tourism policy, and creating an effective agency of Government to implement that policy. An important function of this agency would be to carry out a Federal travel promotion program to market tourism to this country competitive with other nations and thereby enhance our foreign exchange earnings significantly.

The history of the national tourism policy legislation movement has been long and arduous, beginning in 1974 when Senate Resolution 347, cosponsored by 71 Senators, authorized a national tourism policy study at a significant cost to the Government. In 1977 the national tourism policy study issued its report and recommendations, which included results of a series of extensive regional and national meetings to assess the needs of the tourism industry. These meetings were attended by nearly 300 public and private sector industry leaders.

The culmination of this investment of time and costs in terms of extensive hearings and detailed private and public input took the form of a National Tourism Policy Act, which the Senate of the 96th Congress passed unanimously and the House overwhelmingly. The bill was eventually vetoed by President Carter on December 25, 1980. We have prepared a rebuttal to his veto message, and since it speaks to arguments that are specious yet commonly heard, I ask that it be made a part of the record of this proceeding, with your permission.

Senator PRESSLER. Without objection.1

We have reviewed this history in order to put into perspective where we stand today with regard to the Federal Government's recognition and pursuit of its proper role in tourism. Thirty-two national travel industry associations have gone on record in support of this legislation. In fact, representatives of the travel and tourism industry have appeared before congressional committees to support the goals of the National Tourism Policy Act on September 28, 1978; February 26, 1979; July 25, 1979; March 5, 1980; and February 18, 1981. This continued support for national tourism policy legislation is evidenced by the April 7, 1981, vote in support of H.R. 1311 by the industry Advisory Board of the Congressional Travel and Tourism Caucus, representing all components of the industry. This support was overwhelmingly expressed in a resolution delivered to the Secretary of Commerce.

The Senate Travel and Tourism Industry Advisory Council last month also voiced its unanimous support of S. 304. In view of the fact that the administration has not as yet come forth with an acceptable alternative which would establish the proper Federal role in tourism, the industry continues to support the current legislative proposals.

The economic policies of this administration offer a platform of hope for this industry as well as for other industries in this country. With all consistency, we reiterate that support for these economic policies is embodied in the National Tourism Policy Act. A well functioning tourism industry can positively enhance the economy of this Nation through increased jobs at all levels and improved balance of payments. A Commerce Department study states that the investment return for international tourism promotion is

1See p. 10.

80-766 0-81--2

$19 for every $1 invested. When the administration states that it wishes to run the country like a business, we concur.

But instead of the Federal Government recognizing historical support for this legislation enacted by the Congress and supported by the travel and tourism industry, we have constantly fought attempts by the Office of Management and Budget, OMB, to diminish the effectiveness of the U.S. Travel Service, USTS. To prevent the dismantling of USTS, legislation has twice been enacted to maintain that agency at the minimal level until the Congress completed its work on a national tourism policy. The views of the past administration were made clear when, following Congressional enactment of S. 223, which maintained the $8.6 million funding of USTS, President Carter stated when signing the bill:

At the beginning of the year I recommended that the Service be eliminated, for its function can and should be performed by the private sector. I have not changed my view. I have signed S. 223, however, because the appropriations have already been enacted as part of a separate bill.

Shortly thereafter, the Department of Commerce, apparently following directions from the OMB, publicly proposed dismantling the USTS and restructuring its activities. This restructuring took the form of moving USTS into the International Trade Administration, ITA. This proposal, while enhanced, still lives.

As we reiterated at the February 18, 1981, hearing in the United States House of Representatives subcommittee on Commerce, Transportation, and Tourism, this approach has practically no support whatsoever from the Congress or the industry.

The. International Trade Administration was established as the export promotion arm of the Federal Government. To imagine that foreign trade attachés who undertake the promotion of tangible exports could compete effectively with the 124 other countries and their professional travel marketers, who actively and solely promote travel to their own country through a vast, intricate network, is idealistic at best.

Only highly skilled, professional travel marketers working with an adequately funded, industry-supported, comprehensive marketing plan can compete with other nations to obtain our rightful but unrealized share of the world tourist market.

