There will be no doubt—in a little more than five weeks when the USA’s largest international travel marketplace, IPW, hosted by the U.S. Travel Industry Association (US Travel) and led by marketer-in-chief Brand USA—that the U.S. inbound travel industry is, at last, fully open for business.
After canceling the event for a year in 2020, the industry got behind US Travel and took part in IPW last September in Las Vegas. But that get-together, operating at about a third of capacity, seemed at times, more like a statement of defiance in support of the industry for those who showed up: suppliers and buyers alike wearing masks everywhere; in their booths, people trying to maintain a proper distance and not shaking hands (heresy for a business founded on handshakes); “infection checkpoints” to start the day that made the convention center seem hostile and larger than it is; and social functions that just didn’t have that friendly, noisy, rambunctious mix of a multilingual and multicultural crowd that is endemic to IPW.
In other words, it was a tough sell to get people to Las Vegas and work the show. But, fortuitously, it seemed to pay off. A month after IPW, the Biden Administration announced the November 10 elimination of travel bans for EU nations and other key country markets. And since then, bit-by-bit, the walls of bans throughout the world have come tumbling down. There are still some tough regions (APAC countries come to mind), but US Travel is looking at a date book that is at, or just beyond, 7/8th full.
No mistake who this new IPW booth belongs to—Brand USA
A Brand USA State of Mind: It’s a challenge for anyone (including INBOUND’s editor) who’s ever worked on Capitol Hill or in the Federal Estate to explain just how difficult and magnificent it is to pull off what US Travel’s outgoing president, Roger Dow, US Travel’s executive vice president of public affairs and policy, Tori Emerson, and the entire US Travel lobbying team have pulled off. Perhaps a miraculous medal of some sort is in order.
What they did was get bipartisan backing for inclusion of $250 million for Brand USA in the March Omnibus Appropriations Act that Congress passed and President Biden signed into law.
Here’s what Brand USA faced. Under the terms of the Travel Promotion Act of 2010, which established Brand USA as our country’s DMO, the agency is allowed to match private sector contributions of up to $100 million—with up to $100 million in fees collected from travelers to the United States from Visa Waiver nations (there are 40 of these).
Snapshot: Before $250 million in Recovery Funding
Prior to the Congressional relief funding, Brand USA faced a sort of Catch 22 situation. As Aaron Wodin-Schwarz explained at Brand USA’s recent board of directors meeting, on the one hand, Brand USA’s federal matching fund come from charges on Visa Waiver travelers to the United States—only no one was traveling to the USA. On the other hand, because of a tourism industry shutdown, there were few partners who could afford contributions to Brand USA.
What the recovery funding will mean—a quick summary Part I
—Brand USA will submit a plan to Congress for allocating relief funding by May 5.
—The plan is a framework that will guide Brand USA’s decision making over the next 2.5—three fiscal years and provide a bridge back to normal operations.
—Each fiscal year will have its own detailed business plan with marketing objectives and budge AND annual report to Congress.
—The framework includes: methodology for market and channel selection; typical programs; and more.
—The legislation does not affect Brand USA’s underlying mission and funding model.
What the recovery funding will mean—a quick summary Part II
—For planning purposes, let’s assume that the $250 million in funding will be/have been received by the end of April.
—$50 million of the funds require matching funds, and Brand USA’s team expects to receive these funds in Fiscal Year 2023 once they are matched.
—Here is a breakdown of the $250 million in federal government revenue over three fiscal years:
● FY 2022, (ends at conclusion of October 31, 2022) $40.5 million
● FY 2023, $139.5 million
● FY 2024, $70 million
FY 2022 Expense Budget
|Scenario||Readiness Spend||Recovery Spend||Federal Relief Spend||Total|
|Board Approved Budget||$23,120,000||$53,780,000||x||$76,900,000|
|Proposed Budget with $250 million Federal Relief $||$23,120,000||$53,780,000||$40,503,259||$117,403,259|
Emerging from the Pandemic, Brand USA is Still Valued by its Partners: In going through the ratings of the organization’s Annual Partnership Perception and Performance Evaluation, Cassady Bailey, vice president partner engagement, was able to tell board members that the measures of “Partnership Value and Maintaining Partnership” have remained in the over-90 percent ratings, although there was some slippage last year, from 94 percent to 90 percent in partners’ value of membership. Of course, the year was the trough year for the pandemic. (The survey was conducted January-March.)
Perception of Brand USA
(Top 2 Boxes—Agree)
|Year||Partnership Value||Maintaining Membership|
Note: Perception of Brand USA’s partnership value increased among state DMOs remained at 100 percent among partners contributing $1million or above.
(Click here and you can connect to the complete proceedings of the Brand USA board of directors meeting discussed above.)