In the past decade, airlines, hotels, cruises — and all that goes with them — have had to cope with everything from grounded planes after the Sept. 11 terrorist attacks to swine flu to volcanic ash to skyrocketing gasoline prices to a devastating economic slump — and now the massive oil spill in the Gulf of Mexico.
“I’m just waiting for the locusts to come down and start picking up people on the golf courses,” said Roger Dow, president and CEO of the U.S. Travel Association. “If people say that Sept. 11 was a perfect storm, I believe now that that was just partly cloudy with a chance of showers.”
The travel industry lost more than 400,000 jobs during the 2008 and 2009 fiscal years, dropped 37 percent in market share of global travelers after 1994 and had about 41 million Americans cancel their travel plans annually, according to the U.S. Travel Association. Commerce Department figures show that 633,000 fewer overseas travelers chose the United States as a destination in 2008 than in 2000.
But experts say the cloud hanging over the travel industry is showing signs of lifting — because of, in part, a helping hand from Congress.
The industry got a lift in March from Washington when President Barack Obama signed the Travel Promotion Act, which formed a national tourism board, among other things. The board is tasked with coordinating advertising and drumming up interest in travel to the U.S. from abroad and will also help streamline visa applications for overseas travelers.
“When international visitors come to the United States, they spend money on a wide range of goods and services that support U.S. jobs,” Commerce Secretary Gary Locke said when the Travel Promotion Act was signed. “Creating a global tourism promotion program to encourage international visitors to vacation in America will help spur economic growth and create more jobs.”
An independent analysis by Oxford Economics showed that the program has the potential to attract more than 1.6 million visitors from around the globe and more than $4 billion in additional consumer spending. Plus, it can create at least 40,000 jobs in the U.S. Moreover, the nonpartisan Congressional Budget Office predicts the act will help cut the federal deficit by $425 million during the next decade.
Estimates put the amount of money that foreign visitors spend in the U.S. at about $4,500 per person per trip. And Jonathan Tisch, chairman and CEO of Loews Hotels, believes every member of Congress has a vested interest in tourism and how it affects constituents and local economies.
“You can make a broad statement that travel and tourism takes place in all 435 congressional districts. We have met with literally hundreds of members of Congress to try educating them about a strong travel and tourism industry,” Tisch told POLITICO. “Properly supported, our industry can be a vehicle for job creation and economic growth.”
But travel experts say the industry isn’t relying on government action to overcome the plethora of obstacles that have fallen its way.
Airlines, hotels, cruises, restaurants have also had to rethink the way they interact with each other, since they are now part of a larger, interconnected travel experience. The thought behind it, Dow told POLITICO, is that air travelers also need places to stay and eat when they arrive and perhaps cars to get around.
“It’s not so much of recovering, as it is adapting and managing and continuing to grow,” said Bob Sharak, executive vice president of marketing and distribution for the Cruise Lines International Association.
The cruise industry has seen steady growth since 1980, Sharak said, and has been relatively insulated from many of the economic woes that have swamped other modes of travel.
But Jim May, president and CEO of the Air Transport Association of America, is quick to note the airline industry has not had similar good fortune and that drastic measures had to be taken.
“Fuel prices have moderated, and we took some pretty draconian measures to curb capacity to streamline our operations to make sure that we right-sized the work force,” May said. “Those economizing measures have made a big impact.”
Perhaps the biggest hurdle facing the industry has been “building the case of why travel matters,” Dow said. That’s no easy feat when an unemployment rate of nearly 10 percent forces most Americans to keep close tabs on their wallets, Tisch said.
In the past few years, though, businesses had to cut back on travel, in part, because of the stigma tied to what were considered to be superfluous expenditures. When news broke that financial giant American International Group was paying its top executives huge bonuses despite receiving a federal bailout from the Troubled Asset Relief Program, many companies cut back on travel, conferences and costs that could be seen as unnecessary.
Even the president stepped into the fray, suggesting that big corporate executives seeking federal bailouts shouldn’t be hanging out in Las Vegas.
“After the financial crisis, there was the vilification and grandstanding against people having meetings and events and incentive trips,” Dow said.
Air Transport Association’s May said the halt in business travel was mostly a “misguided approach by some in government that would suggest that you shouldn’t go off to have business meetings and that there wasn’t a justifiable reasoning.”
“When you stop business travel, you’re not hurting the fat cat with cigars; you’re hurting the bellman, the waitress,” Dow said.
“It’s as much a function of the economy beginning to turn around some, but people [are] recognizing that they need to travel to do business,” May said, adding that the airline industry is finally experiencing an uptick in business flights. “We’re seeing a very significant growth in business travel, but it’s only been very recent.”
Overall, experts remain bullish about the industry. They’ve already seen growth during the past year and say they hope to begin recovering much of what was lost in the past decade.
Projections from the U.S. Travel Association for this year, released at the end of last year, show leisure travel increasing 2 percent, business travel up by 2.5 percent and international inbound travel increasing by almost 3 percent.
“Travel and tourism aren’t just fun things to do. They’re the lifeblood of the economy,” Dow said. “There’s no question that it’s a turning-point year. When you’re hearing people talking about the oil spill, they’re mentioning concerns about travel and tourism. Our footprint is growing.”