U.S. Travel and Tourism Advisory Board

1 2 1 U.S. TRAVEL AND TOURISM ADVISORY BOARD 2 3 4 5 6 Room 4830 7 DOC Building 8 14th & Constitution Avenue. N.W. 9 Washington, DC 10 11 Wednesday, 12 September 14, 2011 13 14 15 The meeting was convened, pursuant to notice, 16 17 at 9:15 a.m., MR. ROSSI RALENKOTTER, Chair, presiding. 18 19 APPEARANCES: 20 21 MEMBERS OF THE BOARD 22 23 MR. ROSSI RALENKOTTER 24 President and Chief Executive Officer 25 Las Vegas Convention and Visitors Authority 26 27 MS. DAWN DREW 28 Founder and Chief Executive Officer 29 The M.O.S.T.E., Inc. 30 31 MS. HOLLY AGRA 32 President 33 Chicago's First Lady Cruises 34 35 MS. SHEILA ARMSTRONG 36 Executive Director 37 U.S. Cultural and Heritage Tourism 38 Marketing Council 39 40 MS. HELANE BECKER 41 Managing Director 42 Dahlman Rose & Company 433 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 2 2 1 MR. JOHN SPROULS 2 Chief Executive Officer 3 Universal Orlando Resort 4 and Executive Vice President 5 Universal Parks and Resorts 6 7 MR. SAM GILLILAND 8 Chairman and Chief Executive Officer 9 Sabre Holdings 10 11 MR. DOUGLAS SHIFFLET 12 Chairman and Chief Executive Officer 13 D.K. Shifflet & Associates 14 15 MR. GREG STUBBLEFIELD 16 Executive Vice President and 17 Chief Strategy Officer 18 Enterprise Holdings 19 20 MR. JOSE ANDRES 21 President and Co-Founder 22 ThinkFoodGroup 23 24 MR. CHANDRAKANT "C.K." PATEL 25 President 26 BVM Holdings, Inc. 27 28 MR. HUBERT JOLY 29 President and Chief Executive Officer 30 Carlson Companies 31 32 MR. ADAM GOLDSTEIN 33 President and Chief Executive Officer 34 Royal Caribbean International 35 36 MS. MARYANN FERENC 37 Founder, President and 38 Chief Executive Officer 39 Mise en Place, Inc. 40 41 MR. PHILIP LEVINE 42 President & CEO 43 Baron Corporation3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 3 2 1 2 MR. GEORGE ZIMMERMAN 3 Vice President, Travel 4 Michigan at the Michigan Economic 5 Development Corporation 6 7 U.S. DEPARTMENT OF COMMERCE 8 9 MR. FRANCISCO SANCHEZ 10 Under Secretary for Manufacturing & Services 11 U.S. Department of Commerce 12 13 MS. NICOLE Y. LAMB-HALE 14 Assistant Secretary for Manufacturing 15 and Services 16 U.S. Department of Commerce 17 18 MS. HELEN MARANO 19 Director 20 Office of Travel and Tourism Industries 21 U.S. Department of Commerce 22 23 MR. MICHAEL MASSERMAN 24 Director 25 Office of Advisory Committees 26 U.S. Department of Commerce 27 28 MS. JENNA PILAT 29 Deputy Director 30 Office of Advisory Committees 31 32 MR. MARC CHITTUM 33 Executive Secretary 34 U.S. Travel and Tourism Advisory Board 35 36 ALSO PRESENT: 37 38 MS. PATRICIA COGSWELL 39 National Security Staff 40 White House 41 42 MR. RICHARD L. FRIEDMAN 43 President's Export Council3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 4 2 1 2 MR. CARL BURLESON 3 Federal Aviation Administration 4 5 MR. STEPHEN J. CLOOBECK (via teleconference) 6 Chairman 7 Corporation for Travel Promotion (CTP) 8 9 MR. KENNETH HYATT 10 Acting Deputy Assistant Secretary for 11 Services 12 Liaison for CTP 13 14 MR. PAUL BRUMAN 15 TSA3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 5 2 1 I N D E X 2 3 PAGE 4 5 6 OPENING REMARKS & INTRODUCTIONS 7 Rossi Ralenkotter, Chair 5 8 9 WELCOME AND NEI UPDATE 10 Francisco Sanchez, Under Secretary for 11 International Trade 9 12 13 ADVOCACY PRESENTATION & DISCUSSION 14 Adam Goldstein, Subcommittee Member 16, 80 15 16 RESEARCH PRESENTATION & DISCUSSION 17 Doug Shifflet, Subcommittee Chair 45 18 19 REMARKS 20 Dr. Becky Blank, Acting Secretary of Commerce 63 21 22 REMARKS 23 Rhea Suh, Assistant Secretary for Policy, 24 Budget and Management, 25 Department of the Interior 77 26 27 FINAL PRESENTATION 28 Rossi Ralenkotter, Chair 83 29 30 TOURISM POLICY COUNCIL UPDATE ON PAST 31 RECOMMENDATIONS 32  Michael Frias, Deputy Assistant Secretary 33 for thePrivate Sector, 34 Department of Homeland Security 96 35  Ed Ramotowski, Acting Deputy Assistant 36 Secretaryfor Visa Services, 37 Department of State 86 38  Carl Burleson, Deputy Assistant Administrator 39 for Policy, International Affairs and 40 Environment, Federal Aviation Administration 104 41  Stephen J. Cloobeck, Chairman, Corporation for 42 Travel Promotion 111 433 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 6 2 1 CLOSING REMARKS & NEXT STEPS 2 Nicole Lamb-Hale, Assistant Secretary for 3 Manufacturing and Services 116 4 5 ADJOURNMENT 1113 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 7 2 1 P R O C E E D I N G S2 OPENING REMARKS & INTRODUCTIONS34 CHAIRMAN RALENKOTTER: Good morning, 5 everyone. I'm sorry I didn't have a gavel with me, so 6 I did what a pit boss in Las Vegas does, I just 7 clapped my hands.8 (Laughter)9 CHAIRMAN RALENKOTTER: But again, thank you 10 for all being here. This is our final meeting, our 11 wrap up of a lot of hard work by everyone on the 12 committee, and I'll do a few remarks at the end. But 13 I really do appreciate all the hard work that has gone14 into this and I think we are seeing some progress, 15 some movement, and some great dialogue going back and 16 forth.17 So to get started, I think we all need to 18 just, at the table, introduce ourselves.19 Dawn, we'll start with you.20 MS. DREW: Hi. Dawn Drew, CEO and Founder of21 The Most, Incorporated out of New York City.22 MR. SHIFFLET: I'm Doug Shifflet. I'm 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 8 2 1 Chairman and CEO of D.K. Shifflet & Associates.2 MR. JOLY: Hubert Joly. I'm the CEO of 3 Carlson.4 MR. STUBBLEFIELD: Greg Stubblefield, 5 Executive Vice President and Chief Strategy Officer 6 for Enterprise Holdings, which is Enterprise Rent-A-7 Car, National Car Rental, and Alamo.8 MR. ANDRES: Jose Andres, chef, 9 ThinkFoodGroup, here in Washington, DC.10 MS. BECKER: I'm Helane Becker, director with11 Dahlman Rose & Company, a brokerage firm in New York.12 MS. ARMSTRONG: Sheila Armstrong. I'm the 13 co-founder and Executive Director of U.S. Cultural and14 Heritage Tourism Marketing Council.15 MR. MASSERMAN: Mike Masserman, Director of 16 the Office of Advisory Committees here at Department 17 of Commerce.18 MR. FRIAS: Michael Frias, Deputy Assistant 19 Secretary for the Private Sector at DHS.20 SECRETARY LAMB-HALE: Nicole Lamb-Hale, 21 Assistant Secretary for Manufacturing & Services, 22 Commerce.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 9 2 1 SECRETARY SANCHEZ: Francisco Sanchez, Under 2 Secretary of Commerce for Trade.3 MR. HYATT: Ken Hyatt, Acting Deputy 4 Under Secretary for Services and Liaison to the 5 corporation --6 MS. COGSWELL: I'm Patty Cogswell and I know 7 it says Department of Homeland Security, but in fact 8 I'm with the National Security staff at the White 9 House.10 (Laughter)11 CHAIRMAN RALENKOTTER: She's incognito.12 (Laughter)13 MR. RAMOTOWSKI: Ed Ramotowski, the Managing 14 Director of Visa Services at State.15 MS. MARANO: Helen Marano, Director of the 16 Office of Travel and Tourism Industries, a tireless 17 leader for you all.18 (Laughter)19 MR. MCREYNOLDS: John McReynolds with 20 Universal Park Resorts.21 MR. ZIMMERMAN: George Zimmerman, Travel 22 Michigan.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 10 2 1 MS. AGRA: Holly Agra, Chicago's First Lady 2 Cruises in downtown Chicago.3 MR. DAVIDSON: Good morning, everyone. Todd 4 Davidson with Travel Oregon.5 MS. FERENC: Maryann Ferenc, CEO of Mise en 6 Place Restaurant and Bank Company from Tampa, Florida.7 MR. GILLELAND: Sam Gilleland, Saber Holdings.8 MR. GOLDSTEIN: Adam Goldstein, Royal 9 Caribbean.10 MR. RALENKOTTER: And I'm Rossi Ralenkotter, 11 President and CEO of Las Vegas Convention and Visitors12 Authority. Again, welcome everyone. We have a tight 13 agenda, so I'm going to turn it over to Francisco, 14 who's going to give us an update on the Export 15 Initiative.161718192021223 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 11 2 123456789101112131415 WELCOME AND NEI UPDATE16 By Francisco Sanchez,17 Under Secretary for International Trade1819 SECRETARY SANCHEZ: Right. Thank you, Rossi.20 Good morning, everyone. It's good to see all of you.21 Let me start by thanking Rossi, Dawn, and the22 entire board for your excellent service. I have been 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 12 2 1 on a lot of boards, some outside of government, 2 nonprofits and for-profit, and in government, and not 3 all boards are created equal.4 But this board has delivered and you've 5 delivered very, very good, very sound, very strong 6 policy recommendations. I know I am very grateful to 7 the effort you've put into this. Secretary Locke--I 8 should say former Secretary Locke--before he left for 9 China, commented on the effectiveness of this board. 10 So, a big, big thank you with a lot of gratitude to 11 all of you.12 Let me talk about trade very quickly. 13 Overall, we're doing well. Trade in the first seven 14 months of this year, exports are up 16 percent over 15 2010, which is phenomenal considering that in 2010 16 they were up 17 percent over 2009. To meet the 17 President's NEI goals we have to be growing at about 18 14.8 percent each of the five years that the NEI has 19 set as its goal of doubling exports. So overall we're20 doing great. I am very happy to report that travel 21 and tourism is playing a very, very important role in 22 our trade numbers looking good.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 13 2 1 Direct employment from travel and tourism 2 industries increased 2 percent in the first quarter of3 2011, making it the fourth consecutive quarter of job 4 growth in the sector, outpacing the average growth of 5 travel and tourism employment. The air passenger 6 sector increased its labor force by 4.3 percent in the7 first quarter.8 In the first six months of 2011, 9 international visitation grew by 5 percent over the 10 same period last year. Even better, international 11 visitors have spent $86.9 billion during their visits 12 to the United States through July of 2011, which is an13 increase of 13 percent over last year. The growth of 14 U.S. travel and tourism exports have appreciably 15 outpaced the growth of imports, thereby resulting in 16 about a $23.3 billion trade surplus for travel and 17 tourism, which by the way is an increase of 30 percent18 over last year.19 VOICE: Wow.20 (Applause)21 SECRETARY SANCHEZ: Now, if you didn't see 22 the President's speech on Thursday, I suspect that you3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 14 2 1 at least have heard about his speech and you know that2 on Monday he delivered to the Congress the American 3 Jobs Act. This is a very, very important Act at this 4 particular time. Independent economists--not the 5 government economists, not the White House economist--6 estimate that this Act will generate somewhere between7 1.5 and 2 million jobs. 8 I have to say that I've got to believe a 9 chunk of those jobs will come from the travel and 10 tourism industry. I also want to say that a lot of 11 the things in that Act, in that proposed Act, will 12 benefit the travel and tourism industry.13 Very quickly, just a couple of things. The 14 payroll tax gets cut 50 percent for 98 percent of all 15 businesses in the United States. If you increase the 16 wages for your current employees or you hire new ones,17 you get an additional cut. If you're making capital 18 expenditures, you can fully depreciate it in 2012--19 huge, very important in this industry. 20 There are a lot of other things in there. I 21 won't bore you. But I felt it was important to point 22 this out, it's huge if, and only if, the Congress 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 15 2 1 acts. I can't tell you to lobby so I'm not going to 2 tell you to lobby, but I will tell you that it's 3 important for you to become well-informed of the 4 President's plan and to generate debate and talk about5 it because we need action now.6 So with that, let me stop and let me also 7 just talk a minute about some of the work you've done.8 We've shared your recommendations with the inter-9 agency Tourism Policy Council, which includes the 10 Department of State and Homeland Security, as well as 11 the White House. The council met last week to discuss12 how to move forward on many of the issues that you 13 have raised, including one that I know we've been 14 talking about for a while: enhancing the visa process.15 The council reviewed the metrics to further 16 track progress on travel facilitation issues raised by17 the President's Export Council and the board at this 18 inter-agency policy committee meeting. It also 19 established a Crisis Communications Working Group to 20 develop and coordinate responses to industry issues, 21 including during times of catastrophes such as the 22 deep-water horizon or Hurricane Irene.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 16 2 1 Today you'll be hearing a report from the 2 State Department on the extensive progress that 3 they're making in increasing responsiveness to meet 4 the increased demand for visas, in particular among 5 emerging nations. I know that the Travel Facilitation6 Subcommittee met with Ambassador Jacobs yesterday to 7 hear an update and to engage in further discussion on 8 the board's recommendations.9 The board's work has been recognized and 10 discussed at the White House, where the Obama 11 administration is actively looking for ways to 12 facilitate legitimate travel and support the travel 13 and tourism industry which, I don't need to tell 14 anyone in this room, promotes millions of jobs for 15 American workers and, as I pointed out in my earlier 16 comments, is contributing significantly to the balance17 of trade. The administration is fully engaged with you18 as representatives of the travel and tourism industry 19 to jointly pave the way for increased travel activity 20 to support job growth for the American economy.21 Following the Chair's comments, we look 22 forward to giving you a more in-depth update on your 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 17 2 1 recommendations and the actions that are being taken 2 as a result of them, but let me also just say one more3 thing. As you're aware, we recently rechartered the 4 board and we are currently accepting applications for 5 the next round of appointments. We hope, if you're 6 interested in continuing to serve, that you will let 7 us know. You've been terrific and we hope that many 8 of you will come back to us.9 So, Mr. Chairman, thank you very much.10 CHAIRMAN RALENKOTTER: Thank you. And on 11 behalf of the committee itself I want to thank 12 everyone in Commerce for the cooperation. The feeling13 of a partnership has really been developed. We 14 believe that as we move forward with some of the 15 initiatives we're talking about we're going to see 16 increased jobs, we're going to see more international 17 visitation, as well as domestic travel to our country.18 So I want to thank you and everyone at Commerce for 19 that, because without that spirit of cooperativeness 20 we can't make this all work. So, thank you again.21 SECRETARY SANCHEZ: Thank you, Rossi.22 CHAIRMAN RALENKOTTER: We appreciate it.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 18 2 1 SECRETARY SANCHEZ: Thank you.2 CHAIRMAN RALENKOTTER: Okay. Thank you.3 Before I start with the presentations though,4 I would like to recognize Dick Friedman, who is here 5 with the President's Export Council. Dick, if you'd 6 just give us a little wave there. Thank you for being7 here. We appreciate it.8 MR. FRIEDMAN: Glad to be here.9 CHAIRMAN RALENKOTTER: Thank you. Okay.10 Well, we're down to two presentations. We 11 have the Advocacy Committee and the Research 12 Subcommittee presenting today. So I'd like to turn 13 this over to Sam Gilliland. Sam, if you would start.1415161718192021223 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 19 2 123456789101112131415 ADVOCACY PRESENTATION & DISCUSSION16 Adam Goldstein, Subcommittee Member1718 MR. GILLILAND: Thank you. Thank you, Rossi,19 and thanks to all of you for the opportunity to 20 present the recommendations of our Advocacy 21 Subcommittee regarding energy policy.22 And before I jump in, I would also express my3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 20 2 1 appreciation to the subcommittee itself, our members, 2 and their contributions to the work product that we'll3 present to you all here today.4 Those at the May meeting will recall that we 5 presented recommendations regarding aviation security 6 and I am pleased that we're seeing traction. There 7 are wheels, in some cases, already in motion and some 8 that have been put in motion since those 9 recommendations have been put forward and we really 10 appreciate it and are pleased to see that there is 11 some momentum behind those recommendations.12 Before I hand it over to Adam--who really is 13 an expert on energy policy and security--to take you 14 through our presentation here and our recommendations,15 I wanted to just emphasize for a moment the importance16 of this particular topic, travel and tourism. I think17 there aren't always direct linkages made between 18 energy policy and travel and tourism, except in times 19 of crisis.20 So as you look back to when oil was nearing 21 $150 a barrel, and even as it sits bumping up and down22 and close to $100 a barrel, you see many businesses in3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 21 2 1 the travel and tourism industry, but particularly the 2 airlines -- and back in the days when it was near $1503 a barrel, airlines were in dire straits. 