```

[Senate Hearing 110-79]
[From the U.S. Government Publishing Office]

                                                         S. Hrg. 110-79
 
                    PROMOTING TRAVEL TO AMERICA: AN 
             EXAMINATION OF ECONOMIC AND SECURITY CONCERNS

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            JANUARY 31, 2007

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation

                     U.S. GOVERNMENT PRINTING OFFICE

34-743 PDF                 WASHINGTON DC:  2006
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       0SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                   DANIEL K. INOUYE, Hawaii, Chairman
JOHN D. ROCKEFELLER IV, West         TED STEVENS, Alaska, Vice Chairman
    Virginia                         JOHN McCAIN, Arizona
JOHN F. KERRY, Massachusetts         TRENT LOTT, Mississippi
BYRON L. DORGAN, North Dakota        KAY BAILEY HUTCHISON, Texas
BARBARA BOXER, California            OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida                 GORDON H. SMITH, Oregon
MARIA CANTWELL, Washington           JOHN ENSIGN, Nevada
FRANK R. LAUTENBERG, New Jersey      JOHN E. SUNUNU, New Hampshire
MARK PRYOR, Arkansas                 JIM DeMINT, South Carolina
THOMAS R. CARPER, Delaware           DAVID VITTER, Louisiana
CLAIRE McCASKILL, Missouri           JOHN THUNE, South Dakota
AMY KLOBUCHAR, Minnesota
   Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
Lila Harper Helms, Democratic Deputy Staff Director and Policy Director
              Margaret Spring, Democratic General Counsel
             Lisa J. Sutherland, Republican Staff Director
          Christine D. Kurth, Republican Deputy Staff Director
             Kenneth R. Nahigian, Republican Chief Counsel

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on January 31, 2007.................................     1
Statement of Senator Dorgan......................................     1
    Prepared statement...........................................     2
Statement of Senator Inouye......................................     3
    Prepared statement...........................................     3
Statement of Senator Stevens.....................................     4
    Prepared statement...........................................     4
Statement of Senator Thune.......................................    25

                               Witnesses

May, James C., President/CEO, Air Transport Association..........    15
    Prepared statement...........................................    17
Porter, Stevan, President, The Americas, InterContinental Hotels 
  Group; Chairman, Discover America Partnership..................     5
    Prepared statement...........................................     6
Rasulo, Jay, Chairman, Walt Disney Parks and Resorts; Chairman, 
  Travel Industry Association; Chairman, U.S. Travel and Tourism 
  Advisory Board.................................................    12
    Prepared statement...........................................    14
Tisch, Jonathan M., Chairman, Travel Business Roundtable; 
  Chairman/CEO, Loews Hotels.....................................     8
    Prepared statement...........................................    10

                                Appendix

Response to written questions submitted by Hon. Frank R. 
  Lautenberg to:
    James C. May.................................................    33
    Stevan Porter................................................    32
    Jay Rasulo...................................................    32
    Jonathan M. Tisch............................................    31

                    PROMOTING TRAVEL TO AMERICA: AN 
                      EXAMINATION OF ECONOMIC AND 
                           SECURITY CONCERNS

                              ----------                              

                      WEDNESDAY, JANUARY 31, 2007

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:50 p.m. in room 
SR-253, Russell Senate Office Building, Hon. Byron L. Dorgan, 
presiding.

          OPENING STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Dorgan. [presiding] We will call the hearing to 
order today, this is the Senate Committee on Commerce, Science, 
and Transportation. It's a full Committee hearing on the issue 
of promoting travel to our country and an examination of the 
economic and safety concerns of those issues.
    I am joined by my colleague, the Chairman of the full 
Committee, who has asked me to chair this Committee hearing. I 
am the Chairman of the Subcommittee that deals with the issue 
of tourism.
    I am joined by the Chairman, Senator Inouye, and the former 
Chairman of this Committee, Senator Stevens.
    I'd just like to make some very brief comments, then I will 
turn to my colleagues, and then we will turn to the witnesses.
    We welcome all of you here today. A lot of very important 
work has been done by organizations and groups dealing with the 
subject of travel and tourism.
    Travel and tourism is a very important part of our economy. 
It's well over a trillion dollars to the American economy, and 
it provides many jobs.
    And in the shadow of 9/11 and also in the intervening years 
with the war in Iraq and other issues, we have seen substantial 
decline in the share of destination tourism to the United 
States versus tourism and travel and tourism around the rest of 
the world.
    Consequently, there is a discussion going on in this 
country about what we can do to reach out to the rest of the 
world, and what we can do to promote travel and tourism in our 
country. We think it is important to tell the rest of the 
world, ``You're welcome here. Come and see this country. We 
have a lot to offer; it is a great, great place.'' 
Understanding and seeing America firsthand is something, I 
think that promotes greater understanding around the world 
about who we are and what we are about. I think all of us share 
a determination to see how we can better effectively--or more 
effectively, rather--accomplish that.
    None of us, I believe, are interested, in any way, in 
sacrificing security issues in the name of the economy. We 
understand that what we need to do, and will do, in trying to 
promote travel and tourism in this country, has to be 
consistent with the interests of national security.
    And again, in the shadow of 9/11, the issues of national 
security have become ever more important. We understand there 
is a war on terrorism and terrorists going on--we want to try 
to keep bad people out of this country. We want to have 
sufficient border security to try to prevent terrorists from 
entering our country. We understand all of that, and no one is 
more sensitive to that than my two colleagues who have been 
involved in the security and defense issues for many, many 
decades.
    Although we are certainly familiar with that issue, and 
cognizant of it, we--at the same time--believe that you can 
develop an approach that recognizes and addresses our security 
interests, and at the same time does more to promote our travel 
and tourism.
    Many of our allies have engaged in a much more aggressive 
campaign, fueled with substantial investment dollars to promote 
tourism to their countries, and at about the same time, we 
have--in many ways--retracted in this country.
    We used to have a specific agency in the Commerce 
Department, that was abolished in the mid-1990s, to address 
some of these issues.
    But we felt that it was important to both have an early 
hearing and have an opportunity to hear from witnesses about 
their views on this issue of travel and tourism and promoting 
our country as a destination for tourists. We felt it was 
important to also examine, in the context of that, economic and 
security issues.
    So, I'm pleased that witnesses have come forward to testify 
today, and Mr. Chairman, thank you for allowing me--as the 
Subcommittee Chairman--to chair the full Committee hearing 
today.
    [The prepared statement of Senator Dorgan follows:]

              Prepared Statement of Hon. Byron L. Dorgan, 
                     U.S. Senator from North Dakota
    Today's hearing is the first in a series of hearings to examine the 
reasons why the United States is becoming less competitive in 
attracting international travelers. While travel and tourism is 
America's second largest services export industry creating a $9.7 
billion balance of trade surplus in 2005, other countries have gained 
market share to our detriment. In 1992, the United States had 9.4 
percent of the total international travel market. In 2004, that number 
slipped to 6 percent, and if we do nothing to address this trend we 
will lose even more market share.
    The absence of Federal leadership in travel promotion has 
encouraged states to fill that void, such as the efforts made by my 
home state of North Dakota. Tourism is an essential industry for North 
Dakota. It is the state's second largest industry, with visitors 
spending $3.36 billion in 2004. The investment that North Dakota made 
to encourage travel and tourism has reaped enormous benefits, with the 
state getting a return of investment of almost $82 for each dollar 
spent on travel promotion. While states have made inroads to attracting 
travelers, the lack of a coordinated Federal campaign creates a 
comparative disadvantage to countries that have centralized ministries 
or offices to encourage international travel to their countries. The 
example of North Dakota should be a lesson for the entire country. A 
small investment has the potential to create a significant windfall for 
our economy.
    However, investing in promotion means nothing if the underlying 
impediments to international travel are not addressed. Travel industry 
leaders have done extensive research and polling to find that 
international travelers believe the process to come to America is one 
of the worst in the world. The visa application process has been 
inefficient, with travelers in some countries having to wait extended 
periods before receiving an answer on an application. And if the 
traveler is successful in obtaining a visa, he is met by a confusing 
and inhospitable border and entry process. Word of mouth is a powerful 
thing, and the terrible reputation we have earned is an additional 
hurdle to encouraging more people to visit America. It is not just 
about losing destination tourists. Businesses are losing clients to 
companies in other countries because of how hard it is to enter the 
United States. The economic health of the country however must also be 
balanced with homeland security. We should by no means decrease the 
security of the Nation for economic gain, but I believe there is room 
to make the visa and entry process more efficient and welcoming. Our 
competitors in the European Union appear to have found that balance. 
Our agencies can do the same.
    I look forward to listening to today's witnesses and we will have a 
second hearing in the near future to hear from the State Department and 
the Department of Homeland Security. I plan to work with Chairman 
Inouye and the other members of the Commerce Committee to examine these 
issues thoroughly and begin work on legislation to address our 
competitiveness in the international travel sector. This is a great 
country, and we should welcome visitors to our shores to meet our 
people and experience our culture.

    Senator Inouye.

              STATEMENT OF HON. DANIEL K. INOUYE, 
                    U.S. SENATOR FROM HAWAII

    The Chairman. Thank you very much, Mr. Chairman. May I ask 
that my full statement be made part of the record?
    Senator Dorgan. Without objection.
    The Chairman. When I do this, I'd like to note two facts. 
This is one of the very few major industries with a favorable 
trade balance at a time when our Nation is suffering from 
negative trade balances. I think it's the only major, 
industrialized country without a cabinet position in charge. 
All other countries have ministers--we don't.
    I just hope that the government of the United States takes 
a much more serious look at tourism. Naturally, it's a major 
industry in Hawaii, but it's also a major industry in the 
United States.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Senator Inouye follows:]

 Prepared Statement of Hon. Daniel K. Inouye, U.S. Senator from Hawaii
    Travel and tourism is Hawaii's number one industry. In 2006, the 
Hawaii Department of Business, Economic Development and Tourism 
reported $12 billion in tourism revenues--a 3 percent increase over 
tourism revenue in 2005.
    This industry is just as important for the Nation's economy as it 
is for Hawaii. Travel and tourism is America's second largest services 
export industry and its third largest retail sales industry, generating 
a $9.7 billion balance of trade surplus in 2005.
    The travel and tourism industry has shown resilience since the 
terrorist attacks of September 11, but America has become a less 
desirable destination for many international travelers.
    According to the U.S. Department of Commerce, in 1992, the U.S. 
attracted 9.4 percent of all international tourist arrivals from around 
the world.
    In 2004, the United States attracted only 6 percent of total 
international arrivals.
    Success in this industry is unpredictable because of uncontrollable 
influences such as natural or man-made catastrophic events or economic 
downturns that impact the pocketbook of potential travelers.
    However, there are certain controllable factors such as capital 
investments, which can benefit the industry and help keep it 
competitive, and we all know a competitive industry provides a 
tremendous economic benefit to our Nation.
    In fact, prior to 1997, the Federal Government made capital 
investments in tourism through coordinated advertising to international 
markets, and we remained competitive in attracting international 
visitors.
    To further prove the point that capital investment works, the 
decline in international visits began in 1997 when the U.S. Government 
stopped providing funds for international advertising. The Federal 
Government reinstated funding for international advertising in 2003, 
but we have a long way to go to recover the lost world market share.
    Another essential component is to ensure our borders are protected 
for both Americans and visitors. While we must secure our borders, we 
must do so in a manner that ensures our international friends continue 
to feel welcome. Many in the travel and tourism industry have expressed 
concerns with the sometimes overly aggressive measures used by the 
Department of Homeland Security and the Department of State as part of 
their effort to improve border security.
    I look forward to hearing from the witnesses about how to balance 
these important goals.

    Senator Dorgan. Senator Inouye, thank you very much.
    Senator Stevens.

                STATEMENT OF HON. TED STEVENS, 
                    U.S. SENATOR FROM ALASKA

    Senator Stevens. Thank you, and I thank the Chairman for 
calling this hearing, it's a very important hearing and these 
four gentlemen have some interesting statements to make. I 
would ask that my statement be put in the record also.
