NEW YORK, June 5, 2017 – Jonathan M. Tisch, Chairman and CEO of Loews Hotels & Co., today called on the travel and hospitality industry to unite to support pro-travel policies and protect against a second “Lost Decade” for global travel to the U.S. Tisch addressed these topics in his keynote address at the 39th Annual NYU International Hospitality Industry Investment Conference.
Tisch called for the industry to exert its leadership in response to a flurry of recent policies that could impact international travel to the U.S., including calls for “extreme vetting,” executive orders on immigration, and the proposed elimination of Brand USA. Tisch cited the anti-travel environment after 9/11 as a troubling precedent, when the U.S. lost over $600 billion in traveler spending and 467,000 jobs during a “Lost Decade” for travel.
“Ending this ten-year slump required a united industry effort to push for pro-travel policies,” said Tisch. “We learned some valuable lessons that we need to put into action again today.”
Tisch highlighted the need for the industry to communicate travel’s importance to new political leaders, including its impact on U.S. economic growth, jobs, and the trade deficit. He noted that travel generated $246 billion in U.S. exports last year, cutting nearly $90 billion off America’s trade deficit.
“Travel drives the U.S. economy,” Tisch said. “It’s our job to engage the new leadership in Washington to make sure they understand the role we can play in achieving our shared economic goals. If the Trump administration really wants to cut the trade deficit, they’ll need our help.”
According to Tisch, shaping the promised $1 trillion infrastructure investment program opens another leadership opportunity. “We need to make sure improving our aviation infrastructure – our airports, runways and other essentials – is front and center,” said Tisch. “We can help achieve these goals by making the travel industry a major player in the debate over American infrastructure investment.”
Tisch also strongly defended Brand USA, which was zeroed out in the Trump administration’s new budget proposal. Eliminating Brand USA “makes no sense on a policy level,” Tisch said. “It’s completely at odds with the administration’s own economic goals.”
“Eliminating Brand USA will increase the federal deficit by $510 million over three years. And by reducing international travel to the U.S., it will also widen America’s trade deficit,” said Tisch.
Tisch called on the travel industry to take a coordinated, proactive stance on these imperatives: “For years and years, we fought hard to get a seat at the table. Now it’s time to use that position: To protect the gains we’ve made. To seize the opportunities that lie ahead. And to launch travel on its next phase of growth.”
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Thank you very much Dennis.
I appreciate the kind introduction and I’m excited to welcome you all to the NYU International Hospitality Industry Investment Conference.
This is our 39th year – and every spring this conference is a milestone event on my calendar.
I always enjoy hearing from the travel and hospitality industry’s most influential voices.
I’m energized by the students who make this event possible as they prepare to launch careers in our industry.
And I value the chance to step back from the day-to-day responsibilities of running a hospitality company … to reflect on the opportunities I see ahead for our industry … and to work with all of you to help shape our future.
We have some great panels and speakers this year.
- CEOs Thomas Baltimore of Park Hotels and Resorts … Sebastien Bazin of AccorHotels … Mark Hoplamazian of Hyatt Hotels … and Dara Khosrowshahi of Expedia will discuss the impact of a changing consumer base and rising competition.
- Our Leaders’ Forum will feature Eric Danziger of Trump Hotels … David Kong of Best Western Hotels & Resorts … James Murren of MGM Resorts … James Riley of Mandarin Oriential Hotel Group … and J. Allen Smith of Four Seasons Hotels and Resorts.
- We have panels of a wide range of topics – including a session on how Airbnb and online travel agents are using technology to disrupt the hospitality industry.
But I’d like to kick off the conference by discussing an issue many travel leaders are debating …
How will the new administration’s policies impact the travel industry – especially international travel?
Travel’s Goal: Secure Borders and Open Doors
In the past few months, we’ve seen a flurry of announcements from the White House that could have a significant impact on our industry.
- Two executive orders relating to immigration … perceived and referred to across the world as a “travel ban” …
- A new ban on laptops on flights from the Middle East … and news reports suggesting it may be extended to all travelers flying to the U.S. from Europe…
- Calls for “extreme vetting” of travelers from U.S. allies – countries like France, Germany and Australia … including requirements that visitors hand over cell phones and provide access to social media accounts.