4 I think it is very important to the travel 5 industry that we have a healthy airline industry 6 because, after all, it is in many respects the power 7 grid of travel and tourism, bringing people to 8 destinations, allowing those people to spend money 9 through many of the firms that are represented here 10 today.11 So it is really important and I hope it 12 becomes an important agenda item, both for Commerce 13 and also for the travel industry as a whole. So with 14 that I will turn it over to Adam to walk us through 15 this.16 MR. GOLDSTEIN: Thank you very much, Sam. 17 Thank you to the Department for this opportunity to 18 talk about energy policy, and in fact for all the 19 opportunities that you've given us for these two years20 to comment on a number of items of great interest to 21 our industry, and also for being very proactive and 22 taking it forward throughout the government, which we 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 22 2 1 are counting on you for and very pleased to see that 2 that's happening.3 I also want to thank Sam because I did not 4 expect, when I joined the Advocacy Subcommittee, such 5 keen support for the idea of coming forward with some 6 recommendations on energy policy. I do not expect--to7 the point that Sam just made--such a ready connection 8 having been made between the interests of this 9 industry and the country and what is happening in the 10 energy space. So that really has been great from my 11 standpoint. 12 As, as it says in the letter, we've worked 13 quite a bit with an entity known as SAFE. It stands 14 for Security America's Future Energy, which is a 15 nonpartisan organization that is dedicated to helping 16 the United States confront and reduce its 17 vulnerability in this area, and I should disclose that18 I'm a member of something called the Energy Security 19 Leadership Council, which is an affiliate to SAFE.20 We understand in making these recommendations21 that there isn't actually a single one of them that 22 the Department of Commerce could action all by itself.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 23 2 1 The examples that you just gave of interagency 2 cooperation and things that are happening on the 3 interagency scene are symbolic of exactly what we're 4 looking for in terms of the opportunity that the 5 Department has to spearhead action and critical debate6 to move the country forward. These recommendations, 7 although they certainly would benefit the travel and 8 tourism industry greatly, are not parochial. 9 The vulnerability that we're talking about 10 here is the vulnerability of the United States of 11 America and all of its people and the recommendations 12 we believe would help everyone, not only in terms of 13 job creation, but in terms of the basic safety and 14 security of our country going forward into an 15 uncertain future.16 (Showing of slides)17 MR. GOLDSTEIN: If we can go to the first 18 slide, we changed the slides a little bit last night. 19 We took enormous risk in doing so.20 (Laughter)21 MR. GOLDSTEIN: So we'll see what comes up on22 the screen. The definition of energy security as we 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 24 2 1 put forward as the first bullet, it's a very simple 2 concept. But as Sam said, the connection is not often3 made of what that means to the daily and long-term 4 needs of our sector and other sectors.5 The second and third bullet points. When you6 look at them, they appear to be blindingly obvious. 7 Yet, the country has not been able to take, 8 consistently over time, the steps that are needed to 9 reduce particularly the volatility of energy prices. 10 That clearly undermined the economy, our sector, and 11 in general the ability to plan forward. All business 12 and government prize the ability to plan for the 13 future, but the volatility that we're confronting here14 very much undermines that ability.15 We have experience now in the last few years,16 tremendous dislocations in the travel and tourism 17 sector, loss of employment, shutting down of whole 18 capabilities, air service to cities being one 19 prominent example, significant reductions in capacity 20 to major tourism centers, as businesses have tried to 21 get through the period that we have been enduring. So22 that is, in essence, the background to why we believe 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 25 2 1 recommendations should be brought forward and action 2 should be taken.3 If we go to the next slide --4 (Changing of slides)5 MR. GOLDSTEIN: I know it's hard to read from6 a distance. Essentially that slide shows 40 years of 7 the relationship between oil expenditure as a 8 percentage of GDP and the economy. What it shows in 9 the dark bars, which appear now and then as you look 10 across the slide, are essentially the recessionary 11 periods. 12 But if you look at the line that hovers above13 the bars, essentially what you see is that every 14 recession that we have endured in the last 40-plus 15 years has a direct relationship with a spike in oil 16 prices. It doesn't mean it will happen every time, 17 but every recession that we've had is connected to 18 such a spike. It simply is not in our interest to 19 tolerate this condition endlessly on into the future. 20 You can see some of the points here. For the21 air industry, which of the various sectors of travel 22 and tourism has fuel representing the highest 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 26 2 1 percentage of its cost base, a $1 increase in jet fuel2 costs the industry approximately $17.5 billion. So a 3 $10, $20, $30, $40 increase is clearly the difference 4 between industry viability and great suffering in the 5 industry, just as one example.6 What we see here is that, generally speaking,7 over these years, when 4 to 5 percent of our GDP is 8 spent in oil expenditures, we're coming into a 9 recessionary environment. Unfortunately, that is the 10 case at the moment. So when people get worried about 11 what this situation is that we're in, that is one of 12 the key indicators that will cause us to worry and the13 government to worry about what's going on. So that's a14 pretty stark reminder of what we have faced and what 15 we potentially will face if we don't take actions to 16 address these issues.17 (Changing of slides)18 MR. GOLDSTEIN: If we go to the next slide, I19 should say, by the way, that airlines -- it's 20 important to note that while I commented on the 21 airline sector. airlines are not alone. They may face22 the highest percentage of their cost base, but you can3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 27 2 1 go through all the sectors of travel and tourism, and 2 they're either highly directly affected or very 3 indirectly affected in a trickle-down type of effect 4 as they try to contend with higher auto prices.5 Certainly in the cruise sector we appreciate 6 that greatly, but you can talk about hotels, and 7 convention centers, and retain travel agencies, and 8 tour operators, and on and on it goes. We are all 9 affected by this.10 The costs that we have borne, if you take it 11 to the level of the individual in a household, it's 12 really interesting what has transpired in the last 13 decade. In general, the tax burden on individuals has14 been reduced, by round numbers, $2,000 per person. In15 general, the extra costs that these individuals have 16 paid out in higher energy prices, rough numbers, is 17 about $2,000.18 So all the benefits that have occurred 19 through the lessening of the tax burden in the last 20 decade have been completely and totally offset by the 21 increase in energy costs. You can also make 22 connections between the additional energy costs that 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 28 2 1 the country has faced and the shortfall in mortgage 2 payments that occurred in the run-up to the real 3 estate crisis in 2007, 2008, 2009, a similar type of 4 correlation. 5 So energy costs directly undermine the 6 economy and reduced discretionary spending, which of 7 course a tremendous part of the success of our sector 8 depends on consumers choosing to spend discretionary 9 dollars. They don't have them because they're going 10 to energy prices. We are completely vulnerable to 11 that. You can even say, if you want to state it as a 12 very simple equation, volatility of energy prices 13 equals vulnerability of our sector and of the United 14 States. We should take actions to address that.15 We cannot control, obviously, the entire 16 energy environment. The price of oil is determined on17 a global basis. We all see that the emerging 18 economies, whose travelers would love to come and 19 visit the United States, are rapidly increasing their 20 usage of energy. So factors that cause volatility go 21 far beyond the bounds of the United States. We should22 address those areas that we are capable of addressing. 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 29 2 1 If we could go to the next slide.2 (Changing of slides)3 MR. GOLDSTEIN: These are the basics, what I 4 would call the 40, the 70, and the 90 just to try to 5 frame how oil fits into the general picture of the 6 economy and of our industry. 7 On the left pie, that's the primary energy 8 demand for our country, and oil, the orange slice, 9 represents 39 percent. So approximately 40 percent of10 energy demand in the United States is met by -- if you11 then move over into the sectors of transportation, 12 about 70 percent of the country's use of oil goes to 13 transportation. So, oil and transportation are 14 intensely linked.15 In fact, within transportation, 95 percent of16 the energy requirement within transportation is oil. 17 So when we talk energy generally in the economy, you 18 talk about a lot of things. But when you talk about 19 the transportation sector and how things move, they 20 move because of oil. The dependency of our sector is 21 acute with respect to oil. 22 No matter what we do here, it's going to take3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 30 2 1 a very long time to change those fundamentals. But if2 we never get started, we will never change those 3 fundamentals. So our reliance, our sector's reliance 4 on a single, highly volatile fuel to power mobility is5 what jeopardizes us and reduces the security of the 6 country, depresses the dollar, and vastly increases 7 our balance of trade deficit.8 (Changing of slides)9 MR. GOLDSTEIN: If we go to the next slide we10 see something that I think most Americans simply do 11 not appreciate. There's often debate in the country 12 about the role that the large oil companies play in 13 the drama of energy prices, and energy profits for 14 that matter. You have to go down on this list to the 15 bottom, to number 14 to find an oil major on the list 16 of entities that control the world's oil reserves. 17 The first 13 belong to another country. You can see 18 from the size of the bars, compared to ExxonMobil 19 which we may understand as the most valuable company 20 in the world, I think, in stock market value, at least21 some days --22 (Laughter)3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 31 2 1 MR. GOLDSTEIN: Compare that little bar to 2 the bars above it. The first one I think is the 3 National Iranian Oil Company, the second one is Saudi 4 Aramco, so the Saudi Arabian oil company, and so on. 5 The next one is Russia, and so it goes. I think the 6 next one is Iraq.7 The oil majors have nothing in comparison to 8 what is controlled by countries whose interests are 9 often antithetical to ours, or at least there is some 10 degree of tension or hostility and they are the ones 11 who have the oil. That isn't going to change in our 12 lifetimes. You can see that from the graph. 13 So more than 90 percent of the global crude 14 oil reserves are held by those types of companies in 15 those countries, and that is what is a critical source16 of our vulnerability. So given all that, our sense is17 that it's clearly in our national interest for 18 Congress and the administration to move forward to 19 develop a comprehensive strategy to increase American 20 energy security and to take actions quickly, even if 21 the pay-off will not occur for a longer period of time.22 There are things happening in travel and 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 32 2 1 tourism today to facilitate that. There's a lot of 2 effort going on around alternative fuels, creating 3 them and using them, in the air sector and elsewhere. 4 There is momentum in some quarters for electric 5 vehicle transportation, which I'll come back to in a 6 minute.7 But we need to do more as an industry and we 8 need a much more aggressive public/private partnership9 with the government in order to move forward in a very10 meaningful way. The actions that are being taken will11 not get us there yet.12 (Changing of slides)13 MR. GOLDSTEIN: So if we then go to the next 14 slide, this is a summary of the policy recommendations15 that are contained in the letter. There's essentially16 one slide still left for each one of those four major 17 areas to go through, which I will do in a minute. It 18 is very possible to make progress on all of these 19 recommendations but it is a pan-governmental type of 20 undertaking. 21 I think there's a real opportunity for the 22 Department of Commerce to step forward and be visible 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 33 2 1 in a very positive and constructive way within the 2 government to take leadership in these areas, even 3 though you will need help from your colleagues to 4 achieve them. We will need regular touring policy 5 changes to get where we need to go.6 (Changing of slides)7 MR. GOLDSTEIN: If we go to the next slide, 8 we'll start with the first area, which is increasing 9 efficiency in the transport sector. In all my years 10 in travel and tourism I've been hearing about the 11 funding of the transportation infrastructure, the 12 different acts that have occurred over time. There's 13 a lot of legislation that is in place. We do struggle14 to get that done; so often it goes on by many, many 15 extensions, unfortunately.16 But what I've come to realize in the last 17 year as we've done this work is that the decision-18 making calculus that determines what transportation 19 infrastructure development occurs in the country so 20 far to this point is in no way affected by the desire 21 to use oil more efficiently. There is no connection 22 in how we choose to do transportation infrastructure 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 34 2 1 projects and what will help the country save oil.2 We believe that those types of metrics should3 be introduced into the travel and tourism 4 infrastructure policy calculus so that the significant5 spending that occurs over time can help drive us 6 towards the right result. There are lots of 7 opportunities and options, more than can be discussed 8 here. 9 In the first bullet point up there in the 10 white space it says, "Congress should pass 11 transportation legislation that funds road pricing 12 pilot programs, including congestion fees and vehicle 13 miles traveled fees". These are interesting and 14 sometimes controversial subjects. We don't have time 15 obviously to delve into them today, but I certainly 16 recommend -- we recommend for the Department of 17 Commerce to come fully up to speed on these options 18 and to promote those that you believe the most in.19 Also in this area of the efficiency in the 20 transportation sector--and I will be very happy for 21 Sam to help me out here because he's closer to this 22 than I am--is we want to take advantage of the 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 35 2 1 opportunity to ensure that the Federal Aviation 2 Administration can do what needs to be done and is 3 funded to do what needs to be done to get the Next 4 Generation of air traffic control in place, 5 implemented, so that the country can save very 6 significant amounts of oil by a more rational 7 orchestration of air -- 8 MR. GILLILAND: Well, just one factoid. I 9 think the view is that when in place, when full 10 implemented, the NextGen system will drive 16 percent 11 efficiency, and therefore much lower utilization of 12 fuel for airlines. So 16 percent is a huge 13 opportunity if we can push forward with NextGen air 14 traffic control and air traffic control technology.15 MR. BURLESON: So when would you like 16 reaction? I'm Carl Burleson with the FAA.17 (Laughter)18 MR. GILLILAND: Our intention as an industry 19 is to be fully supportive of your efforts to do what 20 needs to be done.21 MR. BURLESON: We really appreciate it. It 22 is absolutely critical. When you look at airlines, 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 36 2 1 airlines' fuel bill today and operating costs are 2 between 35 to 40 percent of their operating costs. So3 clearly this is a huge issue for the airlines. You 4 can see in the system today, in terms of both managing5 utilization, loss of service to a number of cities, 6 it's a huge driver and certainly we think NextGen is a7 critical piece on how we deliver future efficiencies, 8 both in the air traffic side, but also, as you're 9 touching on, on fuels. Certainly our vision for 10 alternative fuels is a critical piece of NextGen.11 MR. GOLDSTEIN: Often when you get into the 12 specifics of our recommendations we are of course 13 advocating government actions. There are also private14 sector initiatives that need to take place. Some of 15 them, we believe, require tax incentives, so that is a16 component of what we're talking about. But probably 17 the main, central component here would be to make sure18 that the FAA is funded, staffed, and ready to 19 implement what it needs to do.20 (Changing of slides)21 MR. GOLDSTEIN: If we then move to the next 22 slide, to the next area, which is accelerating the 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 37 2 1 commercialization of alternatives to oil, as I've 2 mentioned several times it's going to take a long 3 time. The scale of our use of oil dwarfs our use of 4 alternatives today.5 But as science and government and private 6 sector devote increasing attention to the 7 possibilities that exist for alternatives, we continue8 to find exciting potential developments, even, for 9 example, in the air sector where, because the range of10 possibilities for energy use for the air sector is 11 narrow compared to land-based sectors, or even 12 shipping, we find even within that sector that there 13 are potential alternatives for high-density energies 14 that are liquid fueled that could work in the aviation15 environment. There is some progress being made on 16 that, including a lot of cooperation with the U.S. 17 military, but there's much more that can be done.18 But the area in which SAFE, in particular, 19 has pushed the hardest and where there is legislation 20 that is in front of Congress in this session called 21 the Promoting Electric Vehicles Act of 2011, which is 22 up there on the slide, is the electrification of road 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 38 2 1 transport. It is the shift of the powering of 2 transportation mobility from an oil-based equation to 3 an electricity-based equation over time. 4 The act is intended to cause competition 5 amongst local communities around the United States, 6 literally through public/private partnerships, to bid 7 for selection as an area for critical mass, to become 8 a leadership community where all the different 9 components of electrification will be accelerated and 10 brought together so that in that community 11 electrification will be prevalent on the roads as the 12 source of power for the cars and trucks.13 Before I showed what I called the 40 to 70 14 and the 90 to show how critical, how central to energy15 demand oil is in the transportation sector, these two 16 pie graphs show you the exact opposite case as it 17 relates to electricity. Oil has almost nothing to do 18 with electricity generation in this country and the 19 transportation sector essentially does not depend on 20 electricity for anything at all. So the opportunity 21 to move towards electricity as the source of powering 22 transportation moves us essentially completely away 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 39 2 1 from oil, and transportation is a huge untapped 2 opportunity in this regard.3 So there are two ubiquitous infrastructures 4 for supporting our energy needs in the country, the 5 gasoline infrastructure and the electricity 6 infrastructure. So one of the reasons why we are so 7 enamored of electricity for this purpose is that the 8 ubiquity of the infrastructure is there. 