News for the Hospitality Executive
New York - Jonathan M. Tisch, Chairman of Loews Hotels, said
today that the
travel industry must take on the challenge of improving our nation's
infrastructure and seize the opportunities presented by a boom in
travel. "Let's help find the solutions to an infrastructure problem
is too big and too complex for either government or industry to solve
own," said Tisch.
REMARKS BY JONATHAN TISCH
34TH ANNUAL NYU INTERNATIONAL HOSPITALITY INDUSTRY
JUNE 4, 2012
Thank you Bjorn for your gracious introduction and welcome all to the 34th annual NYU International Hospitality Industry Investment Conference.
As you know, Dr. Hanson has completed his second year as Dean and we are so excited to see how this program has taken off with new energy, new direction and new ideas.
Bjorn was kind to mention that this is my 18th year as conference chair and in those years, I have had the honor of working with so many wonderful people to ensure the success of this conference. I think when we started this journey almost 20 years ago, we had some 600 attendees, now we are close to 2,200 attendees who come here year after year to get a sense of where we are now and where we are going as an industry.
It is a journey that involves a year of planning. I need to thank our executive planning committee, who are listed once again in your brochure, Dr. Hanson and his superb team, and of course the woman who makes it so easy for all of us, our conference coordinator, Dorothy Jennings.
Also, let me thank Dean Rach. We could not stand here today without her work as the founding dean of the Preston Robert Tisch Center at NYU, it's wonderful to have her here with us today.
While you were coming into the room the list of patrons and sponsors were playing on the screen. I hope you were paying attention to these firms because these are companies that have made a commitment to the education of the next generation of leaders in our industry. They deeply care about the future of the lodging industry.
On behalf of our executive committee and the Tisch Center, I want to thank our sponsors and patrons. It is because of their contributions, that we will be able to hand over nearly two million dollars in scholarship money to NYU and the Tisch Center at the end of this conference.
As usual, we will have session after session to ensure that you are going to know more after you leave here than you did when you arrived.
At lunch today, you'll hear from our featured luncheon speaker, Governor Chris Christie of the state of New Jersey. Tomorrow, I'll be speaking to the NBC News Political Director and Chief White House Correspondent, Chuck Todd, who will share his insights into the presidential race in my Beyond the Boardroom interview.
It is an honor to be standing here at a center named for my father, Preston Robert Tisch. He was a true founder of today's modern lodging industry. It is very meaningful to my family for NYU to recognize him in this way.
Looking out over the current economic landscape - we have been slowly moving in the right direction...but our recovery remains fragile.
All it takes is a glance at the daily headlines or five minutes watching CNBC or Bloomberg to recognize we're operating in uncertain times. The European debt crisis ... instability in the Middle East ... America's budget challenges: The caution signs are evident and numerous.
Nevertheless, I see many reasons to be optimistic about our future.
Since the national recovery began, travel employment has grown about one-third faster than hiring in the rest of the economy. To date, we've made up about half of the jobs lost during the recession.
Hotel occupancy rates are expected to grow again this year. And the forward looking Travel Sentiment Index has risen to levels we haven't seen since before the recession.
In many ways, the fact that travel is leading the economy is not a new story.
Travel is already America's Number One service export. Our industry helps generate nearly $2 trillion in economic output every year. We support about 14 million U.S. jobs and generate $118 billion in tax revenue at the local, state, and federal levels.
What is different about the past year is that the travel industry is finally being recognized in government circles and amongst our elected officials as a key driver of our nation's economic growth.
Political leaders are coming to understand that "travel means business." They are beginning to recognize the benefits of policies aimed directly at promoting travel and making our industry a top international competitor in the global travel marketplace.
That process began just over two years ago when Congress passed and President Obama signed the bipartisan Travel Promotion Act into law.
Last year at this conference, I announced that industry-veteran Jim Evans had just been hired as CEO of Brand USA. Under Jim's guidance, this public-private partnership will administer and design the $200 million per year campaign to promote America as a travel destination - all without a dime of taxpayer money, I might add.
Just over a month ago, Brand USA unveiled its first Global Marketing Campaign.
In May, the first ads were launched in Japan, Canada and the U.K.
This is a remarkable achievement - a sign of rising influence and rising respect for our industry in Washington.
Few events better symbolize travel's rise to prominence than President Obama's speech this past January at Disney World. Not only did the president commit his administration to making America "the top tourist destination in the world" - he announced a new National Travel and Tourism Strategy. And when it was presented last month, that goal was set of welcoming 100 million visitors to the U.S. by 2021.
A critical component of that strategy is reforming our burdensome, inefficient visa system - a system that had become the equivalent of a giant "Not Welcome" sign to international travelers.
Under the leadership of Deputy Secretary of State Thomas Nides, we're already seeing concrete progress.
In the past six months, the number of visas processed from fast-growing markets like China and Brazil are up by as much as 59 percent. Waiting periods that once stretched to 100 days are now down to under 10.
Congress is also moving forward with legislation that would allow travelers from additional U.S. allies to visit America without a visa - the same privilege we already extend to 36 nations.
The message I take away from these achievements is that when we unite behind a common purpose, there's nothing we can't achieve.
Travel's emergence on the national agenda is the direct result of our decision to start acting like an industry rather than a series of parochial concerns.
Does anyone really believe that hotels alone could have won passage of the Travel Promotion Act? Does anyone think the airlines alone could persuade President Obama to launch a National Travel and Tourism Strategy? Does anyone have confidence Brand USA can survive with just the support of rental car companies?
The key to our future prosperity is to create a rising tide of travel and tourism that will lift our entire industry.
The opportunities are right in front of us.
This year, more than one billion people will vacation abroad - nearly one out of every seven people in the world.
