Private sector fails US tourist industry

A decline in tourism has left the home of Disneyland, Hollywood and the Big Apple $57bn (36bn) poorer and with 230,000 fewer jobs than it had five years ago, according to the US National Tourism Organisation.

Uncle Sam may be the home of marketing, but the US as a tourist destination is losing international market share, which according to the USNTO has dropped by some 17 per cent in the same period.

For this reason, officers on the USNTO board such as the president of Walt Disney Attractions, Judson Green, vice chairman of American Express, Jonathan Linen, and vice chairman of Alamo Rent A Car, Roger Ballou, are backing the Visit USA Act. If the Act is passed on October 9, it will authorise state funding of $60m (36m) for an international advertising campaign for the US.

“We are losing market share to other countries and we have got to do something about it,” says a spokesman for the Republican Senator for Montana, Conrad Burns who with Democrat Senator for South Carolina, Ernest Hollings, is sponsoring the Bill. “This Act will authorise the appropriation of the money to do this,” the spokesman adds.

The reasons why the US tourism industry is backing this Bill will be of interest to the Department for Culture, Media and Sport, which is considering putting the English Tourist Board into private hands.

Having abandoned its state-funded national tourism body, the US Travel and Tourism Administration (USTTA) in 1996, its privately-run replacement, the USNTO is looking to Congress for help with advertising and marketing costs. That’s because no private operator has come up with money for an international campaign promoting the US as a destination.

The rationale for getting rid of the US Travel and Tourism Administration (USTTA) in April 1996 mirrors that of the UK government, which is considering the abolition of the English Tourist Board.

The idea was to reduce public expenditure on, and government involvement in, the tourism industry. In its most profligate year, the USTTA had a budget of 10.5m for administration costs, of which only 750,000 was spent on international marketing. As a result, the organisation was seen as ineffectual.

David Airey, professor of tourism management at the University of Surrey, says: “Two years ago the US said we don’t need a public body and the private sector will provide the necessary funding for research or marketing of national tourism. This is a feeling that is reflected on both sides of the Atlantic.”

But, adds Airey, no companies have come forward to drive any international country marketing campaign.

“Individual organisations will not put money into something that directly benefits their competitors as well as themselves. They’ve all been waiting for someone else to come forward first and nobody has,” he says.

The countries which are winning in the tourism stakes are investing heavily in international advertising campaigns to brand their countries.

Australia spent some 18m on global advertising last year, while Thailand spent 15.5m, according to the World Tourism Organisation. Meanwhile, the US as an international tourist destination has effectively had no presence in recent years, although substantial amounts of money are invested in state and city tourist campaigns.

Any moves towards creating a unified campaign have also been blunted by the activity of individual states and cities doing a good job of marketing themselves abroad. Some states, such as Florida, have been doing a successful job, but others are unable to compete with the heavyweight campaigns of their rivals.

“If you look at countries such as Australia, South Africa or France they’ve all got a presence in the market,” says Airey. “But when you compare advertising for Idaho or Oregon with these countrywide campaigns, you can see it puts the US at a disadvantage and understand the rationale for having a national body. In essence, the US is back to where it was before when it disbanded the USTTA in 1996.”

According to figures from the World Tourism Organisation, the average annual growth rate for inbound tourism for the Americas between 1988 – 1997 was 4.1 per cent, lagging behind East Asia at 7.4 per cent and Africa at 7.1 per cent.

This modest US growth is set against a buoyant market. The world tourism market is projected to grow from 673 million arrivals in 2000 to 1.6 billion arrivals in 2020, according to the WTO.

The USNTO is also looking for matching funding from private partners, which could swell state-funding to $120m (72m). The campaign, which would air in “major overseas markets around the world”, would brand, position and promote the US as “the premier destination of choice for international travellers”. The UK, as the second most important market after Japan, is likely to see a good part of this money come its way.

If the Bill is passed, creating a campaign acceptable to political parties and private industry will be a challenge. Contributing companies are in a powerful position to influence whether or not their products appear in the campaign.

“The political aspect of developing tourist board advertising is very difficult,” said Claude Marcus, executive vice chairman of Publicis in Paris, talking at the International Tourism, Travel and Leisure Advertising Festival in Valencia two weeks ago.

Marcus adds: “If you work for a single country then all the regions of that country want to be included in the campaign and you frequently have too many people trying to defend their own interests. Too often you see ads that look like pages out of a stamp collector’s album. What you need in this situation is a marketing director who has the courage to follow a vision through.”

The US has found out at great cost that national tourism campaigns are most effectively run from a central core and that even the might of Hollywood is not enough to sell the US as a destination.

The US has also discovered that the private sector has not come up with all the answers it was hoping for, something Culture secretary Chris Smith will need to take on board before he makes a decision on the future of the ETB at the end of the year.