Of course, the travel industry supports efforts to remain vigilant in the face of security threats to the U.S.
But as Colin Powell always said … we need to have both secure borders and open doors.
Because when it comes to a business as competitive as travel, we need to remember that words matter. Perceptions matter. The way the administration’s policies are portrayed to the world matters.
In other words, it’s important to balance security measures designed to keep out people who mean us harm … with words and actions assuring legitimate travelers that we welcome them and their business.
A recent international survey ranked public perceptions of a country’s openness to travel ... and the U.S. didn’t even crack the top 20.
Those views didn’t develop in just the last four or five months. But we haven’t done anything to reverse them either.
Let me be clear about one thing: I’m not raising these concerns as a Democrat or a Republican. I’ve worked with both parties … in the White House and in Congress … to advance the travel industry.
And I look forward to working with the Trump Administration to promote policies that will help America succeed.
It’s also too early to measure the full impact of these policies on travel to the U.S. The official Commerce Department data won’t be available for several months. But as we enter the summer season which is the busiest for international travelers, there’s been some anecdotal evidence that raises a few caution flags:
- Since the first travel ban was announced, several groups have cancelled trips to the U.S., including Canada’s largest school district.
- At our own hotel in Miami, we have had groups cancel because there is just ONE attendee from a travel ban country;
- Emirates airline cut flights to five U.S. cities, including Boston, Los Angeles, and Orlando – tracing the move to recent government policy changes.
- NYC & Company – the destination marketing agency for New York – forecasts that the new travel policies will mean 700,000 fewer foreign travelers in 2017 – costing more than $1 billion in lost revenue. In response, NYC & Company has already launched a $3 million, international tourism campaign. The tagline? “All Are Welcome.”
Again, this is mostly anecdotal evidence. We all hope the data on travel to the U.S. remains positive. But no one can deny the tremendous uncertainty people feel about traveling to the U.S. right now.
U.S. travel leaders can’t afford to wait to see if that growing uncertainty starts to hit our businesses and bottom line. The travel industry must take a leadership role now.
After all, we tried the “wait and see” approach before. And the results were not good.
Lessons of the “Lost Decade”
In the wake of 9/11, an anti-travel political climate severely impacted international travel to the U.S.
Visa requirements were tightened. Political rhetoric ratcheted up. Policymakers saw national security and inbound international travel, as conflicting goals.
The result was a “Lost Decade” for our industry – with far reaching consequences for America’s economy.
While global travel boomed, the U.S. was left out.
Around the world, travel spending jumped nearly 90 percent. The U.S. saw just 13 percent growth.
That “Lost Decade” cost our country over 68 million visitors … $606 billion in traveler spending … and 467,000 jobs.
Ending this ten-year slump required a united industry effort to push for pro-travel policies.
We learned some valuable lessons that are even more actionable today.
The travel industry dropped the narrow, siloed thinking that undercut our strength and limited our influence in the public policy arena.
Instead, we stopped seeing ourselves as just hotels or destinations or rental car companies – and joined together as a single industry.
The result was the passage of the most ambitious travel agenda ever: The Travel Promotion Act … the creation of Brand USA … visa reform … improving the customs and entry process … a new national goal to attract 100 million international visitors every year.
These policy “wins” not only helped the travel industry – they allowed travel to play a major role in lifting America out of the recession. They established travel as a major driver of economic growth and job creation. And they raised our visibility in Washington – giving us a seat at the table that we need to use again.
Thinking back over the past decade, these victories may seem like ancient history.
But here’s a fact that puts things in perspective: By one measure, international travel to the U.S. did not return to pre-9/11 levels until December 2016. According to the U.S. Travel Association, international travel’s share of total U.S. exports just recently reached the highs set back in 2000.
So as we gather today at the crossroads of the world, as we’ve finally climbed all the way back … we frighteningly face political headwinds once again.
Together, we must take action now to ensure that today’s uncertainties don’t turn into tomorrow’s next lost decade of travel.
