The Trump administration’s budget proposal released this week seeks to eliminate Brand USA, a federal tourism marketing arm organized under the Commerce Department. Congress created Brand USA with the 2010 Travel Promotion Act, aiming to spur international travel to America and to help communicate visa and entry policies. Anti-terrorism laws enacted after the 9/11 attacks had left the U.S. of international tourism in tatters compared with other nations. Congress, President Barack Obama, and the $250 billion American tourism industry were eager to reverse the trend.
Brand USA argues that it earns its keep. Every $1 in marketing it spent in fiscal year 2015 returned $21.20 in visitor spending, according to Tourism Economics Inc., a travel industry consulting group. Brand USA, a public-private partnership, contends that its efforts also brought in 1.2 million additional travelers last year who dropped $4 billion in American cash registers. Though the Government Accountability Office has questioned Brand USA’s numbers, the loss of its efforts has many in the travel industry ready to lobby legislators about the importance of selling America abroad.
“It may just relate to political tides, looking for opportunities for cost cutting, and what limited government looks like,” said Adam Sacks, president of Wayne, Pennsylvania-based Brand USA. But “these are not welfare programs; these are economic investments that yield real returns.”
“It’s confusing and puzzling that this would be some sort of deliberate effort.”
Disbanding Brand USA “would be analogous to canceling your life insurance right before you go skydiving,” said Jonathan Grella, a lobbyist with the U.S. Travel Association. His organization released a statement Tuesday decrying what it called the Trump administration’s decision to “unilaterally” disarm on marketing America as a traveler destination.
“It’s confusing and puzzling that this would be some sort of deliberate effort. It’s a head-scratcher,” Grella said. The Commerce Department referred Brand USA inquiries to the Department of Homeland Security. That agency didn’t immediately respond to a request for comment.
Ironically, the agency that would get Brand USA’s funds, U.S. Customs and Border Protection, is the one that’s been most aggressive about implementing much-criticized border and airport procedures, including White House executive orders on travel that courts have rebuffed on constitutional grounds. The CBP enforced Trump’s initial travel ban of Muslim-majority nations in January, detaining numerous foreign travelers before federal courts blocked the ban and a subsequent revised version. The CBP also requested U.S. green-card holders relinquish their documents, and rescinded Global Entry status for certain U.S. citizens. Multiple lawsuits across the country challenging aspects of Trump’s travel policies are wending their way through the courts.
“Our contention has always been that border security and international travel can peaceably coexist,” said John Edman, director of Explore Minnesota Tourism and a Brand USA board member. But even if the administration’s controversial policies are permanently blocked, the damage to America as a desirable holiday spot has been done, the travel lobby claims, through “a mix of rhetoric and policy,” Sacks said.
“We have a really compelling case for our existence.”
Brand USA is funded with $10 of the $14 fee international visitors from 38 countries pay to use an electronic system authorizing visa-free travel. Of these funds, Brand USA can access as much as $100 million annually for its budget, if it matches those expenditures with returns to U.S. coffers. All of which means Brand USA isn’t a traditional cost on the federal budget, supporters said. “Brand USA isn’t funded with a dime of taxpayer money, reduced the deficit by $50 million, and by the [Office of Management and Budget’s] own accounting, eliminating it would put the federal budget further in the red,” the U.S. Travel Association said.
Brand USA is popular with many tourism officials because it’s charged with assisting both rural and far better-known locales, which helps put a Jacksonville, Florida, or Savannah, Georgia, on an equal footing with New Orleans or San Francisco in terms of federal tourism marketing resources.
Government analysts, however, aren’t so sure Brand USA is bringing as much bang for each buck. At a time of Trump’s “America First” policy, the administration may have decided that funds going to Brand USA may be better spent on border security.
A 2013 GAO report found that Brand USA had not devised a plan to measure its performance with specific timeframes, methodologies, and data sources to evaluate progress to its long-term mission. The GAO said the organization measured its online media impact, but not its effect on overall U.S. travel from abroad.
The group has 76 employees in Washington and roughly an equal number of contract workers abroad staffing 13 offices, Brand USA Chief Executive Officer Christopher Thompson said. It coordinates with state and local visitor organizations and acts as the umbrella organization for U.S. activities at global trade shows.
“We have a really compelling case for our existence,” Thompson said. “This president came in with a charge to trim spending and to take a fresh look at government. So was I surprised at how we were presented in the budget? Yeah, I would be lying if I said I wasn’t.”
One cause for concern is that people in America’s top two international travel markets—Canada and Mexico—are expressing reservations about future U.S. trips, based on monthly “traveler sentiment” polling, Carroll Rheem, Brand USA’s vice president of research and analytics, told directors at their March 22 meeting.
Between December and February, travelers from Mexico, Australia, Canada, and Germany all said they were less likely to visit America because of the political climate, according to Brand USA polling data. International travelers in China and India were least influenced by that issue.
“Every year global travel grows—last year 1.2 billion international trips were taken—and that number is expected to reach 1.8 billion by 2030,” Marriott International Inc. CEO Arne Sorenson said in an emailed statement. “Brand USA competes in the global marketplace to attract those travelers and educate them on U. S. travel policies.”
Three of Brand USA’s 11 board members said they were confident Congress would continue the organization’s work. For one thing, much of the federal marketing effort has allowed “second and third-tier destinations around the country” to access travelers from places like China, Australia, and Europe, said Sacks, the economist. “They’d never be able to touch those markets otherwise,” he explained, a view echoed by Cathy Tull, senior vice president of marketing for the Las Vegas Convention and Visitors Bureau. The city is trying to break 43 million visitors this year, topping the prior record set in 2016.
A similar fight over whether government should aid tourism marketing is playing out in Florida, where the Republican-led legislature voted recently to slash Visit Florida’s budget by 67 percent, to $25 million. Governor Rick Scott, also a Republican, has threatened a veto, claiming the proposed budget would harm economic growth in a state where tourism is the top industry and accounts for one of every six jobs.
At least Two Brand USA board members, Edman and Tampa Bay restaurateur owner Maryann Ferenc, cited Trump’s business ties to the hospitality industry, in terms of hotel and golf developments, as the most curious aspect of his decision to zero-out Brand USA.
“It would seem at odds with his background,” Ferenc said. “But obviously he’s trying to deal with other things.”