUSINESS

Mr. Jay Rasulo, Chairman 63

MEETING ADJOURNED 65

[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 AND WELCOMING REMARKS]{.underline}

Mr. Jay Rasulo, Chairman

CHAIRMAN RASULO: Can we all find our seat and get under way? I know I am
trying to be respectful of everyone\'s schedule. Thank you. Thank you.

We have got a few empty chairs. I know Bruce is here. There he is. I
think we will get under way.

So the gavel is acquired. We have a pretty good, full agenda today, a
lot of people speaking to us on interesting subjects, so I think we
ought to get right under way.

I think that the full agenda is really a reflection of the tremendous
momentum of this advisory board, and I congratulate and thank all of
you. By the way, that momentum is shared by the travel industry at
large.

In a moment, Ambassador Frank Lavin is going to give us an update on
recent activities in China and India. We are also going to hear about
the progress with respect to our recommendations on the Gulf Coast\--you
all will remember that that is where we started, at the Secretary\'s
request\--and our recommendations and proposed national tourism strategy
as well.

We will receive an update on the Rice-Chertoff Secure Borders Open Doors
Initiative, and we will have a chance to weigh in with questions and
feedback at that time. We will receive a brief preview of the Discover
America Partnership\'s Legislative Blueprint to bring more travel to
America.

As you can see, it is pretty full, so without further ado I will
introduce our first speaker, sitting right next to me, Ambassador Frank
Lavin, Under Secretary for International Trade.

[TRADE UPDATE]{.underline}

The Honorable Frank Lavin,

Under Secretary for International Trade

AMBASSADOR LAVIN: Thanks, Jay. Welcome, everybody, back to the Commerce
Department. It is good to have a chance to visit again.

What I wanted to do, just to sort of kick off discussion, is take a step
away from China and India for a second and take a general snapshot of
some of the statistics we see in the travel and tourism industry.

Sam, have you got those? Could we just hand out that little packet of
data? Oh. Caroline\'s got it. Good.

We just pulled together some of the numbers we\'re looking at. Our
numbers lag about six weeks, so even at the end of January we don\'t
have year-end numbers from 2006, but we have 11-month numbers for 2006.

But I think it is worth just taking a minute to look at some of these.
There are a lot of ways to slice numbers, so this is an abbreviated
version, Mr. Chairman, but it is worth, I think, just spending a little
bit of time on.

The first page that I\'d ask you to look at is simply how our top 10
markets performed. Of course, top 10s are sources of tourism. As a
reference point, the last line on that page is \"All Others\", and we
see \"All Others\", together, are a sizeable amount. But that top 10
really gives you an overwhelming majority, well over two-thirds of U.S.
tourism exports.

We see a mixed picture, frankly. Some strong growth in a few key
markets, and then downward trends in the euro zone, primarily. Many
people might associate that with currency movements, but nonetheless it
is not good news anytime there is a downward number, and we ought to
give, I think, some discussion as to what can be done to turn that
around.

The second page, we wanted to look at, where is the growth coming from?
So we said, of our relevant markets, the top 30 markets, which markets
are giving us good growth numbers and where can we cultivate some good
news?

Mexico is almost a stand-alone proposition for its potential, and by the
same token, the tourists so to speak, from Mexico might not represent
the same dollar value as tourists from elsewhere. And Jamaica is
interesting, but there is going to be a ceiling of those numbers because
it is not a large market.

Interestingly, in the top four are China and India, both of which have
very respectable growth rates, but from a small base. Neither China, nor
India, are in our top 10 markets. So I was just taking a long way to get
to the point you made up front, Jay, talking about China and India, to
say that those are two key markets for us.

I think, in my view, we are substantially below where we could be or
where we ought to be. The only silver lining in that is, there are very
high rates of growth. So, really, one of the questions we look at is,
what do we do to foster that growth and get that above even the very
healthy number it is at now.

If we could look at the third page. When we are looking at three and
four, we are kind of seeing the same numbers, which is, there is a lot
of seasonality here, as well as cyclicality to this. I think it is shown
more dramatically with, I guess it is page 4, of the 2000 and 2006
numbers.

It captures the seasonality and it also captures, I think, very well
that post 9/11 recovery, where we see each peak year pretty much post
2001, we have a new peak. 2003 was not ahead of 2002, but almost flat
there, then it starts rebounding nicely. It looks like each season is a
new peak as well.

Nonetheless, that does not tell us where we ought to be, it simply says
we are going in the right direction. But how much farther can we go and
what slope can we be on are really, I would suggest, the questions we
ought to be looking at.

That is captured again in dollar value terms on the next page where we
are looking for seats. Again, we have a record-setting month and that is
gratifying, but I think Jay said that doesn\'t necessarily tell us where
we could be, but it is not a bad place to start a discussion.

That is captured again on the very last page, where we look at overall
numbers. We see the sharp impact of 9/11, then recovery, to receipts. I
think one of the comments that we have heard from the industry which I
think we all should take on board, was, yes, look at receipts and look
at these numbers, but also look at market share and look at rank order,
because our numbers have been going up since 9/11 reasonably steadily,
but other countries\' markets have been going up at a more rapid pace.

So even with this recovery and even with this good news, one could make
the argument that we could be performing at even higher numbers. I think
that is a good starting point to a discussion about marketing
connection.

And if I may, just to finish off this general topic\--I am happy to take
questions on these\--let me just offer a comment if I can about
something. I spoke with most people here at the last meeting, and then
subsequently in discussions, on this educational initiative.

We had an idea to market U.S. universities in China. We get some 80,000
students a year from China to the U.S. There were differences of
opinions in TTAB as to the wisdom or the fit of that kind of initiative
with general tourism because, in fact, it is not what is normally
thought of as core tourism initiatives.

But what we were able to do, just to finish the story, we were able to
raise private sector funds to cover most of the cost, or about half the
cost, I should say. So we went ahead with this initiative. We didn\'t
take any of the tourism promotion money. We got several dozen U.S.
schools to get behind it. We ran two 30-minute spots in China, and I
think a total of 60 different advertisements across China, I think 180
million households.

The entire campaign was about \$500,000, so not an extraordinary
campaign, especially when one thinks of a market that large. On the
other hand, it was the only U.S. marketing that took place in China all
of last year, so we felt reasonably good about doing it. The question
is, can we just build that out?

But I just wanted to thank the members of TTAB for their support for
this, even though it eventually ended up being implemented outside the
TTAB framework. I appreciate it.

So, Jay, those are my general comments.

CHAIRMAN RASULO: Thank you, Ambassador.

[Q & A]{.underline}

CHAIRMAN RASULO: Any questions? I, myself, have a single question,
Frank. Maybe you can update the board on where we are relative to China
and getting on the list of China\'s approved travel destinations.