    Senator Dorgan. Without objection.
    Senator Stevens. And if--unless one of the witnesses offers 
it--I would offer, that the Blueprint to Discover America be 
entered into the record.
    But, I'm looking forward to the witnesses' statements. 
Thank you very much.
    [The prepared statement of Senator Stevens follows:]

    Prepared Statement of Hon. Ted Stevens, U.S. Senator from Alaska
    Thank you, Chairman Inouye, for calling this hearing to discuss the 
important role that travel and tourism play in our country's economy 
and the current difficulties it faces. This industry is not only vital 
to our two states but it contributes a great deal to the Nation's 
prosperity.
    To our witnesses, I thank you for being here today, and appreciate 
the time and energy each of you has spent to bring more visitors to the 
United States. Many of you have worked with Commerce Secretary 
Gutierrez in this endeavor and his and your efforts are appreciated.
    The travel and tourism industry is the second largest private-
sector employer in my state of Alaska. More than 24,000 Alaskan jobs 
rely on travel and tourism, contributing over $2 billion dollars to the 
state's economy each year.
    While attention to transportation security is vital for our 
country, it is equally important that our security not have the 
unintended consequence of driving away international visitors and 
commerce. If we do not allow for quick and efficient movement through 
our transportation systems we may soon hamper a critical piece of the 
Nation's economy. Our country's declining share of international 
visitors may be a warning sign that this already may be happening.
    I look forward to hearing the results of your report, and working 
with both you and the Members of this Committee to address these 
important issues.

    Senator Dorgan. Senator Stevens, thank you very much.
    Let me begin by calling on Mr. Stevan Porter, the President 
of the Americas for the Intercontinental Hotels Group, 
Chairman, Discover America Partnership--the effort that my 
colleague from Alaska just mentioned. Let me thank Mr. Porter 
for coming forward, and thank you and so many others for a lot 
of work that has gone into a very impressive proposal. Mr. 
Porter, you may proceed.

          STATEMENT OF STEVAN PORTER, PRESIDENT, THE 
  AMERICAS, INTERCONTINENTAL HOTELS GROUP; CHAIRMAN, DISCOVER 
                      AMERICA PARTNERSHIP

    Mr. Porter. Thank you, Chairman Dorgan, Chairman Inouye, 
and Members of the Committee.
    First, just to let you know who IHG is, we are one of the 
world's largest hotel companies, we have a family of seven 
brands, which include Intercontinental, Crowne Plaza, Hotel 
Indigo, Holiday Inn, Holiday Inn Express, Staybridge Suites and 
Candlewood Suites. Our Americas region--which is our largest--
is operated out of our headquarters office, in Atlanta, 
Georgia.
    And, Chairman Inouye, in preparing for today's hearing, I 
was reminded within the company, of the pioneer efforts of one 
of our founders, one of Holiday Inns founders, Bill Walton, who 
served as Vice Chairman of our board at one point in his 
career. And in the 1970s, we commissioned him to come to 
Washington as the unofficial Ambassador on behalf of Holiday 
Inn, with a straightforward mission then--similar to now--to 
increase government awareness of the significance of the travel 
industry to the United States. I know he had the privilege of 
working directly with you during that time, and I think you got 
to know him as ``Wild Bill,'' and I would like you to know that 
he sends his greetings, and he's enjoying a well-deserved 
retirement.
    Now, I come here today with my colleagues as a hotelier, 
but also as a businessman, and as Chairman of the Discover 
America Partnership. My colleagues, Jonathan Tisch, Jay Rasulo, 
and a number of others, started this partnership just last year 
to highlight the unique role that travel plays--not only in 
America's economic arena--but also in public diplomacy efforts, 
and to respond to a travel crisis that has resulted in a 17 
percent decline in overseas travelers to the United States 
since 9/11.
    That 17 percent--according to the Travel Industry 
Association--translates to something in the arena of 200,000 
jobs, $90 billion in spending, and $15 billion in Federal, 
State and local taxes.
    The Discover America Partnership believes that travel is a 
critical component of America's economic security and public 
diplomacy efforts, we also believe it's time to address this 
growing crisis, and to see international travel for what it 
truly is--an opportunity.
    To help the United States welcome millions of more visitors 
annually, we've developed a three-step plan that can improve 
America's visa policy, entry procedures and perceptions about 
the travel process.
    I'll focus my comments this afternoon on one step in the 
plan--entry procedures--and my colleagues will discuss visa 
policy and the need to change perceptions.
    For many international travelers to the United States, a 
long flight is followed by an often daunting experience--
navigating the scrutiny of the United States Customs and Border 
Protection process. Policies implemented, well-intentioned, 
over the past 5 years, appear to have strengthened our 
security. Lost, however, have been efficiencies, and a 
semblance of customer service.
    And, importantly, lost are meaningful high-economic impact 
events, such as the Pan-American Games, lost from San Antonio 
and awarded, ultimately, to Brazil. And the United States 
Olympic Committee, as we look ahead, which is one of our 
members, recognizes this as a similar concern in pursuing award 
of the 2016 Olympics to either Chicago or Los Angeles.
    We're here today to offer our commitment to work with 
Congress and the Administration to assure international 
travelers a speedy and hassle-free entry process; turn our top 
inbound airports into world models; bring the considerable 
expertise of the travel and hospitality industry to provide 
foreign travelers with a positive first impression of the 
United States; and to develop an effective international 
registered traveler program; in short, America Welcomes You.
    The specifics of how we propose to implement these steps 
are--as you've already noted--included in the Blueprint to 
Discover America, which we did submit to the Committee, along 
with my statement, and we would ask that it be made part of the 
hearing record. *
---------------------------------------------------------------------------
    * The information referred to has been retained in Committee files.
---------------------------------------------------------------------------
    The hotel industry has a track record of stepping up to 
lend its expertise to managing the challenges facing our 
Nation. During the gasoline shortage of 1973 and 1974, Holiday 
Inns drew on the local knowledge of our hotel managers across 
the country, coupled with our unique HOLIDEX reservation 
system, to compile information on the availability of gasoline, 
and to serve as a central data collection point for the Federal 
Government.
    Likewise, when Hurricane Katrina hit the Gulf Coast, IHG 
and many other hotel companies were quick to respond. We 
provided housing and meals for rescue workers, refugees, and 
those working to restore critical infrastructure to that 
ravaged area.
    The Discover America Partnership seeks to continue that 
record of service, by lending the travel industry's expertise 
to assuring that foreign visitors to this country find their 
initial entry experience as welcoming and positive as the rest 
of their stay. We hope that Congress will join with us in 
making this a high-priority issue.
    Thank you for the opportunity to testify before this 
Committee today, and I'll be happy to answer any questions you 
may have.
    [The prepared statement of Mr. Porter follows:]

     Prepared Statement of Stevan Porter, President, The Americas, 
 InterContinental Hotels Group; Chairman, Discover America Partnership
    Chairman Inouye, Members of the Committee, good afternoon. My name 
is Stevan Porter and I am President, The Americas, of InterContinental 
Hotels Group (IHG). IHG is the world's most global hotel company with 
more than 3,600 owned, leased, managed and franchised hotels across 
nearly 100 countries and territories. IHG owns a portfolio of well-
recognized and respected brands including InterContinental Hotels and 
Resorts, Crowne Plaza, Hotel Indigo, Holiday Inn, Holiday Inn Express, 
Staybridge Suites, and Candlewood Suites. IHG's Americas region is 
managed from our headquarters in Atlanta, Georgia.
    I am here today not only as a hotelier, but also as Chairman of the 
Discover America Partnership. My colleagues Jonathan Tisch, Jay Rasulo 
and many others started the Partnership last year to highlight the 
unique role that travel can play in America's public diplomacy efforts 
and to respond to a travel crisis that has resulted in a 17 percent 
decline in overseas travelers to the U.S. since 9/11. According to the 
Travel Industry Association, this decline has resulted in a loss of 
nearly 200,000 jobs, $90 billion in spending and $15 billion in 
Federal, state and local taxes.
    The Discover America Partnership believes that travel is a critical 
component of America's economic security and public diplomacy efforts. 
It's time to address this growing crisis and to see international 
travel for what it is: an opportunity.
    To help the U.S. welcome millions of more visitors annually, we 
have developed a three-step plan that can repair America's visa policy, 
entry procedures and perceptions about the travel process. This plan is 
based on months of research, including analyses of how other countries 
address these important issues and in-depth conversations with 
officials in the Departments of Homeland Security, State, Commerce and 
Transportation. We also spoke with more than 2,000 international 
travelers to gain their perspective on obstacles to travel and what the 
U.S. might do to regain their business.
    There are several key characteristics of this plan that I would 
like to bring to your attention:

        1. Our plan enhances the security of our visa and entry process 
        in significant ways by making needed investments in personnel 
        and technology and by focusing human resources on travelers 
        that pose the greatest threat.

        2. Our plan outlines a holistic and user-focused approach to 
        travel policy.

        3. Our plan calls for relatively modest investments and changes 
        to achieve revolutionary results. An annual investment of 
        approximately $300 million would cover the bulk of these 
        proposals. Many of these proposals will actually achieve 
        savings in other areas, by allowing government agencies to re-
        deploy resources elsewhere. The potential return on this 
        investment is tens of billions of dollars for the economy, 
        billions of dollars in added tax revenues and hundreds of 
        thousands of new jobs.

    Please allow me to focus on one step in this plan: entry 
procedures. My colleagues will discuss visa policy and the need to 
change perceptions.
    For many international travelers to the United States, a long 
flight is followed by a daunting experience: navigating the scrutiny of 
the U.S. Customs and Border Protection process. Policies implemented 
over the past 5 years appear to have strengthened America's border 
security. Lost, however, have been efficiencies and a semblance of 
customer service.
    I am here today to offer our commitment to work with Congress and 
the Administration to assure international travelers a speedy and 
hassle-free entry process; to turn our top inbound airports into world 
models; to bring the considerable expertise of the travel and 
hospitality industry to providing foreign travelers with a positive 
first impression of the United States; and to develop an effective 
international registered-traveler program. The specifics of how we 
propose to implement these steps are included in the ``Blueprint to 
Discover America'' which I have submitted to the Committee along with 
my statement. I ask that it be made part of the hearing record. *
---------------------------------------------------------------------------
    * The information referred to has been retained in Committee files.
---------------------------------------------------------------------------
    The hotel industry has a track record of stepping up to lend its 
expertise to managing the challenges facing our Nation. During the 
gasoline shortage of 1973-1974, Holiday Inn drew on the local knowledge 
of its hotel managers across the country coupled with its then-unique 
HOLIDEX national reservation system, to compile information on the 
availability of gasoline and to serve as a central data collection 
point for the Federal Government. Likewise, when Hurricane Katrina hit 
the Gulf Coast, IHG and other hotel companies were quick to respond, 
providing housing and meals for rescue workers, refugees, and those 
working to restore critical infrastructure to the area.
    The Discover America Partnership seeks to continue that record of 
service by lending the travel industry's expertise to assuring that 
foreign visitors to this country find their initial entry experience as 
welcoming and positive as the rest of their stay. We hope that Congress 
will join with us in making this a priority issue.
    Thank you for the opportunity to testify before this Committee 
today. I would be happy to answer any questions you may have.

    Senator Dorgan. Mr. Porter, thank you very much for your 
testimony.
    Next we will hear from Jonathan Tisch, who is Chairman and 
CEO of Loews Hotel. He has been involved in the effort that has 
just been described.
    Mr. Tisch, you may proceed.

           STATEMENT OF JONATHAN M. TISCH, CHAIRMAN, 
     TRAVEL BUSINESS ROUNDTABLE; CHAIRMAN/CEO, LOEWS HOTELS

    Mr. Tisch. Mr. Chairman, Senators Dorgan, Stevens, and 
Lautenberg, thank you very much for the opportunity to speak 
with you and discuss the issues that are important to the 
travel and tourism industry, and more importantly, to our 
entire country.