9 Now, there's a lot that needs to be done with10 batteries and charging stations and so on and so 11 forth, but it wouldn't take, relatively speaking, that12 much more effort to put the drivers of cars in a 13 position where they can just plug in instead of just 14 going to the pump and fueling up with gas.15 And I don't know if any of you have had the 16 opportunity. I did have the opportunity to drive a 17 Chevy Volt for a week a few weeks ago, and it's really18 a very interesting experience to have. Okay, today 19 the tank -- actually the gas tank is wonderful if you 20 have to get there, but the battery right now provides 21 you 34 miles of travel. 22 Obviously to achieve what we're talking about3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 40 2 1 it will have to go much, much, much higher than that, 2 and part of the government involvement is to spearhead3 basic research that will get us to batteries that have4 much, much, much longer use lives before they need a 5 charge. But we are on the way. This country does 6 electricity well. Do we have issues in electricity? 7 Sure. Transmission, distribution, generation, all of 8 it. But as a basic proposition, we do electricity 9 well. 10 Electricity is what would give public 11 policymakers the flexibility over time to direct the 12 energy source for the electricity to evolve and the 13 drivers wouldn't have to worry about it. All they 14 know is, you plug into the outlet and your car can 15 move more. I think that's pretty much all we want the16 drivers to know. But lots for the public policymakers17 to think about behind the scenes. So, we're really 18 looking for the Department of Commerce, Department of 19 Energy, and other departments to accelerate the 20 progress of plug-in electric vehicles. 21 I should mention one more thing on 22 alternative fuels. The reason why I am on the Energy 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 41 2 1 Security Leadership Council is that Royal Caribbean 2 has a strange history wherein we became the world's 3 largest user of biodiesel for a period of about two 4 years, powering eight of our big cruise ships, and 5 today we don't use it. 6 I don't have time to explain all that here, 7 but suffice it to say that the possibilities, we 8 clearly saw. Motor vehicles, ships, and aircraft can 9 be powered by alternative fuels and there's a lot of 10 effort that needs to take place in there, and a lot of11 government support that is needed to support action.12 (Changing of slides)13 MR. GOLDSTEIN: If we go to the next slide, 14 this graph really says it all. This is the graph that15 shows the budget in the country for energy, research, 16 development and deployment over the past 30 to 40 17 years. After the tremendous ramp-up that occurred in 18 the 1970s oil crisis, you can pretty much see we went 19 off the proverbial cliff.20 For the importance of this issue to this 21 country, even understanding how difficult dollars are 22 to come by in this era, we can't have this. This 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 42 2 1 won't get us where we need to get to in terms of the 2 recommendations that we're making or all the different3 things that have to happen in energy to reduce the 4 country's vulnerability. 5 There are actions that Congress should take 6 in terms of creating trust funds and technology 7 authorities that would propel us to a better place, 8 but it will take investment in the short term. Of 9 course, that investment will create jobs as well, but 10 we cannot go on like that. We need to reform the 11 process of research, development and deployment. 12 It is spread piecemeal across almost the 13 entire executive branch of the government, probably in14 Congress too, and here is a real opportunity, I think,15 for the Department of Commerce to spearhead the 16 harmonization of the research regime so that we do it 17 in an efficient and sensible manner. We are not 18 advocating that the government choose particular 19 technologies, just that we have a more rational and 20 harmonized research regime.21 (Changing of slides)22 MR. GOLDSTEIN: If we then go to the next and3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 43 2 1 last slide, this is understandably a controversial 2 issue in many quarters. The United States of America 3 has within its territorial boundaries enormous amounts4 of proven, and unproven but expected, oil reserves on 5 the Outer Continental Shelf, in the Gulf of Mexico, in6 Alaska, and so forth. 7 Other countries, if they have such assets, 8 they take advantage of them. This needs to occur in a9 profoundly environmentally responsible manner. We 10 can't obviously have, again, what we just experienced,11 but searching for oil does not mean that what we 12 experienced must happen again. 13 There are countries, notably Norway, who have14 proven under much more difficult conditions that they 15 can extract oil and gas from under the water and under16 the ground with the smallest possible environmental 17 footprint, although there is an environmental 18 footprint, and serve the needs of their country, and 19 actually in the case of Norway, set their country up 20 for decades, or even centuries, of prosperity by doing21 all of these activities in a really responsible and 22 sensible way. Why shouldn't the United States of 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 44 2 1 America be able to manage that?2 The graph shows the potential in the years 3 coming for significantly more oil and gas to be 4 developed here in the United States, significantly 5 more. But would it change the world price of oil? 6 Not necessarily, because the world price of oil is set7 on a world basis. Would it affect the balance of 8 payments and our deficit as a country in trade? 9 Tremendously. It would have a direct and immediate 10 impact on that as we grow up the capabilities. Our 11 industry has a vested interest in that and we 12 certainly would like to see the actions taken to 13 promote that.14 So in closing, I think we go maybe one more 15 time back to the summary slide, if you have that.16 (Changing of slides)17 MR. GOLDSTEIN: Reform of the regulatory 18 approach in general, including for offshore 19 production, is critical. There are clearly a number 20 of critical steps that need to be taken. I think the 21 most critical thing is to maintain the necessary level22 of intention. The ebbing and flowing of attention, as3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 45 2 1 crises ramp up and ramp down, is what has placed us in2 this predicament. 3 We have not been able to sustain as a country4 year-in and year-out the necessary set of actions. 5 For all we know, with the softening economy and 6 potentially an improvement in, let's say, peaceful 7 conditions in some of the more contentious parts of 8 the world, we could see a ramp-down in oil prices in 9 the near future. It's possible. 10 If, once again, the implication of that is 11 everybody takes their eye off the ball and goes back 12 to daily business as usual, then other people will be 13 sitting in a room just like this in 5, 10, or 15 years14 having the exact same discussion. We hope that that 15 doesn't happen and we very much hope that the 16 Department of Commerce will take a leadership role in 17 ensuring that that does not happen in actioning these 18 recommendations, and we thank you again very, very 19 much.20 (Applause)21 SECRETARY SANCHEZ: Adam and Sam, that was an22 excellent presentation. In fact, if you would be so 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 46 2 1 kind as to let us have a copy of that.2 MR. GOLDSTEIN: By all means.3 SECRETARY SANCHEZ: I will shamelessly 4 appropriate large portions of it when I talk about 5 this topic.6 (Laughter)7 SECRETARY SANCHEZ: I'll give credit, though.8 (Laughter)9 MR. GOLDSTEIN: Thank you.10 SECRETARY SANCHEZ: Let me just say a few 11 things. I think you're right. I think the Department12 has a role to play. We are working closely with the 13 Department of Energy on a number of these issues. 14 Nicole led, what would you call it, a workshop? At 15 the Paris Air Show and the jet biofuels sector. Very 16 exciting to see this budding industry coming up. She 17 held a workshop there with all of the various players 18 in that small but growing industry.19 By the end of the year, we're going to have 20 an interagency meeting with the private sector in that21 jet biofuel space to talk about how we should be 22 coordinating as a government on that area. I know 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 47 2 1 that that's just one segment that you talked about, 2 and we'll probably need to look at doing that in other3 places. So we hear you and we're acting on it, and I 4 suspect we should be acting even quicker. Thank you 5 very much. 6 I apologize that I have to excuse myself. 7 I'm going to be leaving on an eight-day trip to 8 Turkey, Poland, and the Czech Republic. If I don't 9 leave now, I'm in big trouble, according to my staff.10 (Laughter)11 SECRETARY SANCHEZ: Thank you, again, all, 12 for your service. I hope to see you again very soon. 13 Thanks.14 (Applause)15 CHAIRMAN RALENKOTTER: Sam, Adam, thank you 16 for a great report. Very thoughtful and well 17 researched. 18 Do we have any questions or any comments from19 the committee? Would anybody like to make any 20 comments?21 SECRETARY LAMB-HALE: I'd just like to say 22 thank you so much again for the work that you're 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 48 2 1 doing. We're very supportive of your recommendations 2 on NextGen. You know, as the President mentioned in 3 his speech last week, infrastructure upgrades are 4 critical. I really appreciate the tie to 5 infrastructure and energy policy that you articulated.6 I think that's just incredible. 7 I haven't heard it put that way and I think 8 it's certainly a critical component. Our roles are 9 configured and all of the various transportation roles10 are configured in a way to, you know, preserve energy 11 sources, and that's the point. This is just 12 excellent. So, thank you so much.13 Of course, that's a critical component to 14 getting people back to work as well. So, thank you. 15 We look forward to the rest of the recommendations 16 that we'll hear today.17 CHAIRMAN RALENKOTTER: Okay. Great.18 Carl, would you like to have any other 19 comments?20 MR. BURLESON: Well, as my 18-year-old would 21 put it, the FAA thinks your report is "hip, cool, and 22 doing it right".3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 49 2 1 (Laughter)2 MR. BURLESON: So again, we're very grateful 3 of the attention you paid to NextGen. We certainly 4 think that's critical. We are very pleased with the 5 attention you paid to reauthorization. This is a big 6 deal. I know this was probably lost in the debt 7 debate, but for those of you who might have seen it, 8 because of the lack of authorization extension the FAA9 actually had to furlough 4,000 people.10 Actually, the 4,000 people we were 11 furloughing were almost three-quarters of our NextGen 12 staff. I have to say we've already seen the 13 ramifications of that. In my own organization I've 14 had two of my best and brightest young engineers say, 15 well, thank you very much, I think I've had enough of 16 government work, I think I'm going to go find brighter17 prospects somewhere else. So I think this is a real 18 concern to us because we really need to get NextGen 19 done. 20 But that really requires a lot of not just 21 the hardware, but the software of human capital. 22 Certainly these are the folks that probably have the 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 50 2 1 greatest ability to go somewhere else. So I think 2 it's really important that we have the authorization 3 and have a stable level of funding that is so 4 important to this.5 I will say I think the good news in the 6 alternative fuels area is this administration has 7 really pushed hard to take the lead in this area. We 8 started what's called the Commercial Aviation 9 Alternative Fuel Initiative a number of years ago. We10 had our first approved biofuel standard this summer in11 July, a 50 percent blend. Again, I think we're moving12 very much forward.13 For those who haven't had a chance, because I14 know this is not in everyone's reading, the FAA just 15 put out a new strategic plan. We call it Destination 16 2025. One of our goals there is that by 2018, the 17 aviation sector will be using 1 billion gallons of 18 alternative fuel. 19 So again, I think the way your letter is 20 framed, we need to pay attention. I think what I 21 would share with you is we already have the attention,22 we already are taking initiatives. We would welcome 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 51 2 1 your support to continue to move that forward. 2 I think the other really important thing is 3 we've been able to do this really through a 4 public/private partnership. When you look at what 5 we're doing through CAAFI, that has really been us 6 coming together with a number of agencies, but really 7 relying extensively on private partnership with us. I8 think it really is a terrific model for the kinds of 9 initiatives you're talking about. So again, thank you10 very much for this letter. I can't wait to show it to11 my senior management.12 CHAIRMAN RALENKOTTER: Thank you, Carl.13 Any other comments from the committee?14 (No response)15 CHAIRMAN RALENKOTTER: So we do need to have 16 a motion to accept the letter and the report so we can17 forward that on to the Commerce Secretary.18 VOICE: So moved.19 CHAIRMAN RALENKOTTER: I have a motion.20 VOICE: Second.21 CHAIRMAN RALENKOTTER: I have a second. Any 22 further discussion?3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 52 2 1 (No response)2 CHAIRMAN RALENKOTTER: All in favor say aye.3 (Chorus of Ayes)4 CHAIRMAN RALENKOTTER: All opposed?5 (No response)6 CHAIRMAN RALENKOTTER: The motion passes. 7 Thank you very much.8 Now I think we need to go on with the last 9 report, which is Research. Doug Shifflet is going to 10 be making that presentation, so Doug, I'm going to 11 turn it over to you.1213141516171819202122 RESEARCH PRESENTATION & DISCUSSION3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 53 2 1 Doug Shifflet, Subcommittee Chair23 MR. SHIFFLET: Thank you, Rossi. I hope you 4 all don't mind if I stand for this. We've narrowed 5 this down to 4,372 numbers, 6.5, which I'm going to 6 have to read to you because you won't be able to see 7 it.8 (Laughter)9 MR. SHIFFLET: The quietness penalty. That 10 is what you expect, right?11 (Laughter)12 MR. SHIFFLET: We're going to deal 13 conceptually with the issue. I'm sorry that Francisco14 had to leave. It's amazing to me what lengths people 15 will go to out of a Research presentation.16 (Laughter)17 MR. SHIFFLET: Let me thank the people that 18 have been on our committee. Adam Sacks is not here, 19 unfortunately, and Bill Saunders from Visa couldn't 20 join us, but George Zimmerman, and -- and -- Eckert 21 have been strong contributors and we really appreciate22 their effort.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 54 2 1 There's going to be a lot of button-pushing 2 on this, so I'll just go kind of like this. Okay.3 (Showing of slides)4 MR. SHIFFLET: So what I'm going to do is 5 kind of theoretically go through some of the issues 6 that we see. So what we're trying to do, our mission 7 here has been to focus on practical recommendations, 8 the ideas that through the application of improved 9 measurement-based insights, insights that you can get 10 from usually good measurement, we can enhance job 11 creation on exports and leverage the growth of the 12 whole travel industry by being smarter about 13 advocation of information. So that's kind of where we14 are coming from.15 Our approach to that is problem/solution, 16 where sometimes people come up with solutions for 17 which there is really not a problem and there's a lot 18 of product out there that's like that and never goes 19 very far. So the idea is to clearly identify what the20 issue is and then once you have it, work through what 21 the solution might be in terms of measurement.22 So we've identified three areas of concern. 