Vancouver, BC Canada � October 2003 � Thank you, Ken (Crass), for your kind introduction. It is a pleasure to address the state of the travel industry before you. There is simply no place in the lower 48 states or in the world that has the rugged beauty and the diversity of wildlife and landscape that you possess in Alaska. In addition, you have worked very hard as an industry to invite the world to your doorstep. It�s not surprising that Alaska is such a well-know and popular place to visit.

Let me take a moment to acknowledge and thank Bob Dindinger, chair of ATIA. I would also like to recognize Chris Van Imhoff, General Manager of the Alyeska Resort and also a member of the U.S. Travel and Tourism Promotion Advisory Board that I will discuss in a few moments. Chris was a gracious host when the TIA Board of Directors held a meeting in Girdwood a couple of years ago.

And finally, let me mention Sharon Gaiptman, marketing manager of the Alaska Marine Highway System. Sharon has been a sponsor of the Visit USA Committee member dinner at TIA�s Marketing Outlook Forum. She serves on the TIA Government Affairs and Membership Committees, and has been an active participant in TIA�s SeeAmerica programs. Please join me in recognizing all of these distinguished members of the Alaska tourism industry.

Later in my remarks I will provide you with a Washington update. But I would like to take a moment now to mention a prominent Alaskan who has played a major role in important travel industry legislation. Senator Ted Stevens is responsible for Congressional action that created a one-time $50 million international travel marketing fund. He is owed a great debt of gratitude by the entire travel industry. Please join me in showing our appreciation for his work.

As I said a moment ago, Alaska is an incredible destination. Whether it is majestic mountain peaks, astounding glaciers or the constantly changing glow of the northern lights, Alaska speaks to visitors as no one other place can.

In the U.S. it is only in Alaska that you will you find pure wilderness, adventure on land and sea, and both polar and grizzly bears.

From the glassy surfaces of remote lakes to the lush rain forests that sweep endlessly across your state the experience is unforgettable.

Alaska�s heritage and culture range from ancient peoples whose way of life is a living history book, to the unique influences of your neighbors to the west. And, of course, the gold rush lives on in rivers across the state. The travel industry has had its ups and downs recently, but nothing can diminish the exceptional quality of an Alaska visit.

Many of you held your own over the past two years as interest in the natural environment and cultural heritage surged. But overall, the travel industry is still struggling to recover following September 11th, the slow economy and related events. But there are hopeful signs on the rocky and twisting road to full recovery.

I know that many of you are familiar with TIA. We represent the entire $525 billion U.S. travel and tourism industry. Our mission is to promote and facilitate increased travel to and within the U.S. TIA�s research arm is the principal entity that measures and tracks the size, scope and impact of travel and tourism. We also provide reliable analyses of a host of economic and other data for you. We represent the industry in the halls of government in Washington, D.C. And many of you are familiar with the domestic and international marketing opportunities that TIA provides on your behalf.

The segments of the travel industry that TIA represents include, for example; hotels, airlines, theme parks, attractions, and cruise lines. Also included are rental car companies, trains, motorcoaches, tour operators, restaurants, travel agencies and destination marketing organizations. Also represented are all 56 state and territorial tourism offices. Our industry is responsible for one in every seven American jobs directly or indirectly. Our annual payroll is a whopping $166 billion. We generate enormous federal, state and local tax revenues annually that help contribute to the building of roads and funding of schools and many other public services.

Some of that funding actually comes back to directly benefit the travel industry. I can report on an incremental victory in Congress that�s very important to Alaska. Representatives recently overruled a House Appropriations Committee decision that would have eliminated Transportation Enhancements. This is funding set aside from the federal transportation budget for tourism-related projects.

Here in Alaska, Transportation Enhancements are helping to preserve the Tanana Valley Railroad Museum as well as other historic railroad facilities in the state. Enhancement funding has also made significant contributions toward improving the Kenai River Flats Interpretive Site where visitors can better understand the delicate balance of the Alaska environment. In fact, federal Transportation Enhancements have contributed almost $35 million to at least 132 tourism related projects spread across Alaska in the past decade. This is significant money that allows communities to move forward with important projects that might otherwise never be developed.

TIA was among the key lobbyists on this issue. And when our supporters in the House offered an amendment to restore the enhancements, it passed 327-90. I want to caution you that the House bill must be reconciled with the Senator Stevens� version. But as of today, support is strong in Congress to continue this critical funding. I�ll have a more detailed Washington update in a few moments.

