Hospitality leaders ask that Congress criticize less

  • Article by: KEVIN DIAZ , Star Tribune
  • Updated: May 13, 2009 - 11:51 PM

They say business meetings have such a bad name they've lost bookings worth $1.9 billion.

WASHINGTON - Images of corporate executives at play in plush resorts have given business travel a black eye, and the tourism and hospitality industry is feeling the pain.

Spurred by that so-called AIG effect, a group of industry leaders -- including Jay Witzel, president and CEO of Minnesota-based Carlson Hotels Worldwide -- asked Congress for help Wednesday during a Senate hearing on tourism in troubled economic times.

They're not asking for a government bailout. But they are asking members of Congress to tone down the rhetoric -- or at least do no harm.

"This part of our industry has been the source of undeserved and crippling attacks in recent months," Witzel told a Senate Commerce Committee panel convened by Sen. Amy Klobuchar, D-Minn. "An environment has been created in America where legitimate business travel is being questioned and cancelled. This translates into additional loss of jobs, taxes and travel-related revenues for an industry that is already hard-hit from the general economic recession."

Witzel and other industry leaders are also getting behind legislative efforts to promote U.S. travel destinations worldwide, funded by a $10 fee collected from overseas visitors. The effort coincides with a new state ad campaign to promote Minnesota as a travel destination for cash-strapped folks vacationing closer to home.

Perhaps business leaders' sharpest messages to Congress focused on the public relations fallout from the financial mess on Wall Street, which has hurt resorts in desirable travel destinations across the nation. Much of the problem apparently stems from popular outrage over the AIG executives who spent more than $440,000 at the St. Regis Resort in September days after taking an $85 billion federal bailout.

News about that junket and others like it reverberated for months on cable television and the halls of Congress, which only grudgingly approved the $700 billion financial industry bailout. The upshot: U.S. companies cancelled meetings, events and incentive programs worth more than $1.9 billion in lost travel spending in the first two months of this year, according to Smith Travel Research and the U.S. Travel Association.

Witzel leads a company that owns more than 1,020 hotel locations under five brands, as well as Carlson Marketing, one of the nation's leading meeting and event companies. Overall, he said, business travel generates $240 billion in spending and 2.4 million U.S. jobs.

"Critics have mislabeled many meetings and events as unnecessary and frivolous, causing companies that have received federal government support, plus many more that have not, to cancel business travel and activities," he said.

Witzel is not alone in raising this concern. Joining him before Klobuchar's subcommittee on competitiveness, innovation and export promotion was Sam Gilliland, chairman CEO of Sabre Holdings, the Texas-based parent company of Travelocity.com

"Paralyzing confusion abounds in our industry and in corporations about what the Treasury Department considers 'luxury' and 'excessive' expenditures in the area of business travel," he said. "Meetings, conventions and incentive travel are proven business tools that allow companies to establish valuable relationships, solicit feedback and reward employees."

Guidelines sought

To stem the uncertainty and uncork business travel, industry leaders are asking the government for clear guidelines.

Klobuchar, a cosponsor of the Travel Promotion Act, a Disney-backed bill introduced this week to market the U.S. abroad, lent a sympathetic ear about "a few bad actors" who have made businesses shy away from travel. "We need to do what we can to encourage companies to spend on travel again, in an ethical, acceptable manner," she said.

Other lawmakers on the panel acknowledged that, in the wake of the AIG scandal, Congress has not always been a great champion of business travel. "What makes good politics might not make good business," said Sen. Mel Martinez, R-Fla., who has seen tourism in his state slump.

Another powerful ally is Senate Democratic Leader Harry Reid, who told the panel that his home state of Nevada, a convention mecca, is suffering from historic budget shortfalls due to a decline of visitors. "Simply put, our state depends on visitors," he said.

Meanwhile, in Minnesota, where tourism is an $11 billion industry, state officials are launching television ads in adjoining states and Canada. Said John Edman, director of Explore Minnesota Tourism: "We're getting the word out that Minnesota's a great place to get away to."

Kevin Diaz • 202-408-2753

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