SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 915 words

COMMITTEE: HOUSE ENERGY AND COMMERCE

SUBCOMMITTEE: COMMERCE, TRADE AND CONSUMER PROTECTION

HEADLINE: STATE OF THE TOURISM INDUSTRY

AFFILIATION: INTERNATIONAL ASSOCIATION OF AMUSEMENT PARKS AND ATTRACTIONS

BODY:
INTERNATIONAL ASSOCIATION OF AMUSEMENT PARKS AND ATTRACTIONS

Testimony of the International Association of Amusement Parks and Attractions

Before the Commerce, Trade and Consumer Protection Subcommittee Committee on Energy and Commerce United States House of Representatives

October 17, 2001

The International Association of Amusement Parks and Attractions (IAAPA) thanks the Committee for holding this hearing focusing on the travel and tourism industry. IAAPA appreciates the opportunity to inform the Committee of the situation faced by its members following the tragic events of September 11, 2001. IAAPA is the world's largest association of permanently situated amusement parks, family entertainment centers, waterparks, attractions, and industry suppliers. IAAPA represents more than 5,000 members in 101 countries. Our members in the United States face both short-term and long- term consequences following the September 11 attacks. In the short term, the shut-down of America's air transportation system following the attacks resulted in a drastic reduction in attendance at destination parks, particularly in Florida and California. On September 28, the Orlando Sentinel had the following to say about the status of tourism in that city:

"The marketing campaigns can't come soon enough for many in the tourism industry.

"Immediately after the terrorist strikes, the number of tourists and business travelers flying to Central Florida fell swiftly.

"Hotel occupancy, ordinarily about 60 percent in September, plunged below 10 percent at some properties.

"Lines at popular theme-park attractions such as Space Mountain at Disney's Magic Kingdom practically disappeared.

"Since then, business has picked up, but only a little, and then mostly on weekends. Hotel occupancy has climbed to the 20 percent to 40 percent range, but that still is far below the 55 percent innkeepers generally need to break even.

"And with business down, thousands of service- and hospitality- industry workers had their work hours reduced or lost their jobs outright."

Because many IAAPA member facilities are closed for the season or operating only on weekends, the long-term effects of the impact of the events of September 11 on the industry are more difficult to determine. It is clear, though, that if potential guests are afraid to travel and this continues into 2002, the entire industry will be severely affected.

With these considerations in mind, IAAPA makes the following recommendations:

-Make travel safe main. Most importantly, the federal government should do whatever is necessary to make air, and all other forms of travel safe for Americans and for those visiting the United States. Air marshals and the highest security precautions should be added to airports that serve major tourist destinations.

-Restore confidence in travel safety. Once every effort is made to ensure that travel is safe, the government needs to take a leading role in informing the public that it is safe to travel. Americans' confidence with the safety of travel has been so shaken that we believe it will take the government's credibility to bring confidence back to the public.

Promote the travel and tourism industry. The federal government should directly support promotional campaigns overseas, urging travel to the United States. Within the United States, federal- state matching grant program should be set up to fund staterun travel and tourism promotional campaigns. A matching grant program would provide the resources, scale, encouragement and credibility needed to kick-start an effective campaign to get Americans feeling good about traveling again.

Economic Stimulus Recommendations

IAAPA commends Congress and the Administration on the work being done to pass legislation to stimulate the economy. The industry would greatly benefit by any legislation that encourages consumer and business spending and gets the economy back on its feet as quickly as possible.

Temporary changes to tax law should include the following:

-Temporary payroll tax credit for both employees and employers applied towards taxes paid this year. It is important that this provision be either retroactive to the beginning of the year or the total allowed be an average for 2001.

-Accelerated or bonus depreciation retroactive to January 2001.

-Extension of the work opportunity tax credit for an additional year, through the end of 2002.

IAAPA Testimony Page 3

Finally, we would like to lend our support to the proposals being promoted by the Travel Industry Association of America (TIA). Among those proposals, IAAPA would highlight the following:

- $500 tax credit per person ($1,000 for a couple filing jointly) for personal travel expenses for travel originating and within North America.

Expanded allowance of carry back of net operating losses for taxpayers in the travel and tourism industry beyond the current two-year limit to five years for losses attributable to the period between September 11, 2001 and December 31, 2002.

Additionally, the industry supports any efforts the government may take to ensure that parks continue to be able to obtain their usual reinsurance coverage at rates that are not cost prohibitive and that acts of terrorism are not excluded from insurance coverage.

IAAPA thanks you for inviting our comments as the United States House of Representatives continues its important work to move our country ahead.



LOAD-DATE: November 16, 2001