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Remarks at American Hotel and Lodging Association Summit

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Monday, March 15, 2010

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Secretary of Commerce Gary Locke
Remarks at American Hotel and Lodging Association
Washington, D.C.

Thank you, David, for the kind words and for your service on our U.S. Travel and Tourism Advisory Board.

I’m delighted to be here.

Travel and tourism was a key contributor to the economy of Washington State when I was governor. And during my tenure, we launched a very successful web-based tourism promotion program that brought visitors, sales, and jobs to the state.

So I came to my current office well aware of the importance of travel and tourism to the economy and employment.

At a time when a lot of people are justifiably concerned about America's trade deficit, travel and tourism has consistently been a surplus for the United States. Last year, international travelers spent $22 billion more here than U.S. citizens did abroad.

We have to build on that competitive advantage, especially during this time of immense economic difficulty.

Putting people back to work is the number one priority of the Obama administration.

That’s what this past year has been all about. It’s what this coming year will be all about. And I'm counting on your industry to play a key role in that effort.

I know that people are frustrated that the economy is not turning around more quickly.

But it’s important to be mindful of where we have come from.

Early last year:

  • The economy was losing on average, 700,000 jobs a month;
  • And we were watching a cascade of bank failures unlike anything we’d seen since the 1930s.

We were on the precipice of a second Great Depression.

But thanks to the difficult and sometimes unpopular steps the administration took to stabilize financial and housing markets and stimulate our economy, we have returned from the brink.

An economy that was shrinking by six percent a year ago is growing by nearly six percent today.

Still, we have a long way to go.

We’ve got to keep working to create a sustainable economy that provides more opportunity for everyone.

Like a lot of areas of our economy, the travel and tourism industry is facing some stiff headwinds.

2008 saw a record $1.3 trillion in direct and indirect industry sales for the United States, which supported 8.6 million jobs.

But that robust growth evaporated in 2009.

Employment dropped by 400,000 (or nearly five percent) into the third quarter of 2009.

Later this week, we will be issuing the international travel and tourism visitation and receipts for 2009.

The story is as we expected – down 5 percent for international visitation and down 15 percent for receipts. Other countries around the world are experiencing similar declines.

This has, of course, hit the lodging industry particularly hard—as eight out of 10 overseas travelers in 2008 stayed in a hotel or motel during their trip to the U.S.

Unfortunately, accommodations and transportation were the sectors posting the largest declines among traveler spending for the third quarter.

The good news is that your overseas customers are the best customers for our economy – they spend more and stay longer.

And across the travel and tourism industry, we are seeing glimmers of hope.

In the fourth quarter last year, for instance, there were monthly increases for 15 of the top 20 international visitor markets.

This positions us well in the U.S. for potentially meeting our forecasted 3 percent recovery for the travel and tourism industry in 2010.

At the Commerce Department, we are working hard to accelerate this recovery.

On March 4, I was privileged to be with the President when he signed the Travel Promotion Act of 2009, which, as you know, had broad support from the industry and Congress.

The Act creates a public-private partnership called the Corporation for Travel Promotion. This new alliance between the U.S. government and the nation’s travel and tourism industry will help encourage more international visitors to come to the United States.

The Commerce Department will have the lead to get it all started. The President’s last comment to me as he was shaking my hand and about to leave the Oval Office, was “Gary Locke…make sure you do it right!”

That is exactly what we intend to do.

We are already working on opening the field for applicants for the Corporation’s Board, so the notice should be going out within the next few weeks. Watch for this, as I know that a member of your sector is slated to be on the Board.

The law requires the 11-member Board to be established within six months of the signing. We are intent on meeting that well ahead of the deadline, in a transparent and balanced manner.

While we are working on the Board selection, we are already engaged with the Department of Homeland Security to get the fee collection system, which will help support the Corporation, in place as quickly as possible.

Once the Board is established, the Corporation can be formed, and the staff can be hired for setting up the real work of the Corporation.

As you know, we have a great product to sell, and the new Corporation for Travel Promotion will be able to draw on expertise from the existing structures that the Commerce Department already has in place.

We already work closely with industry through the management of a Travel and Tourism Advisory Board.

This group, which I chair, includes 29 industry members selected to represent their sectors. They provide input and guidance on a range of issues, from facilitating travel to infrastructure development to sustainability concerns, among others.

As I mentioned, David serves on this board. We look forward to his continued insights and partnership in this endeavor.

We are also pleased to have the heads of the Hyatt and Carlson companies serving on this Board.

Commerce also oversees an interagency Tourism Policy Council, which engages more than 17 agencies and government departments to coordinate policies impacting the industry.

We continue to work closely with the State Department on facilitating business visas for improved participation in trade shows, exhibitions, and meetings.

Of course, a chief focus of policymakers throughout the U.S. government is ensuring open and fair market access for our exporters.

Most of you are aware of the bilateral agreement between the U.S. and China that took effect in December 2007, enabling group leisure travel to the United States.

The initial agreement was limited to nine highly-urban provinces. The agreement has now been expanded to a total of 21 provinces.

We’re very excited about capitalizing on this powerhouse of an emerging market.

Also, importantly, this has enabled U.S. businesses and destinations to market themselves now in China, a barrier prior to this agreement.

We see similar opportunities in India and Brazil.

But the Commerce Department's help isn't limited to just shaping policies and regulations to help your industry.

We have a great team of industry experts working to create a competitive business environment for you.

We have a sales force of Commercial Service officers positioned in almost 80 countries across the globe and 107 offices throughout our country.

And we also partner with 35 private-sector, Visit USA Associations throughout the world to enhance communications and export promotion efforts.

The Corporation for Travel Promotion will add greater leverage to these efforts.

Now, all of our efforts are going to dovetail with President Obama's broader plans to spur American exports.

Last week, the president provided further details about his National Export Initiative, which seeks to double our exports in the next five years and support two million jobs.

There is no question that travel and tourism—a key service industry export—will play a key role in helping us reach this goal.

The president specifically cited the Travel Promotion Act as an example of a model law for establishing active promotion and marketing efforts.

I have no question that the people in this room will be working every day to maintain America's competitive advantage in travel and tourism.

These days, we hear a lot about America's problems, but there is one reassuring fact that is as true as ever:

America is still a fascinating, wonderful and welcoming place to visit.

You are all part of the reason it remains so.

So I thank you and the entire travel and tourism industry, which contributes so much to this country’s continued prosperity and well-being.