U.S. Commerce Secretary Wilbur Ross announced on Tuesday afternoon (EST) the appointment to the Brand USA board of directors of Noel Irwin Hentschel, chairman and CEO of AmericanTours International (ATI) and Mike Gallagher, co-founder and co-chair of CityPASS. Irwin Hentschel becomes the first receptive tour operator to serve on the board and Gallagher becomes the first board member with a background in packaging admissions to attractions and entertainment venues. More details here:
New Brand USA IMAX Film Debuts Next Week in D.C
Brand USA’s second IMAX® and giant-screen documentary, America’s Musical Journey, will have a premiere screening in Washington, D.C. on February 15, 2018 at the Smithsonian Air and Space Museum. Narrated by Academy Award winning actor Morgran Freeman, and featuring visits to a number of U.S. destinations famous for their music, America’s Musical Journey celebrates “the diverse music and creative risk-taking spirit that characterize America.”
Grammy-nominated singer/songwriter Aloe Blacc serves as the de fact host of the film, as he traces Louis Armstrong’s footsteps through the colorful locales where America’s music was born—cities like New Orleans, Chicago, Detroit, New York City, Nashville, Miami and more—and meet the artists, music makers, storytellers, and innovators who are shaping America’s culture today.
America’s Musical Journey is Brand USA’s second giant-screen production. The first, featuring America’s national parks, premiered in February 2016 and was a popular hit among overseas visitors to the U.S. It is still playing at some venues. Brand USA has already given the go ahead for a third giant-screen film by MacGillivray Freeman Films. It is scheduled to debut in 2020.
Based in Laguna Beach, California, MacGillivrary Freeman Films was founded in the mid-1960s by GregMacGillivray and Jim Freeman. It has produced documentaries, feature films, and IMAX films. In 2010, MacGillivray Freeman Films became the first documentary film producer to ever cross the $1 billion mark in gross box office.
For more information, visit www.americasmusicaljourney.com
A Sneak Attack on Brand USA is Buried in the Fine Print of Tax Bill
When the U.S. Senate passed the wide-ranging tax bill early on the morning of Dec. 2, it opened the door to the automatic implementation of previous legislation that, in effect, would require the de-funding of Brand USA (officially, the Corporation for Travel Promotion) and deep cuts in the programs of U.S. Customs and Border Protection (CBP).
While awaiting word from the U.S. Travel Association as to what it thinks about the possibility of the elimination of Brand USA’s funding, here’s what we found out from various sources.
In February 2010, Congress passed and President Barack Obama signed into law The Pay-As-You-Go Act of 2010 (Title I of Public Law 111-139)—also called Paygo—which reinstated a law enacted in 1990 under President George H.W. Bush and was effective until 2002. The act is designed to ensure that most new spending is offset by spending cuts or added revenue elsewhere (with several major policy exemptions). The tax cut bill will cost the U.S., by most estimates, some $1.5 trillion. Hence, the Paygo cuts.
As explained by the New York Times, with the exception of Social Security, the U.S. Postal Service and some income-based programs such as unemployment benefits and food stamps, most mandatory spending programs are subject to Paygo. For 2018, the law would take away $14 billion in some farm aid programs, $1.7 billion for Social Security block grants, Meals on Wheels and millions here and there for scores of federal programs.
The Times lists 228 programs whose funding would be claimed as a result of Paygo (see the list here: https://www.nytimes.com/interactive/2017/11/29/upshot/paygo-medicare-cuts-tax-bill.html). Number 223 on the list is a $100 million for the Corporation for Travel Promotion (DBA Brand USA). The $100 million is the amount of funds that is collected of visitors to the U.S. from Visa Waiver Program counties via a fee when they register for their travel through the Electronic System for Travel Authorization (ESTA). Through a one-to-one match of contributions from the private sector, Brand USA can received up to $100 million in funds.
Equally startling is Number 94 on the list, which identifies $1.344 billion in funds for operations and support for U.S. Customs and Border Protection. There is no specific indication as to what operations and support will be cut.
Can It Be Reversed? “Congress has found a way to slip around the rule in the past by including an exception in legislation from the Paygo cuts,” noted the Times. “But because of the special budget process Republicans are using for tax overhaul this year, the tax bill itself can’t include such an exception.”
Jonathan Grella, executive vice president of public affairs for the U.S. Travel Association, told us: “Brand USA is one of hundreds of programs in the bucket of mandatory spending items which could be affected by the rules required for spending offsets. We don’t believe that Brand USA is being singled out in anyway.