    I am, as the Senator mentioned, Jonathan Tisch, the 
Chairman and CEO of Loews Hotels, and I also serve as Chairman 
of the Travel Business Roundtable, a CEO-driven organization 
whose mission is to raise the visibility of the travel and 
tourism industry here on Capitol Hill, and around the country, 
and to discuss the economic and social contributions which are 
vast, that our industry makes to this country of ours. And I 
also serve as Chairman of NYC & Company, which is New York 
City's travel, tourism, and visitors' agency.
    Along with our strategic partner, the Travel Industry 
Association, we represent all sectors of the U.S. travel and 
tourism industry, as Steve just mentioned, an industry that has 
in excess of $703 billion in expenditures, and employs about 
7.5 million Americans directly, and about another 10 million 
more Americans indirectly.
    As a member of the Discover America Partnership leadership 
group, I thank you for allowing my colleagues and me the 
opportunity to present before this Committee today.
    Steve has just articulated the challenge, and has described 
the second part of our Blueprint for change. If I might, let's 
take a step back and review step one--reforming America's visa 
issuance system.
    The State Department has put in place new programs and 
added staff to facilitate the visa process since September 11, 
2001. However, the U.S. inbound travel market from overseas 
still lags behind the pre-9/11 levels, so that shows us that 
more can, and should, be done.
    Before they ever have the opportunity to set foot on 
American soil, most international travelers--those that are not 
living in countries that are part of the Visa Waiver Program--
must obtain a non-immigrant visitor visa. Two hurdles are large 
in this process--the distance from consular posts, and wait-
times for interviews. And they have all too often made 
obtaining a visa cumbersome, and in some cases are re-directing 
travelers to other destinations.
    Following September 11th, every visa applicant was required 
to have an in-person interview with a U.S. consular official. 
In places such as Brazil and India, with a total land mass 
equal, or in excess, to the United States, there are only four 
consulates in the entire country.
    In these cases, potential visitors to the U.S. must take a 
trip, just to be considered for the right to visit us here in 
the United States. In 2005, the National Foreign Trade Council 
estimated that U.S. businesses lost $30 billion between 2002 
and 2004, because of America's visa system.
    According to the U.S. Government Accountability Office, 
during a recent 6-month period in 2006, 97 of the 211 visa 
issuing posts were reporting wait times in excess of 30 days, 
and 9 posts had wait times of over 90 days. Clearly, this is 
unacceptable. Especially when the State Department's own goal 
is to have wait times of 30 days or less.
    As recently as November of last year, the wait times in 
India were as high as 184 days. Due to additional staffing 
resources, the State Department was able to process the 
backlogs and reduce wait times to under 1 week in three of the 
four consulates. We're pleased to see the progress has been 
somewhat sustained. This model should be applied to other 
problem locations, such as Mexico and Brazil. For all of the 
reasons Steve just laid out, we need more international 
visitors, not fewer, to come to the United States. We have the 
capability of welcoming more visitors, while at the same time, 
strengthening our security.
    In our Blueprint, we lay out four recommendations for 
improving the visa process, while enhancing--enhancing--
security. Number one, reduce wait times at all consular posts 
to less than 30 days. Number two, use technology for visa 
processing where distances are excessive. Number three, 
strengthen and expand the Visa Waiver Program; and, number 
four, enhance security and efficiency upon entry into and exit 
from the United States.
    First, we are challenging the State Department to meet 
their own standard, and cut the wait times down to 30 days or 
less at consular posts. And we suggest several ways to do that.
    For those posts with recurring problems, ``rapid response'' 
teams could be deployed. Consular officials and trained experts 
should be sent to handle the demand, similar to State's 
response in India.
    We also believe that Congress should take an active role to 
assess the needs of consular offices overseas, and adequately 
fund staffing demands.
    Our second recommendation is adapting 21st century 
technology, which is videoconferencing and Internet 
applications to better facilitate the visa process, and to 
lessen the hassle for visa applicants in geographically large 
countries, as I mentioned, such as Brazil, China, Russia, and 
India.
    In fact, videoconferencing for visa interviews was one of 
the initiatives outlined in Secretary of State Rice and 
Secretary Chertoff's Secure Borders and Open Doors Plan, which 
was announced a year ago, in January of 2006.
    For these plans to succeed, we ask that Congress enact 
legislation that allows for the use of technology and new 
methods of collecting information, when the appropriate 
security controls are in place, to facilitate interviews and 
other background checks.
    Additionally, the reemergence of using American Chambers of 
Commerce overseas to expedite visa issuance for business 
travelers has been successful, and that progress should 
continue.
    The third element for visa reform is strengthening our Visa 
Waiver Program, which allows travelers from lower-risk 
countries--our best trading partners--to come here without 
obtaining a visa. The VWP is essential for keeping our doors 
open to international travelers. Two-thirds of all overseas 
travelers to the United States come from Visa Waiver countries. 
By expanding the program, we can welcome more travelers, while 
consular resources can better be prioritized for higher risks.
    The President recently announced that his plan is to do 
just that. By opening the Program to more of our allies, while 
requiring more personal information from travelers for security 
purposes, we boost our economy, our diplomacy, and our security 
all at the same time.
    Our last visa recommendation is already being addressed by 
the Federal Government, and that is creating an effective exit 
tracking system. Today, our government is wary of letting more 
visitors into the country, because we are not sure if they will 
ever leave. The US-VISIT program has been an excellent example 
of using 21st century technology to protect our borders, but 
the exit component is still incomplete. We must build on this 
technology to carefully monitor the entry and exit of 
travelers, but to do so in a way that does not hinder travel.
    It's time we use the resources at our disposal, and execute 
the same concept at our visa posts, and at our ports of entry.
    In conclusion, Senators, this Blueprint lays out a 
comprehensive plan that strengthens our national security, at 
the same time, bolsters our economy, and creates more jobs here 
at home. By taking these actions, and communicating such 
progress to the public, we will also help turn around the 
negative perceptions of America. Thank you very much.
    [The prepared statement of Mr. Tisch follows:]

  Prepared Statement of Jonathan M. Tisch, Chairman, Travel Business 
                 Roundtable, Chairman/CEO, Loews Hotels
Introduction
    Good afternoon. Chairman Inouye and Ranking Member Stevens, I would 
like to thank you and Senator Dorgan for your attention to the travel 
challenges America is currently experiencing and for holding today's 
hearing.
    I am Jonathan Tisch, Chairman and Chief Executive Officer of Loews 
Hotels, and Chairman of the Travel Business Roundtable, a CEO-based 
organization whose mission is to educate policymakers about the 
important social and economic contributions of the U.S. travel 
industry.
    Along with our strategic partner, the Travel Industry Association 
(TIA), we represent all sectors of the U.S. travel and tourism 
industry--an industry that has $703 billion in expenditures, employs 
7.5 million Americans and has untapped potential for winning hearts and 
minds of people from around the world.
    Along with this testimony, I would like to submit the ``Blueprint 
to Discover America'' as part of my statement for the record.
Need for a 21st Century Visa System
    As a member of the Discover America Partnership's Leadership, I 
thank you for allowing my colleagues and me the opportunity to present 
before this Committee today. I would like to describe for you step one 
of our blueprint for change: reforming America's visa issuance system.
    The State Department has put in place new programs and added staff 
to facilitate the visa process since 9/11. Some progress has been made. 
However, the U.S. inbound travel market from overseas still lags behind 
pre-9/11 levels. More can and should be done.
    Overseas travel to the U.S. has declined 17 percent since 2001 
while travel worldwide is steadily on the rise. A recent survey 
conducted by the Discover America Partnership showed that international 
travelers are 74 percent more likely to have a favorable opinion of the 
U.S. if they have actually visited here. In addition, those 2,000 
travelers surveyed indicated they were 61 percent more likely to 
support the U.S. and its policies after having visited. Clearly, we 
need more international travelers; they strengthen our economy, our 
diplomacy and our security.
    Before most international travelers (those not part of the Visa 
Waiver Program) ever have the opportunity to set foot on American soil, 
they must obtain a non-immigrant visitor visa. Two hurdles in this 
process--distance from consular posts and wait times for interviews--
have all too often made obtaining a visa cumbersome, and in some cases 
are redirecting travelers to other destinations.
    Following 9/11, every visa applicant was required to have an in-
person interview with a U.S. consular official. In places such as 
Brazil and India--with a total land mass equal to or in excess of the 
United States--there are only four consulates in the entire country. In 
these cases, potential visitors to the U.S. must take a trip just to be 
considered for the right to visit the U.S.
    According to the U.S. Government Accountability Office (GAO), 
during a recent six-month period in 2006, 97 of the 211 visa-issuing 
posts were reporting wait times in excess of 30 days, and nine posts 
with wait times over 90 days. This is unacceptable, especially when the 
State Department's own goal is to have wait times of 30 days or less.
    As recently as November of last year, the wait times in India were 
as high 184 days. Due to additional staffing and resources, the State 
Department was able to process the backlogs and reduce wait times to 
under 1 week in three of the four consulates. We are pleased to see 
that progress has been mostly sustained. This model should be applied 
to other locations with lengthy wait times such as Mexico and Brazil.
    Hurdles in the visa process have had an economic toll as well. In 
2005, the National Foreign Trade Council estimated that U.S. businesses 
lost $30 billion between 2002 and 2004 because of America's visa 
system. We need more international visitors, not fewer, to come to the 
U.S., and we have the capability of welcoming more visitors while at 
the same time strengthening our security.
    In this ``Blueprint to Discover America,'' we lay out four 
recommendations for improving the visa process while enhancing 
security:

        1. Reduce wait times at all consular posts to less than 30 
        days;

        2. Use technology for visa processing where travel distances 
        are excessive;

        3. Strengthen and expand the visa waiver program; and

        4. Enhance security and efficiency upon entry into and exit 
        from the U.S.

Reduce Wait Times
    First, we are challenging the State Department to meet their own 
standard and cut the wait times to 30 days or less at all consular 
posts. We suggest several ways to do that. For those posts with 
recurring problems, ``rapid response'' teams should be deployed. 
Consular officials and trained experts should be sent to handle the 
demand--similar to State's response in India. We also believe that 
Congress should take an active role to assess the needs at consular 
offices overseas and adequately fund staffing demands.
Bridge the Distance for Interviews
    Our second recommendation is adapting 21st Century technology, such 
as videoconferencing and Internet applications, to better facilitate 
the visa process and to lessen the hassle for visa applicants in 
geographically large countries such as Brazil, China, Russia, and 
India. In fact, videoconferencing for visa interviews was one of the 
initiatives outlined in Secretary of State Condoleezza Rice and DHS 
Secretary Michael Chertoff's ``Secure Borders and Open Doors'' plan, 
announced in January 2006.
    For these plans to succeed, we ask that Congress enact legislation 
that allows for the use of technology and new methods of collecting 
information--when the appropriate security controls are in place--to 
facilitate interviews and other background checks. Additionally, the 
re-emergence of using American Chambers of Commerce overseas to 
expedite visa issuance for business travelers has been successful. That 
progress should continue.
Strengthen and Expand Visa Waiver Travel
    The third element for visa reform is strengthening our Visa Waiver 
Program (VWP), which allows travelers from lower-risk countries--our 
best trading partners--to come here without obtaining a visa. The VWP 
is essential for keeping our doors open to international travel. Two-
thirds of all overseas travel to the U.S. comes from VWP countries.
    By expanding the program, we can welcome more travelers while 
consular resources can be better prioritized for higher risks. The 
President recently announced his plan to do just that. By opening the 
program to more of our allies while requiring more personal information 
from travelers for security purposes, we boost our economy, our 
diplomacy and our security all at the same time.
Expand Upon US-VISIT
    Our last visa recommendation is already being addressed by the 
Federal Government, and that is creating an effective exit tracking 
system. Today our government is wary of letting more visitors into the 
country because we are not sure if they are going to leave. The US-
VISIT program has been an excellent example of using 21st Century 
technology to protect our borders, but the exit component is still 
incomplete.