AMBASSADOR LAVIN: Yes. That is a great question. I think, if I may, kick
it to Henrietta. You\'ve got a State Department group here that we can
specifically get into all of the markets. But I think you put your
finger on it. We want to take that respectable growth rate of 19 percent
and we want to take that up to a higher level, which we do. It\'s a
regulatory challenge in China.

I can tell you from my background, it\'s been on our policy agenda with
China, both through what Commerce has been running in the Joint
Commission on Commerce and Trade on those issues with China, and it has
also hindered the negotiating framework that \-- Paulson is now running
a China strategic economic dialogue.

So, we don\'t have a resolution of it yet, but we are committed to
keeping it up with the Chinese. I will turn to Henrietta, when we get to
that part of the program.

CHAIRMAN RASULO: Okay. Thank you.

Next, I would like to introduce Al Frink, Assistant Secretary for
Manufacturing and Services. I am sad to say that this is Al\'s last
meeting with us, but I think I speak for the entire board in thanking
him for everything he has contributed over the past couple of years.

[GULF COAST RECOVERY STRATEGY AND TOURISM POLICY]{.underline}

[COUNCIL UPDATE]{.underline}

The Honorable Albert A. Frink,

Assistant Secretary for Manufacturing and Services

MR. FRINK: Thank you. Thank you very much, Jay. I\'m going to miss all
of you. You are an amazing group of people to work with.

It is a real pleasure and honor to be finishing my tenure here at
Commerce and meeting with you. This actually probably will be my last
official duty before tomorrow, which will be my last day.

While I am looking forward to returning to California, I definitely,
like I say, will miss all of you. There has been, from my perspective,
tremendous value in what the private sector brings to the government
process from an advisory standpoint.

Certainly, this board deserves all the credit for raising the importance
of tourism. I think you have done an amazing job of bringing that to the
forefront of our concerns.

What makes your advisory board so especially unique, is that the board
provides its advice and we have a facility to move that forward through
our Tourism Policy Council, which helps us identify the gaps between the
private sector needs and the public policy that affects your industry,
especially as it pertains to, in this particular case, the Gulf recovery
strategy.

Let me just move right into that area and address the Policy\'s
findings.

I am pleased to report that the findings in the Policy Council\'s review
of the Gulf Coast recovery strategy indicate that the Federal
Government\'s policies supporting reconstruction of the region are
consistent with the recommendations from the Travel and Tourism Advisory
Board.

Federal funding has been made available, for example, to strengthen
cultural attractions, businesses, to market the region, to accelerate
the clean-up, and to get the positive story out that the Gulf is on its
way back.

As articulated in the board\'s policy recommendations, in order for the
recovery to be strong and, most importantly, permanent, it must be
ultimately driven by the private sector in conjunction with local and
State governments.

The report to the board states that a Federal framework has been put in
place to help rebuild and address those barriers that appear to be
impeding the private sector\'s ability to fuel the recovery process.

So in the coming weeks, the board will receive a detailed report of the
recovery strategy and the Policy\'s findings, and it will address many
of those recommendations.

I think you are going to be pleased with that report because you were
spot-on with your recommendations, and it appears this administration,
from everything that the Policy group has been able to find out, has
been right on target in moving forward with many of the actions that you
have recommended.

It should be mentioned that the board\'s recommendations are just part
of the commitment this administration has put in place to rebuild the
Gulf Coast. The President has been, and continues to be, with the
support of the Secretary and other agencies, dedicated to ensuring that
the Gulf recovery recovers and becomes even stronger than before.

The Secretary has been working diligently with Administrator Donald
Powell to help rebuild the Gulf and to help facilitate industry\'s role
in the rebuilding process.

Department of Commerce will also continue to work with Travel and
Tourism and the media to get a positive story out on the recovery of the
region and is going to provide an op-ed piece in major news publications
to drive that point.

Department of Commerce is also going to continue to promote travel and
tourism investment in this region through economic development
administration. There has been a \$500,000 grant to the Southeast
Tourism Society for a Gulf Coast tourism marketing effort.

Travel and tourism, as most everybody knows, employs the largest segment
of the population; roughly 1 in 5 people in Louisiana, Mississippi, and
Alabama are supported by tourism.

So the industry\--your industry\--is key to the recovery process. So
even with this optimistic report that looks like the work is moving
forward as you recommended, it should be noted that there is a lot more
work to do. I would encourage the board to continue to keep the focus,
as you so ably have been doing in the past.

So with that, I will leave it at that, unless there are any questions.
Thank you very much.

CHAIRMAN RASULO: Thank you, Al.

Are there any questions about what Al spoke on, any questions as to the
Gulf Zone/Opportunity Zone Initiative?

(No response)

CHAIRMAN RASULO: All right. Thank you.

MR. FRINK: Thank you.

CHAIRMAN RASULO: I think we will continue on with the agenda. I think
the Secretary can be in at any time, but until then we will just
continue on and we will interrupt when he gets here.

Next, it\'s m privilege to introduce the Under Secretary of State for
Management, Henrietta Fore, who, along with many other responsibilities,
oversees the visa process for the Department of State.

So, Henrietta, I would turn it over to you.

[UPDATE ON EASE OF TRAVEL ISSUES]{.underline}

The Honorable Henrietta Fore,

Under Secretary of State for Management

MS. FORE: Thank you. Thank you very much. It is a pleasure to be here. I
believe you all know Tony Edson, to my right, who is with me. Of course,
I bring best wishes from Maura Hardy, our Assistant Secretary for
Consulate Affairs.

I appreciate the opportunity to talk about how we are doing and
progressing at the Department of State in collegial work with the
Department of Commerce\--it is nice to see you, Under Secretary
Lavin\--as well our partners at the Department of Homeland Security, and
Deputy Secretary Jackson, when he arrives.

As government and travel industry leaders, I know that all of you know
how important and, in fact, crucial, this industry is to America and to
our tourism. It is the reason that draws most visitors to America.

Foreign business and tourist travel contributed nearly \$105 billion to
the economy last year; foreign students add another \$13 billion. One in
eight civilian jobs are tied, directly or indirectly, to travel and
tourism.

These are remarkable statistics, but they are only part of the story. A
positive experience for a visitor is another essential part of their
visit to America, and that experience has an incalculable influence on
shaping the impressions and the opinions of our Nation and of our
people. Our best advertisement, as you have heard us say of America, is
America.

Keeping our national \"Welcome\" mat out is a matter, now, of national
security. The Department of State is convinced that we must strike the
right balance between protecting America\'s borders and preserving
America\'s welcome.

We believe that a strong welcome to qualified visitors should begin with
their application for a U.S. visa by providing efficient, professional,
and dignified service to every applicant.

A year ago, the Secretaries of State and Homeland Security launched the
Rice-Chertoff joint vision, Secure Borders and Open Doors in an
Information Age. As many of you know, this initiative has three parts.
Many of you were supporters, and we thank you very, very much.

