Loews Hotels Chairman Jonathan M. Tisch Calls for Public Policy Reforms, Industry Leadership to Win Global Competition for Travel
 
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Loews Hotels Chairman Jonathan M. Tisch Calls for Public Policy Reforms, Industry Leadership to Win Global Competition for Travel

Reforms to Customs, to Visa Process and Infrastructure Upgrades Necessary to Grow U.S. Share of International Travelers

New York, June 3, 2013 – Jonathan M. Tisch, chairman of Loews Hotels, today urged travel industry leaders to unite behind a push for public policy reforms to help the United States compete in the international travel market. "Given travel's increasingly prominent role in promoting growth and job creation, our industry needs public policies that reflect travel’s value to the economy," said Tisch.

Among the changes Tisch called for were improvements to the Customs and entry process at our nation's gateway airports, investments to upgrade the country’s travel infrastructure and legislation to make permanent recent improvements in visa processing. Tisch made these remarks this morning in an address to a packed hall of 1,800 people at the 35th Annual NYU International Hospitality Industry Investment Conference.

Noting that the global middle class is projected to grow by more than 3 billion people by 2030, Tisch argued, "Our industry’s future depends on our ability to compete and win in the international travel market."

According to Tisch, a key challenge to winning a growing share of international travelers is providing a seamless travel experience. "We need to capture their attention in their home countries, spur their interest in visiting the United States, make it easy for them to get here and, once they arrive, provide a welcoming enjoyable experience."

Tisch said this begins by providing a "great travel experience from the earliest stage of a trip," starting with obtaining a visa. He congratulated the Obama Administration for slashing visa wait times for Chinese travelers from more than 100 to just five days and for cutting wait times in Brazil by 98 percent.

"Our success in improving the visa process provides a model for action," stated Tisch. "Now we need to turn this same focused attention to the next barrier visitors to the U.S. face—an unwelcoming Customs process."

Citing recent survey data from the U.S. Travel Association, Tisch said that more than 40 percent of U.S. visitors plan on telling friends or colleagues to avoid traveling to the U.S. because of the current Customs and entry process—largely due to long Customs lines.  “An investment in 1,000 additional Customs and Border Protection officials at our gateway airports could help meet a 30-minute goal for clearing international visitors through Customs,” said Tisch.

To meet growing travel demand, Tisch also underscored the ongoing need for upgrading travel infrastructure. "The hard truth is, America’s aging infrastructure cannot handle the travelers we already have, much less the millions of new travelers we’re trying to attract."

In closing, Tisch voiced his support for the immigration bill working its way through the U.S. Senate.  "Immigrants come to America to forge a better life for themselves and their families," said Tisch. “It’s a great source of pride for us that many take their first steps up the ladder of opportunity in the hospitality industry."

Tisch stated that provisions in the Senate immigration bill would address some of challenges raised in his remarks—including codifying visa improvements into law and providing enough funding for additional Customs agents to improve the entry process.

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Jen Farley
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Cheryl Feliciano
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Full Remarks

Thank you for your kind introduction. It’s a great pleasure to welcome everyone to this year's New York University International Hospitality Industry Investment Conference.

For 35 years, NYU has organized what has become a marquee event in our industry.  And ever since NYU’s Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management was established in 1995, we’ve been proud to play a role in making it happen.

I’d like to congratulate Dean Bjorn Hanson and his team for pulling together another outstanding conference.

I’d also like to extend a particular welcome to all the NYU-Tisch Center students who are joining us today.  You represent the next generation of leadership in our industry … and I hope you leave this conference as excited as I am about the prospects for the future.

I look forward to this conference each year because it gives us a chance to step back and take the long view of our industry and where it’s headed. It brings us together to share ideas … confront challenges … and figure out how to seize the incredible opportunities on our horizon.

We’ll hear from some of the titans of real estate, including Thomas Pritzker of Hyatt Hotels and Mort Zuckerman of Boston Properties.

We also have a great lineup of industry CEOs, who will share their insights about where our industry is headed:  Steve Joyce of Choice Hotels ... Chris Nassetta of Hilton … Trudy Rautio of Carlson … and Edward Walter of Host Hotels & Resorts.

And we also have a special guest for my Beyond the Boardroom interview tomorrow – NFL Commissioner Roger Goodell.

Travel emerging as a key driver of our economy

This afternoon, CNBC's Ron Insana will moderate a panel of leading economists who will give you their view about the state of the economy and the outlook for the coming year.

Most economists seem to agree the current recovery is modest by historical standards. 

That may be true.

But I think many of us will look back on this recovery as a time when travel really established a leadership role in our economy – a time when the travel industry emerged as a key driver of growth and job creation.