    We must build on this technology to carefully monitor the entry and 
exit of travelers, but do so in a way that does not hinder travel. It 
is time we use the resources at our disposal and execute the same 
concept at our visa posts and at our ports of entry.
Conclusion
    In conclusion, this blueprint lays out a comprehensive plan that 
strengthens our Nation's security and at the same time bolsters our 
economy and creates more jobs here at home. By taking these actions and 
communicating such progress to the public, we will also help turn 
around the negative perceptions of America.

    Senator Dorgan. Mr. Tisch, thank you very much.
    Next, we will hear from Mr. Jay Rasulo, who is Chairman of 
Walt Disney Parks and Resorts, and Chairman of the Travel 
Industry Association, and Chairman of the U.S. Travel and 
Tourism Advisory Board.
    Mr. Rasulo, thank you for joining us. You may proceed.

   STATEMENT OF JAY RASULO, CHAIRMAN, WALT DISNEY PARKS AND 
              RESORTS; CHAIRMAN, TRAVEL INDUSTRY 
        ASSOCIATION; CHAIRMAN, U.S. TRAVEL AND TOURISM 
                         ADVISORY BOARD

    Mr. Rasulo. Thank you, Mr. Chairman.
    On behalf of the Nation's travel and tourism industry, I 
appreciate the opportunity to appear before you to discuss our 
plan to increase the economic and diplomatic benefits of travel 
to the U.S.
    I speak from three perspectives: First, as National 
Chairman of the Travel Industry Association, which represents 
the $600 billion U.S. travel industry.
    I also serve as Chairman of the U.S. Travel and Tourism 
Advisory Board. This is a panel of the industry's top CEOs that 
is charged with advising the Department of Commerce on the 
creation of a national strategy to compete for greater market 
share of the growing world travel and tourism market.
    And finally, I'm Chairman of Walt Disney Parks and Resorts, 
which operates 11 theme parks on three continents, a top-rated 
cruise line, and 32,000 hotel rooms. Here in the U.S., our 
vacation businesses are responsible for creating 175,000 jobs, 
while contributing nearly $9 billion in economic revenue each 
year to the local economies.
    The challenge that has been described today is not merely 
an industry challenge, or even a private-sector challenge, it's 
America's challenge, one that both government and the private 
sector must address together.
    When it comes to security and ease of travel, people 
sometimes mistakenly believe that we must choose one or the 
other--that we can't have both.
    The Blueprint we've created shows that it is well within 
America's reach to be both more secure, and more welcoming. As 
my colleagues have described, the solution proposed must unfold 
in three steps. First, we must keep the visa process secure, 
but make it more user-friendly. Second, we must strengthen the 
security of our entry process, but make it more welcoming, and 
efficient.
    But it's not enough to fix the problem. We must also tell 
the world that we've done it, because negative perceptions have 
a funny way of lingering long after the reality has changed.
    That's why the third step of this process must be the 
creation of a nationally coordinated program that communicates 
these changes to the world.
    In preparing the Blueprint to Discover America, we 
conducted quite a bit of research to understand why people are 
avoiding traveling to the U.S. And it was very clear to us that 
the confusion and misperception about the entry experience are 
significant deterrents to international visitation.
    The Western Hemisphere Travel Initiative is a perfect 
example. This new law requires a passport from and to--for 
travel to and from Canada--and is causing considerable anxiety 
and confusion among travelers. Their confusion is unnecessary, 
and it's amplified because the U.S. has no dedicated resources 
to communicate these changes, to counter misperceptions, and to 
help people understand and navigate the process.
    The government agencies are, individually, doing what they 
can on their existing budgets, and so is the private sector. 
Many companies, like Disney, are dedicating marketing and sales 
resources toward getting the word out. The Travel Industry 
Association has even set up a website called ``get a passport 
now'' which has been visited more than a million times.
    But none of this is any substitute for a well-funded, 
nationally coordinated program that communicates these policies 
with a single voice. In fact, this is something that virtually 
every other industrialized country in the world is already 
doing.
    Australia, for instance, spends $113 million a year 
communicating and promoting itself to travelers. Canada spends 
$58 million a year. But, the U.S. currently has no such 
program.
    We envision the creation of a new federally chartered 
public-private entity. It would combine the expertise of the 
private sector with the oversight and coordination of the 
Federal Government. It would serve as the primary voice for all 
travel-related policies, and it would also coordinate our 
national strategies to maximize the benefits of travel to 
America.
    This program would fill a vital gap in our current 
strategies to attract more visitors, and it would pay for 
itself many times over.
    We estimate that almost all of the recommendations in our 
Blueprint could be implemented at a total cost of under $300 
million a year. If these changes resulted in an increase of 
only one million visitors, the additional tax revenue would 
cover the investment.
    If we recaptured 10 million new visitors, which represents 
little more than one additional share point of world travel, 
the added tax revenue would be ten times what we invest, and 
that doesn't include the tens of billions of dollars added to 
the economy, and hundreds of thousands of new jobs.
    But this effort also serves a larger national purpose. It 
would advance America's public diplomacy--the public face we 
present to the world.
    Where I work, we often talk about the magic of Disney, but 
there is also a magic to America. People simply need to visit 
here to feel this magic. Our research has found that traveling 
to the United States makes a visitor 74 percent more likely to 
feel extremely favorably about this Nation. If we can get 
people through the gate, we can change their perceptions of 
America.
    Imagine the goodwill that will result if we simply let 
people know we want them to come. Imagine the benefits that 
will flow to our Nation if peoples around the globe know that 
America remains an open, friendly, pleasant place to visit.
    Again, I thank you for the opportunity to speak here today, 
and I look forward to addressing your questions.
    [The prepared statement of Mr. Rasulo follows:]

   Prepared Statement of Jay Rasulo, Chairman, Walt Disney Parks and 
 Resorts; Chairman, Travel Industry Association; Chairman, U.S. Travel 
                       and Tourism Advisory Board
    Mr. Chairman, on behalf of the Nation's travel and tourism 
industry, I appreciate the opportunity to appear before you to discuss 
our plan to increase the economic and diplomatic benefits of travel to 
the U.S.
    I speak today from three perspectives.
    First, as 2006 Chairman of the Travel Industry Association, which 
represents the $600 billion U.S. travel industry.
    I also serve as Chairman of the U.S. Travel and Tourism Advisory 
Board. This is a panel of the industry's top CEOs that is charged with 
advising the Department of Commerce on the creation of a national 
strategy to compete for a greater share of the growing world travel and 
tourism market.
    And finally, I am Chairman of Walt Disney Parks and Resorts, which 
operates 11 theme parks on three continents, a top-rated cruise line, 
and 32,000 hotel rooms. Here in the U.S., our vacation businesses are 
responsible for creating 175,000 jobs, while contributing nearly nine 
billion dollars in economic revenue each year to their local economies.
    The challenge that has been described today is not merely an 
industry challenge or even a private sector challenge--it is America's 
challenge--one that both government and the private sector must address 
together.
    When it comes to security and ease of travel, people sometimes 
mistakenly believe we must choose one or the other--that we can't have 
both. I believe this is a false choice. And the blueprint we have 
created shows that it is well within America's reach to be both more 
secure and more welcoming.
    As my colleagues have described, the solution we propose must 
unfold in three steps.
    First, we must keep the visa process secure, but make it more user-
friendly.
    Second, we must strengthen the security of our entry process, but 
make it more welcoming and efficient.
    But it's not enough to fix the problem. We must also tell the world 
we did it, because negative perceptions have a funny way of lingering 
long after the reality has changed.
    That's why the third step in this process must be the creation of a 
nationally coordinated program that communicates these changes to the 
world.
    In preparing the Blueprint to Discover America, we conducted quite 
a bit of research to understand why people are avoiding traveling to 
the U.S. And it was very clear to us that confusion and misperceptions 
about the entry experience are a far bigger deterrent than the 
processes themselves.
    The Western Hemisphere Travel Initiative is a perfect example. This 
new law requires a passport for travel to and from Canada--and it is 
causing considerable anxiety and confusion among travelers. Their 
confusion is unnecessarily amplified because the U.S. has no dedicated 
resources to communicate these changes, to counter misperceptions and 
help people understand and navigate the process.
    The government agencies are individually doing what they can with 
their existing budgets, and so is the private sector. Many companies--
including Disney--are dedicating marketing and sales resources toward 
getting the word out. The Travel Industry Association has even set up a 
website called ``get a passport now,'' which has been visited more than 
a million times.
    But none of this is any substitute for a well-funded, nationally 
coordinated program that communicates these policies with a single 
voice.
    In fact, this is something that virtually every other 
industrialized country in the world is already doing. Australia, for 
instance, spends $113 million dollars a year communicating and 
promoting itself to travelers. Canada spends $58 million dollars. But 
the U.S. currently has no such program.
    We envision the creation of a new public-private entity. We could 
call it, perhaps, the Corporation to Discover America.
    It would combine the expertise of the private sector with the 
oversight and coordination of the Federal Government. It would serve as 
the primary voice for all travel-related policies, and it would also 
coordinate our national strategies to maximize the benefits of travel 
to America.
    This program would fill a vital gap in our current strategies to 
attract more visitors. And it would pay for itself many times over.
    We estimate that almost all of the recommendations in our Blueprint 
could be implemented at a total cost of under $300 million a year. If 
these changes resulted in an increase of only 1 million visitors, the 
additional tax revenue would cover the investment.
    If we recapture 10 million new visitors--which represents little 
more than one additional share-point of world travel--the added tax 
revenues would be ten times what we invest. And that doesn't include 
tens of billions of dollars added to the economy, and hundreds of 
thousands of new jobs.
    But this effort also serves a larger national purpose. It would 
advance America's public diplomacy--the public face we present to the 
world.
    Where I work, we often talk about the magic of Disney, but there is 
also a magic to America. People simply need to visit here to feel this 
magic. Our research has found that traveling to the United States makes 
a visitor 74 percent more likely to feel extremely favorably about this 
Nation.
    If we can get people through the gate, we can change their 
perceptions of America.
    Imagine the goodwill that will result if we simply let people know 
we want them to come.
    Imagine the benefits that will flow to our Nation if other peoples 
around the globe know that America remains an open, friendly, pleasant 
place to visit.
    Again, I thank you for the opportunity to speak here today, and I 
look forward to addressing your questions.

    Senator Dorgan. Thank you very much. I understand I 
mispronounced your name, it's Mr. Rasulo.
    Mr. Rasulo. Quite all right, thank you.
    Senator Dorgan. Thank you for being with us, Mr. Rasulo.
    Finally, we will hear from James May. Jim May is President 
and CEO of the Air Transport Association.
    Jim, thank you and welcome.

    STATEMENT OF JAMES C. MAY, PRESIDENT/CEO, AIR TRANSPORT 
                          ASSOCIATION

    Mr. May. Thank you, Mr. Chairman.
    My name normally isn't mispronounced, it's easy. How's 
that?
    Thank you, Senator Dorgan, Chairman Inouye, Vice Chairman 
Stevens and Members of the Committee.
    We've heard testimony about the ``Blueprint to Discover 
America'' today. And the three main goals, which are a faster 
and more secure visa system, more rapid processing of 
passengers at airports, and creating a more welcoming 
environment for international passengers. These are goals that 
we can agree upon.
    The good news is that, and I'm sure it is the result of a 
lot of work by the Partnership members at this table and 
others, many of these goals are, in fact, being addressed by 
several Federal agencies.
    A quick review tells us that there are many committed 
people working together on these issues, both within the 
Administration, the travel and hospitality industry, and 
certainly, the airlines.
    The Rice-Chertoff Initiative, the DHS/State Department 
``Secure Borders, Open Doors'' initiative, the US-VISIT 
program, and the Commerce Department's U.S. Travel and Tourism 
Advisory Board have all focused on these same goals to improve 
the international traveler experience.
    These government initiatives, which include E-passports, 
model airports, developing a ``single portal'' for transmission 
of passenger information, adding new consular positions, and 
decreasing the wait time for visa applicants, are all needed to 
go a long way toward improving that passenger experience.