The first, was the efficiency, predictability, and transparency of the
visa process. The second, was the security of U.S. passports and other
travel documents. The third, was the U.S. Government\'s ability to
screen visa applicants and travelers who arrive at our borders. We have
made significant progress in advancing these objectives in all areas.

I would like to highlight some of the recent achievements, and I will
close on China because that issue has now arisen.

We have taken a number of steps to build our capacity and to streamline
the visa process to facilitate international travel. Visa applicants use
an electronic visa application form that reduces errors, eliminates
duplicative data entry, and increases the number of applicants,
embassies, and consulates can review in a day\'s time.

Posts from Abijian to Za Greb have established business visa
facilitation programs, and our Washington-based Business Visa Center has
handled more than 2,800 requests from American businesses for
information and assistance in cases involving more than 139,000 business
travelers in this past year. So for year 2006, I think the
Washington-based Business Visa Center has been helpful.

We have introduced a web-based visa appointment system, we
post-appointment wait times on line so applicants know what to expect.
We have added 570 new consular positions to handle the visa demand.
These efforts have produced results.

Our metrics are positive across the board. Non-immigrant visa issuances
for fiscal year 2006 rose 8 percent over the previous year, with
business tourist visa issuances increasing by 12 percent.

We issued an all-time high of 591,000 student and exchange visitor visas
in fiscal year 2006. Visa processing delays have been cut dramatically.
Ninety-eight percent of all qualified applicants are approved within two
days of their visa interview.

We have put the structures in place to ensure the visa process is not
the daunting ordeal it is sometimes portrayed in the press. Visa demand
is surging, especially in key markets such as China, India and Brazil.

Clearly, travelers still seek to come to the United States and we will
help them get there. To meet this demand, we will turn to technology and
proven best practices to introduce further enhancements over the next
two years such a start-to-finish all-electronic visa process, a
centralized visa appointment system to enable every non-immigrant visa
applicant to be scheduled for an appointment within 30 days\--we already
meet this standard in a majority of our posts\--as well as a remote data
collection and interview via digital video conference.

Let me turn, now, to Secure Travel Documents. As a part of promotion of
Secure Travel Documents, the first phase of the Western Hemisphere
Travel Initiative, that all travelers arriving in the United States by
air present a passport or other approved document, went into effect on
January 23rd.

This transition was so smooth, it was almost a non-event. The
overwhelming majority of arrivals from destinations that previously did
not require a passport did, in fact, present a passport.

For the few that did not, the Department of Homeland Security did a
great job of ensuring that they could enter. This seamless transition
was the result of an aggressive outreach by the travel industry, by
foreign countries that were affected by the Western Hemisphere Travel
Initiative legislation, as well as our colleagues in all of our
departments, as well as at Department of State.

But informing Americans that they needed to get a passport was just one
piece of the task. The Department\'s passport agencies planned and
prepared for more than a 50 percent increase in workload.

They have been steadily keeping abreast of this unprecedented demand.
The key is this: that Americans\' ability to travel has not been
constrained by the new requirements.

We began issuing biometric passports last August. All of our 17 passport
agencies can issue these e-passports and, by spring of this year, all of
our U.S. passports will be e-passports.

We are also aggressively moving forward with Department of Homeland
Security on the model ports of entry concept. Our goal is to ensure that
visitors have a positive experience from the time that they make a visa
appointment to the time that they pick up their baggage at baggage
claim.

Let me now turn to China. I would like to just take a moment and say
what we are doing to facilitate this. This is one example, but we also
have initiatives at work in India, in Brazil, in Mexico, around the
globe.

It is an important and growing market for us, and we know for all of you
because we have been hearing from you. According to the Office of Travel
and Tourism Industries, 405,000 travelers arrived in the United States
from China and Hong Kong in 2005, an increase of 24 percent over the
year 2004.

Last year, our visa issuances for China increased 18 percent over the
prior fiscal year. Beijing alone realized a 20.8 percent increase in
visa applications in fiscal year 2006, one of the highest visa growth
rates in the world.

We have several innovative programs to facilitate travel by Chinese
applicants. Our China posts have set up programs with local American
Chambers of Commerce to expedite appointments for U.S. business visas,
for employees, for customers, and for clients of American companies.
When I was last in China, there seemed to be a very good and strong
feeling that this was working well.

Second, our Chinese tour groups can apply for visa interview
appointments in Beijing for members as a group with a lower
per-applicant service fee than for individual applicants, and over 170
tour groups have used this arrangement to date.

In November, we made holders of the Asia-Pacific Economic Cooperation,
the APEC, Business Traveler Card, ABTC, eligible for expedited
appointments and access to crew lanes at the U.S. ports of entry.
Approximately 120 high-ranking Chinese businessmen and officials and
2,300 Hong Kong residents hold these travel cards.

Embassy Beijing is piloting a program called Tour Track under which the
embassy reserves appointments for clients of embassy-approved travel
agencies. These agencies provide detailed and well-organized information
on well-qualified travelers to streamline the interview process. Over
600 applicants have used Tour Track to date.

We have also spent a bit of time working with all of you with the travel
industry. So since I have been joined by my colleague, Deputy Secretary
Jackson, we have been working hard on this Rice-Chertoff initiative with
all of you in a good public/private partnership.

The successful debut of the Western Hemisphere Travel Initiative last
week is an excellent example of how government can cooperate with the
travel and tourism industry and community on initiatives that balance
secure borders and open doors.

We can achieve others. We plan to continue our visa enhancement plans.
We welcome comments and suggestions from all of you from private
business. We need your help in getting the message out to the traveling
public that American welcomes foreign visitors, students, tourists,
business travelers, and others.

I think we have been doing much better as a team in this past year, Mr.
Chairman, but there is more to do. We are committed to working with all
of you in the travel and tourism industry to maintain and to enhance our
nation\'s welcome to international visitors.

I hope this was helpful. Thank you.

CHAIRMAN RASULO: Thank you.

Before we take questions of Henrietta, I would like to introduce Michael
Jackson, representing the other half of the Rice-Chertoff initiative, as
far as update goes.

Michael is the Deputy Secretary of the U.S. Department of Homeland
Security. He serves as DHS\'s Chief Operating Officer, with
responsibility for managing the day-to-day operations of the Department.

Michael?

[UPDATE ON EASE OF TRAVEL ISSUES]{.underline}

The Honorable Michael P. Jackson,

Deputy Secretary of Homeland Security

MR. JACKSON: Thank you, Jay. Do you want me to talk for a minute, and
then are Henrietta and I going to answer questions?

CHAIRMAN RASULO: Right after you speak.

MR. JACKSON: Good. Well, thank you, first of all, for inviting me, Jay,
for this meeting. Thanks for the opportunity to chat a little bit.
Henrietta is a great partner.