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 55 2 1 The first, is measurement of international visitation 2 to the U.S, OTPI's specialty. We want to thank them 3 very sincerely for the entire Department's efforts and4 support of this, and also some of the work that we've 5 done with Customs and Border Protection through 6 Homeland Security.7 The second area that we're working on is 8 international competitive knowledge for U.S. 9 promotion. This has more to do with preparation for 10 travel promotion that we've been speaking with, but 11 there are so many issues associated with that that we 12 thought we should address.13 The third area is comprehensive metrics and 14 their communication. This is a little more 15 theoretical but it has to do with the information that16 Commerce provides to the industry and how they do it, 17 and some thoughts that can help people use the 18 information more effectively. 19 So I'm going to walk through them one at a 20 time. The first one is insufficient measurement of 21 the international visitation to the USA. We call it 22 that partially because the Travel Promotion Act has 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 56 2 1 mandated that the sample size be much larger. The 2 first one is that you need a 1 percent sample, 3 according to TPA. TPA started really giving two-4 tenths of 1 percent of the victors that come to the 5 United States. 6 There's a five-fold increase and it's an 7 unpleasant one -- to do that. So the question for us 8 is really what are the issues for the industry? Do we9 really care? What's really involved? So the export 10 data is certainly equivocal for states. Only about 2011 states can currently use the data from OTPI because 12 the samples are insufficient. 13 Last year we ran a small survey through the 14 industry and some 70 percent of the people said this 15 information is critical for our budgeting and our 16 marketing analysis in order to go after that business.17 In fact, some 69 percent of those people said they 18 currently can't go.19 So they are making decisions which are under-20 leveraged, sometimes wrong, wasting money that they 21 dearly need, especially in their -- and the 22 Corporation for Travel Promotion absolutely needs this3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 57 2 1 information because they've been mandated, in fact, to2 measure and evaluate the effectiveness of their 3 programs. So what do you do about that?4 Well, our approach to the solation is really 5 pretty straightforward conceptually. That is find a 6 broader base and lower cost. CIAT, which is the -- 7 International Air Travelers. Most of the people that 8 are coming in are not coming by land. In fact, the 9 internet survey is really about the only way to do 10 that. 11 We've worked through several approaches to 12 try and get the internet survey. What we found is 13 that we can get at least a 10 times cost reduction. 14 You can survey at least 10 people for every one you 15 can do in a paper survey that you hand out in an 16 airport or on an airplane. It's more like 20, but we 17 don't want to overstate the situation until we can 18 actually get it in place.19 So the issue is, how do you do that? Here 20 are a series of recommendations that we have. The 21 first one is--keep in mind that this is near-term, and22 I'll tell you why in a moment--operationalize the ESTA3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 58 2 1 approval page. The Electralite system for travel 2 authorization that is replacing the I-94, or the I-94W3 for the visa waiver countries, currently. They are 4 currently getting a million applications a month. 5 That's a lot of folks. 6 If we could tap into that, then we could 7 survey people and get the 1 percent sample pretty 8 quickly. The problem, of course, is that their email 9 address is that kernel when they go online to register10 cannot be used. So we've had some very good 11 conversations with Suzie Shepherd and Customs and 12 Border Protection folks and they have told us that the13 final page of their approval document can have an opt-14 in if you will, but that moves them someplace else. 15 They're willing to program that at their cost. So the16 idea, first of all, is to create a new site. 17 There was already a button at that approval 18 page for Discover America. It says if you want some 19 more information, push this button. Well, you can't 20 have two buttons because you get one and you don't get21 the other, so there needs to be a coming together of 22 this. When you then do that, we have been given the 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 59 2 1 opportunity through that organization to have a pop-up2 page. Not a button, but a pop-up, almost full-screen 3 to come up to tell them why they should click and go 4 there, and that there will be potentially several 5 other things that can happen on that side. But we 6 want to sign up for a survey, not opt in. 7 So the next part of that is to operationalize8 what we're calling -- by the way, we were thinking 9 about, as part of this presentation, having four pages10 of acronyms so we could all keep them straight, but we11 decided to just add one, which is Discover America 12 Promotion, CIAT, or DAPs. The new site had all that 13 stuff off the Customs and Border Protection site into 14 one place where we can provide them with more 15 information, we can graphically make it far more 16 effective, the look and feel, and all of this.17 I will tell you that there is a cost to this,18 but the cost is really relatively inexpensive. You've19 got to operationalize the back end if people are going20 to opt into a survey. You've got to keep track of all21 those email addresses and you have to keep them secure22 and they're not coming right now, they're going to 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 60 2 1 come later, so you've got to get back to them when you2 find the time, you've got to manage all that. So 3 there is substantial effort.4 We estimate, talking with people that we 5 know, it's about $100,000 to set up that site, about 6 $350,000 a year to run it, which is dramatically less 7 than what the system currently costs. I talked to Jim8 Rabins of CTP. He was very much in favor of this. 9 He's asking for a sponsor this Friday at their meeting10 in Montana, to have someone step up so that we could 11 get through the first phase.12 If we can set up the promotional program that13 can be there so that people can pay to promote their 14 products to the places these people are going, because15 we'll ask them where they're going, then you can have 16 two promotions at a cost. 17 If you look at the cost of promoting in other18 venues, what you find is that we could very quickly 19 get to a million or more dollars and that if you only 20 need $350,000 the program becomes self-funded. So 21 that's our concept. If we go beyond that, this is the22 CTP support. In fact, they're already stepping up to 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 61 2 1 the plate and we're pleased to let you all know that.2 So the self-funding program really will get 3 us to the mandated 1 percent, we believe. The issue 4 is near-term because CTP is positioning the brand now,5 and if you're going to have a measurement system in 6 place you really should have a pre-measurement so you 7 know what the shift is afterward. They'll be in the 8 field, they'll be talking about it in November with 9 the general positioning, but they'll be promoting by 10 next spring, we believe, so we've got a relatively 11 short window to get this in place.12 So that's where we are on that issue. 13 Insufficient competitive knowledge for brand 14 development and promotion. This also leads back to 15 the CTP. They do easily understand product 16 development, brand positioning, but part of the issues17 we're talking about here is, it's a really complex 18 product. It's terribly complex and you've got to 19 communicate it to diverse audiences in different 20 cultures with different value systems. 21 As part of that, what often happens is some 22 things which are quite difficult to deal with. For 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 62 2 1 example, those people are already going someplace, you2 know. They've got beaches, they've got an awful lot 3 of things that everybody else has, and those places 4 are all being promoted at a high level. It's going to5 be a very competitive effort. This is not saying, 6 come to the U.S., you're going to love it here. It's 7 going to be very difficult to really move people. 8 So for the third area here we have people at 9 home. All the destinations really are stakeholders. 10 They're all going to want to see their destination in 11 the positioning and advertising. Those kinds of 12 pressures are very difficult because they're putting 13 up money and all of this.14 So the kind of recommendations that we're 15 suggesting really are near- to mid-term, but the 16 contextual understanding involves avoiding the inside-17 out perspective. It's very common to say here's 18 what's great about the United States, come on over. 19 Well, the issue isn't what we think is great,20 it's what they are looking for. They are finding it 21 someplace else. So the issue is an outside-in 22 perspective, which is understanding those markets and 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 63 2 1 those people and finding out, what are the hot buttons2 that we can use to get them to come here? So that's 3 another cost and it's a time issue, so how do you do 4 that? 5 Well, operation can be helpful. I had a 6 conversation just yesterday with Michelle McKenzie, 7 who's the director of CTC in Canada. They have been 8 running these kinds of surveys for many -- they're one9 of the best in the world at doing that and they want 10 very much to cooperate with us. I'm not sure the CTP 11 is going to want to do it that way. They may not have12 complete control.13 But we could tune -- use their history from 14 all of North America and then focus people in on the 15 United States using the information very quickly to 16 find -- so that's a recommendation that makes some 17 sense. All of this is testing and information 18 development which is why we believe that it's 19 appropriate for us to be suggesting this not only to 20 Commerce, but in fact to the CTP, and both are very 21 receptive to this discussion.22 So in testing the promotions, the uniqueness,3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 64 2 1 the communications, all these efforts are terribly 2 important. You are all familiar with, obviously, Las 3 Vegas. If you say what happens here stays -- now 4 matter how you say that, everybody knows it's Las 5 Vegas. If you have the Nike swoosh, everybody sees it6 all the time, you know what it is. They put it on 7 everything. 8 So part of the issue is coming up with 9 something which is in fact something everybody will 10 get, understand, recognize every time. If done in a 11 relative positioning way so that all he products in 12 the U.S. can get under that umbrella and use it all 13 the time so that it becomes as ubiquitous as the Nike 14 swoosh or anything else that'll say that's the U.S., 15 constant reminders from the U.S.16 It needs to be, obviously, unique. Everybody17 has beaches. Most every country can talk about their 18 crafts, the wicker they make, or anything that you 19 want to think of. Almost everybody has some of it. 20 How do you become unique? So that's a major issue but21 it's also a researchable and testable issue.22 To get there, you really need objective 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 65 2 1 clarity. What we're talking about here is simply 2 being very clear about the objectives, to set them up 3 and make sure they're measurable. It is not just, we 4 are going to increase things by 20 percent, it's, what5 are the things that you're going to communicate to do 6 that? What's the communication objective? How do you 7 make that all happen? So that's the approach we're 8 taking here.9 So the third area is comprehensive metrics. 10 What we're trying to accomplish here is overcoming the11 problem of the need to gain marketing impact when 12 budgets are lower, when people are holding that, 13 except maybe in Michigan where they're wise enough to 14 know that --15 So to, in fact, create leverage requires 16 smarter decisions and smarter decisions are based on 17 their analysis of issues, markets and travelers, and 18 that requires, of course, effective measurement. So 19 what's the solution here? Well, more comprehensive 20 frequent or monthly metrics in an authoritative 21 dashboard, which we suggest might well come from 22 Department of Commerce--in fact, it's my understanding3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 66 2 1 they're working on one now--and use what we are 2 suggesting is something called metrics by objective, 3 which I'll show as a framework for thinking about 4 developing the metrics, not just saying we'll use --5 (Changing of slides)6 MR. SHIFFLET: So let's go to the next slide.7 What we're talking about here really is the 8 authoritative dashboard. So one of the major thoughts9 is don't just put up the data that Commerce has. If 10 you look at what facilitate has talked about with wait11 times and that kind of thing, that's not Commerce 12 data, that State Department data. Well, it seems to 13 me Commerce is in the position to pull the appropriate14 data from all departments, put it in one place so we 15 can work with it. The dollar exchange rate happened 16 to be a huge driver of people's international 17 behavior, so in fact that should be one of the kind of18 metrics that we want.19 Monthly toll measures. The Department of 20 Commerce provides international visitation numbers, 21 right, but not total. The amount in the U.S. of 22 travelers internationally is somewhere around 5, 10 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 67 2 1 percent and they generate about 18 percent of the 2 revenue. 3 But what about the rest of the country? How 4 is that doing? What's the relationship? So we're 5 suggesting that domestic travel be incorporated to 6 provide tools so we can understand our industry from 7 the perspective of the total country, including the 8 Department of Commerce insights and the integration of9 that information.10 The core metrics. Currently visitor -- I'm 11 sorry. The visitor counts is the core measurement. 12 How many people came? Well, historically it's a 13 turnstile number. You know, how many people walked 14 through the door? But it's essentially the same no 15 matter how you say it. Hotels don't count folios, you16 know, they look at occupancy. Airlines look at load 17 factor. You get misled if you just count people, or 18 you can be misled. 19 What I'm showing you here is this is some of 20 our data from North Carolina, but we could do it for 21 anyplace. But our monthly data shows that as you move22 from 2005 to 2008, the red line is the visitor count, 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 68 2 1 how many people came. Okay. The blue line is visitor2 days. It takes into account how long they stayed. 3 The green dot is how much they spent. Well, which one4 is related to the money, you know? The problem is the5 conclusion that you reach. 6 When you watch the red line and visitor 7 counts you think you're doing great, you're telling 8 the world you're doing great, and the money has 9 stopped and people are saying, are you crazy? People 10 aren't coming to my hotel. Our occupancy -- and 11 you're telling me more people are coming? 12 Well, what happens when times get bad is 13 people slow down and they may come two or three times,14 but they only stay a day or two. One of the problems 15 is the reverse when you go into an improved situation,16 where the market is improving, when in fact you may 17 have people coming but they have fewer people coming 18 because instead of coming a couple of times they come 19 once and stay for a week. So you make the wrong 20 decisions, you promote inappropriately, that kind of 21 thing.22 So what we're suggesting is that something 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 69 2 1 like person days be used and you share information so 2 that if the market's going up it's really the share 3 that counts, especially when we're looking 4 international and at share of what. What is the U.S. 5 share of France? What's the share out of the U.K.? 6 You know, where else are they going? So it's not just7 the absolute numbers, obviously it's how well we're 8 doing relative to the rest of the market. So that's 9 the kind of considerations that we would like to see 10 and are recommending that Commerce provide on an 11 ongoing basis.12 So metrics by objective is one of the ways --13 one of the problems that happens is that people very 14 often are talking about, how well did we do when you 15 have a single measure, or whatever. Different people 16 are interpreting that in different ways, so how do we 17 all get on the same page and get everyone on board 18 with what we're talking about?19 So we're talking about, and it sounds pretty 20 basic but we don't see it very often, is the business 21 objective. What is it that you say you're going to 22 do, how are you going to do it? One of the drivers, 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 70 2 1 irrespective of your behavior, that will affect it, 2 and how are you going to use that information, what 3 are you going to do with it, what decisions are you 4 going to make with it, and what are the components -- 5 actually, what's the formula for the metric? I'm 6 sorry if I'm going -- this is maybe so basic that you 7 all are saying, yeah, yeah. But again, we don't see 8 it that often. Then you generate the metric with the 9 filters that you say need to be with it to justify 10 what it really means. 