By Tom McClimon
September 14, 2009

The Senate on September 9 passed the U.S. Travel Promotion Act, which was included in the Mayors Ten Point Action Plan as a priority issue. The U.S. Conference of Mayors passed its first resolution in support of the federal government establishing an international marketing program at its 74th Annual Conference in 2006 and has reaffirmed that support unanimously every year since.

“We applaud the Senate’s action today and urge the House to follow suit,” stated Conference of Mayors President Seattle Mayor Greg Nickels. “We know that attracting more international visitors will create jobs and benefit many of our local economies.”

“Ever since 9/11, mayors have recognized the importance of travel and tourism to their communities,” stated Conference of Mayors CEO and Executive Director Tom Cochran, former board member of the Travel Business Roundtable. “We’ve lost jobs and businesses in our cities as result of losing our share of the international visitors. The nation’s mayors thank the Senate for its action today and now it is time for the House to act.”

“We are very pleased that this important legislation is moving forward to boost the visitor industry and help improve our nation’s economy,” said Honolulu Mayor Mufi Hannemann, Chairman of the Conference’s Standing Committee on Tourism, Arts, Parks Entertainment and Sports. “The U.S. Conference of Mayors has made this measure a priority and I am very pleased that the Senate has now approved this long-awaited and much needed legislation.”

The Travel Promotion Act will create a public-private partnership to promote the United States as a premier international travel destination and communicate US security and entry policies. The travel promotion will be paid for by private sector contributions and a $10 fee on foreign travelers. The US Travel Association, of which the Conference of Mayors is a member, estimates that the bill would attract 1.6 million new international visitors, create nearly 40,000 new jobs in its first year, and would generate $4 billion in new economic activity and contribute over $320 million in new federal tax revenue each year.

The bill now moves to the House of Representatives that passed it during its last session.

The Conference of Mayors, working with a coalition of state and local groups, was successful in blocking attempts to add an amendment to the bill that would have preempted all state and local taxes on hotel rooms booked by Online Travel Companies (OTCs). Companies such as Expedia, Travelocity, Orbitz, Priceline and Hotels.com tried unsuccessfully to urge several Senators to offer such an amendment. They are seeking legislation in response to a number of recent court rulings that have ordered them to pay state and local governments hotel taxes based on the full retail room rate or the full amount charged to customers. Hotels provide OTCs a block of rooms to sell on line at a discounted rate. OTCs have been charging consumers a full, marked-up retail rate and collecting taxes based on the full retail rate, but only submitting state and local taxes based on the discounted rate. The courts have mostly ruled against this practice and that’s why OTCs are seeking preemption legislation.