These are some of the public policy issues facing the industry regarding travel and tourism:

• Machine readable passports
• Destination marketing
• Presidential advisory council on travel and tourism
• Business meal deduction

Visa/Machine Readable Passport Issues
The travel and tourism industry chalked up an important victory in its ongoing campaign against federal policies that fail to balance national and economic security. The U.S. Department of State announced Sept. 9, 2003, it will grant one-year waivers to certain key international travel markets for the U.S. that are still replacing passports with high-tech, machine-readable passports, or MRPs. Significant U.S. trading partners such as Italy, Spain, Switzerland and France were not ready to fully comply with the new rules but are rapidly making progress.

The announcement comes just weeks before a scheduled Oct. 1, 2003, deadline to require visitors entering the U.S. from 26 of the 27 Visa Waiver Program countries to have the newer passports or obtain U.S. visas. The travel and tourism industry has argued forcefully that not enough travelers would have the newer passports by the Oct. 1 deadline and called on the State Department to exercise the authority granted to it by Congress to delay MRP requirements in specific countries in order to facilitate continued travel to the U.S. from those important tourism markets.

While the industry supports the use of machine-readable passports, the acceleration of this MRP deadline in the USA Patriot Act from 2007 to 2003 left several countries scrambling to distribute the new documents. Millions of potential visitors from several of these Visa Waiver Program countries do not yet have machine-readable passports, and this deadline would have created yet another travel barrier, and further reduced international travel to the U.S., which declined by 20 percent between 2000 and 2002.

The travel industry stands squarely in support of national security and will continue to work with the White House to advance policies that do not upset the crucial balance between homeland security and the economy. This latest action by the Department of State has demonstrated that reasonable policies can prevail.

Destination Marketing
The historical reluctance of the U.S. government to allocate any resources for promoting our country as a travel destination has had a clear-cut bottom-line impact, not only on the U.S. travel and tourism industry, but also on the health of the U.S. economy. In 1996, travel and tourism generated a balance of trade surplus of nearly $26 billion for the United States. In 2001, that trade surplus had declined an astounding amount to $8.6 billion.

Not surprisingly, the U.S. share of the increasingly competitive and lucrative international travel market also declined. The United States is now the third most sought-after travel destination in the world, behind France and Spain, and the global competition for tourist dollars continues to grow. According to the World Tourism Organization, travel and tourism economic activity accounted for 11.7 percent of world GDP in 1999. Global tourism receipts reached $463 billion in 2001. And global travelers are expected to grow to 1.56 billion by the year 2020.

In response to these trends, many foreign governments are devoting ever-increasing budgets to tourism promotion. For example, here are some of the per-country expenditures on tourism promotion in 1997: Spain ($147.0 million), Mexico ($103.2 million), Brazil ($92.3 million), Australia ($87.5 million), France ($58.2 million), New Zealand ($32.8 million), and Germany ($26.6). The evidence suggests that there is a direct correlation between the amount a country spends on tourism promotion and the number of international tourist visits it receives each year.

In addition, each of the 50 states has established an official government-sponsored office or bureau to promote tourism. In fiscal year 2001, for example, Texas appropriated nearly $20 million to fund its Department of Tourism Development as part of its effort to attract visitors to the Lone Star State; California and Florida, as do many other states, have similar programs. Moreover, in 1999-2000, states spent a total of more than $159 billion domestically and $27 billion internationally to advertise their desirability as tourist destinations.

The industry applauds President Bush and Congress for the unprecedented appropriation of $50 million to the Department of Commerce in fiscal year 2003 for an international destination marketing campaign. Language accompanying the appropriation called for the creation of the U.S. Travel and Tourism Promotion Advisory Board—a bipartisan cross-section of the travel-and-tourism industry comprised of 15 senior U.S. travel and tourism industry executives, including National Restaurant Association Board member Bill Hyde (Ruth’s Chris Steak House, Metairie, La.). The board will make recommendations on advertising and marketing programs that would encourage international visitors to travel to the United States. The campaign will also include a matching grants program to support regional promotion efforts.

This represents a very important first step toward helping the United States regain market share. The industry further supports permanent funding for an aggressive international campaign to be established.

Presidential Advisory Council On Travel And Tourism
Tourism is an unsung hero of the U.S. economy. Over the course of the past eight years, it has generated more than 56.7 million jobs, $3.7 trillion in expenditures, $622 billion in state, local and federal taxes and $157 billion in trade surpluses. Despite such robust economic performance, tourism’s contributions to the prosperity of American life have not been fully recognized, understood nor strategically developed by many policymakers for what it is: A powerful driver of jobs, community development, small business growth and export generation.

