Travel and Tourism Summit - Opening remarks by Thomas J. Donohue

U.S. Chamber of Commerce

April 20, 2005

Good morning, ladies and gentlemen. Welcome to the U.S. Chamber of Commerce. I'm Tom Donohue, the Chamber's president and CEO, and I'm very pleased to kick off the third Travel and Tourism Summit.

I'd like to start by thanking our summit co-chair and partner, Jonathan Tisch, chairman and CEO of Loews Hotels and chairman of the Travel Business Roundtable. No single individual has done more to promote this industry.

I'd also like to thank each of our association and corporate partners who have helped make this event possible. You can see their names on the panels to either side of me as well as at the back of your briefing book. I'd like to say a special thank you to our luncheon sponsor, American Express, for its support.

The Chamber has joined with these organizations to host this event because fostering travel and tourism is indispensable to our overall economic health.

It bears repeating that few, if any, industries generate jobs and commerce like this one.

Let's not forget that one out of every eight people in the U.S. private-sector workforce is employed directly or indirectly in travel and tourism related jobs.

Also, the industry contributes nearly $100 billion in tax revenue for federal, state, and local governments…funds that are used for health care, education, transportation, and other critical needs.

The travel and tourism industry has come a long way since we held our first summit in 2003, thanks in great part to a number of people in this room who have provided the leadership to bring travel back.

At our first summit, travel and tourism was still reeling from 9/11 and great economic uncertainty following the recession.

Today, the economy is strong and growing stronger. More people are flying and staying in hotels. America and the world appear to have regained the confidence to travel again.

But there's a reason we are gathered here for a third consecutive year. The industry still faces several tremendous challenges that are destroying jobs, and which cannot be ignored.

First, this industry, perhaps more than any, depends on enhanced security.

However, we must enhance security without discouraging legitimate travel to the United States because of such things as visa processing delays and biometric passport requirements.

That leads me to a second major challenge, which is that international travel to the United States, though rebounding in part because of the weak dollar, is declining as an overall percentage of global travel.

According to the Travel Industry Association of America, U.S. market share of overall global travel has declined 38% since 1992.

We must do a better job marketing our country and making it more attractive to the rest of the world.

Third, in an era of tight budgets, travel and tourism industries are easy targets for tax and fee increases.

If you're a local government official and you want to increase revenues without meeting strong resistance from voters, what do you do?

You raise taxes and fees on hotel rooms and rental cars because those taxes are paid by residents of someplace else.

We have to stop policymakers from looking to travel and tourism to ease budget constraints.

Finally, we must deal with the crisis in commercial aviation.

We need to increase capacity by making dramatic improvements to our airports, runways, and air traffic control systems.

Then there's the issue of security costs. Airline security is a matter of national security, and as such, it's not fair to ask the airlines to foot the entire bill.

Airlines are willing to pay their fair share – but they cannot nor should they shoulder the entire security cost burden.

We'll be talking about this issue in greater detail at tomorrow's aviation conference at the Grand Hyatt Washington.

Our speakers will include Fred Smith of FedEx, Doug Parker of America West and FAA Administrator Marion Blakey.

I wish I could say there were quick and easy legislative fixes to all of the challenges I've just mentioned. There aren't.

Rather, change must come through grassroots activism and in communities all over the country – not just in Washington.

This summit represents a valuable opportunity to come together to share ideas, learn more information, and discuss strategy. But real progress will only be made through a continuous, coordinated effort nationwide.

The Chamber's Travel and Tourism Across America initiative is doing just that – working with leading travel and tourism organizations at the grassroots level to promote travel to and within the United States even as we continue to enhance security.

For those of you involved in this initiative, we appreciate your commitment and support. For all others, I encourage you to participate.

At this time, I'd like to hand the program over to someone who needs no introduction to this audience… chairman and CEO of Loews Hotels and chairman of the Travel Business Roundtable, Jonathan Tisch.

[Tisch makes brief welcoming remarks. After Tisch, you will introduce James May, who will then introduce Sen. Chuck Hagel]

Introduction of James May

It's now my pleasure to introduce a person who is intimately familiar with the airline industry and the challenges it's facing.

Jim May is president and CEO of the Air Transport Association of America, whose members transport 95% of all the passenger and cargo traffic in the United States.

He's an experienced association man. Most recently he was executive vice president of the National Association of Broadcasters, and some time ago he was at Grocery Manufacturers of America.

He also spent a few years in the 1980s at PepsiCo and later at Coca-Cola Bottling Company of New York.

Let's welcome Jim May.