I am glad to come in on her heels and try to play clean-up, but that is
usually a tough act. I am happy to just be here for a minute and try to
lay out a few of the issues that I think you are concerned about.

Bill has kindly hosted me at the Export Council to talk about some of
these issues, so I apologize in advance that you\'re going to have to
hear a little bit of the same thing.

I thought I would touch upon, just generally, what we\'re trying to do
to backstop the orientation that you heard Henrietta talk about on the
facilitation role that we have at the border, then go quickly over a
status update on the Western Hemisphere Travel Initiative, talk a little
bit about the visa waiver program, which is also, I think, something of
interest, and mention a couple exit points, then have questions.

For us, the job at DHS is to strike a balance between security and
mobility, to make sure that we are dealing in a fair way with the
security concerns which are real at our borders, but at the same time to
make sure that people and goods are moving freely and that we are making
this country a welcome place to visit, and that we do our work at the
borders in an effective fashion, but with open arms for our visitors.

The Western Hemisphere Travel Initiative is sort of a point of concern
for some. I want to just give you a quick status report. As I think all
of you know, the first phase of this is the requirement which started on
the 23rd for all air passengers moving in the Western Hemisphere to have
a passport in order to fly.

We had excellent help from the business community and from governments.
It was the Bahamas that took out a full-page ad saying, we will help you
pay the cost of getting a passport if you need it. Bill\'s firm held
enrollments for \"Passport Day\" to give their employees the opportunity
to obtain passports as they needed it. There was just a lot of outreach
there.

I am pleased to tell you that well over 99 percent of the passengers
that arrived to travel by airplane yesterday had a passport. This is
true of U.S. citizens, it is true of Canadians, it is true of Mexicans,
it is true of individuals traveling from the Caribbean. It is just true
systematically across the board.

Some people do show up at this juncture that do not have the passport,
and we have, in every single case, been able to facilitate that in a
fair and effective fashion. It just has not been a problem.

We put out very precise written guidance to our CBP people. We trained
to it so people would know what to expect in how to keep things moving
in a fair way. We work overtime and we are watching these numbers daily
to make sure that they are reducing, and when they\'re down to the point
of zero we\'ll make this known that we\'re basically at the point where
everybody should expect to arrive.

The passenger will always need some capacity for a lost passport, for a
special circumstance, for an emergency visit, for these types of reasons
to be flexible, and we will be that way.

The next phase of the land border crossing, we\'re equally committed.
This is where Henrietta\'s department and DHS are working closely.
Henrietta, I apologize if I missed the update on this from your side.
The passport card is something that I think you will see coming out.

Our goal is to try to hit this by summertime, early fall, to have these
cards in people\'s hands and to work, especially with the business
community, with the travel community, with the tourism industry to
tailor the distribution of these cards to people who need them,
especially if we can do appearances to help corporations to do a large
group, to work with groups to help get the cards they need, et cetera.

We are looking at ways to make this work in the lanes, at the border
points of entry, in a fast and efficient way. I can tell you, I just
spent two hours with our team talking about acquisition strategy and
technology pieces associated with this. We have got a very strong focus
on it.

Then, I think, this is part of the broader security strategy, one
element of which has gotten some attention from the administration and
in the public with the visa waiver program.

There has been pent-up pressure to try to see other visa waiver
countries added to the list, the \-- countries in western Europe, South
Korea, other countries that are eager to participate in the visa waiver
program.

The President said, not long back, that we were willing to try to look
at the existing statutory framework in place that requires this 3
percent visa refusal rate threshold to be met. We are looking at having
some flexibility there in exchange for having a higher security profile
in the countries that we are entertaining that flexibility for.

So you will be seeing, in a very, very short period of time, at the
Deputy level, folks in the administration have worked through a strategy
on this that will be, I think, public very, very quickly and we are
working with Congress in terms of our early briefings on this to talk
through how best to do that.

So I think you see, whether you are in the Western Hemisphere or around
the globe, that we are looking at multiple different tools to try to
make this process both safe and secure, and at the same time something
that is sensitive to the importance of mobility.

I could tell you a little bit about model points of entry under
Rice-Chertoff. We have worked at that in Dulles and in Houston. We think
that that is something that we can take to more places.

We have looked at and announced a common redress program for people who
are bumping up against our screening programs and having trouble getting
through one of those types of problems, so we have announced DHS TRIP,
which is a unified traveler redress program.

So, there is a multiplicity of different things that we are trying to
lay on the table to put our sincere commitment to make sure that travel
facilitation is part of DHS\'s DNA. We are looking for that balance. We
are eager to hear from you guys how we are striking that balance, and
how effectively.

So with that, one of the best advocates for travel and industry has
walked through the door in the person of Secretary Gutierrez, so perhaps
I will take a pause and just say that I will be happy to take questions,
and defer to the Secretary if he has any remarks as well.

So, Jay, I will leave it there.

CHAIRMAN RASULO: Great. Thank you, Michael.

[Q & A]{.underline}

CHAIRMAN RASULO: I think it would be a good time to entertain questions
for both of these folks regarding Rice-Chertoff and the measures that
have been taken in that regard, which, as you can all see, are quite a
few.

Any questions from the Board on that?

MR. MARRIOTT: It was about a year ago that we understood that South
Korea was on the verge of getting visa waiver approval. Where is that
now?

MR. JACKSON: They\'re still very much in the mix of trying to work
through with us the process of how they would get there. This new
approach that we are going to be laying out in the very, very short term
might make it easier to reach that point for South Korea. We are going
to be talking about security measures and how we balance all that
together.

So they are, I think, eager to try to participate. We are seriously
working with them and looking at that. I do not have anything to
announce today, but I would say that it is definitely on the agenda for
us.

MR. MARRIOTT: They are a big source of incoming, and it will be even
bigger, so if this can be resolved, that will be great.

MR. JACKSON: Yes.

MR. MARRIOTT: On the consular offices, are you fully staffed around the
world?

MS. FORE: We still do not have complete staffing, but it\'s due to the
budgets. But we have allocated the staffing so that we are addressing
the areas to make sure that we have met our numbers, our performance
goals, so we have these terrific statistics, like issuing business visas
and other visas within two days of an appointment. But we are living
within our means, as most Federal agencies are these days, as the
Secretary knows well, but I think we are looking after our traveling
public.

MR. MARRIOTT: How many more people do you think you need to fully staff
the consulate offices?

MS. FORE: Well, the budget is up on the Hill right now for 2007. We
believe we will have a continuing resolution, so we will have to live
within our means there. For our 2008 budget, we have a request and that
should be public on the 5th of February.

MR. MARRIOTT: And will that determine the number of people?

MS. FORE: Yes, it will.

MR. MARRIOTT: Okay.