Added Grella, “In the hunt for revenue, cutting Brand USA would be a big step in the wrong direction. Brand USA is critical to helping maximize the economic benefits of travel. Last year, Brand USA’s activities generated $615 million in incremental federal taxes—more than four times its budget—and another $552 million in state and local taxes.”
Inside Brand USA’s India Sales Mission– Two Suppliers’ Perpectives
Reports from the Sixth Annual Brand USA-led trade mission to India suggest that all of the hyperbolic reports one might have seen in the past year about the strength of the market from India are not hyperbole. They are real.
The Brand USA trade mission to India, held from September 10 to 15, visited two largest cities—Mumbai (estimated population of 12,691,836, according to the World Population Review), Delhi (10,927,986) and, this year, adding Chennai (4,328,063), India’s fourth largest city. There were 37 companies and 51 delegates from destinations, attractions and other travel suppliers¹, and they talked business with a large number of agents and operators. So intense was this interest in the market this year that, there was a waiting list of 10 suppliers waiting to take the place of anyone who might cancel.
In 2016, there were 1.17 million visitors from India to the USA, making it the 11th highest-ranked country by arrival numbers. Spending by Indians was the 6th highest – more than some countries with higher arrival figures.
To get a first-hand perspective on both the trade mission and the Indian market , the Inbound Report spoke with Robert Y. Graff, corporate vice president of marketing and international sales for the Las Vegas-based Papillon Group who’s spent years developing the market on both trade missions and through his presence at SATTE (South Asia Travel and Tourism Exchange), which is held annually in late January in India; and tour and travel industry veteran Stefan Merkl, founder and owner of Explore Marketing, who represented several U.S. travel suppliers on the trade mission.
First Impressions:
“India is growing, secondary cities are becoming more important, and major tour operators represent 18 percent of USA visitors,” said Graff. “FIT and online activity are growing.” He also believes that traffic will increase as lift capacity continues to increase. For instance, he noted, the number airline seats to the U.S. are expanding as Middle East carriers and Air India move ahead with more non-stop services to the USA. Faced with stiff competition on U.S. routes, Air India recently launched a new recent flight from Delhi to San Francisco. At the same time, Qatar Airways has added a new flight from its based in Doha to Las Vegas. And that carrier has said that it plans to buy 100 aircraft to better service the India market.
The preferred routes for Indian travelers to the U.S. are via the Middle East Gulf states such as Doha, Dubai and Abu Dhabi, noted Graff, explaining that the UAE carriers provide superior service, with mostly new aircraft. (Hamad International Airport in Doha, Qatar is the home base of Qatar Airways; Dubai International Airport in Dubai, UAE, is the headquarters base of Emirates airlines; and Abu Dubai International Airport is the base for Etihad Airways. In Abu Dhabi, U.S. Customs and Border Protection operates the only pre-clearance facility in all of the Middle East and Continental Europe for U.S.-bound travelers.)
On the matter of air service, Merkl agreed. “The Middle East carriers such as Emirates continue to be a preferred connector to the U.S., as well as the increasing number of nonstop flights with Air India. Also Lufthansa continues to be strong in this market,” he told us. As for the overall condition of the market, Merkl said “it’s interesting to see how the market is switching quite rapidly from being group-based to being increasingly FIT-focused. Particularly younger travelers want to be independent, while some of the older ones still continue to want a lot of hand-holding. So, for example, they would call themselves FIT, but then would expect transfers all along, even when they travel within a city and could easily take public transit or walk.”
Looking toward 2018 and beyond: In addition to an increase in FIT traffic Merkl and Graff told the Inbound Report, is that there seems to be a building demand for destinations and experiences that are “Beyond the Gateways,”
Said Graff: “Growth from secondary cities is interesting. We’re experiencing more visitors from Chennai, Bangalore and Hyderabad. We all cover Mumbai and Delhi, but there is so much more out there. There is also a lot of growth among the smaller regional tour operators. … 2018-19 should be a good year for Indian visitation to the USA; expect double digit increases as Brand USA plans on pouring more resources in the market. Ironically, we hear that fewer visas are being issued to Chinese—however, this is not the case in India.² A record number of 10-year visas have been issued and the us government plans to exceed that number for this year. MICE is up, GIT is flat, and FIT is through the roof.”
“The Indian economy is strong,” said Graff, noting that the nation’s goods and services (GST) tax introduced on all services including travel has been decreased to just 5 percent. “So, assuming there is no change to U.S. supplier costs or exchange rates, the same U.S. vacation could cost less next year.”
We heard much the same from Merkl regarding 2018. And for the long-term, Merkl is decidedly optimistic: “The market will continue to grow as GDP grows at 7 percent quite consistently and the market is very optimistic about the future of India and their potential for becoming a global player.”