- We cannot be complacent.
- We cannot sit back and wait.
- We cannot assume that our past success is permanent.
Our Challenge: Renew the Fight for Travel
So, how do we do it? How do we demonstrate leadership? How do we protect our hard-won gains … and push for greater progress?
I see three opportunities:
First, we must take responsibility for communicating the importance of travel to Washington’s new political leadership.
We have a new Administration and a Congress. For many key decision-makers, this is their first time working in Washington or government.
We should not presume they all understand travel’s critical role in powering America’s economy. If we as an industry don’t speak up … to inform, to educate, to persuade … who will?
Remember, the Obama Administration didn’t exactly take office with an idea of promoting travel. We had our shares of ups and downs – including the president himself calling on companies to cancel trips to Las Vegas.
But our persistence paid off. And in the end, we won over the Obama Administration. They became strong supporters of our industry and this paved the way for those historic policies I mentioned earlier.
How do we achieve the same success with the Trump Administration? I see a couple areas that should resonate with them.
#1: Travel’s impact on America’s economy: The travel industry generated $2.3 trillion in economic impact last year. Without a thriving travel industry, the U.S. economy will suffer.
#2: Travel’s impact on American jobs: Our industry supports over 15 million jobs. About 1 in 9 American jobs depends on travel. These are good, middle-class jobs that put millions of people on a pathway to the American Dream. And unlike jobs in other industries, travel jobs can never be exported.
#3: Travel’s impact on our trade deficit: Last year, travel generated $246 billion in exports. That’s the most of any services industry … far more than financial services, for example. Those travel exports cut nearly $90 billion off America’s trade deficit. If the Trump Administration really wants to cut the trade deficit, they’ll need our help.
Here’s the bottom line: Travel drives the US economy. That fact is indisputable. It’s our job to engage the new leadership in Washington … to make sure they understand the role we can play in achieving our shared economic goals of more growth, more jobs, and more U.S. exports.
The second leadership opportunity for travel is to shape the promised $1 trillion infrastructure investment program.
The White House and Congress … Democrats and Republicans … now agree that America desperately needs to invest in its infrastructure.
The President plans a major speech this week outlining his vision. According to news reports, the administration wants to lead a vast public-private partnership – leveraging corporate resources with federal, state and city tax revenues to speed investment and jump start construction.
This is an innovative approach that will enlist the energies of many of us in the room. We should welcome the opportunity to take a leadership role in this effort.
Our job as travel industry leaders is to make sure improving our aviation infrastructure – our airports, runways and operating systems – is “front and center.” We also need to remind Washington not to forget the need for federal resources to back up this new partnership.
Many of you in this room know the critical players in this debate. People like Steve Roth and Richard LeFrak, who head President Trump’s infrastructure council. And Gary Cohn, Director of the National Economic Council, who plays a key role in economic policy.
We need to use these relationships to make sure travel’s voice is heard. Because right now, the debate is dominated by local interests with a limited perspective. Everyone has a pet project in their city, district or back yard.
Our industry is the only stakeholder that represents the needs of the average traveler. This gives us a unique perspective and insight. Because let’s face it: Traveling today isn’t easy and the end-to-end travel experience isn’t getting any better.
For example … the rest of the world has upgraded its airports. Yet America’s have languished with underperforming facilities and outdated systems.
For the past few years, at this forum, you have heard me raise this issue. But the facts remain the same. Here’s just one: In an annual ranking of the world’s top 100 airports, the best the US can do is 26th place. And that’s not New York or Chicago or Los Angeles or any of our major gateways.
On the campaign trail, President Trump criticized American airports as “third world.” Now that he’s in the White House, we need to work together to give Americans the airports they deserve.
This requires desperately needed capital investment in upgraded runways, gates and terminals to alleviate airport gridlock.
We also need modern technology – like replacing our World-War-II-era, radar-based air traffic control system with the satellite-based NextGen. After all, don’t you think the technology directing our planes should be at least as sophisticated as the GPS system used by the average Uber driver?
Fully implemented, this single innovation would reduce delays by 41 percent and create $38 billion in savings by 2020.