MS. FORE: And your support for all of us, I think, has been very
helpful, so that we do have staffing in all of our agencies to help the
Travel and Tourism Department.

MR. BUSTAMANTE: Mr. Jackson, that\'s an encouraging update on Korea,
certainly a real important trade partner for us in Alaska.

The question I have as it relates to China, you were talking as far as
different types of visas and such for admittance to the U.S., whether
it\'s a business visa, student visa. Are you working towards a visitor
or tour group-type visa? What efforts are being made?

I know it\'s a delicate balancing act as far as encouraging trade and
then maintaining the integrity of security, but is there any progress
into easing access for visitors coming from China?

MR. JACKSON: Henrietta, do you want to take the first shot at that?

MS. FORE: Well, with the new business traveler card, I think that has
helped in relieving some of the access because there is a way to screen.
Security is a very important element of this.

I think helping with the AMSHAMS has been another very important part
because these are for American companies, employees, individuals, and
people who are known to American companies. So I think there\'s been
significant progress there.

MR. JACKSON: On the specific issue of the tour groups, it is an issue
that we\'re looking at. One of the things that we\'re doing at this
juncture is trying to understand better the security risks and to talk
to some of the other countries that have entertained this type of means
of access to get their experience.

So we\'re doing a little bit of government-to-government conversation
and we\'re trying to understand better how that might work and be
consistent with our concerns. We have some issues there that we would
definitely need to understand and be reassured on before we would be
ready to take that step, but it is something that we\'re looking at.

MR. BUSTAMANTE: Is there any role where this advisory board or the
private sector could assist in helping that process along or is it
purely a government-to-government type of dialogue?

MR. JACKSON: Well, I think it would be fair to say that the travel and
tourism industry would think it is a good idea if it could be done in a
secure fashion, so we\'ll take that as a foundational input. Probably,
at this point the work is on our shoulders as well.

There are a number of related issues that we have with the Chinese
Government that we would probably find wrapped around this conversation,
so it might be associated with a broader spectrum of some conversations
that we would need to have with China.

MR. MARRIOTT: As far as China is concerned, they had at least 30 million
outbound travelers in 2005, and there was probably a lot more in 2006, a
lot of them, of course, going to Macao. But, still, we\'re getting about
1 percent, so that\'s a huge opportunity for this country and we
encourage you to really put some effort into trying to fix this thing,
because there are several countries around the world that have
destination status \--

MR. JACKSON: Yes. Many.

MR. MARRIOTT: \-- that are receiving thousands and millions of Chinese
visitors and we\'re not getting hardly any.

MR. JACKSON: And given that that number is projected to grow to 100
million by 2015, it is something we definitely want to look at getting
our fair share of.

CHAIRMAN RASULO: I have a question for both of you about model airports.
I happen to think that is a very important initiative. There are only a
dozen or so airports in the country that handle 80 percent of overseas
visitors. If we could get the formula right in the two test cases, I
think it\'s easily expandable.

Of course, you know that Disney, along with many other companies
represented in this room, have offered the services of the private
sector to help crack the code on this, whether it\'s line management,
training, place making, video, signage, et cetera.

I am a little concerned\--and maybe you can speak to it, Michael\--about
the budgets for this and where it lies. I\'ve heard recently that the
budgets may only cover video screens, and maybe you can talk to that a
little bit.

MR. JACKSON: Yes. Well, we sort of launched it in mid-budget year, so
it\'s caught up in, let\'s try to launch and learn as much as we can
before we had a large budget appropriation associated with the program.

I welcome very much, Jay, the idea. I think that our airport partners
would be active participants in this, that our airline partners would be
active participants, that our industry partners, broader, are supportive
of it.

As Jay knows but some of you might not, when 9/11 happened and we were
trying to build TSA from scratch, one of the people that we borrowed
from the private sector to help us figure out how to do it was a line
management guy who was a real expert at Disney.

We said, where do you go to find people who stand in line and still seem
happy, and it seemed like we knew where to go. So all of these types of
offers, I think, are very, very useful to us.

We\'re at the stage now where our senior management at the two
departments are trying to assess the results of the Houston and Dulles
work that we\'re doing, and say, how do you take it to a farther field
and faster?

You know, this is not rocket science, honestly. We can just do a little
better job of this. It includes, for our part, training people to be
sensitive to the cultural diversity of the people representing
themselves to us.

TSA, for example, just recently took a little template of training and
spread it across the whole organization just to do exactly that, so
we\'re eager to try to take any good idea and any outstretched hand for
help that we can find. Henrietta is particularly good at milking those
offers fruitfully, and I\'ll defer to her as well.

MS. FORE: Yes. Well, we love to get offers from all of you for any ways
that we can help our customer service and our metrics, and that\'s
anywhere in the world or all over the world.

CHAIRMAN RASULO: Great. Thank you.

Other questions?

MR. MARRIOTT: Let me ask the same question that I asked about the
consular staff. How about your staffing at airports \-- immigration
staffing at the airports?

MR. JACKSON: I think we\'re pretty good on the CBP side. We have seen
patterns of growth in air traffic coming back since the 9/11
dip\--trench, crater, whatever you want to call it\--but what I would
say I would only give us marginally good grades at is being nimble in
adjusting to the patterns of movement.

So if a new service is brought on line, if there is a surge in a
particular market that we have to surge into, we haven\'t been as nimble
as I\'d like to see us. TSA is getting a little bit more nimble in that
regard. There\'s a lot of fixed assets that go with the CBP footprint
that require real estate modifications.

So on the CBP side, I think we\'re more or less okay but we\'ll be
trying to make modifications to see market changes. In TSA, we\'ve had a
cap on the number of screeners that we can hire. We are punching the
ceiling of being able to live under that cap, and so that\'s a concern
for me and we want to be able to make sure that we can cover the full
spectrum of needs on the domestic travel side, so either with connecting
flights or in pier point-to-point inside the country.

MR. MARRIOTT: But on the immigration side, do you have enough people to
handle that? The comment that\'s made that they\'re rude usually comes
because they\'ve got too much pressure and there\'s not enough people to
do the work. At least, that happens in our business. When we get a rude
situation, we\'re usually under-staffed and people get stressed and they
get blown out, so they blow out everybody coming through the line.

MR. JACKSON: Yes. I\'ve used a great story about someone that I met in
TSA\'s early stand-up. She was a single mom. She had a high school
education. She had a medical disability. She went out and became one of
the first trainers that helped stand up TSA. I met her on a plane,
flying back from Arkansas.

She said, \"Mr. Jackson, people in airports are grumpy these days.
Whenever I feel like they\'re grumpy and I\'m getting grumpy, I just try
to take a deep breath and look down that jetway, put my eyes on one
person, and say, if I do my job right tonight, this person is going to
get home to their wife, their daughter, their son, their loved one.\"

We have phenomenal people with that type of commitment all throughout
the system. We\'re going to have bad apples every once in a while or
somebody with a bad day that just doesn\'t take that deep breath and do
the right thing.