    And as I compare the government's programs with the 
objective of the Blueprint, I feel that those Blueprint 
objectives are, in fact--although in a different way--being 
addressed. Having noted the consistency of objectives between 
the Blueprint and many government initiatives, I think there is 
also one glaring inconsistency.
    The Blueprint to Discover America runs counter to one of 
the key recommendations set forth by the Travel and Tourism 
Advisory Board which a couple of months ago, raised concerns 
about imposing taxes on passengers. It explained how new taxes 
can ``increase the cost of travel and can dampen demand for 
inbound travel.''
    The Partnership's Blueprint suggests that their new 
objectives can be met with an investment of some $300 million 
to underwrite such initiatives as training CBP and TSA 
officials in ``customer service techniques.''
    It goes on to suggest that all of the initiatives could be 
paid for with a $5 fee for ``all travelers leaving the United 
States via air,'' or with a charge of approximately $10 added 
to the cost of ``purchasing the airline ticket.'' Now, in 
fairness, the Blueprint also offers a third funding 
alternative, which is the issuance of about $1 billion in tax 
credit bonds.
    In my view, these fee proposals are wrong-headed and 
counter-intuitive. Why would we want to charge passengers more 
at the very time we're trying to encourage more of them to 
visit the U.S.? It simply does not make sense. I'd like to 
remind the Committee that international airline passengers are, 
today, paying approximately $50 in U.S. taxes and fees for each 
and every trip to America. In 2006, that number generated 
roughly $3.3 billion to $3.7 billion.
    Now, what passengers should expect for that $50, is an 
efficient system to get them through our airports, painlessly. 
If more needs to be done to expedite handling airline 
passengers, and processing visas--and I think it does--then the 
Federal Government needs to underwrite these efforts, not 
passengers.
    The Blueprint also says that ``all foreign travelers to the 
United States should be greeted at the inspection booth with 
the words, 'Welcome to the United States'.'' While I appreciate 
a warm welcome as much as the next person does, it's hard for 
me to support charging passengers a $5 fee to purchase a smile 
and a greeting.
    The ATA strongly favors securing America's borders, and we 
can do that by eliminating inadequate processes, and 
transitioning to an electronic visa application form, making 
visa appointments online, sharing data among government 
agencies to avoid duplicative work, and adding even more 
consular positions and locations, all efforts that are 
underway.
    Mr. Chairman, we are also quite sensitive to the need to 
balance the sometimes competing interests of post-9/11 security 
with ease of travel, something you mentioned in your opening 
comments. Our airlines frequently comment on the so-called 
``hassle factor'' that security presents. But at the end of the 
day, we accept the reality that, in some instances, there are 
necessary tradeoffs.
    ATA has been working very closely with government agencies 
to implement these initiatives. We have long been an advocate 
for full coordination among government agencies, a problem that 
exists at many different levels, and support a DHS-led ``single 
face'' at U.S. ports of entry.
    I want to reiterate, we support the fundamental objectives 
in the Blueprint, to speed passengers through airports, to 
expedite visa processing, and enhance security, and to make the 
travel experience more enjoyable. For the most part, we think 
these objectives are, in fact, being addressed by the State 
Department, the Department of Homeland Security and the 
Commerce Department, but they could clearly be done with more 
vigor and with a greater sense of urgency, which we encourage 
this Committee to enforce.
    America must effectively compete for international 
visitors, or millions of travelers will take billions of 
dollars that they would have spent here, and go elsewhere. Our 
airlines are eager to bring more international visitors to 
America, so that they can experience firsthand what we already 
know--America is a great country to do business with, and to 
visit. Thank you.
    [The prepared statement of Mr. May follows:]

   Prepared Statement of James C. May, President/CEO, Air Transport 
                              Association
    Good afternoon, Chairman Inouye and Vice Chairman Stevens. I 
appreciate being here.
    We have just heard testimony about the ``Blueprint to Discover 
America.'' Their three main goals--a faster and more secure visa 
system, more rapid processing of passengers at airports, and creating a 
more welcoming environment for international passengers--are goals that 
we all agree upon.
    The good news--and I am sure it is the result of the good work by 
Partnership members, is that these are also goals that are already 
being addressed by several Federal agencies.
    The fact that we are sitting together today tells us that there are 
a lot of committed people working together on these issues in the 
Administration, in affected businesses, and in the airlines.
    The Rice-Chertoff Initiative, the DHS/State Department ``Secure 
Borders, Open Doors'' initiative, the US-VISIT program, and the 
Commerce Department's U.S Travel and Tourism Advisory Board, have all 
focused on these same goals to improve the international traveler 
experience.
    These government initiatives, such as E-passports, model airports, 
developing a ``single portal'' for transmission of passenger 
information, adding new consular positions and decreasing the wait time 
for visa applicants, are going a long way toward improving the 
passenger experience. As I compared the government's programs with the 
objectives of the ``Blueprint,'' I felt that those ``Blueprint'' 
objectives were being addressed.
    Having noted the consistency of the objectives between the 
``Blueprint'' and the government initiatives, there is one glaring 
inconsistency. The ``Blueprint to Discover America'' goes against one 
of the key recommendations put forth by the government. The Travel and 
Tourism Advisory Board raised concerns about imposing taxes on 
passengers. It explained how those can ``increase the cost of travel 
and can dampen demand for inbound travel.''
    The ``Blueprint'' proposes to pay for all these initiatives with a 
$5 fee for ``all travelers leaving the United States via air'' or with 
a charge of approximately $10 to be added to the cost of ``purchasing 
the airline ticket.'' To be fair, the ``Blueprint'' offered a third 
funding alternative, the issuance of $1 billion in tax free bonds.
    Why would we want to charge passengers more at the same time we are 
trying to get more of them visit the U.S.? That just does not make any 
sense.
    I would like to remind the Committee that international airline 
passengers are already paying approximately $50 in U.S. taxes and fees 
for each trip to America. What passengers should expect for $50 is an 
efficient system to get them through our airports.
    Travel and tourism create spending of over $650 billion a year in 
the U.S. and generate approximately $100 billion in additional taxes 
for state, local, and Federal governments. If more needs to be done to 
expedite handling airline passengers or processing visas, and it does, 
the Federal Government needs to commit to use a portion of those 
additional tax revenues to these efforts.
    The ``Blueprint'' also says that ``all foreign travelers into the 
U.S. should be greeted at the inspection booth with the words `Welcome 
to the United States'.''
    While I appreciate a warm welcome--it is hard for me to support 
charging passengers a $5 fee to purchase a smile and a greeting.
    The ATA strongly favors securing America's borders, and we can do 
that by eliminating inadequate processes and transitioning to 
electronic visa application forms, making visa appointments online, 
sharing data among government agencies to avoid duplicative work, and 
adding even more consular positions and locations.
    ATA has been working very closely with government agencies to 
implement these initiatives. We have long been an advocate for full 
coordination among government agencies and support a DHS-lead ``single 
face'' at U.S. airports of entry.
    I want to reiterate--we support these fundamental changes in the 
``Blueprint'' to speed passengers through airports, to expedite visa 
processing and enhance security, and to make the travel experience more 
enjoyable. We think they are already being addressed by the State 
Department, the DHS, and the Commerce Department--but that they could 
be done with a little more vigor and with a greater sense of urgency.
    America has to effectively compete for those visitors or otherwise 
millions of travelers will take the billions that they would have spent 
here, and spend it elsewhere. Our airlines are eager to bring more 
international visitors to America so they can experience firsthand what 
we already know--that America is a great country to do business with, 
and to visit.
    Thank you.

    Senator Dorgan. Mr. May, thank you very much.
    Let me ask a number of questions, and then turn to my 
colleagues.
    First, if the recommendations that you suggest are 
implemented, from what countries would you expect that we would 
see the largest increase in travelers to the United States? 
Does anyone have an estimate of that? Mr. Porter?
    Mr. Porter. Yes, the Blueprint, as defined and described, 
would focus on international arrivals from overseas travelers, 
so we would see the largest amount of those coming--increasing 
the contribution from England, we'd see an increased 
contribution from Japan and from China, which are already big 
contributors, but we have seen decline. Similarly, Brazil has 
shown significant decline in the past 5 years, so that would be 
another country of focus, as well.
    Senator Dorgan. The Discover America Partnership has 
provided a blueprint outlining objectives and tactics in a 
number of very specific areas, which is helpful, it seems to 
me, in terms of our evaluation of them.
    I want to talk about the return on investment where we, 
too, embrace these ideas. What would be the benefits of such a 
program, and what do you believe would be the return on 
investment for our country to pursue such a program?
    Mr. Porter. Very, very fair question.
    First, in the construct of this strategic plan, very 
similar to the way we would pursue this inside any one of the 
companies that we represent, this is a combination of a variety 
of options among many that were evaluated. And these come 
forward as being what we think of as some of the strongest, but 
clearly open to review, discussion, and debate, sort of as 
we're having here today.
    That said, within the three component parts--improvement in 
the visa process, we think, is an investment initially at about 
$50 million, improvements in the entry procedures is about $50 
million, and then the notion of improving perceptions is an 
investment of about $200 million. And, as we would execute down 
that path, clearly we think fixing the first two is the right 
place to start with that resourcing.
    Once that would be agreed to, having passed through some of 
those objectives as benchmarks, thresholds we've laid out, then 
you'd move into the communications component, and the return as 
noted in there, we see as being sizeable.
    And I think Jay did a nice job sizing that, it is to return 
us to a market share position that reflects, first, covering 
the decline--we've gone from about a 7.5 percent share to a 6 
percent share--that one and a half points is roughly the 10 
million visitors that we've described with the corresponding 
economic benefits. And the pie has gotten bigger at the same 
time.
    So, not only have we lost position, but the pie has 
improved, so it's sort of a double loss of position.
    Senator Dorgan. Mr. May seemed to suggest that the Rice-
Chertoff joint vision has created some progress in a number of 
areas, and that perhaps it could be improved a bit, but I 
think, I think you seem to suggest that there has been 
substantial progress in these areas.
    Do all of you agree with that, or is, or do--? I mean, I 
assume that the reason you've put this together is you believe 
much more needs to be done, is that correct?
    Mr. Rasulo. If I may, Senator.
    I think that we all agree that progress has been made, and 
Rice-Chertoff, in fact, was used as an input to this blueprint 
in many ways, and gave us a vocabulary that we could share with 
both the State Department and the Department of Homeland 
Security in really trying to secure the very same goals.
    I think the Blueprint pushes a little further in the use of 
technologies in specific reviews of staffing, and tries to 
isolate the problems with specific answers.
    It also speaks to the area of promotion, to which the Rice-
Chertoff initiative did not speak. And, if I may, just add on 
the issue of return, we have some information about valuable--
the value of promotion in terms of return, both in terms of 
spending, and in terms of taxes.
    The input here comes from a number of things--sort of an 
academic study from a group from Oxford, an Oxford 
organization--I don't remember the exact name, it's in the 
Blueprint--that showed that well-executed programs can return, 
in terms of spending, up to 75 to 1, but probably on average, 
35 to 1, if you look at programs around the world.
    In my home state, the State of California, we had a bit of 
a control experiment in that we promoted California 
internationally for a number of years, and then the funding was 
cut off and we lost it, we saw the effect down, and when it was 
reinstated, we saw the effect back up, and that was about 14 to 
1. On average, we think in terms of tax revenue, the average is 
probably around 6 to 1.
    Senator Dorgan. You're correct that the Rice-Chertoff 
initiative did not deal with the issue of promotion, but just 
one final point--other countries that are involved in promotion 
and a greater activity here to try to get a better share for 
their countries of the international travelers. Are they paying 
for these initiatives through--the public sector? The private 
sector? Or a combination? Do you have any information about 
that?
    Mr. Rasulo. Most are public, public funding. There are some 
that are public/private partnerships, with some matching. 
California is an example of that. There's contribution from the 
private sector, which is more than equally matched, but as a 
substantial contribution from the State of California. So, 
there are many public/private partnerships, but most have 
substantial government funding, as part of them. Canada, as an 
example, I believe is completely publicly funded.
