PRESS RELEASE

FOR IMMEDIATE RELEASE
Contact: Debra Kelman Loew
212.794-3577

Travel Business Roundtable Criticizes Rescission of Funds for Historic International Destination Marketing Campaign

February 5, 2004

Washington, D.C. — In a recent letter to Commerce Department Secretary Don Evans, the Travel Business Roundtable (TBR) expressed its strong disappointment that the vast majority of funding for an international destination marketing campaign has been rescinded. Specifically, $40 million of the $50 million appropriated by Congress for the campaign was rescinded in the FY04 Omnibus Appropriations bill. Congress originally appropriated the funding as part of the FY03 Omnibus Appropriations bill, which was signed into law last February and marked the first time the U.S. had allocated federal funds to brand and market the country as an international destination.

The original legislation also called for the Commerce Department to create the Travel and Tourism Promotion Advisory Board to oversee an advertising and marketing campaign to encourage individuals to travel to the United States. The Advisory Board of 15 industry leaders in the travel and tourism industry was announced in August, five months after the statutory deadline to do so had expired. The Board includes 12 members whose companies are also TBR members including TBR Chairman Jonathan Tisch, also Chairman and CEO of Loews Hotels.

A large contributing factor to the rescission was that the funds were not obligated in a timely manner, thus leaving them vulnerable to cuts. Secretary Evans convened the first meeting of the Board in September and outlined an aggressive campaign targeting Canada, Mexico, the United Kingdom, Japan and Germany, as well as a complementary regional grants program; however, the funds had not been obligated by January when the FY04 Omnibus Appropriations Conference Report was enacted. And, because the rescission language was inserted into a non-amendable conference report æ one that contained long-delayed annual funding for a number of key agencies of the Federal government æ it was impossible to remove the language.

TBR is concerned that the remaining $10 million may be subject to further cuts as the Commerce Department tries to fulfill an additional $100 million rescission obligation against its overall FY04 budget. It is feared that with further cuts, the program could be whittled down to a little more than a pilot program. Given the enormity of the cuts already made to the program, TBR sent a letter to Secretary Evans asking to spare the remaining funds from any further decrease.

"We are extremely disappointed about this distressing turn of events," notes Tisch. "The U.S. would have had federal funds to help re-ignite our nation's vital travel and tourism industry. Without a cohesive effort to promote the U.S. abroad, we will continue to lose market share, causing further job loss and the loss of millions of dollars in revenue and tax dollars that are critical to federal, state and local economies."

Since September 11, 2001, international travel has declined significantly resulting in the loss of millions of jobs in aviation and travel. From their peak of approximately 51 million in 2000, international arrivals to the U.S. have continued to decline, dropping to approximately 42 million in 2002. Also notable, international spending in the U.S. dropped from $82 billion in 2000 to $66.5 billion in 2002. The U.S. has dropped to third place as the most visited destination, behind France and Spain. However, the potential to grow the industry offers tremendous rewards. A one percent shift would result in the creation of 154,000 new jobs in the travel and tourism industry.

TBR and other industry organizations are continuing to work closely with Congressional allies on the Hill and the Department of Commerce to try and avoid further cuts from the remaining destination marketing funds, which are critical to revitalizing the U.S. travel and tourism industry.

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