Many obstacles remain before we will again see the level of prosperity we experienced just a few short years ago. When all the numbers are in, TIA Research predicts leisure travel will be up about 2.5 percent this year. Modest, but in this economy, we�ll take it. Business travel remains depressed and shows only a modest recovery trend. Our surveys show business people are pursuing technology in place of travel even though they prefer to do business with a warm handshake. International inbound travel, as I�ll explain in a few moments, is also down. Other TIA studies confirm that consumers are waiting later than ever to book, and they�re becoming very good at finding the best deals on the Internet.

Some segments, such as recreational vehicles, have positive sales off the charts. TIA predicts a record-high for road travel this year by auto, motorcoach and RV. Rail travel has also been strong.

Americans continue to favor regional travel. Most segments of the industry will come out somewhere in between the lows of the business and international inbound travel sectors and the highs represented by RVs.

TIA has also documented the details of two significant consumer trends we picked up on immediately following September 11th. Americans are more interested than ever in travel to places where the natural environment has been preserved. And consumer interest in historical and cultural sites and attractions remains heightened. Two recent reports, called Geotourism and The Historic/Cultural Traveler, begin to track these preferences. And they provide insight for travel industry professionals who would like to understand this market. We work in a time when consumer trends are constantly changing. Each of us must keep up or we risk being left behind by our competitors.

TIA supports the entire travel industry by gathering, analyzing, publishing and disseminating economic, marketing, and international research that articulates the economic significance of the travel and tourism industry at national, state and local levels. We help to define the size, characteristics and growth of existing and emerging travel markets and provide trend analysis and forecasts of future travel activity and impact.

2003 has proven to be yet another year where we need to stretch precious marketing resources. To that end, the national SeeAmerica brand continues to serve the travel industry well.

Just as states have recognized the leverage that a statewide brand provides destinations and travel companies, the national SeeAmerica brand has shown itself to be an important domestic as well as an international promotional tool for all.

In 2002, a number of you participated in the unique SeeAmerica promotion campaign with the U.S. Postal Service that leveraged a travel-oriented series of postage stamps.

The partnership was so popular in the industry that we launched a SeeAmerica�s Byways campaign this year in partnership with the U.S. Department of Transportation. It�s taken the consumer trend toward more road trips, tracked by TIA research, and used it to our collective advantage.

A wealth of travel itineraries are listed on the SeeAmerica.org non-commercial Web site. They were submitted by state travel offices, city and regional bureaus and tour operators from across the nation.

Most of the itineraries follow the nation�s officially designated byways and highlight the scenic, historic and cultural attractions that are the heart and soul of America. The SeeAmerica�s Byways campaign is using the national SeeAmerica brand to leverage resources so that the travel industry in Alaska can benefit.

Our exciting marketing initiative for is SeeAmerica�s National Parks. It builds on the twin consumer trends of interest in staying closer to home and a desire to connect with scenic, historic and cultural sites. It takes advantage of the 388 National Parks and Monuments found in every state except Delaware.

We will again leverage the resources of the federal government as we have in the past, in this case partnering with the National Park Service and the National Park Foundation. There will be opportunities to list your itineraries and travel deals on SeeAmerica.org. There will be posters. We�ll produce another photographic e-mail that you can send for free to your customers and partners to build interest in your business.

We have created national promotional programs that have entry points for the industry at whatever level you are willing or able to use. Much of the participation, like listings on SeeAmerica.org are free. And many others are at reduced or very low cost.

For example, hundreds of travel and tourism related businesses printed and offered the public millions of free SeeAmerica Bookmarks this year. The inexpensive bookmarks were customized by each participating organization. Special offers and messages about the value of traveling in America went on the back. The bookmarks have a common SeeAmerica theme on the front. We arrange bulk printing for orders large and small and get these at amazingly low prices. We�ll have a new bookmark available next spring.

Cooperative offerings include two special SeeAmerica�s National Parks advertising supplements in USA Today next year. If you�ve always dreamed of reaching a national audience but couldn�t figure out how to afford it, you won�t find a better opportunity.

The SeeAmerica brand has proven to be a powerful marketing tool domestically. But as many travel industry organizations look across our borders to find growth markets and new opportunities, the SeeAmerica brand is invaluable. It does for all of us what brands like Alaska�s do for each of you.