    Senator Dorgan. I'm going to have to ask other questions at 
another go round.
    Mr. Tisch. Senator, if I can just add to that, we have 
released, today, this document which is the 1-year review of 
Rice-Chertoff. And it is appropriate that it is the day that 
we're talking to you about extending some of the ideas here, 
but then adding the Blueprint to it.
    What the Blueprint does is put aside parochial concerns of 
various aspects of the travel and tourism industry, and works 
together toward a greater good. And when you ask about return 
on investment, I think you can look at the financial return, 
which my colleagues have discussed a bit, and it really focuses 
on some of--all of the Senators' opening comments, about 
helping us with the positive balance of trade.
    Our industry is uniquely poised to be a vehicle for job 
creation, and for economic development. I serve, as I mentioned 
in my comments, as Chairman of New York City's Convention of 
Visitor's Bureau, and our industry is growing and we continue 
to create jobs.
    To give you a sense of how important that international 
traveler is, we had a record year in 2006--44 million people 
visited New York City. Of that, only 18 percent were from 
international destinations, but they were responsible for 45 
percent of all the visitor spending. That's why we need the 
international traveler. They stay longer, and they spend more 
money.
    Now, you switch to the intangible results, and as we all 
know, and we're all deeply concerned about the image of 
America, Americans, and American brands overseas is at an all-
time low. The results show that when you come to this country, 
you leave with a more positive image of us as a Nation. And 
when you combine the tangible and the intangible, we think that 
the Blueprint becomes the path to help our country on many 
fronts.
    Senator Dorgan. Mr. Tisch, thank you.
    Senator Inouye?
    The Chairman. About 25 years ago, Ireland, the government 
of Ireland, spent more money promoting the Blarney Stone than 
the United States did for the whole country. What improvement 
have we had? Are we spending more than Ireland?
    Mr. Rasulo. Well, let me--let me answer that. From a 
nationally coordinated perspective, overseen by a Federal 
agency of any sort, or a centralized message, we spend zero. So 
we haven't, I guess, if they're spending anything on the 
Blarney Stone then it's more than us. And Ireland, in fact, is 
one of the many nations that spends against national tourism.
    Needless to say, Senators, we as private entities, do 
invest in promotion overseas, but we cannot fill the essential 
role that a centralized, federally overseen program can do. 
Particularly, now that we know the biggest inhibitors are the 
entry process and the visa process, there is no private entity 
or state entity, that would be either a trusted source of that 
information, or the appropriate source of that information.
    So, I think, to answer your question, there hasn't been an 
improvement.
    The Chairman. Well, what countries have been the most 
successful in attracting international visitors?
    Mr. Porter. We have that detailed within the Blueprint.
    Australia certainly jumps to the top of that list as having 
been highly effective in focused programs in spending, Canada 
would be another example of a country that has done quite well 
on that front, some of the European countries have stepped into 
that, as well. So they are wildly, most all countries for whom 
this industry is a significant contributor, are significantly 
ahead of the spending patterns of the United States.
    The Chairman. What sort of visa and security processes do 
these countries have, as compared to the United States?
    Mr. Porter. You'll find in there, again, details on that. 
We know, and many of us travel frequently, England, Israel and 
others have been far more advanced in using technology to 
advantage entry into those countries. Those are good models. 
Australia has also been advanced in using technology to make it 
fast through the booking process to get access to that country. 
So, I think they are definitely good models that we can emulate 
in this country, for certain.
    Mr. Tisch. And if you look at the historic competitors of 
the United States--Australia, and Japan, Italy--what we're now 
seeing is a big push by Middle Eastern countries, such as 
Dubai, Abu Dhabi, to grab a larger market share of conventions, 
conferences, by building enormous meeting halls and hotel 
facilities, restaurants--the whole travel and tourism 
infrastructure. They are throwing hundreds of millions of 
dollars to attract U.S. business that might now go to Las 
Vegas, New York, or Orlando, to their shores.
    The Chairman. There's one thing in common with these 
countries--the government is involved.
    Mr. Tisch. It is my understanding that the government is 
absolutely involved, sir.
    The Chairman. Last September, I think the organization 
submitted recommendations to the Secretary of Commerce? What 
has happened? Have they been implemented?
    Mr. Rasulo. Senator, it just so happened that yesterday, 
the U.S. Travel and Tourism Advisory Board had a meeting with 
the Secretary, and reports are out from the Department of State 
and Homeland Security on some of the recommendations. And I 
think there--there is no, no doubt there has been incremental 
improvement in the processes.
    The model airport program from the Rice-Chertoff Initiative 
has had some advancement, there has been some improvement on 
the visa side, but I think that we've only scratched the 
surface in finding the efficiencies that technology and 
appropriate staffing levels can provide, and haven't scratched 
the surface at all, although it was not a recommendation of 
the, of that particular paper--have not scratched the surface 
at all on the area of promotion and communication.
    I would like to add, by the way, that since it's 
referenced, and I do chair that committee, it was referenced 
that the committee argued against the collection of fees or 
taxes from travelers.
    Actually, what it recommended was against fees that don't 
benefit travel. And clearly, the aspects of the Blueprint we're 
discussing today are to the benefit of travel.
    The Chairman. We have just implemented the new visa 
requirements in the Western Hemisphere. What will be the impact 
on visitors from those countries?
    Mr. Rasulo. Well, it's hard to know, and I'll defer to my 
colleagues, but right now, a very small percentage of our 
travel from Canada and to Canada is by air, relative to ground 
crossing. So far--we heard yesterday from a Director of 
Homeland Security, Michael Jackson, that 90 percent of the 
passengers arriving in the U.S. or going to Canada by air--do 
have passports. And that those who didn't have been 
accommodated, to date, in the early days, in ways that no one 
has been turned around, yet.
    I think the real test against the WHTI is how efficiently 
we can implement the border crossing. Which is--which are 
frequent, are often not what you and I would think of as 
travel, but a trip to a movie, a trip to go shopping, a trip to 
a drug store that's at the end of town can be a border crossing 
in a lot of our border states.
    And so, we've yet to see the impact of the ultimate 
implementation. We're all working quite hard to be sure that 
that is implemented with a deadline of--thanks to some of you--
of mid-2009 to be sure that that gets implemented in a way that 
won't affect our flow from Canada which, of course, is our most 
important trading partner, and our most important travel 
partner in the world.
    Mr. Porter. And Chairman, if I may, just give some further 
illustration to that. Jay has pointed out at the outset of 
WHTI, with regard to air arrivals, we knew going into the 
penetration of passport holders for those arrivals is pretty 
high, so that has been borne out to be the case, and it has not 
had significant negative impact.
    As we move to land arrivals--whether from Mexico or from 
Canada--lodging alone, we have roughly 50,000 hotels in the 
United States, and about 25 percent of those are within a 
hundred miles of either the Canada or the Mexico border. And it 
is not an uncommon thing to have significant cross-border 
travel to enjoy many of the amenities of the United States, a 
broad array of industries. Penetration of passports in the 
population at large is sub-30 percent in the United States, 
similarly, sub-40 percent in Canada, so we think the potential 
for dramatic impact is significant, which goes back to the need 
to have coordinated communications on these initiatives, so we 
get the security right, but also make sure the doors stay open.
    The Chairman. I notice my time is up, I thank you very 
much, Mr. Chairman.
    Senator Dorgan. Senator Stevens?
    Senator Stevens. In the nineties, there was an organization 
called the U.S. Tourism Organization. Are you any of you aware 
of that one?
    Mr. Tisch. I was a member.
    Senator Stevens. What happened to that?
    Mr. Tisch. It lost its funding through the Commerce 
Department.
    Senator Stevens. It was federally funded to start?
    Mr. Tisch. Yes, it was. And it was through the Commerce 
Department, sir, and it lost its funding.
    Senator Stevens. Are you of the opinion that there must be 
Federal funding to initiate this new program?
    Mr. Tisch. We are of the opinion that there are private 
sector ways working with government, as Jay outlined, and we 
threw a few ideas out there. But, we do feel that we need some 
assistance in this, but the private sector understands our 
role, and our responsibilities, and wants to work with 
government to find ways to pay for the programs that we are 
calling for.
    Senator Stevens. We have initiated other programs such as 
the Pitman-Robertson program that deals with firearms and 
archery and activities like that--they're basically what we 
call a user-pay benefit trust fund concept--have you examined 
that concept?
    Mr. Porter. I don't believe we did directly, no. And just, 
again, going back to the intent behind the Blueprint--we 
thought it important, as we bring this initiative forward--to 
be honest about the fact that it requires resourcing. And we 
felt that it was important to try to put a fine line on the 
quantum of what that resourcing might be. And we also thought 
it was a requirement to put forward a variety of options as one 
approach to understanding how it might be resourced.
    It would be our intent that this would advance into further 
discussion to further validate alternate resources. We're not 
necessarily committed to, or married to any one of these, but 
we clearly know that resourcing is a requirement, and we think 
there are a variety of options to sort that out.
    Senator Stevens. Have you presented this plan to the 
Department of Commerce now?
    Mr. Rasulo. We did. We did present that plan yesterday at 
the board meeting to Secretary Gutierrez and his staff, yes.
    Senator Stevens. And this Discover America Partnership 
Corporation--you envision that that would be authorized by 
Congress to start with?
    Mr. Porter. Actually, it could potentially be one approach 
to putting funding forward and having some oversight body in a 
relationship between the private sector and the government, 
advance this initiative, yes.
    Senator Stevens. Well, I want to make sure we understand 
that, if we proceed to have such a corporation created and 
implement a program through legislation, does that meet your 
desire? Do you want to cooperate with that?
    Mr. Porter. Yes, we do.
    Senator Stevens. Now, Mr. May, I understand what you're 
saying about exit fees and we've all had an acquaintance with 
that sort of thing. Is your industry, though, prepared to work 
with the travel agencies, the travel industry, to facilitate 
the development of the Partnership program and otherwise?
    Mr. May. Senator Stevens, we have endorsed the principles 
of the Blueprint, and are happy to work with it. We have 
questioned, as you might imagine, some of the funding formulas 
that are attached to that, but I would suggest, in a manner 
reminiscent of the opening comments of Chairman Inouye, there 
are billions of dollars that are currently being spent on many 
of these different programs--whether it's US-VISIT, visa exit, 
Secure Flight, AQQ--we can go down a very long list. I would 
hope that this Committee would undertake, at the outset, to 
bring up representatives from the State Department, the 
Department of Homeland Security, TSA, CBP, ICE, and the other 
multiple alphabet soup organizations that are responsible for a 
very diverse enforcement of issues.
    And if the State Department suggests that they are going to 
make significant progress with their programs--they've issued 
recent press releases to that effect--I think this Committee 
has an opportunity to hold their feet to the fire, and make 
sure the programs we have today are cost-effective, efficient, 
and are doing what they are intended to do, which is not to say 
that we shouldn't have more promotion, but I think there's a 
lot of work that needs to be done on making sure all of these 
programs are coordinated, and that we have a command and 
control structure that works effectively for the benefit of the 
international traveler.
    Senator Stevens. I think some of you were involved with the 
funds that--when I was chairman of the Appropriations 
Committee, we were able to get Congress to approve--those 
monies weren't all spent. Was that because of a lack of 
infrastructure in the Executive Branch to carry it out, or was 
there just not an agreement within the industry of where they 
should be spent?
    Mr. Rasulo. I had the pleasure of chairing the advisory 
committee that the legislation that you submitted called out 
for the spending of $50 million that was appropriated for this 
very purpose. And that was an advisory committee to the 
Commerce Department.
    Frankly by the time the effort was organized, by the time 
the board members were named--and, in fact, two of us were on 
that board--by the time it was named, it was already 6 or 7 
months into the year, and it wasn't that we couldn't figure out 
how to spend the money, we knew exactly how we were going to 
spend it--we couldn't get through the Federal approval process 
quickly enough before the money got swept up in an omnibus 
bill, the omnibus bill at the end of the year. And we were left 
with $8 million which we spent about $6 million-plus in what we 
called a pilot program in the U.K., which I'm happy to say 
seemed to have had very positive results.