11 So here's a very simple idea. Entries of 12 international leisure visitor days by 15 percent, 13 whatever the number is. Well, what are the things 14 that affect that? The leisure monitoring level, how 15 much money are we spending, but also, what's the 16 economic environment? Is it going up, is it going 17 down? And what's the exchange rate? Those kinds of 18 factors that are driving it.19 So if you find out that you went down when 20 the rest of the world went up you've got a real issue.21 Or if you went up, you went up more slowly than the 22 other ones, you've got an issue. So those are the 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 71 2 1 kinds of things, and then you can -- you can measure 2 it. It becomes very specific.3 You have a definition and everybody says, I 4 know what it means and you're not trying to pull the 5 wool over our eyes. So we found very useful the share6 of market certainly is an issue. The entire market 7 goes down and you go down less, you're actually 8 looking good and you can justify what you're doing. 9 It's terribly important to understand.10 ROI becomes another one. If the CTP says 11 we're going to generate 10:1 ROI on our efforts in 12 marketing, well, who is it that you're going to get? 13 International leisure travelers from certain markets. 14 Well, the problem then becomes, what are the factors 15 influencing that? What are you going to do about it? 16 How do you measure it? What's the definition? So 17 then you get to a CTP ROI that you know what it means,18 everybody's on board and you don't have people sniping19 at you from Congress or anywhere else. So that's the 20 idea. 21 Our summary is really these are key areas. 22 The international measurement and Customs and Border 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 72 2 1 Protection is working with us at CPP, is moving 2 forward to help fund that and move that along. We 3 hope that that will happen before too long. The 4 competitive knowledge, working with Canada on a lot of5 the information that's going to be needed for the 6 positioning of the U.S., and in the third area we're 7 talking about some kind of a dashboard which is -- 8 moving it all forward through all the metrics and 9 kinds of ideas that we're talking about.10 So that's the conceptual approach to -- 11 numbers, which we're happy to provide. Thank you very12 much.13 (Applause)14 CHAIRMAN RALENKOTTER: Doug, thank you. If 15 we could hold any comments or questions because we 16 have the Acting Secretary of Commerce, Dr. Becky 17 Blank, with us. We would like to hear a few words 18 from you. Welcome.192021223 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 73 2 1234567891011 REMARKS12 Dr. Becky Blank, Acting Secretary of Commerce1314 ACTING SECRETARY BLANK: Thank you very much.15 I really appreciate the chance to stop by. I'm going 16 to have to apologize because my schedule is a little 17 tight this morning. I have to leave for the airport 18 at 10:45. I have to leave for the airport at a 19 quarter to, whenever the next quarter to comes. I had20 my eyes dilated this morning and everything is still 21 fuzzy around the edges. I can't read my -- it's a 22 sign of aging, right?3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 74 2 1 In any case, I have spent some time this 2 weekend reading through all of the materials that you 3 have put together over the last, whatever, nine 4 months, the various letters that were sent this spring5 and the ones that you are sending today. I just want 6 to say that I was really impressed with the quality 7 and the care with which you sort of have put data, 8 arguments, and recommendations together. 9 I think that the level of expertise that's 10 really clear in those recommendations is clearly 11 driving a response here inside the administration 12 because it's obvious that we've got a partner here who13 really -- you know, you know what you're talking about14 and you're putting real time and effort into it. So I15 want to thank you for that.16 I want to talk just a little bit by starting 17 at the big picture of the overall economy and then 18 drop down to say a few things about travel and tourism19 and where we are with regard to some of the 20 recommendations that we've received over the last 21 number of months.22 So let me just go through that real briefly, 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 75 2 1 and then if we have time for a few questions we can do2 so. So as you all know, domestic travel and tourism 3 depends very heavily on income levels and on the 4 overall economy. The recession of 2007, 2008, 2009 5 was extremely deep, left too many Americans out of 6 work and too many businesses facing reduced demand.7 When President Obama first came into office 8 we were at the very depths of this recession and he 9 took a number of tough steps, steps that were not 10 always popular, to stabilize the financial system, to 11 keep the automobile industry from going bankrupt, to 12 pass along a tax cut to middle class families, and to 13 shore up the bottom line for America's cities and 14 states so teachers and policemen could keep their jobs.15 The economy since then has been recovering. 16 We've had four quarters of positive economic growth. 17 We've created more than 2.4 million jobs since the 18 depth of the recession. But the bad news is, as you 19 all know, the growth simply hasn't been as fast as any20 one of us would like. I am economist by background 21 and I know exactly what levels of growth we need to 22 start pulling unemployment rates down, and we 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 76 2 1 obviously just haven't seen that. 2 We'd love to be up in growth rates of 3.5, 4 3 percent, and instead our growth rates have been down 4 closer somewhere between 1 percent and 2 to 2.5 at 5 best. That's what needs to change. You know, we have6 to create stable and higher levels of both for the 7 economy, not just for the overall macroeconomy to pull8 down unemployment and to help work through our set of 9 foreclosed houses out there, but to help all of the 10 different industries such as your own that are really 11 looking for an expansion in consumer demand and, you 12 know, seeing the economy move forward more.13 So one of the -- you know, this is the reason14 for the Americans Jobs Act that President Obama 15 presented last Thursday night, a sense that we are 16 still in a very fragile economy. It's not moving as 17 fast as we want it to and we need to do some things 18 that will get some wind under the sails of businesses 19 and of consumers. 20 If we can do that, you will move into the 21 virtuous cycle whereby increased consumer demand 22 stimulates more business, spending demand, and in turn3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 77 2 1 creates more jobs, which in turn creates more -- 2 that's where we want to be and where we haven't quite 3 gotten to as fully as we would all like.4 So four main components to President Obama's 5 plan. Component number one is to help businesses, and6 particularly smaller businesses which I know are a lot7 of your constituencies, by cutting taxes, with 8 substantial cuts in payroll taxes and a complete 9 payroll tax holiday for any new hires or for any wage 10 expansions for current employees, as well as 11 expansions of the depreciation allowances with 100 12 percent expensing all the way through 2012.13 Secondly, putting Americans back to work 14 through modernizing infrastructure. There's a 15 proposal here to support the infrastructure bank that 16 has bipartisan support. It's actually on the Hill 17 right now, with support from Kay Bailey-Huchison and 18 from John Kerry, so we're very hopeful that that may 19 have some legs under it as an initiative that's going 20 to move forward, and then some money to states that is21 directed to retain or rehire teachers and first 22 responders who may have been laid off, particularly 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 78 2 1 cops and firefighters.2 So, you know, number one is assistance to 3 businesses, number two is ways to put some people back4 to work through modernizing American infrastructure 5 and assisting teachers and first responders. The 6 third is assistance to long-term unemployed. Yes, the7 President is asking for further extensions of 8 Unemployment Insurance given the level of unemployment9 we're at and the number of people who have been 10 unemployed long term. That is crucial. 11 But there's some real creativity in this plan12 about how to not just extend unemployment benefits but13 to do some things that are going to help long-term 14 unemployed get back to work. So there's a $4,000 tax 15 credit if you hire someone who's been unemployed for 16 six months or longer. 17 There's a number of options. The states run 18 the Unemployment Insurance systems. There's a number 19 of options for States to select that allow people who 20 are unemployed to go into training and still receive 21 some of their unemployment benefits, or to go back to 22 work part-time and still receive some of their 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 79 2 1 unemployment benefits. So I'm hopeful a number of 2 states are going to take some of those options off. 3 So, you know, the third issue here is help for getting4 the long-term unemployed back to work.5 The fourth issue is money in the pockets of 6 American families and workers. That is not just an 7 ongoing extension of the payroll tax cut we had this 8 year, but an expansion of that tax cut so that half of9 what you would normally pay out of your paycheck in 10 payroll taxes will not be paid out. For the average 11 household, that's going to be a gain of $1,500. You 12 know, $1,500 is real money. If you make more than the13 average household, it's going to be bigger. 14 If you make less, it's going to be a little 15 bit smaller because your payroll taxes are predicated 16 on wages. But, you know, there are a number of issues17 here, from help for businesses, help for workers, both18 of them tax cuts, which means the money is going to 19 get spent immediately. Those are paid out every month20 on a regular basis. Help for the long-term 21 unemployed, and then trying to do some things to get 22 particular segments back to work. All right. So 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 80 2 1 that's the outline of the plan. 2 Everyone knows this is not going to solve all3 of our problems, but it is the sort of start that we 4 need to make that will, as they say, give some 5 additional boost particularly to businesses and to 6 consumers that, you know, hopefully over time will 7 then create the long-term recession that is powered by8 the private sector, which is what we have to have to 9 get back to where we want to be economically.10 Now, you in the travel and tourism industry 11 are already doing better than at least some other 12 industries. According to the most recent travel and 13 tourism data, direct employment increased 2 percent, 14 to more than 7.6 million, with more than almost 40,00015 additional jobs in the first quarter of 2011, the 16 fourth consecutive quarter of growth for that industry.17 If you look more closely at those job gains 18 by sector, they're pretty broadly spread. You see 19 gains in air passengers, gains in motels and hotels, 20 gains in the food and beverage sector. In fact, with 21 the exception of the recreation and entertainment 22 sector, every single travel and tourism related sector3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 81 2 1 showed positive gains for employment in the first 2 quarter of 2011, so it's a good start.3 Through the first six months of 2011, 4 international visitation was growing by 5 percent over5 the same period last year, and even better, 6 international visitors spent nearly $87 billion while 7 visiting the United States through July, an increase 8 of 13 percent compared to last year. It goes to your 9 comment, don't just look at people, look at dollars. 10 So the gains in dollars are even bigger than the gains11 in people.12 The growth of travel and tourism exports have13 outpaced the growth of other areas, resulting in a $2314 billion trade surplus for travel and tourism. As many15 of you know, exports in trade have actually been 16 leading growth over the last couple of quarters, so 17 this industry is playing a very important role for 18 that.19 So, you know, the question is, how do we keep20 this going? You've obviously got a series of 21 recommendations in front of us and let me just say a 22 couple of things about what we've done with those 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 82 2 1 recommendations, okay? 2 Increasing travel and tourism is a very clear3 priority in this administration, and I can tell you in4 the month and a half that I've been here acting--we're5 waiting for our nominee to get approved by the Senate,6 but we'll see when that happens--I have gotten 7 multiple inquiries from the White House to myself and 8 to some of our senior staff, sort of just checking in 9 on, you know, where are we with regard to various 10 issues related to travel and tourism. This is an 11 issue that the White House is extremely aware of, and 12 partly they're aware that you have been leading some 13 of the economic growth and they want to do everything 14 they can to keep that up.15 The President's Council on Jobs and 16 Competitiveness, the Commerce Department, the State 17 Department, the Department of Homeland Security, 18 senior White House officials, you know, all appreciate19 the importance of this industry as an engine to 20 economic growth. We shared your recommendations with 21 the interagency Tourism Policy Council, which includes22 State and Homeland Security, as well as the White 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 83 2 1 House. I want to acknowledge the interagency 2 colleagues who are here, and particularly Patty 3 Cogswell, who chairs the Interagency Policy Commission4 at the White House.5 So a number of things they've been doing. 6 The Tourism Policy Council met last week to discuss 7 how to move forward on many of the issues that you 8 have raised, including enhancing the visa process. At9 this meeting the Council also reviewed the metrics to 10 further track progress on travel facilitation issues 11 raised by the President's Export Council and the 12 Interagency Policy Commission.13 It also established a Crisis Communications 14 Working Group to develop and coordinate responses to 15 industry issues, including support during times of 16 disaster, such as deep-water horizon or Hurricane 17 Irene. Shortly you're going to be hearing a report 18 from the State Department on the extensive progress 19 that they are making in increasing responsiveness to 20 meeting the demand for visas, particularly among 21 emerging nations. 22 I know that the Travel Facilitation 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 84 2 1 Subcommittee met with Ambassador Jacobs yesterday to 2 hear an update and to engage in further discussion on 3 the board's recommendations, and I hope that was a 4 good conversation. I haven't gotten a briefing back 5 on that yet.6 I am also pleased that in the development of 7 research recommendations that have just been adopted, 8 the subcommittee worked very closely with the Tourism 9 Policy Council's Research Working Group, which 10 includes both DHS and State, and it's that type of 11 collaboration which I think is going to help move 12 these things forward much more quickly.13 The board's work, as I noticed, has been 14 discussed at the White House where the administration 15 is actively looking for ways to support the travel and16 tourism industry. So, you know, the bottom line here 17 is that the administration really does want to partner18 with you as representatives of travel and tourism to 19 pave the way for increased travel activity, to support20 jobs and economic opportunities for the American 21 people, and for international visitors to come and see22 America.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 85 2 1 So one final note. I know that this is the 2 board's last meeting under its current charter and I 3 really want to thank all of you. You have done an 4 enormous amount of work. I was impressed by 5 everything I had to read through this week when I sort6 of said, show me what the Travel & Tourism board has 7 done. You've been working hard.8 I know from my conversations with Secretary 9 Locke and our travel and tourism team here at Commerce10 that they just really appreciated working with you 11 over this last year or more. So know that your time 12 and your expertise has been appreciated. No one 13 serves on these committees for compensation, and I 14 know you don't serve on them for the lunches that you 15 get.16 (Laughter)17 ACTING SECRETARY BLANK: So thank you for 18 coming and for really engaging in this.19 We have recently rechartered this board and 20 we are currently accepting applications for the next 21 round of appointments, and as I know others have said 22 to you, I hope that if you want to remain on the board3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 86 2 1 you will let us know if you are interested in being 2 one of those who might be renominated.3 So on behalf of myself, the Commerce 4 Department, the administration, thank you for your 5 service. I really look forward to continuing to hear 6 how these issues and all of your set of 7 recommendations are moving forward as they go through 8 the interagency processes here. So. that's a quick 9 movement through some of the things that I wanted to 10 make sure got said this morning.11 (Applause)12 CHAIRMAN RALENKOTTER: Thank you very much.13 ACTING SECRETARY BLANK: I have to go in 14 about five minutes, but if there are questions or 15 issues that anyone wants to raise.16 CHAIRMAN RALENKOTTER: Just one comment. You17 know, it's all about jobs and job creation. Just 18 taking it to Las Vegas, for every 1,000 visitors we 19 get in addition to what we already have, it either 20 stimulates or supports 9 jobs. The jobs in our 21 industry you can't outsource to another country. 