President Donald Trump’s best-known promise is to build a wall, but some Arkansas travel professionals fear that a side-effect of his zeal for border security could keep out the kind of foreigners America wants: free-spending tourists.
The administration’s 2018 federal budget proposes cutting $100 million a year in funding for Brand USA, a program that aims advertising at foreign travelers like Victor Manuel Castro Chinchilla of Honduras, who visited Crystal Bridges Museum of American Art in Bentonville, and Peter M., a German who left a five-star review on TripAdvisor after touring the Johnny Cash Boyhood Home in Dyess.
The money for Brand USA, first authorized by Congress in 2010 and now in the middle of its second five-year authorization period, would be diverted to border security if the budget plan advances unchanged.
Final budget decisions are expected by mid-December, and even close observers don’t seem certain about how seriously to take the threat to the program, which drew great praise from tourism leaders like Gretchen Hall of the Little Rock Convention & Visitors Bureau and Joe David Rice of the Arkansas Parks & Tourism Department.
Supporters are lobbying hard to save the program, which they say doesn’t spend a dime of taxpayer money yet draws millions of world travelers and spotlights points of interest in smaller states lacking the marketing clout of traditional destinations like New York, California and Florida.
Instead, it relies on proceeds from a $10 fee on foreign visitors’ visa applications, up to a $100 million cap.
Brand USA raises cash from the private sector to match that money, mostly from travel-related businesses, according to Patricia Rojas-Ungár, vice president of public affairs for the U.S. Travel Association.
Billions for Economy
“Brand USA was created so that our country could compete in the global travel marketplace,” Rojas-Ungár told Arkansas Business. “For years, you’ve seen ads saying come visit Turkey or see Spain, but the U.S. never had a travel promotions program sanctioned by the government.”
That changed in 2010 when a bipartisan effort led by Sens. Roy Blunt, R-Mo., and Amy Klobuchar, D-Minn., created Brand USA. “The travel industry and Congress came up with a public-private partnership that wouldn’t cost taxpayers anything,” Rojas-Ungár said. “And so far it has been just a tremendous success.”
A typical ad for Arkansas in the 2014 Brand USA Inspiration Guide features striking colorful photos of the Art Trail at Crystal Bridges, the Buffalo River Valley in fall, and sunset at the Clinton Presidential Center in Little Rock.
Recent research by Oxford Economics suggests that over the past four years Brand USA has drawn 4.3 million foreign visitors who added $13.6 billion to the American economy, including nearly $4 billion in federal, state and local tax revenue.
Brand USA estimates that the economic activity it stimulates has so far sustained 60,000 jobs and $2.6 billion in personal income.
“Over four years, for every dollar Brand USA has invested in marketing, $27 dollars have been generated for the American economy,” Rojas-Ungár said. So we’re trying to communicate to the administration that this really is the best way to spend these funds, because of the high ROI.”
Brand USA promotes Arkansas tourism by targeting travelers in Canada, Latin America, Europe and Australia. The Inspiration Guide, translated into 13 languages, has a circulation of more than 500,000 in 21 international markets.
“Today’s visitors are looking past the big destinations, seeking a more authentic experience, and actually that aspect of Arkansas is seen in one of the new Brand USA destination videos,” Hall said. “We have a special Little Rock destination page through their website, and Little Rock and, quite frankly, the state of Arkansas would never have had that kind of reach without a program like this. The international market would be just too expensive.”
Hall traveled recently to Washington to make her case to Sen. John Boozman, R-Ark., who is expected to hold sway on the issue as chairman of the Senate Appropriations Subcommittee on Homeland Security. Under the proposed 2018 budget, the $100 million previously earmarked for Brand USA would be dirverted to the Department of Homeland Security.
“The issue is twofold,” Hall said. “First, tourism is Arkansas’ No. 2 economic industry,” with hospitality and related businesses supplying well over 100,000 jobs in the state. “Second, we feel we’ve got a growing product for international guests with the presidential library of Bill Clinton, the Little Rock Central High School National Historic Site, the Johnny Cash Boyhood Home in northeast Arkansas and Crystal Bridges in the northwest.
“Add to that the Crater of Diamonds” near Murfreesboro, Hall continued. “We feel these greatly appeal to international visitors, especially on their second or third trips. The bottom line for us is that we want to see Brand USA remain fully funded. The amount Brand USA gets from the visa fees is capped at $100 million, and Homeland Security already gets the overage. And as tourism grows, so will the proceeds from the fees generated beyond that cap.”
Hall said she has no way of knowing how many foreigners were among the 29 million tourists who visited Arkansas last year, or the 6 million who came to the Little Rock area.
But foreign events and bus tours suggest a growing market. International tourists made up only a tiny fraction of the 6 million visitors Hot Springs hosted last year, but tourism chief Steve Arrison said 622 foreigners have signed in at the downtown Visitors Center so far this year. Canadians top the list at 152, followed by Germans at 97, Britons at 29 and Chinese at 27.
Rice, who is retiring in December after 30 years as Arkansas’ tourism czar, said his division largely ignored the foreign market until recently “because we didn’t think we had a product.” But the Cash Boyhood Home, Crystal Bridges and the Clinton Center changed the landscape, he said. “The international market is growing, and travelers making their second and third visits are coming to the heartland.”
Wooing the Chinese
Both Rojas-Ungár and Rice mentioned China as particularly fertile ground for wooing visitors. “Brand USA just hosted an event with Travel South USA in Atlanta that brought together high-level Chinese tour operators and government representatives to highlight the South, including Arkansas,” Rojas-Ungár said. “The Chinese market is important because they are some of the highest-spending visitors.”
Brand USA regularly brings foreign journalists to Arkansas, encouraging them to return home and write about it, Rice said. The Guardian, based in London, in 2014 listed the Cash Boyhood Home as one of 40 top places to visit worldwide.
Rice suggested that Chinese tourism could go hand-in-hand with Gov. Asa Hutchinson’s success in bringing Chinese businesses to Arkansas, including a $1.3 billion Sun Paper plant to Clark County. “We have activities that the Chinese are interested in and can’t do at home, like skeet and trap shooting,” Rice said. “In China, private citizens can’t own firearms.”
While Rice is a big supporter of Brand USA, he said the current lobbying push may well rescue its funding. “Their bacon may not need saving,” he said, because budget plans rarely pass into law unaltered. An aide to Boozman echoed that theme.
“The president’s budget proposal is non-binding,” Sara Lasure of Boozman’s office wrote in an email to Arkansas Business. While stopping short of saying that Boozman would seek to reverse the budget provision, Lasure said the senator “supports efforts to promote the U.S. as a tourist destination for international visitors.”
Rojas-Ungár questioned the timing and logic of the budgeting threat, noting that Commerce Secretary Wilbur Ross and Budget Director Mick Mulvaney have spoken favorably of Brand USA in the past.
“We’re cautiously optimistic that the funding might be saved,” she said. “We have a strong case to make that this program allows the private sector to accomplish goals, and lets the government play a role, but not at the expense of taxpayers. It’s a win-win all around.”