So we focus on that training as an aggressive matter within CPB and TSA,
in particular. When we find somebody who has let us down, we go after
that pretty aggressively.

The delay issues and the demand of getting people through is an issue
that we have to manage our way through so we\'re not putting impossible
pressures on the people or the length of the line.

But I would say from our surveys, the lines are really, on aggregate,
with special exceptions aside, our survey data shows that they move
relatively quickly.

So trying to get people to understand what they\'re going to face when
they get to the line, how long they\'re going to have to wait, what they
have to present, what not to do and what to do to get through in a fast
fashion, this is education on both sides of the line, on our guys and on
the public.

So, there is not a simple sort of turnkey there, but it\'s being
maniacally focused on making sure that everybody gets treated with
dignity. We are in that space, just as the travel industry has to be.

CHAIRMAN RASULO: Thank you, Michael and Henrietta. I appreciate it.

Now I would like to introduce the Secretary. Welcome.

SECRETARY GUTIERREZ: Thank you. Thank you, Mr. Chairman.

We have a swearing in ceremony to do, first of all.

(Whereupon, Bruce Bustamante was duly sworn.)

(Applause)

CHAIRMAN RASULO: I think it is safe to say that the progress we\'ve
made, Mr. Secretary, is largely due to your leadership and support of
the travel initiatives. I know you\'d like to update the group on where
we are on the National Tourism Strategy, so I\'ll give you the floor.

[SECRETARY\'S REMARKS]{.underline}

The Honorable Carlos M. Gutierrez,

Secretary of Commerce

SECRETARY GUTIERREZ: Thank you, Mr. Chairman. Thank you for your
continued leadership.

I also want to thank Secretaries Jackson and Fore for being here, and
for everything you\'re doing to help the travel and tourism industry.

I do want to start with an announcement. The Commerce Department is
awarding a two-year \$3.9 million cooperative agreement to the Travel
Industry Association to develop a web site promoting the U.S. as a
travel destination. I believe this is a reallocation of money that we
had in the plan.

The President is talking this week about the economy. In fact, he made a
speech this morning in Illinois, in Peoria, talking about the strength
of our economy. Every month that goes by, every quarter, we see that
there is no question we have a string of economic performance that
points to a very strong economy.

The question now is, as the President said this morning, how do we keep
it going? We have had 3 percent growth over the last four quarters. We
have now had 20 straight quarters of uninterrupted growth. Over 7
million new jobs have been created since August of 2003, and I would
assume that a lot of those jobs have been created in the travel and
tourism industry. The unemployment rate is 4.5 percent, below the
average of the last four decades.

Then, very importantly, real after-tax per capita income is up 9.6
percent since 2001, so real take-home pay after taxes all in per capita,
in real terms, of 9.6 percent. So we have got something going here and
our challenge is to keep it going.

We believe, as you know, that a big reason for our economic progress and
our growth is our tax policy and we want to continue to keep that tax
policy in place, keep taxes low so that business people and consumers
are able to reinvest their money as opposed to having more money coming
to Washington and having Washington reinvest the money. So, that
continues to be the strategy.

We know that travel and tourism is an important part of our growth, an
important part of a driver of exports. Our exports last year were up
about 13 percent. We\'re talking about off a base of \$1.2, \$1.3
trillion. Exports, since the President took office, are up 6 percent, so
they\'ve been increasing and accelerating.

That really points to a lot of these free trade agreements rolling up,
developing momentum, delivering results. Last year, exports were up
about 11 percent. We know that services are a big part of our export
growth. We have a trade surplus in services and within services,
one-third is traced directly to travel and tourism.

I am sure that there are indirect benefits from travel and tourism, so
it\'s a very important industry and we believe that our continued
economic growth will rely on the continued growth of the travel and
tourism industry, which is one reason why we pay a lot of attention to
this industry and why we believe that if this industry grows it will be
good for our economy, for our citizens, for job creation, for
prosperity, for everything that we\'re working so hard to do.

Travel and tourism contributed \$7 billion to our balance of trade in
the first 11 months of 2006, so we actually have a trade surplus in the
industry. A lot of progress has been made and I know that Secretaries
Jackson and Fore were talking about the new record correction process,
the visa waiver policy, reducing backlogs, the China group leisure
travel, the Western Hemisphere Travel Initiative. So you know what
we\'re doing and what we\'re focused on, and that continues to be our
priority.

I want to thank you for the Discover America Partnership work. It\'s
very important work. The more we can get coordinated, the more we can
get synchronized, the better off we will be to deliver tangible and
meaningful results.

I don\'t know if you talked this morning or a little while ago about the
prioritization of countries, but to the extent that we can come together
on what countries are our priorities so that we can go in and focus on
those countries and make meaningful progress on the ground.

It\'s too general to say we want to improve our visa processes. It\'s
just a bit vague. We have to go in each country, and in each country
we\'ll find that what we need to do is different.

That\'s why I just say the power of this list and of having a list of
priority countries will enable us to get very much aligned. We are
there. We want to make progress. We want to develop the metrics. We
consider that a very important part of our agenda.

I do want to say that, as a former baseball player, a batting average of
666 is pretty good. That\'s two out of three recommendations. We
wholeheartedly agree with two out of the three recommendations.

The third one, we continue to have a very honest and genuine
disagreement about the role of government in advertising. We don\'t
believe the government should be involved in advertising industries or
picking industries in which to invest, and we don\'t believe that any
investments should be taken out of taxes. So we\'ll continue to discuss
that and, again, a genuine disagreement.

My recommendation, Mr. Chairman, would be that we focus our energy, our
time, our brain power on the common elements where we have great
agreement and go to work on those, and really achieve some meaningful
accomplishments and differences. We are ready to work for that end goal.

So, thank you for your leadership, thank you for your service, thank you
for everything you\'re doing. Please know that we look forward to not
only working with you, but we\'re in this to achieve results.

We believe that there is real fertile ground for results in this whole
area of visas, tourism, and how we can work together to achieve national
security and commerce at the same time.

So, thank you, Mr. Chairman. Thank you to all of you. I appreciate your
service.

CHAIRMAN RASULO: Thank you.

Next on our agenda, the Secretary alluded to the Discover America
Partnership. I thought it would be wise, since tomorrow we will release
the blueprint

\-- Geoff Freeman, the executive director of the Discover America
Partnership, will present to us today.

The Partnership is the work of private companies, four of which are
represented on this board. I think that the premise that we started out
with was that when it comes to security and ease of travel, people
sometimes have the mistaken belief that that is an either/or challenge.
We happen to believe otherwise, and Geoff is going to speak to that.

