Plenty of lawmakers in Washington want to see Brand USA's funding renewed — but it should come as no surprise that an increased passenger tax will leave some parties unhappy.
Brand USA’s path to reauthorization is looking a bit brighter, as the Senate committee on Commerce, Science and Transportation passed the Brand USA Extension Act last week. A full Senate vote comes next.
The proposed bill will reinstate funding for the country’s destination marketing organization through 2027, which was previously axed (somewhat unwittingly) by a budget cap deal reached by congress in February 2018.
The previously $14 Electronic System for Travel Authorization (ESTA) fee — paid by travelers arriving from visa waiver program countries — will be raised to $21. The new allocation structure will be $4 to Customs and Border Protection (CBP); $7 to Brand USA, which will max out at $100 million; and $10 to the general fund, allowing the aforementioned budget cap deal to remain unchanged. The fee’s new allocation structure means Brand USA’s share will be $3 less than it was before; CBP’s remains the same.
While the U.S. Travel Association, which lobbies on behalf of Brand USA, previously expressed confidence that funding would be renewed before it expired in 2020, it was less sure on the legislative vehicle to get there. This stand-alone bill in the Senate of course still has to be passed, and then move through the House, but Tori Barnes, executive vice president of public affairs and policy at U.S. Travel, is pleased with the progress.
“U.S. Travel is encouraged by the positive momentum of this bill, and stands alongside the Visit U.S. Coalition and our industry partners to assist Congress and the administration in continuing vital tourism marketing efforts,” Barnes wrote in a blog post. “This bill is vital to ensuring the future of America’s travel planning and promotion—and the livelihoods of the 15.7 million Americans whose jobs are supported by this industry.”
While it’s fair to say Brand USA enjoys bipartisan support — nothing to sniff at in 2019 America — not everyone is relieved to see a path to authorization emerge. Airlines For America (A4A), an industry trade group whose members includes American Airlines, United, Alaska Airlines, and Hawaiian Airlines, issued a letter on July 23 opposing the reauthorization.
“On behalf of Airlines for America, I am writing to urge Congress to prioritize security over marketing,” CEO Nicholas E. Calio wrote. “In an era of extremely scarce federal resources and an elevated level of security concern, the rationing of federal revenues like those collected from the ESTA fee should be prioritized for securing our nation – not for advertising.”
While that may seem counterintuitive — one might assume international carriers like United and American would support any initiative that markets the U.S. as an inbound destination, theoretically boosting passenger traffic — a spokesman for A4A told Skift that the group “believe[s] air travelers are already overtaxed, and we oppose taxing them for anything other than services provided by the government.”
Citing excessive wait times at border crossings and growth in passenger traffic, A4A is calling for all ESTA fees to be directed to border patrol and processes, including the vetting of travelers and refugees, modernizing the exit and entry process, staffing, and other CBP activities.
U.S. Travel says that while international arrivals may be growing, the U.S.’s market share is declining — meaning Brand USA is more vital than ever. Currency fluctuations, Trump’s rhetoric, and stricter visa policies have all been cited as contributing factors to the decline.
In a statement, Barnes of U.S. Travel told Skift: “We are puzzled and disappointed that these airlines – several of whom have supported Brand USA’s activities – would now oppose the renewal of an organization that measurably benefits the economy and travel jobs at no cost to the American taxpayer,” Barnes wrote. “The ESTA fee is not included in the price of an airline ticket and therefore has no negative impact on the airlines’ bottom lines; in fact, Brand USA has generated $5.2 billion in revenue for U.S. carriers since 2013.”
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Photo credit: The Lincoln Memorial in Washington D.C. Brand USA