What’s New?
Merkl: “Some of the operators that we spoke to very much said that they want to look beyond the big gateways, and are encouraging fly-and-drive vacations and experiential travel. So from my perspective, this is a good time to start working with FITs. My understanding is that 2nd and 3rd tier cities are becoming increasingly important, as there’s a lot of money there now, with farmers selling land to big developers and then swimming in cash that they want to spend on travel.”
He added, “Student travel continues to be an important aspect of the Indian market, as Indian parents want their kids to see the world, learn from it, and most importantly bring home certificates of any educational experiences that they attended. A certificate on the wall is golden, and parents are more apt to paying a lot of money for an educational trip for their kids than for themselves.”
Graff, meanwhile, gave us a slightly different take, saying that he detected “a lot of interest in new attractions,” but pointing out, “Basically any itinerary that feeds off existing main destinations is of interest. It almost seems like Indian travelers want to explore more, stay longer … but the main iconic cities need to be part of their itinerary.” (Graff wanted to note that Papillon is introducing its Heli Skywalk Tour with VIP Dining Package, which includes a round trip flight to the West Rim of the Grand Canyon, with a stop at the glass-bottom Skywalk Bridge and lunch. The experience takes 6½ to 7 hours.)
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¹ U.S. delegates included representatives from: 7M Tours; Budget Rent-a-Car; Choose Chicago; Destination DC; Empire State Building Observatory; Experience Kissimmee; Georgia Tourism;
Grand Canyon Tour & Travel & Rodeo Restaurant; Greater Miami CVB; Hornblower Cruises & Events;
L & L Tours; Lake Tahoe Visitors Authority; Las Vegas Convention & Visitors Authority; Leisure Pass Group and Tour Operator Land; Los Angeles Tourism & Convention Board; Massachusetts Office of Travel & Tourism; Maxim Tours LLC; MGM Resorts International; NYC & Company; Papillon Helicopters/Scenic Airlines; Philadelphia Convention & Visitors Bureau; Red and White Fleet;
Red Carpet Travels USA LLC; Roaring Camp Railroads; San Francisco Travel Association;
SeaWorld Parks & Entertainment; Tours Limited LLC; Travel Nevada; Travel Oregon;
Tualatin Valley Washington County Visitors Association & Mt Hood Territory; Universal Studios Hollywood; Visit California; Visit Fairfax; Visit Florida; Visit San Jose; Warner Bros. Studio Tour Hollywood;
Wyoming Office of Tourism
² The U.S. National Travel and Tourism Office reports that, for visas, the average annual growth of about 8 percent disguises the wildly fluctuating issuance levels for any year. Growth of 18 percent, 2.3 percent, and 8 percent from FY 203-15 was followed with a 2.2 percent growth in FY 2016.
Brand USA’s New Big Screen Film Focuses on American Music
Trailer of New Brand USA Big Screen Film to debut next week in Chicago: Buoyed by the ongoing success of its National Parks Adventure giant screen film, Brand USA is on schedule to for a February 2018 world premiere of a new film that will highlight musical and cultural treasurers of the United States.
Tom Garzilli, chief marketing officer for Brand USA, explained at last week’s meeting of the Brand USA board’s marketing committee, that the film’s producer, MacGillivray Freeman, will show a trailer of the work-in-progress at the Giant Screen Cinema Association International Conference and Trade Show Sept. 26-29 in Chicago. The same trade show served as the venue for the preview of the trailer of the National Parks Adventure, which debuted in February 2016 in Washington, DC.
To date, Garzilli said, the audience of National Parks Adventure is 4 million. Total global trailers views have exceeded 60 million, and the film is currently showing in 46 cities abroad. Also Youku (one of China’s biggest video sites) streaming views are just under 840,000.
While the National Parks film featured the USA’s great outdoors, MacGillivray Freeman Films President Shaun MacGillivray says the new film follows singer/songwriter Aloe Blacc as he explores some of America’s iconic cultural cities and traces jazz legend Louis Armstrong’s footsteps through the locales where America’s music was born. Viewers will be immersed in the sights and sounds of New Orleans, Chicago, Detroit, New York City, Nashville, Miami Beach and more. They will see visionaries, artists, music makers and innovators who are shaping America’s culture today.
Thus far, crews have done filming in New York City, Miami, Washington DC, Chicago, New Orleans, Detroit and Seattle. Locations still scheduled for filming include Nashville, Memphis, Los Angeles, Austin, St. Louis, Charleston, Oklahoma City, Colorado and Albuquerque.
Readers can learn more about the film by visiting www.AmericasMusicalJourney.com
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