    Senator Stevens. Well, last--I see my time is up--the Duck 
Stamp, you know, sticks in my mind as a hunter. Hunters have 
supported the program which provides the money that assures 
conservation of the species that they hunt. It has been totally 
accepted by all involved in the hunting world of our country. 
Have you examined the ability of the industry to start out and 
raise money through some mechanism, such as a stamp or a 
certificate of membership? There are literally hundreds of 
thousands of people that are the periphery of your industry. 
And it seems that that would raise money, and have a continuous 
flow of money, if the program was successful. Have you looked 
at that form of mechanism of funding?
    Mr. Porter. That particular mechanism, no, we didn't. 
That's a great suggestion as we advance this into the working 
group, and think through what those broader options might be.
    Thank you for that.
    Senator Stevens. Well, I think Senator Inouye and I have 
looked forward to working with you, because certainly our two 
states are very heavily supported by the travel and tourism 
industry. And we've seen the decline that you've mentioned, and 
we'd like very much to work with you to try and sort of bring 
back this industry, and have it bloom as it should, in terms of 
our total economy.
    Thank you very much, Mr. Chairman.
    Senator Dorgan. Senator Thune?

                 STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    Senator Thune. Thank you, Mr. Chairman.
    Panel, thank you for your testimony. I appreciate you 
having this hearing--tourism and travel is a very vital 
industry in my home State of South Dakota, and as the Senator 
from North Dakota is also aware, there are a lot of folks that 
come to our part of the world year in and year out. And, in 
fact, in 2006, visitor spending in South Dakota was $864 
million, so almost a billion dollars a year is being spent in 
the state, and that's a 7 percent increase over the previous 
year.
    So, we've seen steady growth in tourism spending in South 
Dakota, and with the exception of the downturn right after 
2001, that has been a trend line that has been pretty 
consistent. And, it's a big job creator. We have about 33,000 
jobs in South Dakota that are related to our state's tourism 
industry.
    And I think it makes sense to think strategically about how 
we can increase the number of international visitors who come 
to the United States. The money that they spend here in this 
country is money that we wouldn't otherwise realize in our 
economy, and so I look forward to working with others here in 
Congress, as well as with the Administration and industry 
groups to make sure that we're effectively competing for that 
share of international tourists.
    And, I guess I just have a couple of questions for you. As 
I mentioned, tourism constitutes about $900 million for South 
Dakota annually, one of the proposals that you're talking 
about--the Discover America Partnership calls for the creation 
of a federally sponsored, nonprofit corporation to increase our 
country's market share of international tourists. And I guess 
one of my questions would have to do with how that would be 
organized, and would that Board of Directors include 
representation from rural tourism, from that part of the 
industry, as well?
    Mr. Porter. Yes, as conceived, it would be as far-reaching 
as could be. And within my own accountability, while we're a 
big corporation, I represent the voice of about 2,000 
franchisees who are very much attached to business in their 
local constituency. And we conceive this to be as broad a 
representation as could be accomplished, and at the same time, 
make it a group that could advance the initiative.
    Senator Thune. Just as a follow-up question--and this is 
for anybody on the panel--but what else can we be doing to 
ensure that the rural destinations in our country are getting 
good exposure among potential international travelers? 
Obviously, we want people to visit Disneyland and Disneyworld--
which we know they will--we also want them to visit Mt. 
Rushmore, and maybe to come through North America on their way 
to South Dakota.
    Mr. Rasulo. Well, Senator, in answer to your question, I 
think the only vehicle by which we can imagine promotion of 
places that don't have big, private-entity destinations, is 
through a nationally coordinated program, that markets America 
around the world. We, at Disney, are always going to have the 
resources, my colleagues at this table will have the resources, 
their companies will have the resources to promote our own 
businesses and big destinations, so will Las Vegas, so will New 
York, so will San Francisco, et cetera.
    When you get to small--the Faulkner Museum, Mt. Rushmore, 
the National Parks--the funds are simply not there, and there's 
no entity large enough to speak to the world about South Dakota 
or North Dakota, or Mississippi or Arkansas or many other 
states.
    So, the beauty of a nationally coordinated program that 
hooks people on the idea of coming to America at all as a 
destination, and allows local convention bureaus, with very 
small funds after that, to come in on the Internet, when people 
are not seeking, where am I going to go as a country? But, what 
am I going to do when I get there? They typically go to the 
Internet, and that allows, you know, kind of an even playing 
field for all destinations.
    So, I think that's one way to think about, how can we help 
promote distant, small, rural tourism? This is one of the most 
effective ways.
    Mr. Porter. And, if I may just add to that, something we 
spoke about earlier is the impact of the Western Hemisphere 
Travel Initiative, which has potentially great impact for you, 
being a close State to the border of Canada. And it would be an 
organization like this that would lift up those issues, and put 
that communication out.
    As Jay has pointed out, all of us as independents spend a 
lot of money for specific venues, brands, offers--what we don't 
have is this comprehensive voice on behalf of America, and what 
it means to come here and reinforcing a balance between policy 
and opening the doors.
    Mr. Tisch. Senator, your question is very appropriate, 
especially coming from your state, because it's important to 
understand that travel and tourism is not just about corporate 
America, it's not just about the names that are represented at 
this table. It's about the Mom and Pops, who have been in this 
business for many, many years, who need the traveler to bring 
the income so that they can raise their families and educate 
their kids.
    It is interesting to note that we met with Congressman 
Porter and Congressman Farr of the House Travel and Tourism 
Caucus this morning and Congressman Porter raised an idea that, 
I think, maybe it's time for us to give some thought to.
    In 1995, there was the first-ever White House Conference on 
Travel and Tourism. And it brought together about 1,500 
individuals that represented all 50 states in every aspect of 
travel and tourism.
    And it really was the first time that the--once thought of 
as disparate entities--travel and tourism were able to meet in 
a setting to talk about issues that affect all of us--not just 
hotels, airlines, cruise lines, or the smaller operators.
    And maybe now the time has come for us to have another 
White House conference on travel and tourism. The issues have 
changed, the industry has gotten bigger, the contributions that 
we make to this country are now more understood. And what 
struck me to your question, Senator, was that at this 
conference, now 12 years ago, every state sent a 
representative. So, the smaller operators were able to voice 
their concerns, and look at ways that we can all work together 
to promote the industry.
    Senator Thune. I know that marketing, clearly, is the name 
of the game, and you all do it very well. We've got some 
success stories in my State--I don't know if you've ever heard 
of a place called Wall Drug, but if you travel anywhere in the 
Midwest, you probably see signs.
    But, Mr. Rasulo, you mentioned in your testimony that 
Australia and Canada spend about $113 million a year, and $58 
million a year, respectively, on marketing their countries to 
international travelers. And I'm wondering if there's evidence 
that these expenditures have been effective--have they seen an 
increase in international travel as a result of that?
    Mr. Rasulo. We believe, and of course this is, you know, 
the old adage about marketing, half of it I don't know where it 
goes, I don't know which half works.
    But, we have seen--when you look at the results that these 
countries get, and we look around the world, and people often 
say, ``Well, of course, you know, the U.S. share is dropping, 
there are new destinations being added to the map, and they're 
sucking away shares of travel,'' but in fact, when you look at 
the statistics--all of the competitive nations to the U.S. are 
beneficiaries of the world travel growth. It is only a few--and 
mostly the U.S.--that are the net losers in share in the growth 
of travel. And in the case of overseas travelers to the U.S., 
the absolute numbers are declining.
    So, I have to, I have to assume that that is in part due to 
their marketing out there, and their ability to attract. 
Academic studies say that this, the ratio of investment against 
spending in those countries is on the level, on average, of 35 
to 1; tax revenue on the level of 6 to 1; so, I think the 
evidence indicates that they are, but I couch what I say--and 
all of my colleagues can understand this well in the private 
sector--measuring the value of marketing is an art, as much as 
it is a science.
    Senator Thune. Thank you, and I see my time is expired, but 
I appreciate your testimony. I look forward to working with you 
and trying to get a bigger share of that international traveler 
dollar here in the United States.
    Thank you, Mr. Chairman.
    Senator Dorgan. Let me just make a point on the Western 
Hemisphere Travel Initiative. I share a very long border with 
Canada in North Dakota, and we've been very concerned about 
this issue. I believe when I was chairman of an Appropriations 
subcommittee, just prior to 9/11, 2001, I had offered a 
Northern Border Initiative, which really dealt with security. 
And I brought to a committee hearing an orange cone, and placed 
it on the desk and said, ``This is security at a lot of our 
border checkpoints, and the polite drivers actually stop and 
move it as they walk in after the border's closed, or as they 
drive in, and the impolite drivers will just shred it at about 
60 miles an hour.'' But that was border security. That has 
changed at all of those border ports of entry.
    But the proposition that there should be a passport for 
everyone driving back and forth across the border was very 
troubling. A family of four going up to Winnipeg for the day, 
getting passports for $400 or so for the family--I've been very 
concerned about this, on the Northern border and in all of our 
circumstance. We need--there is a kind of a tension between 
security and tourism and travel, and we need to resolve it in a 
way that's thoughtful and serious.
    For example, right now, we have the new cards that are 
being proposed. But, my understanding is, the Postal Service is 
wanting $25 per card, to process the card. So, we're trying to 
understand what that's all about.
    Let me ask you this--I understand about the Initiative that 
has been offered by the State Department and the Department of 
Homeland Security and I want it to succeed. I've seen some 
evidence that there has been some improvement. But, it seems to 
me, not nearly enough improvement. And the fact is, 
government's a big bureaucracy, these agencies are big 
bureaucracies, nobody's ever accused them of speeding. It's 
very hard for them to change, and turn and adapt.
    What if the Congress decided, based on the testimony of you 
here today that we don't have to do anything. This Rice-
Chertoff Initiative, that's fine, you think it's pretty decent, 
moving in the right direction, that's enough. Is that what 
you're saying to us?
    Mr. Porter. No, it's not.
    Senator Dorgan. Or do you think much, much more needs to be 
done?
    Mr. Porter. We clearly think much, much more needs to be 
done. And not dissimilar to any of our individual 
accountabilities, we all recognize, this is a journey that we 
are on. Our world changed on September 11th, we respect that. 
The world continues to change, and we respect that.
    We think Rice-Chertoff was a great step in the right 
direction, and many of us were part of the discussions that led 
to that activity. But it's not as comprehensive as we think it 
needs to be. We don't think it has been resourced as 
effectively as it could be, and we've called that out here. And 
it doesn't allow for what, we think is one of the most 
important components, which is communication. So, clearly, we 
are suggesting that we need to advance that initiative beyond 
where we are today.
    Senator Dorgan. Let me make another point, and ask a 
question. You want to promote our country--and, I think, for a 
lot of good reasons. You know, people come to this country. 
They think well of what they've seen here and what they 
experience here. It's very important at a time when our image 
is suffering around the world.
    Senator Stevens talked about the Duck Stamp, or Ducks 
Unlimited--it was enormously successful as a fundraising 
device. Maybe there are ways in the private sector to do that. 
If not, there are calls for suggestions that the public sector 
finance it.
    Let me ask a question about what other countries are doing. 
Those that are engaged in more aggressive promotion through 
advertising--``Come to our country, see our country,'' those 
countries that are doing that, are most of them using public 
sector funding? Is that how they're enhancing their ability to 
do that?
    Mr. Tisch. Yes, they are using public sector financing.
    Senator Dorgan. And, let me ask about the issue of an exit 
fee. I understand the concern about that from Mr. May, but 
having traveled some around the world, it's not unusual to 
discover on the way out, you have to stop at a kiosk someplace, 
and they want a few bucks from you, for one thing or another.
    These exit fees, if exit fees were, in fact, implemented, 
how could they be implemented in a way in which they did not 
become a part of an airline ticket?