It is the proper role of the Federal Government, as maintained by the International Travel Act of 1961, to promote the United States as a travel destination and to coordinate and develop domestic tourism programs without duplicating or competing with private sector efforts. These are legitimate functions of the U.S. Government designed to benefit the general welfare and cultural understanding, improve commerce and add to this country's foreign exchange earnings. Millions of dollars are spent by private businesses within the travel industry to promote their own service or destination, but it is the Federal sector's responsibility to promote this country as a whole. No single entity of the American travel industry can, or should, preempt the Federal role in this regard. The history of the Federal role in the promotion of international tourism has been a disappointment. After the passage of the International Travel Act of 1961, expectations were raised, but these expectations greatly exceeded reality. Tourism is an all-pervasive activity, which cuts across many different lines in the organization

charts of the Federal Government. To place this important responsibility within the International Trade Administration is a misguided notion.

The travel product is complex. You do not sell the United States as a destination in the same manner as you sell computers or tractors. And to fund this marketing effort, the administration has proposed a $6.5 million budget for tourism activities, to be supplemented by $1.1 million from ITA's foreign commercial service. This totals approximately $1 million less than the already sharply reduced USTS operating budget, which is down from $13.5 million in 1979.

A point on USTS funding should be made here. The travel industry strongly supports the concept that tax dollars should be used wisely and effectively in the pursuit of inbound tourism promotion. It should be noted that pending congressional resolution of a national tourism policy, the industry supported a legislative initiative in 1979 to reduce the USTS budget from $13.5 to $8.5 million by directing that the USTS foreign office programs be maintained at their present level and that savings be effected by economizing on Washington headquarters administrative activities.

The $8.5 million was an amount required at that time to maintain a minimum holding pattern in U.S. Government inbound tourism promotion activities. That minimum has since been eroded by inflation and further budget cut proposals.

Here are a few examples of what other countries are spending in comparison to this $7.6 million: Spain, 1980, $65.8 million; United Kingdom, fiscal year 1980, $39 million; France, 1979, $27.5 million; and Austria, 1979, $16.5 million.

But even more importantly, the scope of the National Tourism Policy Act goes far beyond the notion of foreign tourism promotion. The statement contained in title I of the act addressed many domestic, as well as international, considerations. We do not believe that the proposal to fold USTS into ITA will fundamentally address domestic tourism issues. In fact, this proposal will eliminate any hope this industry has for an integrated, coordinated approach to the entire tourism opportunity.

On the domestic level, we have seen many instances where the Federal Government has taken discriminatory action against the travel and tourism industry. These actions, in the form of legislation, regulation, and executive policy, underscore the existing lack of understanding by the administration of the importance of travel and tourism to the United States.

Examples of these initiatives include proposed onerous energy controls to be instituted in the case of an energy shortfall, past and current proposals to redesignate Monday holidays to their original date of observance, and proposals to severely limit allowable tax deductions for legitimate business expenses.

Mr. Chairman, on the international level, the world tourism market has been growing at a much faster rate than U.S. international tourism receipts. The declining U.S. position in the world tourism market over the last 5 years is illustrated in figure 1 of the two charts that I wish to make part of the record. Since 1976, world international tourism receipts have increased at a compound rate of 20 percent per year. U.S. receipts from international travel,

however, have increased only 16 percent per year, largely due to favorable foreign exchange rates.

Figure 2 indicates the declining U.S. share of the world international tourism market since 1976. After the short-lived peak in 1976, attributable to our Bicentennial celebrations, the U.S. world market share has declined to a low of 12.7 percent in 1979. Preliminary figures for 1980 indicate a continuance of this abysmal performance.

U.S. International Tourism Receipts Have Grown
at a Slower Pace than World Receipts

Figure 1

$12 billion

Sources: U.S. Travel Data Center, U.S. Travel Service, World Tourism Organization

U.S. Share of World International Tourism Receipts
has Declined Since 1976

1980 Preliminary

Figure 2

1980 Preliminary