We have also organized cooperative editorial/advertising inserts in international markets. This is the June insert that ran in London. Another insert ran in September. A third will run in early November just prior to World Travel Market. And we�ll have a full slate of inserts in 2004.

We have marketing offices in the UK, Japan and Brazil where we organize SeeAmerica Week events in all three markets annually. They focus attention on the U.S. travel product in ways no individual organization could ever achieve. In addition, we�re building a SeeAmerica presence at the major international travel trade shows that is showcasing U.S. travel products.

And next April, the 36th annual International Pow Wow will literally bring the top tour operators from around the world to your doorstep. The 2004 venue will be Los Angeles where more than a thousand international tour operators will do business with U.S. suppliers. I hope we�ve weathered the worst in international travel and believe that the next International Pow Wow can propel us to renewed growth in this segment of the industry.

I mentioned that international travel is one of the best prospects for growth in a domestic market where 80 percent of consumers already travel. To that let me add that international travelers stay longer and spend more on average. Destinations of all sizes are finding that they can get a piece of this pie.

To that point, one of the more topical travel industry issues in Washington is the one-time $50 million Congressional appropriation for international travel promotion.

This funding is timely due to the enormous hit that International travel to the U.S. has taken since September 11th. It is down 26 percent in the past two years. And that caps a 37 percent decade-long decline in U.S. market share of world tourism.

I�m pleased to report that a panel of prominent travel industry CEOs, the U.S. Travel and Tourism Promotion Advisory Board, held their first meeting in September and their second one yesterday. The panel is charged with advising the U.S. Department of Commerce on how to spend the $50 million fund created by Congress. They plan to meet again in November and December.

Meanwhile, the Department is steadily announcing decisions about how that money will be used. The target markets will be our top sources of inbound international travelers. As you can see, Canada is at the top of the list. And Commerce wants to get this campaign going early in 2004.

We have lobbied for measurable results from these funds so we can prove our success. We�ve also fought for marketing that is focused on a common national brand for maximum leverage. These two priorities will help convince Congress of the need for an ongoing federal partnership. And we are working hard to get legislation introduced that will support a sustained international marketing effort.

Of course there is a great irony in the timing of Congress� decision to fund international travel promotion. At the same time we�re expanding our marketing, a tightening web of security measures are making many legitimate would-be travelers to the U.S. feel unwelcome.

No one disagrees that we need better security. But our economy also needs the nearly $90 billion that international visitors spend here. TIA and others have argued forcefully that we can and must have both. There are three specific federal policies that we believe should strike a better balance between security and the economy. They are: Increased personal interviews of visa applicants, a plan to gather biometric identity information from all international visitors, and a new date by which visitors from our major trading partners must have machine-readable passports.

Starting in August, the U.S. Department of State ramped up the number of visa applicants worldwide that it interviews personally. We agree with that policy. But State is trying to increase interviews to 90 percent or more in some overseas offices without adding any additional staff or space. The result has been long, frustrating lines in nations like Brazil and South Korea. Both are important markets. Would-be travelers are being asked to wait up to two months before they can even have an interview. Approval takes even longer. Uncertainty about traveling to the U.S. has rarely been higher.

In another new security measure, the Department of Homeland Security plans to ask international visitors for fingerprints or other biometric information with which to positively identify them. This policy is to begin at the end of this year. Again, we support the policy. And I�d like to emphasize that we all want stronger security measures. But the announcement has been shrouded in a haze of confusion. We�re not convinced they have the technology or the skills to use this information by the deadline. And in the process, we fear more international travelers will be put off and will go somewhere else.

The third major issue involves visitors from 26 of our friendliest overseas trading partners�a group critical to our economy. Congress recently moved up the date by which these visitors need a machine-readable bar code on their passports. The new deadline was October 1st. For some, like the UK, it was not a problem. They�ve been producing bar-coded passports for years. But for our allies, Spain, Italy, France and Switzerland who previously had until 2007 to comply, it was likely that hundreds of thousands of visitors would be discouraged from coming here.

TIA and others launched an industry lobbying and public relations campaign that asked only for a little more time for our trading partners to comply. I�m pleased to report that while the going was rough, the administration announced that it will give all of the low-risk nations who are on their way toward compliance one more year. I can�t tell you how pleased we are to see common sense and rational policy-making prevail. We praise the administration for making decisions that benefit everyone.

On the other two issues, we�ll continue to apply pressure and seek reasonable compromises that protect both security and the economy.