In the next few years, the number of international travelers from China alone is projected to grow by 135 percent - from Brazil by 274 percent.
Now we've all been in this business for a while - and we tend to think of travel as a mature industry. But the truth is, we're right on the verge of potentially the greatest boom market in our industry's history.
The critical question is: Will the U.S. be able to compete effectively for these travelers?
We certainly have the world-class destinations ... and world-class hotels. Brand USA and the National Tourism Strategy will provide a critical boost.
But there's a giant elephant in the room that everyone would rather ignore.
The simple fact is, travelling today can be a big hassle.
Think about a family of four on their first trip to New York.
First, they've got to fight through traffic to reach their home airport.
When they get there, every parking deck is full - so they stash their car in some satellite lot and wait around for a bus to take them to the airport.
After paying $100 in bag fees, they finally make it inside the terminal - only to confront a massive line slowly snaking toward security.
Once through security, and after cramming their single carry-on into the packed overhead bins, they settle in for the flight - only to watch their plane inch forward to take its place in the long line to the runway.
Upon arriving in New York, they battle their way through the overflowing terminal and queue up for the $50 cab ride into the city - a bumper-to-bumper voyage through gridlocked roadways and bottlenecked tunnels and bridges.
Then and only then do they step into one of our lobbies and try to hit the reset button on what's been an exhausting, expensive, time-consuming, patience-testing journey ... only to look forward to the reverse trip on the way back home.
It doesn't take much imagination to recognize the entire hassle-filled travel process as a giant barrier between the travel industry and the opportunities that lie before us.
As I discussed last year, I believe the main challenge is modernizing America's aging, obsolete infrastructure.
The challenge for all of us: our infrastructure system - particularly our aviation infrastructure - does not have the bandwidth to handle the current volume of travelers, much less the millions of new visitors our industry is working so hard to bring the United States.
A few pieces of data tell the tale.
Frommer's recently released a ranking of the world's 10 worst airports. The New York region was awarded a highly dubious distinction. All three of our major airports made the list.
It's not hard to see why.
At least one-third of all flights out of JFK, LaGuardia and Newark fail to depart on time. Congestion is so severe that the U.S. Department of Transportation actually opens some military flight routes during peak holiday travel periods.
New York isn't the only problem by any means. Chicago's Midway also landed on the world's 10 worst list. Nationwide, the average delay for all late flights is nearly one hour - more than double the average of Europe.
When it came to ranking the world's best airports, only one U.S. airport made the top 25 - Cincinnati, which squeaked in at number 24. San Francisco was the second highest ranked U.S. airport. It placed 39th.
Many of us view airports simply as transportation hubs - mere mechanisms to process travelers. This is a mistake.
Planes stacked on runways...over-crowded gates ... aging facilities: All of these factors impact the reputation of every travel destination, every hotel, every rental car company, every restaurant that relies on air travel as their lifeblood.
Airports and the transportation arteries that connect them to cities and destinations do not just welcome and dispatch travelers. They are vital drivers of that region's economy, including the travel industry.
Unfortunately, given today's fiscal and political realities, we cannot look to Washington alone to solve this problem. In fact, when it comes to creating a long-term strategy for meeting America's infrastructure needs, Washington's legislative process is as gridlocked as our airports.
The last major piece of legislation to invest in our nation's infrastructure expired in 2009 and is currently on its 9th extension. Promising proposals find few champions and instead languish in committee.
Washington is not the only hurdle.
Last summer, the Port Authority of New York and New Jersey - which owns this region's three major airports - had to delay plans to rebuild LaGuardia's aging central terminal because of budget constraints. When that terminal opened - during the Kennedy Administration, I might add - it was designed to handle 8 million travelers. Last year, it was flooded with 24 million.
But then something interesting happened. After trying the traditional route, the Port Authority put out a call for alternative financing solutions to this $3.6 billion infrastructure challenge. To the surprise of many, 15 bidders lined up - with innovative, cost-effective proposals from private investors, construction firms, concession developers and other private companies.
Nearly inadvertently, the Port Authority discovered what may turn out to be the key to addressing America's infrastructure needs - namely an ocean of untapped private capital and innovative plans to deploy it.
One study released last year estimated at least $250 billion in private capital is available for infrastructure investments - including funds from private equity firms, investment banks and pension funds. Through public-private partnerships, these resources could be leveraged to a very promising $625 billion.
Across America, local officials are beginning to recognize that private funds can be creatively applied to public purposes.
In Chicago, government and business leaders have teamed up to establish the Chicago Infrastructure Trust, recently launched by Mayor Rahm Emanuel. Private investment firms have made an initial pledge of $1 billion for public infrastructure projects.
In California, the public employees' retirement system - better known as CalPERS - recently announced plans to invest $4 billion in domestic infrastructure projects. More than four dozen other pension funds have also expressed interest in investing some of their $38 billion in capital on infrastructure.
Here in the state of New York, Governor Andrew Cuomo is pushing legislation that would allow private equity firms to help finance infrastructure projects, including a new $5.2 billion Tappan Zee Bridge.
These are encouraging examples. They show that the infrastructure problem can be solved with innovation, creativity, and joint action by the public and private sectors.
They are also an opportunity for everyone in this room.
Many leaders in our industry have a strong entrepreneurial bent and deep experience leveraging private financing to complete complex projects. Let's make a commitment to apply some of that creative energy to a challenge that is critical to our industry's and our country's future. Let's help find the solutions to problems that are too big and too complex for either government or industry to solve on their own.
Over the past few years, the travel industry has united as never before.
We've established ourselves as an integral part of the national economy.
Today, we command the attention and respect of our country's top leaders.
Now, let's demonstrate that we're equal to the challenges that lie between us and an even more successful future.
Thank you all very much and enjoy the conference.