For the past two years, spending on travel and tourism has outpaced GDP growth – a sign that travel continues to lead the way toward recovery.

The travel industry has added jobs in 11 of the last 12 months.

And since the recovery began in 2010, we’ve created jobs far faster than the rest of the economy.

Both leisure and business travel demand is up. And looking ahead, industry forecasters predict rising hotel occupancy rates and higher room rates over the next 12 months.

Like many companies in the hospitality industry, Loews is investing heavily to take advantage of a recovering economy and a growing travel market.

But we’re not just investing for today’s market … we’re positioning ourselves for what we expect will be a long-term boom for the travel industry.

Consider a few data points.

The International Air Transport Association recently released its latest forecast for future airline traffic.

By 2016, the group expects an additional 800 million airline passengers per year, worldwide.

That’s a huge pipeline of passengers—and potential hotel guests.

As in many other industries, the rising economies of the Asia-Pacific region are leading the way when it comes to future growth.

The World Tourism Organization reports that China has become the fastest-growing tourism source market.

Between 2000 and 2012, international trips by Chinese travelers grew more than eight-fold. By 2016, China will add another 34 million international passengers to the market.

What does this mean for the travel industry? Well, last year alone, Chinese travelers spent a whopping $102 billion, making China the largest spender in the international tourism market.

But even these figures don’t fully capture the magnitude of the opportunity that lies ahead.

Looking out to 2030—not really all that far for our planning purposes – the consulting firm Ernst & Young predicts the global middle class will expand by another 3 billion people. 

Two-thirds of those will come from the Asia-Pacific region.

Growing the U.S. share of the international travel market

This is a compelling picture.But it also presents a challenge.

In many ways, the future of our industry has never looked brighter. But it’s pretty plain that our future depends on our ability to compete and win in the international travel market.

As I’ve mentioned in past years at this conference, achieving our long-term goals requires us to unite as one travel industry … instead of fragmenting into individual sectors like hotels or airlines or destinations.

This has never been more true than when it comes to attracting international travelers.

Think about it for a minute. If you’re visiting from China or India or Korea, the travel experience isn’t defined solely by how much you liked our hotels. The fact is, it starts before you even purchase an airline ticket, reserve a hotel room, or decide on a destination.

So as hotel investors and operators, I believe it’s important for us to take a far broader view of the travel experience.

We must aim to meet and exceed our customers’ expectations from beginning to end—and I’m not talking about from when they enter the lobby till the time they check out.

We need to capture their attention in their home countries … spur their interest in visiting the United States … make it easy for them to get here … and, once they arrive, provide a welcoming, enjoyable experience.

When it comes to broadening our view of the travel experience, I see four major areas where we need to focus.

First, we have to compete for their business.

It all starts with extending an invitation.

This sounds self-evident … but sometimes the simplest truths are the easiest to overlook.

For years, the U.S. stood by while other governments spent lavishly on advertising, trade shows and other tools to attract international visitors.  As a result, our market share languished.

Since the passage of the Travel Promotion Act and the creation of Brand USA, we’ve finally joined the game.

Brand USA is the first overseas campaign designed to attract international travelers to the U.S.

Through marketing and other outreach, Brand USA has boosted America’s reputation as an appealing travel destination—all at no cost to U.S. taxpayers, it’s important to add.

However, in Washington, no victory is ever final—especially in today’s sequester-driven budget environment.

Legislators can be expected to take a hard look at Brand USA’s performance—as they should.  But some may view their budget as easy-pickin's—even though not one dime of taxpayer money goes to support the program.

Our job is to continue backing Brand USA as a vital advocate for our industry.  Take the time to educate yourself about its activities … understand the metrics being used to demonstrate success … and communicate your support to our elected representatives.

Second, we have to deliver a great travel experience from the earliest stage of a trip.

For many overseas visitors, a trip to the U.S. starts with obtaining a visa.  Yet in many parts of the world—including rapidly growing markets like China and Brazil—our visa process once operated like a giant “not welcome” sign.

Over the past two years, the travel industry—represented by the U.S. Travel Association – has worked with the State Department and congressional allies to make it easier for guests to get to the U.S.

The results speak for themselves.

In China, waiting times for obtaining a visa now average just five days, down from 120. In Brazil, we’ve cut the wait by 98 percent—from a high of 140 days down to about two days.

Our success in improving the visa process provides an effective model for action. As an industry, we came together to identify a problem … highlighted ways to fix it … and committed ourselves to working toward a solution.

Now, we need to turn this same focused attention to the next barrier visitors to the U.S. face – a cumbersome, confusing and unwelcoming Customs process.

Today, overseas visitors arriving at prominent gateway airports often face waits of two- to three-hours to clear Customs.

