Promoting Economic Growth Through Tourism

Tourism is a big business in the United States, but one that has taken a beating in the years since the tragic events of September 11, 2001. Strict new security rules, along with more intrusive searches and traveler information requirements all contributed to the sense that America was rolling up the red carpet for international visitors.

Earlier this month, a Senate subcommittee held a hearing to discuss the challenges facing the travel and tourism industry, and the measures being taken to create a more efficient and welcoming travel experience at U.S. ports of entry. In his remarks to the Senate Subcommittee on Competitiveness, Innovation, and Export Promotion, Senate Commerce Committee Chairman Jay Rockefeller noted:

“Between 2000 and 2009, while global international travel exploded, travel to the U.S. lagged behind. According to the U.S. Travel Association (USTA), in 2009, we had 2.4 million fewer overseas travelers than in 2000, a decline that cost our economy more than $500 billion in total spending.” (See Testimony of Chairman John D. (Jay) Rockefeller IV, before the U.S. Senate Commerce Subcommittee on Competitiveness, Innovation, and Export Promotion, 05.Apr.2011.)

Senator Rockefeller pointed with pride to the Travel Promotion Act of 2009, which became law last year, creating a national tourism board that promotes U.S. destinations in overseas markets, and works with government agencies to make visa and entry policies more welcoming and user-friendly. The Board is funded by a $10 travel promotion charge, part of the $14 fee required of Visa Waiver Program visitors, under the Electronic System for Travel Authorization (ESTA) program.

Testifying before the Subcommittee, U.S. Travel Association President, Roger Dow, hailed the Travel Promotion Act, noting, “Oxford Economics estimates that the travel promotion program authorized by the Act could attract as many as 1.6 million new visitors each year, generate as much as $4 billion in new visitor spending annually, and create 40,000 new jobs.” (See Testimony of USTA President, Roger Dow, before the U.S. Senate Commerce Subcommittee on Competitiveness, Innovation, and Export Promotion, 05.Apr.2011.) All of which is good news.

Now for the bad news: our visa system. According to Dow, from the perspective of the U.S. travel industry:

“The single greatest roadblock to increased overseas visitation is an inefficient visa system that can discourage travelers from considering the United States as a preferred destination. Promoting America as a desirable travel destination and streamlining the immigration clearance process will not lead to increased visitation if travelers are unable to obtain a required U.S. visitor’s visa.

“Look at the situation from a leisure or business traveler’s point of view. In some countries, the wait time for U.S. visas can be as long as 100 days. The $140 visa application fee is non-refundable and, of course, applying for a visa is no guarantee that a visa will be issued, with nearly 20% of applicants being refused. The real cost of obtaining a U.S. visa is far greater, particularly when potential visitors do not live near a consular post issuing visas, and therefore must travel hundreds if not thousands of miles and pay for a flight and hotel to make a mandatory trip to a U.S. consulate, and then wait hours for another interview that, on average, lasts for three minutes.”

Dow proposed several remedies for this situation, including hiring more consular staff, or reassigning existing consular staff to places where demand for visitors’ visas is especially high – such as Brazil, India, and China. Dow also suggested that U.S. consulates begin using secure videoconferences to conduct visa interviews remotely, to save applicants the often-significant expense of traveling to a U.S. consulate that may be hours away. He also recommended expanding the current Visa Waiver Program, and asked Congress to pressure the U.S. Department of State (DOS) to establish formal working groups with VWP candidate nations, to “outline specific actions that each country could begin to take today to meet the visa waiver requirements.”

For its part, the DOS noted that it is trying to meet what it characterized as “burgeoning demand” for visas. According to David Donahue, Deputy Assistant Secretary of State for Visa Services:

“Since 2007, we have created 114 new consular officer positions and moved another 74 existing positions from lower to higher priority posts. We have concentrated most of our new resources in the countries with the greatest need. Twenty-four new slots went to posts in Brazil and another 24 went to China. Seventeen were added to Mexico. Another 14 new positions went to India. In October 2008, we opened a new consulate in Hyderabad, India, where a twelve-officer consular section facilitates U.S.-India trade relationships in this hub of high-technology business.” (See Testimony of David T. Donahue, Deputy Assistant Secretary of State for Visa Services, before the Senate Subcommittee on Competitiveness, Innovation, and Export Promotion, 05.Apr.2011.)

That said; Donahue hastened to add that “normal intake of Foreign Service Officers is expected to decline,” and that his agency was “exploring possible alternative staffing models.” He also cautioned against expanding the VWP, because “the countries where we have the largest resource needs presently do not meet the legal requirements to be considered for the program.”

One hopes that in the midst of this season of budget cutting, Congress will bear in mind the need to invest in programs that yield significant benefits for our economy. Taxpayer dollars spent revamping our visa system will pay dividends for all of us. Although the United States is starting to regain its share of the multi-billion global tourism market, much work remains to make traveling to America a welcoming and hassle-free experience. This is a no-brainer.

Disclaimer: The information provided here is of a general nature and may not apply to any specific or particular circumstance. It is not to be construed as legal advice nor presumed indefinitely up to date.