As the political season blossoms, or as some would argue, as it decays, I would like to give you some thoughts about where the travel industry stands that I hope will leave you encouraged. Fortunately, I think our industry is in sharp contrast to the state of politics. True, we don�t always move forward together in peace and harmony. We certainly do have differences.

But as I go around the country to speak to groups like you, I�ve noticed some meaningful changes. We pulled together following September 11th like we�ve never done before. And to this day there�s never been more unity across this broad and diverse industry. Trials can tear a country or an industry apart. Or as in our case, they can unite us.

I�ve talked about brands and cooperative programs and lobbying efforts that have brought competitors to the same table for the same purpose. For 61 years TIA has worked to promote that kind of consonance. We do it through a number of venues, some obvious and some less so.

Later this month, many of the top marketing and other professionals from across our industry will gather in Austin, Texas at the Marketing Outlook Forum. For 29 years, the Forum has documented the global economic, social, marketing, and political trends that will affect travel in the years ahead.

The 2003 edition of TIA�s Educational Seminar for Tourism Organizations, ESTO, in Asheville, North Carolina in August marked 20 years of bringing state tourism directors and convention and visitor bureau professionals together.

Another important group, attraction professionals, will gather in San Antonio in February for the National Conference of Attraction Professionals. This annual meeting is young but strong. Most importantly, like its well-respected peers, the Marketing Outlook Forum and ESTO, N-CAP actively promotes industry unity.

Two other events overtly promote unity within the travel industry. Every January, a new TIA national chair, drawn annually from the ranks of top travel industry executives, presents a State of the Travel Industry address in Washington to a cross-section of industry professionals. And the name of the Travel and Tourism Industry Unity Dinner in March is not coincidental. In addition to focusing travel industry lobbying priorities in Washington, it is a great place to compare notes with colleagues before the summer travel season begins.

The question, of course, is now that we have drawn together as never before, what are we going to do with it? The travel industry is one of the great engines driving the nation�s economy within the powerful service sector. I believe that the travel industry can and should be the service sector�s brightest star. But we�ll only get there by working in concert�in the long term.

Whether it is working under a single brand as a state or a national industry, forging new partnerships within and outside our industry, or coming together behind an important government issue here in Alaska or in Washington, there are plenty of opportunities to flex our unified muscle.

Let me close by giving you what, perhaps, is a fresh perspective on what we all do. We lead fast-paced lives in a competitive business and must stay focused if we want to thrive. But if you can take a step back from all the daily pressures with me for a moment, I�d like to paint a portrait of travel and tourism on a worldwide scale.

Saint Augustine once said, �The world is a book, and those who do not travel, read only a page.� Most of us believe that travel�whether across Alaska, across our continent, or around the world, enlightens us. But in today�s new economy, travel does much more than that.

I believe we are the successors to the Industrial Revolution. They built factories and railroads to make goods and get them to a growing market of workers. We too are building a greater, more prosperous nation. But instead of bricks and steel, our raw materials are natural landscapes, cultural heritage, and friendly people. Our finished products include relaxation, excitement, and above all, lifetime memories.

In the process, travel and tourism provide jobs�good jobs. The key that unlocks even greater prosperity. Furthermore, tourism does not demand the enormous capital investments that industrial endeavors do, giving hope to communities here and around the world.

The resources that I just cited, landscapes and heritage, have redefined wealth or at least the potential for creating it. That definition now includes who you are and the place you have the privilege to call home.

So whether you are from the beautiful panorama of Alaska, the picturesque Maine coast, a remote beach in Florida, or some other place in the world, you possess a place, a culture or a heritage that is valuable to traveler consumers. And tourism provides incentive to preserve these places. I won�t pretend that there aren�t challenges in preserving places or cultures when you invite the world to visit. But I am saying that tourism is fundamentally changing our world and will continue to do so.

CNN can take us on a virtual world tour every 20 minutes. We can be touched by images we see in the media. But I believe it is only when we shake hands with people from other states, nations and cultures that we learn how things really are. And despite the many wonders of technology, we only truly touch one another when we travel and embrace one another�s culture, stature, and dreams.

Travel Industry Association of America
TIA (www.tia.org) is the national, non-profit organization representing all components of the $525 billion travel industry. TIA�s mission is to represent the whole of the U.S. travel industry to promote and facilitate increased travel to and within the United States.

Contact:
Cathy Keefe (Manager, Media Relations)
202-408-2183
ckeefe@tia.org , www.tia.org