What impact does this have on our popularity as a destination? Well, in March, the U.S. Travel Association surveyed 1,200 overseas travelers to find out.The results were pretty alarming.

● More than 4 out of 10 travelers who have visited the U.S. plan on telling their friends or colleagues to stay away because of the current Customs and entry process.

● One in three travelers thought the U.S. is “falling behind other countries” or was even the “worst” Customs process they ever experienced.

● One in seven overseas travelers report they have missed a connection because of Customs delays, causing them to cancel hotel reservations, car rentals and other activities.

U.S. Travel puts the economic cost of lost visitors at $95 billion.

Here’s the good news:  As with the visa process, the solution the Customs mess is relatively straight-forward.

An investment in 1,000 additional Customs and Border Protection officials at our gateway airports could help meet a 30-minute goal for clearing international visitors through Customs. The modest resources required to hire new officers would be more than offset by the billions in new traveler spending that would be unleashed. 

Third, we need to provide a seamless travel experience.

Many international travelers arrive in the U.S. from state-of-the-art airports, complete with modern amenities and easy access to final destinations.

At Korea’s Incheon International Airport, for example, the high-speed Airport Railroad Express whisks passengers nonstop from the airport to Seoul Station. No traffic jams. No construction delays. No queuing up at the taxi stand. Station arrivals are announced in Korean, English, Chinese and Japanese.

At Hong Kong International Airport, visitors can board a transit rail connection and travel twenty miles to downtown in just over 20 minutes.

Does anyone here seriously believe we offer a comparable experience traveling fifteen miles from JFK to Midtown Manhattan?

The hard truth is, America’s aging infrastructure system cannot handle the travelers we already have, much less the millions of new travelers we’re trying to attract.

When the latest list of the world’s top airports came out, the highest-ranking U.S. spot was the Cincinnati/Northern Kentucky International Airport. It clocked in at number 30—down six spots from 2012.

Just three other U.S. airports made the top 50, placing well behind airports in countries such as Malaysia, Finland and Peru.

Everyone seems to agree that America’s infrastructure is a huge drag on our economy.  Everyone seems to understand that modernizing it should be a top priority. Yet, too often, the long-term needs of our infrastructure get sacrificed for short-term political expediency.

We all witnessed the recent finger pointing by both parties over who was responsible for the furlough of 1,500 air traffic controllers each day. Regardless, Congress and the White House quickly gave in to angry passengers and found the funds to end the furloughs.

Lost in the blame game, however, is that fact that Washington had to raid the Airport Improvement Program of $253 million—diverting funds from aviation infrastructure investment.

While our competitors in the travel market are spending billions to upgrade their infrastructure to improve the traveler experience, here in the U.S. we’re cutting investment to pay air traffic controllers.

This temporary [quote] “solution” is a band-aid at best. The American Society of Civil Engineers estimates the U.S. needs to invest $7 billion a year in 29 hub airports over the next five years to avoid chronic flight delays across the country.

Fourth, public policies should support travel … but we can’t always wait for Washington.

Given travel’s increasingly prominent role in promoting growth and job creation, our industry needs public policies that reflect travel’s value to the economy. When it comes to major issues that impact our industry, travel needs to make its voice heard in Washington.

The massive immigration bill now moving through the Senate is a prime example.

As everyone here knows, immigrants are a critical component of our workforce. They come to America to forge a better life for themselves and their families … and it’s a great source of pride for us that many take their first steps up the ladder of opportunity in the hospitality industry.

The Senate immigration bill will provide the kind of clarity our industry and our workforce needs to keep growing. It also contains several provisions that will strengthen America’s competitiveness in the international travel market.

To give just a few examples, the bill codifies the recent improvements made to our visa program … expands the number of countries whose citizens can visit the U.S. without a visa … and provides funding for additional Customs agents—enough to improve the entry process.

While it’s important to have a seat at the table on issues like immigration, visa reform and the Customs process, we can’t always sit patiently back and wait for Washington to act.

Over the past few years, I’ve often said the industry needs to step up and take ownership of the challenges we face – and I’m very encouraged by what I’ve seen.

We knew America needed to compete in the international travel market … so we fought for the creation of Brand USA.

We saw that the visa process was discouraging travelers … so we helped highlight the problem and worked with government officials toward a solution.

We understood that our infrastructure problems are bigger than one industry or even government alone can solve … so we’ve pushed creative solutions like public-private partnerships to jump-start stalled projects

These are all signs of an industry that is ready to take a leadership role in driving our economy ... an industry that is increasingly united, not fragmented … an industry that is positioning itself to seize the incredible opportunities for growth over the coming decades.

The future of our industry has never looked brighter—and I look forward to building that future with you. Thank you and enjoy the conference.

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