Dear Mr. Secretary:
We were heartened to see the DOT Policy and Funding for Travel and Tourism provisions in the Infrastructure Investment and Jobs Act, particularly the establishment of a Chief Travel and Tourism Officer in in the Department.
We would like to draw your attention to the fact that the international inbound sector of the travel industry has been hardest hit by the pandemic, and that hit continues to be exacerbated by prolonged travel restrictions and entry barriers imposed by the administration in response to the pandemic.
International travel was the #1 services export for the USA in 2019 and delivered a $51 billion positive trade surplus on a total of $234 billion in travel exports. Due to the pandemic, the U.S. lost $150 billion in export income and 1.1 million jobs in 2020 and is projected to lose an additional $175 billion by the end of this year, unless entry restrictions are lifted.
While the entire travel industry was dramatically impacted by Covid-19, some parts of the industry are recovering with domestic travel, but the international inbound sector is still at a dead stop. Inbound tour operators – businesses that are responsible for a significant portion of the positive trade surplus generated by travel and tourism exports – have been 95-100% down from their 2019 revenue since March 2020.
This sector of the travel industry is made up of a diverse group of small businesses dependent on international travel to the USA, many of which will be without any revenue for two full years due to booking lead times and seasonality. Inbound tour operators are paid when the travel commences, so they will not see meaningful revenue until Spring 2022.
When there is a clear roadmap for the U.S. reopening to inbound travel, international travel bookings through inbound tour operators will resume, however, the ongoing travel restrictions, visa processing complications around the world and uncertainty created by not having a clear timeline may very well cause a break in the inbound travel infrastructure.
While it’s perhaps not the traditional type of infrastructure, you clearly recognize the need for a strong travel and tourism industry. If inbound travel bookings resume at the rate we’ve seen with domestic travel -and the pent-up demand suggests it will – the U.S. will not be prepared.
Inbound tour operators had to downsize to stay in business, and they will not be able to ramp up with the product and service quality that international visitors have come to appreciate. The industry’s knowledgeable and skilled workforce remains displaced, and businesses will be relying on new, less-expensive employees and others doing double duty until such time that the revenue reaches their companies.
Many took advantage of the PPP and other SBA loan programs, but those funds are running out. These companies need financial support to bridge the gap so they can rebuild the infrastructure now.
We respectfully urge you to include relief and stimulus funding for inbound tour operators in your forthcoming national strategies and budget as a critical travel infrastructure project. We need to stand up these companies and strengthen the inbound travel infrastructure to quickly restore the #1 services export for the USA.
We need the inbound tour operators to survive as they in turn drive international business to other travel and hospitality businesses, like hotels, transportation companies, attractions, and restaurants, throughout the country.
You may reach either of us at headquarters@inboundtravel.org or 859-955-9098. Thank you, Mister Secretary.
Most Respectfully,
Peter van Berkel
Chairman
President, Travalco
Lisa Simon
CEO