Modernizing our airports and upgrading our aviation system so they rank among the world’s best won’t just improve the experience for travelers. It will grow travel … turn more U.S. cities into global business and leisure hubs … and spur economic expansion and job creation across America.
We can help achieve these goals by making the travel industry a major player in the debate over American infrastructure investment.
Third, we need to strengthen programs that promote travel and protect them from political attack.
At the top of the list is Brand USA – which has been zeroed out in the Trump Administration’s budget proposal.
I have to admit, I didn’t see this coming. If anyone should understand the value of a “brand” and the need to market it effectively … it should be Donald Trump.
It also makes no sense on a policy level. It’s completely at odds with the administration’s own economic goals.
According to its own proposed budget, eliminating Brand USA will increase the federal deficit by $510 million over three years. And by reducing international travel to the U.S., it will also widen America’s trade deficit.
A bigger budget deficit and a larger trade deficit … I don’t remember those promises from the campaign trail.
Why is Brand USA so critical now?
Consider this … the market for international travelers has never been more competitive. Brand USA makes the case to a global audience about the rewards and excitement of traveling to the U.S. Destination marketing organizations do the same for their regions.
Brand USA counters negative perceptions of travel to the U.S. It’s the only organization dedicated to both promoting the U.S. as a travel destination and educating travelers about security and visa requirements. And it lets people around the world know they’re welcome in the U.S.
Brand USA has proven highly effective in this mission. It doesn’t spend a dime of taxpayer money. And every dollar of Brand USA marketing generates $28 in visitor spending – a return on investment unheard of in Washington.
The benefits of Brand USA ripple across America:
- Nearly $9 billion in economic impact
- $1.2 billion in federal, state and local taxes
- Nearly 60,000 American jobs.
With U.S. immigration and security policies in flux, Brand USA is essential to helping travelers understand and navigate these new and changing requirements. The Trump Administration shouldn’t be cutting Brand USA … it should be embracing it.
Despite their value, destination marketing organizations are also under attack at the state and local level.
Take the case of Visit Florida.
In the past five years, Visit Florida has helped attract record numbers of visitors and support 1.4 million jobs. Yet, the Florida legislature recently punished this success by proposing a 67 percent budget cut. The new budget would provide just $25 million for Visit Florida – one fourth of the governor’s requested $100 million.
Similar cuts loom around the country, from Massachusetts to North Dakota. Even in tourist-dependent Las Vegas, the convention and visitor’s authority is under attack.
When destination marketing programs are cut, the explanation is always basically the same … some version of “our region sells itself” so there’s no reason to invest.
Pennsylvania illustrates how self-defeating these cuts can be. From 2009 to 2014, the state slashed $125 million in tourism marketing. The result: 37 million fewer tourists and $7.7 billion in lost visitor spending.
The travel industry and our economy as a whole have a huge stake in Brand USA and destination marketing organizations across the country. We can’t sit back and let these political attacks go unanswered. We need to take action to protect these vital programs.
Call to Action: Stand Up for Pro-Travel Policies
So those are the opportunities I see for travel to navigate the current challenges and secure a bright future for our industry and our co-workers:
- Communicate travel’s tremendous benefits to help a new group of policymakers in Washington understand how travel can help achieve America’s economic goals …
- Get deeply engaged in the coming infrastructure debate to promote investments that benefit travel and can drive our economy for decades to come …
- And stand up for valued programs like Brand USA that are under political attack.
I’m sure many of you in this room have other great ideas – this conference is the perfect place to share them and to generate more.
That’s my hope: that this conference continues to be a platform for collaboration, partnership and unity. Every success over the past decade was won because travel came together as an industry … united behind an agenda that would benefit all … and articulated with one voice.
Travel’s call to lead on these issues is really a reflection of our rising impact on the U.S. economy and our widening influence in key policy circles.
For years and years, we fought hard to get a seat at the table. Now it’s time to use our position: To protect the gains we’ve made. To seize the opportunities that lie ahead. And to launch travel on its next phase of growth.
Thank you very much. Enjoy the conference.