Discover America Partnership\'s goal was to set out a comprehensive
blueprint and design to show everyone that we can have both of these two
things.

So with that, I\'ll turn it over to Geoff to give us an update on what
will be made public tomorrow.

[DISCOVER AMERICA PARTNERSHIP BLUEPRINT]{.underline}

Mr. Geoffrey Freeman,

TIA on behalf of Mr. Jay Rasulo, Chairman

MR. FREEMAN: Thank you, Jay. It\'s a pleasure to be here. Thank you, Mr.
Secretary. I do feel as if I\'m on an island down here. Perhaps that\'s
intentional; hopefully not.

As you mentioned, the Discover America Partnership is indeed supported
by many folks on the TTAB, as well as others in the private sector:
Disney, Marriott, the Travel Industry Association, Anheuser-Bush, and
our most recent member is the U.S. Olympic Committee.

The U.S. Olympic Committee believes strongly that the U.S. will not
receive another Olympics, another Pan-American Games, or anything along
those lines until we take a close look at our visa policy and our entry
procedures, and that is why they have endorsed our efforts.

Our efforts are almost entirely focused on Congress. In the post 9/11
environment, Congress has not been engaged in travel policy and
improving the travel process.

It is impressive, the reforms the Department of Homeland Security and
the Department of State have been able to achieve, whether those have
been improvements in the visa process, the new redress system, or others
with the limited resources that Congress has provided.

We intend, and are focused, on getting Congress more engaged in this
challenge. The blueprint that we will release tomorrow focuses on three
core areas. Before I walk through those very quickly, I\'d like to tell
you some of the key characteristics of this plan.

Number one, at every turn in this plan we seek to strengthen security.
At no point do we propose any roll-back in a security measure or
policies that have been put in place since 9/11. Travel and security are
mutually reinforceable, they\'re not mutually exclusive.

Secondly, the ideas that are in this blueprint are largely common sense
ideas. They\'re not earth-shattering ideas, they\'re ideas that many
folks at DHS, State, and elsewhere have considered before, but it is
time for Congress to get engaged and provide the funding that can
support these ideas.

Finally, the total investment that we ask for or that is necessary to
achieve these ideas is approximately \$300 million. This is a modest sum
for the rate of return that we would be certain to achieve if these
policies were put in place.

We estimate that at least 200,000 jobs would be created, 60 million more
travelers would come to the U.S. over an extended period of time, at
least 10 million per year, at least \$3 billion in new tax revenues, and
about \$60 billion in spending; the returns are significant.

Allow me to walk through very quickly what the three elements of this
plan are, and please allow me to thank the Department of State, the
Department of Homeland Security, the Department of Commerce,
specifically the Office of Travel and Tourism Industries, for their
input on this plan.

They may not agree with all aspects of the plan, but we sought out their
input, we have adjusted our plan accordingly, and we appreciate their
involvement.

The first thing we propose are reforms to the visa process. Namely, we
suggest that all travelers around the world should be processed for a
visa in 30 days or less.

We can meet this challenge, and meeting this challenge requires a number
of things. It requires more consular officials. It requires that budgets
are increased so that more consular officials can be hired.

It also requires that we do a better job of adapting to marketplaces. In
India and Brazil, where wait times in many instances remain excessive,
we only have four consulates.

Building more consulates may not be the best option, but use of the
Internet, video conferencing, mobile consulate operations, and
partnering with third party allies such as American Chambers of Commerce
to conduct some security information, is a way that we can adapt to
those marketplaces.

We also call on Congress to take a close look at the policy to interview
all people who want to visit the U.S. That may not be the best approach
to managing risk in the current environment.

We also look to expand the visa waiver program. Consistent with where
the President \-- expand and strengthen the visa waiver program. We
actually go one step further than the President has gone.

We propose expanding the visa waiver program when, and only when, we
have a functioning exit system in place at our airports. We believe that
is a reasonable goal to attain, and that would be the opportune time to
expand the visa waiver program.

Taken together, those improvements, by our estimates, are about \$50
million for the visa process. With the entry process, there, too, we
need significant reforms. Travelers around the world cite the entry
process as being a major deterrent to visiting the U.S., whether it\'s
in a survey that we recently did of travelers around the world where
travelers expressed greater fear of U.S. officials than they did of the
threat of terrorism or crime, and that\'s a challenge that we need to
overcome.

We propose in here any number of ways to improve the entry process and
those improvements fall under two categories: efficiencies and customer
service. On the efficiency side, we call for all travelers to be
processed in 30 minutes or less. When they arrive at our airports they
should be processed in 30 minutes or less.

To meet that goal, we do need more CBP officers. Based on an internal
document that we were provided with, CBP is understaffed at 19 of the
top 20 inbound airports, and approximately half of those airports were
at least 20 percent understaffed. We need more CBP officers to manage
this process.

We also would benefit from an international registered traveler program,
something similar to what the U.K. is currently pursuing, and expects to
have at least one million people enrolled in by the end of the decade.

An international registered traveler program would allow the U.S. to
focus its efforts on those that pose the greatest risk rather than all
travelers, particularly American business travelers who are coming
through our airports for the 25th, 26th time, and are not posing a
threat. An international registered traveler program could help.

There has been much talk today of the model ports of entry initiative
and we applaud DHS and State for the improvements that have taken place
at Dulles and Houston.

There are many more things that need to be done at those airports.
Unless we only focus on those two airports, we propose expanding the
model ports initiative to the top 12 airports in this country, which
represent 80 percent of all inbound travel.

We should aim to turn those 12 airports into world-class models. Enough
of people talking about the great experience they had at the Hong Kong
airport or an airport in China or an airport elsewhere in the world.

We should aspire to turn those 12 airports into models for the world,
and we detail all of the things that could be done for approximately \$2
million an airport, not an insurmountable sum, to improve those
airports, whether that be videos, whether that be signage, whatever that
may be. There is much that can be done, and it is all detailed in the
blueprint.

On the customer service side, we call for a number of things. First and
foremost, we call that TSA and CBP officials be evaluated on customer
service. Currently, that is not an aspect of their evaluation. Whether
it be a raise, a promotion, a bonus, customer service is not an aspect
of that evaluation, and it should be.

We call on CBP, TSA, and others to be required to work with the private
sector on customer service training. The Department of State, as Under
Secretary Fore previously acknowledged, has graciously accepted the
offers from the private sector to help in customer service.

Those offers have not been pursued in other areas of the government. We
would call on those areas of the government to work with the private
sector. We would call on travelers to receive customer service forms to
tell us how we\'re doing. We could benefit to learn from their opinions.

Finally\--and I hope this doesn\'t sound hokey\--we would call for all
travelers to be greeted with, \"Welcome to America\". That first
impression will go a long way to making a difference.