22 ACTING SECRETARY BLANK: Yes. Yes.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 87 2 1 CHAIRMAN RALENKOTTER: So the President's 2 comments to Congress, let's pass this legislation now,3 I think there's a lot of issues that we have brought 4 forth to Commerce that, if implemented them 5 immediately or pretty soon, you would see an increase 6 in not only international visitation, but domestic.7 ACTING SECRETARY BLANK: Yes.8 CHAIRMAN RALENKOTTER: So we're out there 9 selling every day and that's going to be creating more10 jobs.11 ACTING SECRETARY BLANK: And I think it's one12 of the things that people appreciate about your 13 recommendations. I mean, there are always a number of14 things to be worked on that, you know, over the next 15 10 years you'll sort of figure them out and make some 16 improvements. 17 But there are a number of recommendations 18 that have come out of this group that I know that if 19 we can do this sooner rather than later, it will show 20 very immediate effects. That is obviously, in this 21 economy, particularly attractive, so I thank you for 22 that.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 88 2 1 CHAIRMAN RALENKOTTER: Thank you.2 ACTING SECRETARY BLANK: Good. Thank you 3 very much. Best wishes for the rest of today. I hope4 you have a great meeting, and I'll hear all about it 5 when I get back.6 CHAIRMAN RALENKOTTER: Yes. Okay.7 (Applause)8 CHAIRMAN RALENKOTTER: I'm going to divert 9 just a little bit from the schedule because Rhea Suh 10 is here from the Department of Interior. She's the 11 Assistant Secretary for Policy Management and Budget. 12131415161718192021223 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 89 2 123456789101112 REMARKS13 Rhea Suh, Assistant Secretary14 for Policy Management and Budget15 Department of the Interior1617 ASSISTANT SECRETARY SUH: Thanks very much. 18 I also have to leave. I don't have a plane to catch 19 to a fabulous place, I have a Secretary waiting for 20 me, which is a little bit more tenuous for me. So I 21 apologize, but I'm very, very grateful to the board 22 for your willingness to invite the Department of 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 90 2 1 Interior to look at the presentations this morning. 2 There are very concrete take-aways that I will bring 3 back to our Department, and of course very 4 specifically around energy policy and the metrics 5 conversation. So thank you very, very much for the 6 work and the presentations.7 Just a couple of things about the Department 8 of Interior that specifically I want to convey to the 9 folks on the board and to, obviously, our colleagues 10 as well across the Federal Government. Interior, I 11 think, is uniquely positioned to think about 12 increasing the opportunities for attracting foreign 13 tourists to America. If you think about the iconic 14 imagery of what people kind of connotate with America,15 it's oftentimes the assets that we manage and run on 16 behalf of the American people. So anything that we 17 can do to help you all --18 (Phone ringing)19 ASSISTANT SECRETARY SUH: That's the 20 Secretary right now.21 (Laughter)22 ASSISTANT SECRETARY SUH: Probably not a good3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 91 2 1 idea to hang up on him.2 (Laughter)3 ASSISTANT SECRETARY SUH: To further help the4 efforts on behalf of the private sector as well as to 5 further help the efforts that we're engaged in, 6 obviously, in this administration, really to hone and 7 focus down on the travel and hospital sector in 8 particular, we are at your disposal. Really, either 9 formally or informally, please don't hesitate to give 10 us a call. 11 I was thinking that the Secretary would 12 actually be quite interested in having the opportunity13 to sit down with many of you and to get some insight 14 into specifically what the Department of Interior 15 could do to really help increase the opportunity that 16 you see in your industry for, again, increasing the 17 amount of tourists that we bring to this country. So 18 with that, I've got to run. But again, thank you 19 very, very much for the opportunity to be here.20 CHAIRMAN RALENKOTTER: Thank you.21 (Applause)223 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 92 2 12345678910111213141516171819202122 RESEARCH DISCUSSION3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 93 2 12 CHAIRMAN RALENKOTTER: That brings us back to3 the agenda that we have been going through. So it's 4 the Research comments or questions. Just one comment,5 and I can say this from experience, is that all of the6 marketing, advertising, branding campaigns that Las 7 Vegas has instituted over the last 40 years have all 8 been research-driven. 9 We don't do anything without adequate 10 research, both of our customers, or non-customers, 11 trends, and so forth. So it's critical for CTP, it's 12 critical for all of us to make sure that we have a 13 strong research base for anything that we do, because 14 if you have good research you're going to have good 15 results.16 So with that, do we have any questions for 17 Doug?18 SECRETARY LAMB-HALE: Well, thank you, 19 Professor Shifflet.20 MR. SHIFFLET: I was hoping that you'd 21 forgotten about this by now.22 SECRETARY LAMB-HALE: No, no, no. Thank you 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 94 2 1 so much for the presentation. I really enjoyed it and2 I really appreciate--and we all do--your collaboration3 with LTTI and the recognition that we have an unfunded4 mandate. Maybe we should pass the hat to get up to 5 that 1 percent sample size that we need because it's 6 really tough, but I really appreciate the insights 7 that you brought. 8 My favorite slide is the graph that shows how9 the money -- even though the visitors have gone up, 10 the money has gone down. I think we really need to be11 careful as we look at numbers. We shouldn't celebrate12 right away, we need to look at the money that's 13 underneath and work on that. So, thank you so much 14 for your collaboration with our team.15 CHAIRMAN RALENKOTTER: Okay. Thank you.16 Anything else on Research?17 (No response)18 CHAIRMAN RALENKOTTER: I need a motion to 19 accept the report and to adopt the letter.20 VOICE: So moved.21 CHAIRMAN RALENKOTTER: I have a motion. Do I22 have a second?3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 95 2 1 VOICE: Second.2 CHAIRMAN RALENKOTTER: Any discussion?3 (No response)4 CHAIRMAN RALENKOTTER: All those in favor say5 aye?6 (Chorus of Ayes)7 CHAIRMAN RALENKOTTER: Opposed?8 (No response)9 CHAIRMAN RALENKOTTER: Thank you very much.101112131415161718192021223 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 96 2 123456789 FINAL PRESENTATION10 Rossi Ralenkotter, Chair1112 CHAIRMAN RALENKOTTER: I do want to just have13 a couple of concluding remarks on the reports because 14 we have the reports being passed out. I think someone15 is going to be doing that for us, I hope. I hope you 16 have big enough briefcases to take them home with you.17 Just a couple of comments to close, and then 18 we have a couple of other reports for you. First of 19 all, just the issues that we've talked about in the 20 subcommittees. The visa issues, the visa waiver 21 programs, the facilitation of these applications all 22 are very important to us. 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 97 2 1 When we talk about--and this is part of the 2 President's program for jobs--the infrastructure of 3 transportation, whether it's rail, car, bus, plane, 4 all of that is so important to our industry because we5 need to be able to get people from Point A to Point B 6 effectively and efficiently.7 So those are all issues. You know, one of 8 the things that -- when we talk about the 9 reauthorization of the FAA as well as NextGen, you 10 know, in the '90s in the airline industry you had 11 market share and how big can my airline become, to 12 control capacity of today. So anything that we can do13 to improve the efficiency of the air transportation 14 system is going to benefit all of us, especially on 15 the international side. 16 So I want to again compliment all of the 17 members of this board and the subcommittees for all of18 the hard work. This has been an effort that I have 19 just been amazed at as we've gone through all the 20 reports, and the meetings, and the telephone calls and21 everything to get this final work product. So I want 22 to thank all of you. Give yourselves a round of 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 98 2 1 applause.2 (Applause)3 CHAIRMAN RALENKOTTER: The sense of 4 cooperation from Commerce and from everyone involved 5 in our industry has been great, and I think we have 6 started a dialogue that's going to be able to push our7 agenda forward, allowing more visitation both from out8 of the country as well as within the country. So 9 thank you again.10 We will also have flash drives for anybody 11 who needs to have flash drives for this, but all of 12 you can take this on the plane and read it as you go 13 home today. Not while you're driving, if you're 14 driving back, but you can do that.15 Just a couple of updates from some 16 representatives here. We have Ed Ramotowski, who's 17 the Acting Deputy Assistant Secretary of Visa Services18 at Department of State. 192021223 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 99 2 12345678910111213141516171819 TOURISM POLICY COUNCIL UPDATE ON PAST RECOMMENDATIONS20 Ed Ramotowski, Acting Deputy Assistant Secretary21 for Visa Services, Department of State223 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 100 2 1 MR. RAMOTOWSKI: First of all, I don't have 2 to leave.3 (Laughter)4 MR. RAMOTOWSKI: But in the interest of time 5 I'm going to hit the highlights of the report that 6 Ambassador Janice Jacobs gave to the Travel 7 Facilitation Committee yesterday afternoon. We've 8 made her presentation available to the Commerce 9 Department and they can certainly make it available to10 you all.11 First of all, let me express, on behalf of 12 Secretary Clinton, the State Department's thanks for 13 all of your valuable suggestions and your service on 14 the board. This is our most important outreach effort15 with the private sector and it's been an extremely 16 productive dialogue for our Department, and we look 17 forward to continuing that in the future.18 Second, the key take-away is that we've made 19 significant progress on all of the recommendations 20 that the Facilitation Committee has made. That also 21 has been an extremely useful and productive dialogue 22 for us and we thank Hubert and the committee members 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 101 2 1 for their assistance.2 Let me just hit the highlights of that. A 3 key committee recommendation was to reduce wait times 4 in key emerging markets. Let me point out that most 5 of our embassies and consulates around the world have 6 wait times of less than one week. Wait times for 7 student visa interview appointments worldwide are less8 than 15 days. The student sector is an extremely 9 important one for the academic community. Most 10 students coming to the United States are paying full 11 tuition, room and board, and that is a significant 12 injection into the U.S. economy.13 All U.S. embassies and consulates have 14 established procedures to expedite appointments for 15 urgent business travel around the world. We've handed16 out a form describing the Department's Business Visa 17 Center that operates here in Washington, and its 18 purpose is to assist U.S. business with inviting 19 foreign counterparts to conventions, business 20 meetings, seminars, and the like. So, the contact 21 information is there.22 We recognize that emerging markets are a 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 102 2 1 particular priority for the industry and for us as 2 well, and we've made substantial progress in reducing 3 the wait times in China. In all of our posts in 4 China, where at the beginning of our conversation wait5 times were sometimes higher than 90 days, they are all6 under 25 days at the moment, and several of the posts 7 have single-digit wait times.8 (Applause)9 MR. RAMOTOWSKI: I will get to how we did 10 that in just a moment. Let me point out, though, that11 Brazil is still an issue. We recognize that the wait 12 times there are not where we want them to be and we're13 addressing that as our most important goal.14 How did we get the wait times down? Well, 15 the second recommendation of the committee was to add 16 more visa processing officers, particularly in the 17 emerging markets. We've created 114 new consular 18 officer positions. We've reallocated 74 existing 19 positions from countries of lower demand to countries 20 of increasing demand. We sent a large number of 21 temporary duty officers, particularly to Brazil and 22 China, and extended the work hours of our mission in 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 103 2 1 both places.2 In China and Brazil we're now operating our 3 facilities for 12 hours a day. We're sending in more 4 staff to ensure that the visa windows in both places 5 are covered for that entire period of time, and that 6 increases the through-put of applicants that we can 7 handle.8 Also in Brazil, the mission there, in the 9 spirit of reducing wait times, interviewed 8,000 10 applicants on two successive Saturdays and that was 11 well-received down in Brazil, and also it was popular 12 with our staff to show that they were doing their part13 to help the travel and tourism industry.14 Yes, sir?15 MR. SHIFFLET: Are any of those new or moved 16 people standing around with nothing to do?17 MR. RAMOTOWSKI: Absolutely not. If you 18 visited one of our consular sections you'd see that 19 the work is obvious and comes right at you.20 MR. SHIFFLET: That's great.21 MR. RAMOTOWSKI: So, you know, in some other 22 countries visa demand has dropped slightly and we want3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 104 2 1 to reallocate our resources where it will do the most 2 good. That doesn't mean that we don't value the 3 travel from these other countries, it just means, with4 limited resources, we need to put them where they'll 5 get us the most bang for the buck.6 We're going to continue ramping up our 7 staffing in China and Brazil. This year we've already8 adjudicated more than 900,000 visa applications in 9 China, and that's up from 744,000 last year, and only 10 550,000 the year before. So in two years it's almost 11 doubled. We may actually almost break a million cases12 this year in China. By 2014, we expect to be handling13 about 1.4 million cases there. So that is a 14 significant increase. 15 In Brazil, the numbers -- we've already done 16 over 730,000 visa cases this year, up from 576,000 17 last year and 507,000 the year before, so another big 18 increase there. We're looking to increase our 19 adjudications by 40 percent in 2012 in both China and 20 Brazil, and to do that over this year and next we will21 have 98 new adjudicator positions in those countries.22 We've also established in record time a new 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 105 2 1 hiring program to bring on visa adjudication 2 specialists, the so-called LNA program, Limited Non-3 Career Appointments. These are individuals who will 4 be hired for the exclusive task of processing visas in5 high-demand countries, currently China and Brazil. We6 have advertised these jobs.7 We're now currently evaluating the first set 8 of candidates and we expect to send the first group of9 10 to China and the first group of 10 to Brazil in the10 spring of 2012. So those of you familiar with 11 government hiring and personnel systems know that 12 bringing a new program like that into fruition in the 13 space of one year is a major achievement and we've 14 done that and we're committed to continuing that.15 Another key recommendation of the Travel 16 Facilitation Committee was to add four to six visa 17 processing locations each in China and Brazil. That's18 not the easiest thing to do, so we're approaching it 19 in two ways. First of all, we're looking at our 20 existing facilities, both the current ones and some 21 new ones that are under construction, to ensure that 22 we get absolutely the most productivity that we 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 106 2 1 possibly can under those facilities.2 There will be 17 new visa windows established3 in Mumbai, India; 22 new visa windows in Guangcho, 4 China; 20 new visa windows will open later in 5 Shanghai, China; and 8 new windows in Beijing. We 6 also need to optimize the back-office space where the 7 visa processing occurs. It's not just the applicant 8 interface, it's all of the computer and IT support, 9 and everything else that we need to ensure that the 10 visa system is not only efficient, but also secure 11 because visa security is our number-one task.12 We are also sending a team to Brazil in the 13 next two weeks to do a site survey, both of our 14 existing facilities and to look for some possible 15 additional locations where visa processing operations 16 could be established. We expect to have a report to 17 them later this fall and to then act on it as quickly 18 as we can.19 The Travel Committee also recommended that we20 increase the validity of non-immigrant visas for 21 Chinese visitors to 10 years. As Ambassador Jacobs 22 said yesterday, we would love to do that. The law 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 107 2 1 doesn't allow us to unless the Chinese offer 2 reciprocal treatment to Americans. We are pressing 3 that issue hard at high levels, both here and in 4 China. 