Brand USA’s Funding Under Threat After 2015, and Congress May Not Help

For years there was no official entity promoting the U.S. as a tourism destination, and now there is one, the public-private Brand USA, but its funding has become a partisan, political tussle.

Senate Democrats addressed the conundrum by including an amendment in the immigration reform bill, which passed the Senate last month, that would reauthorize the Travel Promotion Act that created Brand USA and fund the organization on an ongoing basis.

Brand USA is currently entitled to receive a maximum of $100 million per year in matching funds through September 30, 2015, with these funds coming from a $14 fee paid by international visitors as part of the Electronic System for Travel Authorization program.

The Senate measure would take that funding beyond 2015, and automatically extend it annually without having to go through periodic funding skirmishes.

But, now the immigration reform bill that passed the Senate goes to the Republican-controlled House, and it’s doubtful that Brand USA funding will find a sympathetic audience in that chamber.

Nevada Rep. Dina Titus,  a Democrat, meanwhile, has introduced a standalone bill that would amend the Travel Promotion Act of 2009 along the lines of the provision that passed the Senate in the immigration-reform bill. Titus’ measure would fund Brand USA on an ongoing basis, or in the words of the bill, “for fiscal year 2012 and each subsequent fiscal year.”

It’s interesting that a legislator from Nevada whose district includes most of Las Vegas is the point person for Brand USA funding in the House.

Republicans have described the immigration reform bill amendment extending the funding of Brand USA as “pork” and a means to reward legislators from Nevada, including Senate Majority Leader Harry Reid, a Democrat, as well as Las Vegas casinos that would benefit from travel promotion, and a resulting influx of international visitors to The Strip.

For its part, Brand USA wants to appear above all of the nasty, political wrangling.

“Our focus is all about increasing visitation and spend to the United States as mandated by the Travel  Promotion Act,” says Anne Madison, a Brand USA spokesperson. “So while activity related to proposed legislation is outside the scope of our purview, I can share with you that we continue to see positive results from our marketing and travel trade outreach.

“The image of and the intent to travel to the United States is up significantly in the markets where we are actively promoting the USA as a premier travel destination. Travel is adding high-quality jobs faster than any other sector of the economy, and international visitation and spending has risen significantly.”

Cathy Keefe, a spokeswoman for the U.S. Travel Association, which has been spearheading lobbying in support of Brand USA, says reauthorizing its funding on an ongoing basis would enable Brand USA to focus on proving the return on investment from its marketing efforts, and gathering public and private support.

“We felt there was no harm in starting early,” Keefe says, referring to the lobbying that USA Travel and its supporters began in Washington in April.

If Congress doesn’t approve Brand USA funding this year — and the House likely won’t take up the immigration reform bill until after it returns from its August recess — then the effort would begin anew in 2014.

Brand USA has been the subject of harsh criticism from budget hawks and others over its internal and external spending practices since its 2010 creation.

In response, Brand USA says it takes its spending oversight responsibilities very seriously, and its marketing campaigns in the foreign countries it targets have increased intent to visit the U.S. 12% to 14%.

As a private-public organization, Brand USA works with the Office of Travel Promotion within in the U.S. Commerce Department, which is newly headed by Hyatt family member Penny Pritzker.

Her appointment as Commerce secretary had to be very welcome news for Brand USA because of the support Pritzker can provide the organization.

But, the current spending climate in Washington, which is just emerging from sequestration-mandated budget cuts, will be an ongoing existential challenge for Brand USA as it fights for survival.