How U.S. policies are driving away foreign visitors, and harming the American economy.

Trade and job creation
Nov. 23 2010 4:47 PM

America's Looming Tourism Crisis

How U.S. policies are driving away foreign visitors, and harming the American economy.

Also in Slate: Martha C. White explores California's domination of  the international almond market, Boeing's push to  sell more aircraft overseas, an innovative air-conditioning company's efforts to break into the international cleantech market, how a small steel manufacturer  thrives on the world stage, how a small American software company can compete cheaply abroad, and how exports can  save the American economy.

Tourist. Click image to expand.
Foreign tourists bring in $120 billion to the U.S. economy

They stand in sidewalk-blocking clusters. They take pictures of the most ridiculous things. They don't tip enough. Grumble all you want about tourists, but the United States needs them. International tourism is not just a big business, it's also a huge export. Tourism makes up 8 percent of our overall exports, and 24 percent of all exports in the services category. People coming from abroad to see everything from the Golden Gate Bridge to the Grand Ole Opry poured $120 billion into our coffers last year, and tourism is one area where the United States runs a healthy trade surplus: $21 billion as of 2009, meaning that Americans spent $21 billion less overseas than foreign tourists spent here.

But the United States is on the brink of a tourism crisis. The United States is losing market share as a tourist destination. According to the U.S. Travel Association, our country's market share of global tourism dropped 31 percent from 2000 to 2009. That translates to 2.4 million fewer visitors in 2009 than at the beginning of the decade.

This is unfortunate, because tourism is a fantastic economic boon. People eat, drink, shop, and go home without consuming any of our finite resources, and they inject their overseas cash directly into our economy. Foreign visitors spend about $4,000 each during a visit. The growing middle classes of countries like China, Brazil, and Argentina mean we have a huge new pool of potential visitors, and with long-haul flights up 31 percent since 2000, our amusement parks, cities, and vistas have never been more accessible.

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All of this growth in developing countries is a double-edged sword for American tourism, though. Upwardly mobile countries are realizing that they can lure many of our most dependable visitors for themselves. South Africa, for instance, has mounted a vigorous campaign to entice British travelers to come there instead of here.

Part of America's tourism problem is marketing. We don't have any at the national level. States and cities have tourism boards that create campaigns such as "What happens in Vegas, stays in Vegas" or California's "Find yourself here." Some big-city hotels hire employees who speak tourist languages, and some restaurants offer menus in multiple languages, but that's about it. There isn't any agency that promotes the entire U.S. of A, as there is for, say, Israel. Tourism industry pros tend to agree that a concerted campaign at the national level would be far more effective than the sum of these piecemeal parts.

Thanks to the Travel Promotion Act of 2009, though, that national tourism board should be coming soon. Signed in March of this year, the legislation establishes funding and marching orders for a new entity called the Corporation for Travel Promotion. An initial $10 million in seed money was raised from the $14 fee paid by travelers entering the United States via the Electronic System for Travel Authorization ($10 goes to travel promotion; the remaining $4 goes to homeland security efforts). In the future, more ESTA money can be "unlocked" when hotel companies and other travel companies make donations; the government will then match the donation with the ESTA dollars. The public-private agency includes 11 board members drawn from organizations such as NYC & Company and Walt Disney Parks and Resorts, and had its first meeting two weeks ago. Chairman Stephen J. Cloobeck, who is also chairman and CEO of Diamond Resorts International, says the board will be identifying countries where people might be eager to visit the United States and creating marketing campaigns to induce them to visit here.

"People have a perception of the U.S. as protectionist, arrogant and inhospitable, and I think we need to change that image," says Cloobeck. "We're going to jump-start the marketing of America."

Since different kinds of visitors want different things out of an overseas vacation, the CTP will have to do some investigative anthropology to figure out how best to catch the interest of prospective visitors. For instance, marketing to the Chinese market might revolve around cultural experiences, while ads aimed at Brazilians might focus on entertainment and nightlife. Caroline Beteta, president and CEO of the California Travel and Tourism Commission, and vice chairman at the CTP, says the national campaign might mirror her state's by using celebrity endorsers to sing the praises of America.

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