5 I can assure the committee that you could 6 have no more effective advocate than the former 7 Secretary of Commerce and now Ambassador to China Gary8 Locke. He is totally familiar with the issue and 9 determined to move forward on it, so we will support 10 him in every possible way to try to make progress with11 the Chinese on this.12 The fifth recommendation of the Committee was13 that the Department of State retain all visa 14 processing and consular fees to cover our costs of 15 staffing visa processing activities. We certainly do 16 appreciate the Committee's support on that score. 17 That will be a difficult thing to get through 18 Congress. 19 I would like to reiterate Ambassador Jacobs' 20 commitment. We are taking the measures that I 21 announced earlier using our existing resources. They 22 are already being taken, they are already funded. We 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 108 2 1 are committed to do that, regardless of what happens 2 with the retention of our aides, but we do appreciate 3 your support for that.4 The final recommendation relating directly to5 State was that the Department of State receive more 6 discretion to waive in-person interviews when we 7 determine that that's a feasible task. That is an 8 issue that we are exploring actively. We have some 9 proposals in mind in our top leadership and the 10 leadership of other government agencies in the 11 security and intelligence fields. We'll be looking at12 that.13 This is something the Department cannot do 14 unilaterally without the support of the security 15 agencies behind us, but given your efforts and the 16 activity in presenting the importance of the travel 17 sector to the U.S. economy, I think those agencies 18 also understand the importance of making logical 19 changes in our visa process where it does not 20 compromise security. So, that's under way as well.21 I would also point out that while there is 22 some strong support in Congress for this type of 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 109 2 1 change, there are others in Congress who are not yet 2 convinced. Yesterday morning I testified before the 3 House Homeland Security Committee and they are 4 certainly very concerned about visa overstays, illegal5 immigration, and security threats to this country. I 6 point that out just to say that we must ensure that 7 visa security is always present in any of the measures8 that we undertake.9 So with that, Hubert, I don't know whether 10 you want to add anything.11 MR. JOLY: Well, on behalf of the 12 subcommittee, and I think the board, I have to say 13 that the progress that has been made, the commitment 14 -- first, the understanding and the commitment, and 15 then the progress of our several months of 16 collaboration has just been outstanding. I think 17 yourself, Ambassador Jacobs -- others, this is an 18 inaugural public/private partnership and I wanted to 19 thank you for the results. I think you said it: 20 everything is not solved. But there is momentum and I21 think we just have to keep going.22 MR. RAMOTOWSKI: Exactly.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 110 2 1 MR. JOLY: You know, sometimes, as was 2 mentioned this morning, there's a badminton game 3 between the industry and the administration, where we 4 criticize each other, we send letters and so forth. 5 This is not the case. I think that we can applaud 6 this collaboration and the results and go towards the 7 finish line. So, thank you. Keep going at it. Thank8 you.9 MR. RAMOTOWSKI: We certainly will. Thank 10 you.11 (Applause)12 CHAIRMAN RALENKOTTER: Thank you for that 13 very positive report.14 So I'm going to now turn it over to Michael 15 Frias, who is the Deputy Assistant Secretary for the 16 Private Sector for Department of Homeland Security.1718192021223 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 111 2 123456789101112 TOURISM POLICY COUNCIL UPDATE ON PAST RECOMMENDATIONS13 Michael Frias, Deputy Assistant Secretary14 for the Private Sector15 Department of Homeland Security1617 DEPUTY ASSISTANT SECRETARY FRIAS: Thank you.18 On behalf of Douglas, who many of you know I'm going 19 to stand in his stead and give a report, and also on 20 behalf of the Secretary, we continue to echo her 21 strong commitment to the travel and tourism industry, 22 and also to our government partners. It's not often 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 112 2 1 that you can find government partners that are as 2 interested, and willing, and engaged to kind of think 3 outside the box and engage the private sector. 4 Sitting in our office at DHS, we often 5 preach, you know, there is a need to engage the 6 private sector for all kinds of issues, not the least 7 of which is security. To have partners like CBP and 8 TSA, and I'd like to recognize Paul Bruman here from 9 TSA, their partnership has been invaluable in 10 accomplishing some things that we wanted to accomplish11 with respect to the recommendations. So now I will go12 through those recommendations and tell you our 13 progress.14 Global entry. One of the recommendations was15 to increase global entry membership. In October of 16 2010 it was around 81,000 members and 1,300 users 17 daily. The result? In September of 2011 there are 18 740,000 travelers with benefits, and around 2,700 19 users every day.20 As you heard from Commissioner Burson, it 21 saves officer hours, but it is also a benchmark. We 22 need to do better than that. That 21,000 saved hours 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 113 2 1 needs to be 50,000, it needs to be 100,000, in order 2 to show real impact and scale. As he said, he's never3 found a pilot project that doesn't work, it's about 4 scaling it. So we will continue to partner with our 5 intergovernmental partners and you to continue to 6 increase that.7 Secondly, I would like to mention, with 8 respect to global entry, and I think Commissioner 9 Burson touched on this, is there's a bit of a paradigm10 shift within security, which is global entry and known11 traveler programs, both CBP's and TSA's, are security 12 efforts. 13 I think Commissioner Burson spoke eloquently 14 to this, which is as long as we can continue to talk 15 about these programs as a security effort, which is, 16 as they use the metaphor, "thinning the hay to find 17 the needle", I think that is something that we will 18 all aspire to and continue to push these programs both19 from a trade and efficiency and travel perspective, 20 but also fundamentally from a limited resource and 21 security aspect as well.22 Again, with global entry and with the rest of3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 114 2 1 the recommendations I will report back on, they were 2 our successes because we partnered successfully with 3 the private sector. Carlson sent out emails, National4 Car Rental sent out emails. We had the partnership 5 with American Express. All of this is not possible, 6 these successes are not possible without that 7 engagement. 8 So we will continue to look to increased 9 partnerships and as, again, Commissioner Burson 10 mentioned, a synching up of the collaborative effort 11 so that it's not these one-off efforts, but it is a 12 collective effort. They shared with me on their way 13 over here that there is a paradigm shift that we're 14 trying to engage in with the government. 15 As you see limited resources in tough budgets16 be a common reality, more and more you hear from the 17 Federal Government. We need to partner with our 18 private sector partners to help accomplish more and do19 more with less. That's true, however, you also have 20 very restrictive rules. 21 I know with FEMA, there are issues with co-22 branding. There are issues even with talking about 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 115 2 1 partnerships with global entry with American Express. 2 It's difficult to get approval to say, thank you, 3 American Express, thank you National Rental Car, for 4 your partnership and with your partnership we helped 5 accomplish the goal of a million known travelers in 6 the program. 7 So I would encourage you to engage with us in8 that effort to shift that paradigm and continue to 9 inform folks and in government of the need for these 10 public/private partnerships, but also to go the next 11 step and actually be able to recognize them publicly 12 and laud those companies that are willing to step 13 forward.14 Model ports of entry. Again, one of the 15 recommendations was to strengthen the program through 16 local partnerships. John Carlson is here. This, 17 again, is a great example of where the local CBP 18 officer was engaged to be creative and work with the 19 folks on the ground to come up with the best solution 20 possible. I heard it time and time again. It was as 21 simple as re-designing how the flow of traffic is 22 versus vertical or horizontal. So simple a solution, 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 116 2 1 but yet an effective outcome. 2 So, you know, we will continue to look with 3 you for other places, as Commissioner Burson said. We4 will look for two land ports, one in the north, one in5 the south, and then also two airports. We had thought6 tentatively Las Vegas International Airport. So, you 7 know, if we could add one more or two more to that 8 list, we look forward to engaging with you.9 Secretary of Homeland Security Napolitano 10 attended your Travel and Tourism Summit. She was 11 sorry that she wasn't able to make the breakfast, but 12 I trust that Commissioner Burson was an adequate 13 stand-in. What I'd like to say, is the Secretary and 14 Douglas have always said that our office, the private 15 sector office, sits at the unique nexus point where 16 national security meets economic security. It's in 17 that little circle where we play. 18 So where we are not operational like State 19 for our component partners with CBP, TSA, and others, 20 we are always a cheerleader for the private sector and21 an advocate for more programs, more engagement, and 22 better ways to solve problems that you all and 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 117 2 1 industry are confronting.2 I will touch on this. A recommendation was 3 to expand the visa waiver program to more countries. 4 You were informed yesterday in the subcommittee that 5 there are two bills currently under review, Senate 6 bill 497 and House bill 959. Again, those are efforts7 that we would be supportive of, but obviously we'll 8 follow State's lead.9 Risk-based screening. TSA began its -- it 10 was said to be trusted traveler. We are changing that11 language. It's known traveler.12 (Laughter)13 DEPUTY ASSISTANT SECRETARY FRIAS: I think 14 the key there is, again, going back to this needle in 15 a haystack idea, which is the more information we know16 about people, the earlier, the easier we can slot them17 into the appropriate lines and do the adequate 18 searches for their risk profile. 19 I think, you know, it's been raised with 20 respect to maybe getting global entry information for 21 people that are renewing passports or holders of 22 particular visas. Those are potential areas to grow 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 118 2 1 because these are obviously applicants and individuals2 whom we know a lot about. 3 So I think that is a trend that is positive 4 and one that we would continue to encourage our 5 components, our agency, and others to kind of look at 6 as potential room for growth. TSA, as you guys may 7 know, did the risk-based security initiative. TSA is 8 developing procedures and systems that will provide 9 expedited screening to known travelers, and will be 10 launching this in 2011. 11 If you guys read the newspaper today you saw 12 that there were some rules that came out or guidelines13 that came out with respect to travelers under the age 14 of 12, so families traveling to popular destinations 15 -- Las Vegas has become family-friendly, and Orlando, 16 and Anaheim, and those places will see a direct 17 benefit from that.18 Aviation security. TSA improved stakeholder 19 engagement. The Federal security directors and 20 stakeholder managers that keep stakeholders apprised 21 of changes. I know Administrator Pistle and Douglas 22 and Assistant Secretary Smith were also able to have 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 119 2 1 conference calls about the roll-outs of reforms. Then2 also, TSA has strategic engagement teams that are 3 working with Fortune 500 companies and continuing to 4 do outreach, as well as they have reactivated the 5 Aviation Security Advisory Committee, which is 6 directly advising Administrator Pistle.7 Marketing outreach and communications. One 8 of the recommendations was to improve marketing and 9 communications to the traveling public, both online 10 and offline. Mr. Shifflet made reference to that with11 respect to ESTA, and also potentially increasing that 12 number and getting folks to fill out an online--call 13 it a quiz--but a test or a poll to kind of lead to 14 empirical data that we can then make sound decisions 15 off of.16 Crisis communications. This is one that I 17 personally picked up and have started to socialize 18 within DHS, and obviously it's a big one and a sticky 19 one. So the Department of Commerce -- the Tourism 20 Policy Council is going to pull together a workgroup 21 on crisis communications, so maybe for the next board 22 that is something where we can report on our progress.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 120 2 1 That is my report. I thank you guys very 2 much. This is my first public/private partnership 3 meeting like this and I have to say the bar has been 4 set really high and I have been spoiled, so I will 5 hold others to this high, high standard.6 Thank you.7 CHAIRMAN RALENKOTTER: Thank you.8 (Applause)9 CHAIRMAN RALENKOTTER: Do we have Steven on 10 the phone? Oh, okay. All right. 1112131415 TOURISM POLICY COUNCIL UPDATE ON PAST RECOMMENDATIONS16 Carl Burleson, Deputy Assistant Administrator17 for Policy, International Affairs and Environment18 Federal Aviation Administration1920 MR. BURLESON: Thank you. Again, I think 21 just to echo Michael's remarks, I'm actually in a 22 better position in terms of public/private 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 121 2 1 partnerships because many of the things I was going to2 share this morning you've already shared. So I think 3 this is a great sign, to see the harmonization of 4 thinking, but I'll make a few observations that I 5 think might be helpful for this group.6 First, I would encourage folks to go to the 7 FAA government website to download Destination 2025. 8 That's our new strategic plan. We are trying to 9 minimize paper for our carbon footprint, but we would 10 encourage you to look at it because I think from the 11 tourist industry point of view the plan the FAA has 12 laid out, I think, is very vital, because part of what13 we've done is try to be much more aspirational in the 14 kinds of goals that we are seeking in terms of 15 improvements of safety, improvements of efficiency and16 capacity, and I think, importantly for this industry, 17 improvements in the international realm in those areas.18 We have laid out pretty aspirational goals of19 where we want to be by 2018 in terms of diffusion of 20 the NextGen kinds of capability around the world so as21 to allow the aviation industry to grow in capacity. 22 We've been pretty aspirational in terms of what we 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 122 2 1 want the safety record to be, not just for our own 2 industry but for the international community.3 Then, finally, I think, which is important, 4 we've also been pretty aspirational on how we want the5 international community to be able to grow aviation in6 a sustainable fashion, so we've made pretty strong 7 commitments--I said earlier about the one billion 8 gallons of alternative fuel--of how we want to 9 absolutely reduce noise impacts, how we want to reduce10 air quality impacts, and how we want to shrink 11 aviation's carbon footprint, even as we increase 12 operations. So this is, I think, quite an ambitious 13 vision and I think it's really important that we 14 achieve this. The only way we're going to do it is 15 certainly in partnership with our industry.16 So speaking of that, there was actually a 17 meeting last week by a number of CEOs of airlines, as 18 well as my Deputy Secretary and my Deputy 19 Administrator with Aniche Chopra of the White House, 20 who is the Chief Technology Officer.21 The whole discussion of that meeting centered22 around NextGen and the importance of technology 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 123 2 1 innovation for us to be able to deliver, in working 2 with airlines, all these capabilities.3 So again, just to be clear, there's a really 4 high-level focus in this administration on how we get 5 NextGen. Certainly the good news is, we have real 6 support by our airline community because they see how 7 vital it is for their interests to be able to grow in 8 an efficient fashion. 9 As I mentioned earlier, when you're talking 10 about 35 or 40 percent of your expenses being fuel, 11 you're trying to figure out every way possible to 12 reduce that fuel burn. So certainly as a regulator I 13 love that because not only do you get the fuel burn 14 reduction, I get the emissions reduction. So again, I15 think there's a real alignment of interest here.16 I would say I think there's a couple of 17 issues on the horizon of which I think you all should 18 be aware. I think most immediately there is -- I 19 mentioned at the San Francisco meeting there is this 20 issue on emissions trading. So the European Union has21 decided to apply its emissions trading system to 22 international aviation around the world.