The United States’ tourism policy was previously coordinated to some extent through the United States Tourism Administration (USTA), which operated under the Department of Commerce with an annual budget of approximately $17 million. The administration was abolished due to congressional budget cuts and a perception among many policymakers that the organization was not achieving its mission. Its successor, the Tourism Industries office within Commerce’s International Trade Administration, operates on a small budget and is largely a statistical resource for inbound travel data. It has neither the resources nor the directive to promote the U.S. as a desirable travel destination overseas.

This lack of strong, coordinated U.S. government support puts the U.S. travel and tourism industry at a sharp disadvantage to its international competitors. More than 130 countries have official, government-sponsored tourism offices. These nations have recognized that a coordinated national tourism policy fulfills numerous domestic goals. This reality is borne out by the fact that the U.S. has fallen behind in recent years to become the third most popular travel destination in the world—behind France and Spain. Not surprisingly, both of these countries provide significant annual funds to their national tourism promotion offices.

The industry advocates the establishment of a Presidential Advisory Council on Travel and Tourism to help the U.S. retain its edge against its competitors as the premier travel destination in the world. The Council would be created by Executive Order as a federal advisory committee under the Federal Advisory Committee Act (FACA). It would be comprised of not more than 35 presidentially appointed members from the private, public and non-profit sectors. These members would include Cabinet members, members of Congress, mayors, governors and industry leaders. The Council would pursue four essential objectives:

• Foster tourism policy development and coordination within the federal government
• Demonstrate how effective tourism policy can be implemented
• Raise awareness of the economic importance of travel and tourism
• Develop appropriate benchmarks to measure tourism policy success

The Council’s activities would include:

• Reviewing current policies and programs that support tourism export growth
• Performing a marketplace needs assessment
• Identifying replicable examples of effective tourism export policy from other countries
• Recommending policy improvements and additional opportunities to advance U.S. tourism exports abroad
• Advising the president on policies that would foster fiscal prosperity and growth for small tourism-related businesses
• Advising the president on domestic policies and approaches that can promote community-based tourism development, particularly in rural and economically depressed areas
• Creating and participating in projects that help forge partnerships among representative of federal and state agencies, urban centers and rural communities, with the goal of creating a strategic vision for community-based tourism development

Business Meal Deduction
The reduction of the business meal and entertainment deduction from 100 percent to 50 percent has negatively affected the travel and tourism industry and the business customers it serves. The cut has been particularly punitive to the small business community, including restaurants.

Research completed in 1998 showed that business meal users and providers cut across demographic lines: One-fifth of business meal users are self-employed; More than two-thirds of business meal users have incomes of less than $60,000 and 37 percent have incomes below $40,000; and low- to moderately-priced table service restaurants are the most popular provider of business meals, with the average check equaling less than $20.

During the 107th Congress, the National Restaurant Association supported several bills that would have increased from 50 to 80 percent the deduction for business meal and entertainment expenses. A temporary increase in the deduction was proposed for inclusion in one version of the economic stimulus legislation last year, but was not retained in the final version, which became law in March 2002.

This Congress, Rep. Mark Foley (R-Fla.) has introduced H.R. 2094, a bill to increase the allowable tax deduction for business-meal spending from 50 percent to 80 percent.

Spousal Travel Deduction
The elimination of the spousal travel tax deduction negatively affected the travel and tourism industry and the business customers it serves, even before Sept. 11, 2001. Restoration of this tax deduction would have a tremendous impact on both the industry and the U.S. economy.

By allowing for the deduction of the travel expenses of a taxpayer’s spouse who accompanies that taxpayer on business travel, government would not only be supporting a pro-family initiative, they would be increasing the demand on travel and tourism. Two airline tickets would be purchased instead of one; two people would dine in a restaurant instead of one; and two people would visit cultural attractions and shop in retail establishments instead of one.

Sen. Lindsey Graham (R-S.C.) in July introduced a bill in the Senate that would permanently restore the spousal travel tax deduction. The legislation (S.1408) was co-sponsored by Assistant Minority Leader Harry Reid (D-Nev.) and Sen. Zell Miller (D-Ga.). In the House of Representatives, Rep. Neil Abercrombie (D-Hawaii), a long-time champion of the re-institution of the spousal travel deduction, also has a bill (H.R. 1313), introduced earlier this year, that would permanently restore the deduction.

Note: This information was compiled through the assistance of the Travel Business Roundtable (TBR), of which the National Restaurant Association is a member, and for which Association President and Chief Executive Officer Steven C. Anderson serves as treasurer. To access the TBR’s Web site, log onto www.tbr.org