The pandemic has highlighted Brand USA's role in driving international visitor demand and tourism's importance as the country's #2 export. Will the global fascination with coming to America transcend politics once borders reopen? Brand USA is betting on it.
On the eve of 2020, it seemed as if Congress would let Brand USA’s funding mechanism expire and that the U.S. might become the world’s first destination without an agency to market its destinations overseas. But at the 11th hour, attributed to a politically charged Trump year, Brand USA saw its funding mechanism renewed for seven years until 2027, a longer stretch than prior five-year stints.
Alas, Covid struck and brought Brand USA’s funding model to its knees because 50 percent of its revenues are sourced from a portion of Visa Waiver Program fees from 39 countries, with a requirement that 50 percent be matching contributions from the private sector. The drop in international visitors means fee collections this year are projected to reach $10 million versus an average of $110 million annually, according to the U.S. Travel Association (USTA).
Eighteen months later, however, the crisis hasn’t hurt the bipartisan support for Brand USA. It’s led a new bill — the Restore Brand USA Act —providing for a one-time allocation of $250 million in surplus funds for Brand USA for it to prepare for the recovery of international tourism in 2022. The bill, which emerged out of advocacy efforts from the Department of Commerce’s Travel and Tourism Advisory Board and the USTA, has passed the Senate so far.
“What this bill seeks to do is take some of the funds that are sort of already in a pot, if you will, that have been paid by international travelers and designating this money back — so there’s been greater collection of fees beyond that $100 million that the program’s been capped at, and so, that money is in there, and so we seek to utilize that money so that next year, we’re able to fund Brand USA,” said Tori Barnes, executive vice president of public affairs at the U.S. Travel Association, which advocates for Brand USA.
It’s a decision that shows the government’s increased understanding of the deep economic impact of America’s travel bans on Canada, the European Union and the UK — which cost the U.S. economy $1.5 billion every week or enough to fund 10,000 American jobs, according to the U.S. Travel Association —and of Brand USA’s role ahead in recovering the country’s number two export as borders reopen.
Optimism is high that the bill will move forward and that it could also be included in the proposed Omnibus Travel and Tourism Act of 2021, a broader piece of tourism legislation in the works addressing policies and investments needed for U.S. travel to recover post pandemic.
“Ideally, the perfect scenario is the House version of the bill comes out looking just like the Senate bill and then it’s just sitting there waiting for a ride,” said Chris Thompson, CEO of Brand USA. “It would probably never be brought up on its own; it would usually be attached to some other must pass legislation.You know, the only way you get to do that is if you have bipartisan support. We’re hopeful and it would be much needed and very much appreciated.”
At a recent hearing held in September, seeking additional industry input on the proposed Omnibus Act, the Commerce Senate Subcommittee on Tourism, Trade and Export Promotion reiterated interest in advancing the emergency funding for Brand USA as part of the wider effort to boost tourism’s future in the U.S. and recoup its revenues.
“As you talked, it made me realize the moment matters, as people start traveling again, we want them to remember to come to our country, where they spend an average of how much, Ms. Barnes?” Senator Klobuchar asked USTA’s Barnes, who answered $4,000 per international visitor.
“Obviously there’s still work to do, as it relates to getting it included in a must pass piece of legislation for example,” said USTA’s Barnes. “But there is a house bill that is gaining co-sponsorship as well and so we’re feeling optimistic that this could be tacked on to something before the end of this year to provide Brand USA with the funding that’s desperately needed to ensure that they can do their work to attract international visitors back to the U.S. once the borders reopened more broadly in November.”
Reopening International Fully Means Learning to Live With the Pandemic
The U.S. is set to reopen to fully vaccinated international travelers starting on November 1, 2021, but Brand USA’s Thompson sees the return of international visitors as a gradual process as governments confirm all the applicable protocols.
“I’ve always said it’s never gonna it’s not going to be an all off and then all on. Even between now and November we’re going to get additional information and additional protocols as it relates to which markets will open first, and it is always a geopolitical cross border conversation between us and each individual government of each respective country,” said Thompson, adding that the U.S. has finally realized that the pandemic isn’t going anywhere and must live with it.
“I think this was a major statement by our country that this is how our country’s choosing to live with the pandemic as it relates to welcoming visitors in from outside our borders, and it was a major step. And I’m hopeful that I might set a standard for what the rest of the world would do too.”
While travel entry protocols are yet to be clarified and will be revealed over the next weeks, this hasn’t stopped Brand USA in getting ready for what it says is major global pent up demand for America. The agency’s ongoing marketing activities online and its digitization in a downturn, including a new online B2B marketplace, GoUSA TV and a new United Stories campaign, were all funded through reserves that Brand USA had originally built up in 2019 in anticipation of potentially not having its funding renewed in time.
“We had good reserves going in, so we were prepared, and we invested in the global marketplace platform. And then we scaled back; we kept all of our office relationships around the world in place, we scaled back retainers, and so we just literally backed off and waited, and so we’ve been ready to go,” said Thompson. “We have a plan for every market, we’ve been keeping our sentiment research in market alive.”
U.S. Will Beat All Recovery Projections Once Borders Reopen
As the main body in charge of driving demand for tourism to the U.S., Thompson is confident the power of the U.S. brand and consumer interest in it will continue to obscure any ongoing 24 or 48 hour news cycle focused on U.S. states with laws prohibiting vaccine mandates for businesses, such as Florida and Texas.
“We have the privilege of promoting those three letters which are probably the most powerful brand in the world and we often say that it is shaped every day by so many things outside of our control,” said Thompson. “The thing that makes the USA aspirational as a travel destination really hasn’t changed — nothing about it, the pop culture that defines it is what makes the USA the USA.”
Thompson said demand was not the issue, and that the focus was to gain consumer confidence again and showing the U.S. can deliver the experience it wants to deliver is going to be shaped by how every city and every state in the country at large handles the post pandemic situation.
The boom in the domestic tourism economy was the best thing that could have happened, Thompson added. “I think that is the best example of us getting out and enjoying the things that we’re asking them to come and join now that the borders are open; that was a big part of our ability to gain their confidence, and it’s never been a demand issue.”
Brand USA will be vital to bringing back the international inbound travel needed, USTA’s Barnes said. “We’ve really emphasized that this emergency funding will be critical to an overall economic recovery of the industry and the US. And so we are optimistic about the path forward here given the demonstrated bipartisan support in both the House and the Senate.”
Referring to expert projections that international tourism will return to 2019 levels in 2023 for Canada, Mexico and as far as 2025 for long-haul markets, Thompson said he did not see those applying to the U.S. travel market.
“I think we’ll beat every one of those projections, once the borders are open.”
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Photo Credit: Brand USA said demand for America from international travelers remains high ahead of November reopening. Ken Walton / Flickr Commons