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 124 2 1 Not surprising, the rest of the world doesn't2 particularly like that idea because Europe decided to 3 do it without talking to anybody. They decided they 4 would unilaterally apply it on its rules, its terms, 5 its targets without actually engaging in any manner of6 negotiation with the rest of the world.7 So that has elicited a not-surprising 8 response from most of the world. Certainly in the 9 U.S. we've tried to explain to our European colleagues10 that the reason the United States exists today is 11 because a couple of hundred years ago Europeans tried 12 to put a tax on us on which we didn't feel like we 13 were well represented.14 (Laughter)15 MR. BURLESON: So sort of an American DNA. 16 But again, I think we've had one congressional hearing17 on this. There's a round table with the House 18 Aviation Subcommittee next week on this. There is a 19 meeting in India late this month which is going to be 20 attended by a large group of countries' major aviation21 states concerned about what Europe is doing. 22 So I suspect this is going to be a long, 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 125 2 1 tough process. Clearly, the outcome of this will have2 some impact, I think, on tourism, because certainly 3 depending on what the pricing is, how that's handled, 4 even retaliation, I mean, all these issues I think are5 going to be working through in the next, probably, 12 6 to 15 months. Even though the European system comes 7 into effect in January, money isn't required to change8 hands until probably April of 2013, so there is some 9 time to try to find a way forward. But again, you can10 anticipate a number of news articles on this.11 The finally, I think one of the things that 12 -- you know, I'm just an aviation guy. In some ways 13 this actually would help me if this goes forward. But14 there's a very different paradigm in parts of the 15 world than what I think you're hearing today in terms 16 of a basic posit that we want to grow tourism.17 I would recommend to you read -- there's a 18 newspaper, The Guardian, in the United Kingdom. I 19 would recommend to you to read the article published 20 on August 30, which basically chronicled the U.K. 21 government policy of, how do we find ways of modifying22 the behavior of Britons to no longer fly out of the 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 126 2 1 U.K. and take family vacations? That's their strategy2 for how to reduce their carbon footprint. So again, 3 this is a really different paradigm in terms of, how 4 do we address this vital issue of climate change, 5 which is, let's restrict demand, let's change 6 behavior, let's not encourage tourism.7 So again it's clear that the U.S. and this 8 administration is very concerned in addressing climate9 change, certainly as we look at what we're doing in 10 FAA, as well as with other agencies to try to bring 11 about NextGen, environmental issues are front and 12 center. 13 How we deal with energy is front and center. 14 But we have a very different paradigm, which is, we 15 believe we can actually bring about the technology and16 operational improvements to support the growth of 17 aviation that is a key part of supporting tourism. 18 But I would give you a head's up that this is not 19 necessarily the view of some parts of the world. 20 I think increasingly in some -- agencies this21 is an ongoing debate in terms of, what is the role of 22 tourism, is it something that really should be 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 127 2 1 fostered or is it something that should be shrunk? So2 again, if it shrunk it actually helps me out a lot. I3 don't have to worry about as much congestion, 4 schedules, and all that kind of stuff. 5 But I think, at least from your standpoint as6 being concerned with tourism, I think you should 7 probably give some attention to different views that 8 actually would have a very different sort of 9 perspective of what is the future of tourism.10 I'd be glad to take any questions.11 CHAIRMAN RALENKOTTER: Questions?12 (No response)13 CHAIRMAN RALENKOTTER: Thank you.14 MR. BURLESON: Thank you.15 (Applause)16 CHAIRMAN RALENKOTTER: So do we have Stephen 17 on the phone?18 MR. CLOOBECK: Hi, Rossi. How are you?19 CHAIRMAN RALENKOTTER: Stephen, I'm doing 20 good. How about you?21 MR. CLOOBECK: Thank you. It's pouring rain 22 in Vegas today.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 128 2 1 (Laughter)2 CHAIRMAN RALENKOTTER: Just one day out of 3 the year. That's not too bad.4 MR. CLOOBECK: That's what you tell everybody.5 CHAIRMAN RALENKOTTER: That's what I tell 6 everybody.7 The floor is yours. Stephen Cloobeck is the 8 Chair of the CTP, and Stephen is going to give us an 9 update on what's going on with the Corporation for 10 Travel.11121314 UPDATE FROM THE CORPORATION FOR TRAVEL PROMOTION15 Stephen J. Cloobeck, Chairman,16 Corporation for Travel Promotion1718 MR. CLOOBECK: Thank you very much, Rossi. 19 We've had some major advancements in the Corporation 20 for Travel Promotion over the last -- I guess we met, 21 oh, four or five months ago, Rossi?22 CHAIRMAN RALENKOTTER: Yes.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 129 2 1 MR. CLOOBECK: And in such time we have now a2 full management team together, led by Jim Evans, our 3 CEO. We've also hired a CFO, Business Development, a 4 full business strategy team. We also were fortunate 5 enough to have chosen our national advertising agency,6 which is J. Walter Thompson. All of these things have7 been transparently put into the press and also are 8 available on our website.9 The reason I'm not able to make it is because10 I'm on the road today going to our board meeting 11 tomorrow and Friday in Wyoming. We are moving our 12 board meetings throughout the United States every 13 other month right now, and we will have our 14 international launch at World Travel Mart in London in15 November for Brand USA. The brand is very close to 16 being announced as to what that DBA will be, and the 17 entire storyboards of that brand, I can tell you have 18 been completed and presented to our board this week.19 We continue to work very closely with your 20 group. I've worked with Hubert Joly, visiting with 21 the President's Export Council, and on the specific 22 aspects of increasing consular affairs offices 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 130 2 1 throughout the world. Tom Noyes has been wonderful. 2 I don't know. Hubert, did you make your presentation 3 yet?4 MR. JOLY: Yes, Stephen. Hi. We've had a 5 comprehensive report yesterday from Ambassador Jacobs,6 and then this morning Ed Ramotowski presented a 7 summary of this report to a standing ovation.8 MR. CLOOBECK: So Hubert and I have been 9 thrilled because we went in extremely apprehensive and10 we could not believe the amount of progress that has 11 been completed and the full thinking of the State 12 Department. So we're very excited about that.13 I believe that we still have to work--we 14 collectively--need to work to make sure that Customs 15 and Borders is really facilitating that hospitable 16 atmosphere on entry and exit from the United States 17 and making sure that the scripting is proper and that 18 they're trained properly and that it's QA'd, that we'd19 get quality assurance that it's actually occurring.20 I get very positive responses from Customs 21 and Borders, but I think it's incumbent upon us 22 collectively to figure out how we QA that, to make 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 131 2 1 sure to dispel the rumors and the myths that we're 2 being rude as a nation. We really haven't heard at 3 CTP that this is truth anymore, so if it's not we want4 to dispel that rumor and come out with some really 5 creative press to let everyone know the United States 6 is a hospitable place to arrive to and to depart from.7 So with that, we have all of our funding put 8 in place through the year. It was challenging, but 9 Commerce and Treasury worked very closely together 10 with us and facilitated our funding. Our active 11 fundraising for matched funds for the two -- starting 12 October of 2012 fiscal, which is October of this year,13 we will be asked to raise $10 million cash, $40 14 million of in-kind funds. 15 We've already started the matching process of16 that. We've reviewed this proposal briefly with 17 Commerce. Our global proposal will be submitted in 18 the next week. So we're going to be off and running, 19 raising this money. We've circled in excess of the 20 $10 million right now, but we're going to be calling 21 on all companies in tourism and travel to participate 22 in this process. The quid pro quo at the beginning: 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 132 2 1 it's nothing more than a patriotic duty to fulfill the2 mission of the statute of the Travel Promotion Act. 3 So with that, Rossi, I'm happy to answer any 4 questions that the TTAB has.5 CHAIRMAN RALENKOTTER: Okay.6 Does anybody have any questions of Stephen?7 (No response)8 CHAIRMAN RALENKOTTER: No questions, Stephen.9 But thank you very much for communicating with us 10 today by phone, and hopefully it will stop raining 11 soon. I'll see you back at home.12 MR. CLOOBECK: All right. Be well. Thank 13 you again.14 CHAIRMAN RALENKOTTER: Okay. Thanks, Stephen.15 A couple of things, just real quick before I 16 turn it over to you. I want to also recognize the 17 Vice Chairman of TTAB, Dawn Drew, for all the hard 18 work that she's done over the course of this process. 19 Thank you again.20 (Applause)21 CHAIRMAN RALENKOTTER: We will have a team 22 photo after this meeting is over, so don't run away. 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 133 2 1 We have to have that team photo for the baseball card 2 that we'll produce.3 (Laughter)4 CHAIRMAN RALENKOTTER: And with that, I'm 5 going to turn this over to Nicole Lamb-Hale and she's 6 going to close.789101112131415161718192021223 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 134 2 12345678 CLOSING REMARKS & NEXT STEPS9 Nicole Lamb-Hale, Assistant Secretary10 for Manufacturing & Services1112 SECRETARY LAMB-HALE: Okay. Well, thank you 13 again for all of the work that's been done, and the 14 impressive binder. I mean, talk about raising the 15 bar! I've never seen a binder like this produced by an16 advisory committee. So, thank you so much.17 I just want to thank my interagency 18 colleagues for all the work that they've done to 19 really bring the results that you've heard today. I 20 hope that it's clear that we've been listening to you 21 from these reports. I am very pleased with the White 22 House's engagement as well.3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 135 2 1 I think that that has been fabulous and has 2 really been the wind beneath our wings, so the 3 President is very focused and I am just so happy to be4 a part of this public/private partnership, as well as 5 with the CTP. We have really worked hard with them. 6 We were able to release the remaining dollars in terms7 of their initial start-up expenses, and I know Stephen8 was very happy about that, as was Jim Evans. 9 So we're moving along. We're trying to move 10 government as fast as the private sector. You know, 11 we're getting there but we will keep striving and 12 really trying to support you and this industry because13 it's so critical to job creation and job growth.14 I also want to say that it's clear that the 15 State Department has been doing a good job because I 16 was in Brazil last week, and on my way back I was on a17 plane full of exports. 18 (Laughter)19 SECRETARY LAMB-HALE: I think the flight 20 staff and I were the only ones speaking English on 21 that plane, so something is going well in what State 22 is doing. So, thank you, Ed, for your report, and 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 136 2 1 really to all of the interagency colleagues that have 2 made a difference here.3 So we really are excited about the 4 opportunity to continue to work with you. I hope that5 many of you will consider applying for the next 6 charter term. We have been working hard at Commerce, 7 through our Office of Travel and Tourism Industries, 8 to support all the work that's being done and we've 9 really been taking on double duty because, under the 10 TPA, we have the obligation to create an Office of 11 Travel Promotion.12 What we've really done, because of our 13 limited resources, is to combine that function into 14 OTTI. So Helen and her team, represented here, have 15 been extremely busy to make sure that we coordinate 16 all of these efforts and really implement the advice 17 that you've given us. So, thank you again for all of 18 the work that you've done. 19 I want to introduce Ken Hyatt, who I know 20 many of you have met. Ken was senior advisor with 21 NITA, and now he's Acting Deputy Assistant Secretary 22 for Services and he's the liaison to the Corporation 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 137 2 1 for Travel Promotion. So, please welcome Ken. He's 2 been calling himself the Minister of Tourism, since 3 most of what he's been doing since he took on the post4 has been in that area. 5 So, you know, as Francisco said earlier and 6 many have said, you've really raised the bar for the 7 work that advisory committees do, so we really 8 appreciate that opportunity.9 I do want to yield some of my time, Rossi, if10 I may, to Dick Friedman, who is here from the 11 President's Export Council. I know everyone knows 12 Dick. It just is another example of the engagement 13 that we're receiving in the private sector and at the 14 White House, so I'd like him to say a few words.15 MR. FRIEDMAN: I'll be very brief. I'm a 16 hotel owner in development from Boston. A year ago, I17 was -- executives that advice the President on policy.18 Together with Alan -- who is the president of Ford 19 Motor Company, I co-chaired the Committee on 20 Manufacturing. I don't know how this got together, 21 but we're working together.22 Let me just tell you, since I'm not 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 138 2 1 restrained, most of the people have talked about the 2 issues which I would talk about -- and Stephen -- but 3 I'm not constrained by telling you not to lobby, so I 4 will tell you to lobby. When I started on this 5 commission I was very enthusiastic about how we could 6 change this and I got very despondent. In the last 7 month or two I've gotten very optimistic again. 8 In fact -- Stephen and I have had numerous 9 conversations with Secretary Noyes, who's a superstar,10 actually, from Wall Street at the State Department and11 is really making a fast change there, frankly, from a 12 very low base I think to a very high base.13 In the last couple of weeks -- I want to tell14 you it's because of the mission. In the last couple 15 of weeks, the message has reached the top. I can 16 report to you that, within the last two to three 17 weeks, I have personally met one-on-one, or maybe one-18 on-two, with the President, with Valerie Jarrett, with19 Secretary Kenton, and on the phone with Tom Noyes -- 20 and yesterday I had lunch with Jim Messina, who used 21 to be the Deputy -- all of those people are getting to22 really understand this issue and they're enthusiastic,3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 139 2 1 and it comes from the pressure that you've got. But 2 there's still problems in Congress and there's still 3 problems in other places, and you've got to keep the 4 heat on. I gave some articles to people, they read 5 them. It comes from Travel Promotion, from the -- so 6 we've just got to keep the heat on.7 Just one thing in addition to what Ed said. 8 Each of these people at the higher end, first of all, 9 they make money on visas. This is ridiculous. They 10 make money on getting visas. Each person they had, 11 they had at least 15,000 visa applicants. I think 12 that's 95 percent of the -- talking about that.13 VOICE: It depends on the country.14 (Laughter)15 MR. FRIEDMAN: But it's a gigantic number. 16 So all -- they are making gigantic progress in these 17 countries. It is reaching the top. Keep the pressure18 on, and thank you for your work.19 (Applause)20 SECRETARY LAMB-HALE: I just wanted to note 21 that all of you received a document -- this is the 22 public fact sheet on what the Tourism Policy Council 3 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 140 2 1 has been doing. So please take a look at that.2 We are also emailing it to you so that, as 3 you make remarks around the country about what the 4 U.S. Government is doing to support the industry, you 5 can draw on some of that. 6 So with that, Rossi, thank you again.7 CHAIRMAN RALENKOTTER: Thank you. Thank you 8 again for everything that you have done for us, too. 9 So with that, we will adjourn our last meeting of this10 group. Again, thank you very much. Don't forget the 11 team photo.12 We're adjourned.13 (Applause)14 (Whereupon, at 11:34 a.m. the meeting was 15 adjourned.)161718192021223 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 141 2 12345 C E R T I F I C A T E6 This is to certify that the foregoing 7 proceedings of a meeting of The Travel and Tourism 8 Advisory Board, at the U.S. Department of Commerce, 9 held on Wednesday, September 14, 2011, were 10 transcribed as herein appears, and this is the 11 original transcript thereof.1213 14 LISA L. DENNIS, CVR15 Court Reporter161718192021223 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401 1 142 2 12345673 4 5 LISA DENNIS COURT REPORTING 6 410-729-0401

U.S. Travel and Tourism Advisory Board

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