    Mr. Porter. Yes, I would imagine--as you've pointed out--
there are a number of mechanisms that could be explored. And, I 
think, again, we are very open to exploring those mechanics. I 
think the key thing is to understand the benefits of any use of 
any kind of funding, and to make sure that we clearly have 
enumerated those, and have support behind those.
    And that aside, not--just so much of the resourcing 
challenges each one of us faces every day, that you face every 
day--our sense is we can find a collective way to get there, 
and make it work.
    Senator Dorgan. Senator Inouye, do you have any additional 
questions?
    The Chairman. Just a note.
    Hawaii's major industry, as you know, is tourism. It's a 
multi-billion dollar industry. But, what most people are not 
aware of is that in order to make this a successful industry, 
we spent a ton of money promoting Hawaii. And that's the only 
way to do it.
    And right now we're in the midst of a promotion program of 
promoting our rural areas. Five years ago, very few people knew 
where Hana was, or Haiku, or Kohala. These places are now 
booming because of promotion and advertising.
    So, I'm with you, and I'm most grateful to you for your 
testimony, and I hope we can get together to figure out--as the 
Chairman indicated--how to implement your recommendations?
    Thank you very much.
    Senator Dorgan. Senator Stevens?
    Senator Stevens. Thank you very much, gentlemen. I 
appreciate your appearance and your comments.
    Senator Dorgan. Your suggestion that we also visit with the 
agencies that are involved in this is well-taken, and we will 
have those discussions, and we have actually had contact with 
them. And I think it is in our interest to--certainly Senator 
Inouye, and Senator Stevens, and myself, and others on this 
Committee--to try to see if we can put together some kind of 
legislation that advances the interest of the type we've 
discussed here today, and of the type that you've described 
today.
    Again, the travel and tourism industry is an enormous part 
of our economy. And it creates many jobs which is very 
important; so, too, is security. You've all recognized that 
today in your testimony, and if we can find a way to work with 
you and engage with you on this--the work you've done on the 
Discover America Partnership--which I'm very impressed with--if 
we can continue to work with you and others, we'd like to find 
a way to put together a piece of legislation that we can offer 
here in the Congress.
    And, Senator Inouye makes the point that all three of us 
are on the Appropriations Committee, as well.
    [Laughter.]
    Mr. Porter. Very good.
    Mr. Tisch. All the better.
    Senator Dorgan. At any rate, we thank you very much for 
your testimony.
    Mr. Porter. Thank you, Senator. Thank you very much.
    Senator Dorgan. This hearing is adjourned.
    [Whereupon, at 4 p.m., the hearing was adjourned.]
                            A P P E N D I X

Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                           Jonathan M. Tisch
    Question 1. Current law caps the number of aviation security 
screeners that the Transportation Security Administration may hire at 
45,000, regardless of the agency's budget. I've suggested the first 
thing we need to do in order to fully staff the TSA and keep airline 
passenger security lines to a minimum is to remove this arbitrary cap 
of 45 thousand security screeners. Do you agree Congress should remove 
the cap and fund the agency's staffing needs to an appropriate level?
    Answer. Concerning TSA staffing at airport security checkpoints, we 
believe there should be sufficient staff at each airport in order to 
screen business and leisure travelers in an efficient and effective 
manner. Reducing lines at peak travel times is especially important in 
order to ensure travelers do not miss their flights, and this requires 
a flexible workforce that can be scheduled to meet these hours of peak 
travel demand. This is especially important for millions of 
international travelers who land in the U.S., but must switch to 
domestic flights in order to reach their final destination. After being 
screened (inspected) by Customs and Border Protection, they must then 
be screened by TSA agents before boarding a domestic flight. Having the 
requisite number of screeners helps make the screening process more 
effective and ensures enhanced safety of air travel within the U.S. 
Often times, fully staffing an airport can be met by shifting the 
number of screeners between airports and adequately staffing during 
peak arrival times. It is important we find a way to stabilize this 
workforce, which has been characterized by high turnover, low morale 
and a high rate of on the job injuries. We should closely evaluate the 
number of screeners at all our airports and staff according to 
individual airport needs, and it is fundamentally important to find the 
balance between staffing and technology to make the system as secure 
and efficient as possible.

    Question 2. Would you agree that more investment in passenger rail 
nationwide is critical to the future of tourism? Would the U.S. tourism 
industry be more interested in economic development opportunities 
spurred by transportation infrastructure projects like railroad 
stations if there were both a Federal policy and Federal funding for 
such projects, like there is for highways and airports?
    Answer. The U.S. travel industry has long supported a well-funded 
intermodal transportation system in this country in order to provide 
true national mobility for business and leisure travelers. When we are 
not housing, feeding or entertaining visitors, various segments of our 
industry are helping travelers reach their intended destination safely 
and on time. Travel by air, rail, sea, or on the road are all essential 
elements for a prosperous travel industry now and in the future. We 
believe all levels of government (especially including the Federal 
Government and the states) must make significant investments in all 
modes of travel (including rail) in order to provide for safe and 
efficient movement of travelers to every corner of this great nation.

    Question 3. Has your company invested in economic development 
opportunities surrounding intercity passenger railroad stations in 
other countries? If so, please explain how the presence of such a 
station has affected your business.
    Answer. Loews Hotels are located principally in the U.S. (with the 
exception of two properties in Canada). We have no existing investments 
surrounding intercity passenger railroad stations in other countries 
nor plans for such currently. However, in looking at new investments, 
we do recognize the importance of passenger railroads in bringing 
people to and from destinations and the important role railways play in 
the travel and tourism experience.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                             Stevan Porter
    Question 1. Should Congress remove the cap and fund TSA's staffing 
needs to an appropriate level?
    Answer. As I discussed in my testimony before the Committee, the 
Discover America Partnership believes the United States needs to invest 
in personnel and technology in order to enhance our Nation's safety and 
security and to assure that the process does not discourage 
international travel to the United States. The TSA screening process is 
a key link in the system, both for international and domestic 
travelers. The Partnership supports efforts by Congress to assure that 
the TSA workforce is sufficient to assure an efficient and effective 
screening process at airports across the country and that it is 
flexible enough to meet hours of peak travel demand.

    Question 2. Would you agree that more investment in passenger rail 
nationwide is critical to the future of tourism?
    Answer. With hotel properties in 100 countries and territories 
around the world, InterContinental Hotels Group understands that our 
country's ability to safely and efficiently move travelers from point 
to point is essential to a robust travel and tourism industry. The 
Discover America Partnership believes that significant investment by 
states and the Federal Government in all modes of travel, including 
rail, should be a national priority.

    Question 3. Has your company invested in economic development 
opportunities surrounding intercity passenger railroad stations in 
other countries? If so, please explain how the presence of such a 
station has affected your business.
    Answer. As president for the Americas, I am not aware of any such 
projects. However. we are surveying the other IHG regions, and I will 
submit to the Committee any examples identified in that survey.
                                 ______
                                 
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to 
                               Jay Rasulo
    Question 1. Current law caps the number of aviation security 
screeners that the Transportation Security Administration may hire at 
45,000, regardless of the agency's budget. I've suggested the first 
thing we need to do in order to fully staff the TSA and keep airline 
passenger security lines to a minimum is to remove this arbitrary cap 
of 45 thousand security screeners. Do you agree Congress should remove 
the cap and fund the agency's staffing needs to an appropriate level?
    Answer. Concerning TSA staffing at airport security checkpoints, we 
believe there should be sufficient staff at each airport in order to 
screen business and leisure travelers in an efficient and effective 
manner. Reducing lines at peak travel times is especially important in 
order to ensure travelers do not miss their flights, and this requires 
a flexible workforce that can be scheduled to meet these hours of peak 
travel demand. This is especially important for millions of 
international travelers who land in the U.S. but must switch to 
domestic flights in order to reach their final destination. After being 
screened by Customs and Border Protection, they must then be screened 
by TSA agents before boarding a domestic flight. Also, having the 
requisite number of screeners can also help make the screening process 
more effective and ensure enhanced safety of air travel within the U.S.

    Question 2. I understand your company was interested in developing 
a passenger rail system linking your theme park with the Orlando 
International Airport. Would you agree that more investment in 
passenger rail nationwide is critical to the future of tourism?
    Answer. Providing for safe and efficient movement of travelers in 
all regions of the country is certainly a worthwhile investment. When 
we are not housing, feeding or entertaining visitors. various segments 
of our industry are helping travelers reach their intended destination 
safely and on time. Travel by air, rail, sea, or on the road are all 
essential elements for a prosperous travel industry now and in the 
future.

    Question 3. Would the U.S. tourism industry be more interested in 
economic development opportunities spurred by transportation 
infrastructure projects like railroad stations if there were both a 
Federal policy and Federal funding for such projects, like there is for 
highways and airports?
    Answer. As stated in response to the previous question, we agree 
with the U.S. travel industry in that a well-funded intermodal 
transportation system, including air, rail, road and sea, is essential. 
Proper public investment in these areas can spur private sector 
development opportunities.

    Question 4. Has your company invested in economic development 
opportunities surrounding intercity passenger railroad stations in 
other countries? If so, please explain how the presence of such a 
station has affected your business.
    Answer. New train stations in France have supported new development 
for Disneyland Resort Paris, and we believe these investments can be 
worthwhile for spurring private sector development.
                                 ______
                                 
 Response to Written Question Submitted by Hon. Frank R. Lautenberg to 
                              James C. May
    Question. Current law caps the number of aviation security 
screeners that the Transportation Security Administration may hire at 
45,000, regardless of the agency's budget. I've suggested the first 
thing we need to do in order to fully staff the TSA and keep airline 
passenger security lines to a minimum is to remove this arbitrary cap 
of 45 thousand security screeners. Do you agree Congress should remove 
the cap and fund the agency's staffing needs to an appropriate level?
    Answer. The simple answer is that the Transportation Security 
Administration should be given all the resources it needs to implement, 
in the most efficient and effective way, the Congressional mandates in 
the Aviation Transportation and Security Act (ATSA). In ATSA, Congress 
very clearly required the Federal Government to provide for the 
screening of all passengers and property, including cargo, carried on 
passenger aircraft. In fact, Congress specifically required that the 
screening ``shall be carried out by a Federal Government Employee.''
    The security issues facing America and the Department of Homeland 
Security are very significant. Indeed, the Comptroller General of the 
United States submitted testimony on February 7, 2007, to the Congress 
on the security challenges facing this country and the DHS. With 
respects to all modes of travel, GAO complemented DHS by saying that 
progress has been made ``particularly in aviation'' and that ``DHS and 
TSA have taken numerous actions to strengthen commercial aviation 
security, including strengthening passenger and baggage screening, 
improving aspects of air cargo security, and strengthening the security 
of international flights and passengers bound for the United States.''
    That GAO testimony praised TSA for using covert testing and other 
means to measure effectiveness of airport screening systems and for 
working to enhance passenger and baggage screener training. GAO also 
noted that TSA has modified airport screening procedures based on risk. 
On the negative side, GAO said that TSA continues to face challenges in 
implementing a program to match domestic airline passenger information 
against terrorist watch lists and in ``fielding needed technologies to 
screen airline passengers for explosives.''
    The GAO did raise an across-the-board criticism of DHS for not 
basing program investments on risk analysis. I believe the more 
detailed answer to your question depends on a thorough risk-analysis of 
all facets of the security problems facing this Nation. Since the air 
transport industry represents only one segment of the full picture, I 
would propose that the Congress undertake to hold hearings on the 
matter you raised so that all the security needs of the U.S. could 
properly be balanced before a decision is made as to whether to raise 
that cap, or not.
    TSA has come a long way in just a few years and is doing an 
effective job of ensuring the security of our air transport system 
within the budget provided by the Congress. TSA has been coordinating 
with the Air Transport Association. The ATA and our member airlines 
will continue to work with the TSA to address new security concerns and 
to look for additional ways to improve the experience of airline 
passengers.
                                 ______
                                 
        Restoring America's Travel Brand--A National Strategy to 
        Compete for 
        International Visitors (September 5, 2006) has been retained in 
        Committee files.

                                  
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