So whether it\'s a foreign traveler coming to the U.S. or an American
traveler coming home, saying \"Welcome home\" or \"Welcome to America\"
could go a long way to changing that first impression. Again, we
estimate about \$50 million to improve the entry experience.

Once you have addressed those two areas, you\'ve addressed the two major
policies that are deterring travelers from coming. Today we have seen a
17 percent decline in overseas travel since 9/11. We saw many of the
numbers earlier from Under Secretary Lavin, even some countries where
travel increased into the U.S.

But even in those areas where travel is increasing to the U.S., it is
increasing by much greater margins to Canada, the U.K., and other
tried-and-true destinations.

So once we fix these policies, the next step is to fix the perceptions.
We have dug a hole for ourselves over the past five years. The general
perception around the world is that the U.S. is not a welcome
destination for travelers. We need to change that. We need to coordinate
our communications and we need to invite travelers to come.

Specifically, we should work with the Department of Homeland Security,
with the Department of State, and with others to more clearly
communicate what our policies are and, more importantly, improvements to
those policies. To date, there is no program in place to communicate
improvements to our travel policies, and we know that great improvements
have taken place.

We need to have a program that can communicate, and that is where the
need for a public/private promotion board makes sense. We need to work
with a global advertising firm, global econometrics firm, and other
firms to determine what the U.S. should do, to determine what other
countries are doing, how much money they\'re spending, where they\'re
spending that money.

Based on that research, we recommend a promotion program that would help
change perceptions. That promotion program would cost approximately
\$200 million annually. We do not propose that any of that money should
come directly from taxpayers. We are not seeking a direct appropriation
for that money.

We propose in the blueprint the markets that should be targeted and the
way that money should be spent. I should point out that typically only
about 40 percent of that money is spent on advertising. There are many
other ways to communicate your policies and the fact that you\'re open
to travelers. We detail all of this in the blueprint.

We also detail in the blueprint, and I would be remiss if I did not
mention, several ways that a program of this type could be funded. We
acknowledge, first and foremost, that if that money could be found in
existing budgets by eliminating waste or unnecessary programs, that is
the ideal way to go.

If that money can\'t be found there, we propose three ideas that could
work or, at the very least, are worth consideration. We do not endorse
any of these.

One, is an exit fee. More than 50 countries around the world have exit
fees. The average fee around the world is approximately \$25. You can
accomplish all of these reforms\--visa reforms, improvements with the
entry process, and the promotion\--with a \$5 exit fee. That would
accomplish all of these areas.

The key question is, how you collect that money. Japan, for example, has
had great experience with kiosks and their \$25 exit fee is collected
through kiosks. We think there should be a hearty discussion about how
you might collect them here.

You could also look at a visa waiver fee. In the 27 countries that
currently have the visa waiver program, and hopefully more countries
that it will be expanded to, it\'s basically a convenience. You do not
have to pay the \$100 visa fee. You don\'t have to go through the visa
process.

For a \$10 visa waiver fee, which could be collected through the new
on-line mechanisms that will come soon, you could fund, again, all of
the visa reforms we mentioned, all of the entry reforms we mentioned,
and the promotion.

The third idea is tax credit bonds, which can be used to fund,
specifically, the promotion efforts. Again, none of these ideas would
come directly from taxpayers, but more often from those who benefit from
the services.

I should point out that the government has a long history in promoting
exports. We currently spend over \$5 billion a year promoting
agricultural exports. Travel is one of the few exports in which we have
a positive trade balance.

It\'s also one of the few exports that we do not currently spend money
promoting. Because of the hole we have dug over the past five years, it
is worth considering whether or not we could both change perceptions and
send an invitation to the rest of the world. Thank you.

CHAIRMAN RASULO: Thank you, Geoff.

Questions for Geoff about the Discover America Partnership?

(No response)

CHAIRMAN RASULO: I hope you will see and read a lot more about it
tomorrow.

SECRETARY GUTIERREZ: I look forward to it. I\'m going to have to get
going, Mr. Chairman.

CHAIRMAN RASULO: Sure. Thank you.

SECRETARY GUTIERREZ: Thank you.

[NEXT STEPS FOR THE BOARD AND OTHER BUSINESS]{.underline}

Mr. Jay Rasulo, Chairman

CHAIRMAN RASULO: A couple of points to wrap up on. We have a proposal
for work on down the road. I think the Board should examine the Discover
America Partnership when it\'s issued tomorrow.

I think that each of the three subcommittees that we have on this Board
should review the parts of the blueprint that refer to their purview and
send their recommendations back to the Board in written form so that we
can be a part of that and perhaps recommend, or at least comment on,
some of the proposals that are made within.

Secondly, the Western Hemisphere Travel Initiative continues to be a
major issue which we should monitor carefully, and we should write a
similar letter outlining our hopes and concerns regarding this
initiative.

I think that you all know, as Michael said, the air side of this has
gone incredibly smoothly, but unfortunately the air side represents only
a tiny portion of border crossings from Canada.

So, I think we should have diligence as a Board against being sure that,
as Michael said, as we introduce things, whatever the vehicle turns out
to be, that not only does it work efficiently, maybe my own opinion is
that perhaps we should try to keep border crossings and see how it works
before we go whole hog across the whole thing.

But however we proceed, I think we\'ll want to keep a focus on making
sure that this works well with our biggest trading partner and biggest
number of border crossings every year.

So with that, unless there are other comments, I am uncharacteristically
going to release you all early, in terms of efficiency. Anything? Frank?

AMBASSADOR LAVIN: Just to make one final comment for next time you meet.
Thanks, Henrietta. Thank you for your comments. And by the way, Geoff, I
thought that presentation was very well done.

What I\'d like to do, with your permission, Mr. Chairman, is come back
and maybe we can carve out a longer session the next time we meet just
on China issues. It\'s the improved destination status that Bill
Marriott mentioned. It\'s our side, what we need to be doing on visas.

There\'s also a huge issue in China with air connectivity. We just do
not have the density of flights we need for that kind of market, and
that itself is a separate channel of trade negotiations with China.

But you burden the tourism industry in all three of these fashions and
you end up with numbers more where they should be. So what can we do to
remove these burdens and get the numbers up to where we think the market
would suggest?

But if you agree, I\'d like to suggest the next time we meet we devote a
little time just to peeling into that issue in some depth.

CHAIRMAN RASULO: I don\'t think there\'d be any objection from anybody
on the board on that. Good. Thank you.

The meeting is adjourned.

(Whereupon, at 4:49 p.m. the meeting was adjourned.)

C E R T I F I C A T E

This is to certify that the foregoing proceedings of a meeting of the
U.S. Travel and Tourism Advisory Board, held on Tuesday, January 30,
2007, were transcribed as herein appears, and this is the original of
transcript thereof.

LISA DENNIS

Certified Verbatim Reporter