Industry Lobbying for Stimulus Package

CEOs from major airlines, hotels, restaurants, retail outlets, travel management companies, and other segments of the industry flocked to Capitol Hill last week to spur government action to stimulate travel and tourism. Dozens of meetings were held between industry leaders representing the Travel Business Roundtable and members of Congress, all aimed at finding ways to get the industry back in gear.

Some Senate leaders expressed interest in a limited tax credit for personal or business travel, the restoration of business meal and entertainment deduction to 100 percent, and the restoration of spousal travel to 100 percent.

Some results of the meetings with more than a dozen U.S. Senators, Speaker of the House Dennis Hastert (R-Ill.), and Senior Advisor to the President Karl Rove:

• Senator Jon Kyl (R-Ariz.) and Senator Zell Miller (D-Ga.) have introduced a bill allowing a $500 tax credit for individuals and up to $1,000 for couples filing joint returns for any kind of travel-related expenses from the time legislation is passed through December 31, 2001. Called the Travel America Now Act, the legislation would give participants tax breaks on airline, cruise, train or bus tickets, hotel accommodations, and rental cars for any travel originating in the U.S.

• Senator John Breaux (D-La.) endorsed the restoration of the business meal and entertainment deduction to 100 percent, up from its current status, which allows up to 50 percent.

• Senators Bill Nelson (D-Fla.) and Bob Graham (D-Fla.) are drafting legislation designed to help the industry and the nation’s economy.

• Senator Byron Dorgan (D-N.D.), chairman of the tourism subcommittee, led hearings on October 12 to discuss the impact of the downturn in the travel industry. He said he is considering introducing legislation that may include assistance in some form to laid-off tourism workers. He also has said that he and other committee members support Kyl’s tax credit bill, according to a Knight Ridder/Tribune Business News article published in The Orlando Sentinel.

• Senator Harry Reid (D-Nev.) will convene a bipartisan meeting today (October 15) to build consensus on immediate stimulus measures for the economy as a whole, keeping in mind the ripple effect of the travel and tourism industry.

TBR’s also stressed its call for the creation of a Presidential Advisory Council on Travel and Tourism at its White House meeting with Karl Rove. The Council would be comprised of representatives from the public, private, and nonprofit sectors, and would work with the Executive Branch on tourism policymaking and implementation, according to TBR.

Coming on the heels of Congress’s decision to provide a $15 billion bailout of the struggling airline industry, members of the Travel Business Roundtable stressed that what they want is stimulus, not a bailout.

"This is not a bailout," said Marilyn Carlson Nelson, former head of the Travel Industry Association of America to the Senate Subcommittee on Consumer Affairs, Foreign Commerce and Tourism.

"Rather than seek a bailout, the best way to help the travel and tourism industry and the 18 million people it employs is to get people traveling," says Jonathan Tisch, chairman and CEO of Loews Hotels and chairman of the TBR. "To that end, we are offering policymakers an array of options to address three key areas of concern: the well-being of our workers who have lost or will lose their jobs; ways to encourage the resumption of travel; and the creation of greater liquidity for employers and employees."

Having contributed almost $100 billion in tax revenues last year and constituting $582 billion annual revenues in total, the industry has been hard hit by the terrorist attacks of September 11 and the ongoing war on terrorism. While business is reported to be creeping back toward pre-attack levels in some parts of the country, recent FBI warnings that new attacks are imminent aren’t helping.

Some project that more than 1 million people in the U.S. travel and tourism industry could lose their jobs if business doesn’t regain some momentum. Travel and tourism, unlike other industries, is an important business segment in all 435 congressional districts and all 50 states. It also constitutes the top three industries in 28 states and the District of Columbia.