Does Obama Understand the Travel Business?

| Tuesday, 23 Aug. 2011
 


 

Over the weekend President Obama make a remark about the American joblessness problem to a crowd assembled in Atkinson, IL. He said "One of the challenges in terms of rebuilding our economy is businesses have gotten so efficient that, when was the last time somebody went to a bank teller instead of using an ATM, or used a travel agent instead of just going online? A lot of jobs that used to be out there requiring people now have become automated."

Now, jumbled grammar aside, there are many aspects of this statement where I disagree – and at least one group of travel agents agrees with me. According to an article at TravelPulse.com, Barry Liben, CEO of the Travel Leaders Group, pointed to the company's $16.62 billion in annual sales volume in 2010 -- more than Orbitz, Travelocity or Priceline – and all of it through its thousands of wholly owned, franchised and/or affiliated agencies. This, says Liben, is proof that a significant percentage of the American traveling public prefers booking through "real people" travel agents versus the Internet.

Liben remarked, "Not so fast, Mr. President. While many components of travel may have become commoditized, there's no commoditizing the human touch. Our more than 30,000 travel agent experts are proud taxpaying professionals who offer what the Internet can never replicate -- providing the human touch to the traveling public through exceptional hands-on care, all while saving them time and, yes, money."

Liben then asked rhetorically, "When was the last time somebody went to their online site instead of going to a travel agent when they were stranded in an airport because of terrible weather or worse? Businesses like ours are the heart and soul of America, and we are alive, well and contributing to the future economic growth of this country."

Well said, Mr. Liben. I agree with everything you just said, and I want to add that, if anything, this statement by Mr. Obama only shows how little attention the current administration pays to the importance of the tourism industry as a major component of our economy. Mr. Obama seems to think travel boils down to "going online to book a flight." – But what he is missing is the real importance of tourism to this country, versus mere travel. it's almost he is out of touch with the reality of the cost/profit potential of travel in general.

According to HotTravelJobs.com, one in ten new jobs added to the economy this year has been in the travel business.

What the President apparently missed is that while you may "book" online, you don't "travel" online, or "sightsee" online. Travel is by definition a personal experience – not a virtual one. Consider a vacation to the Grand Canyon. Yes, you can book your flight to Phoenix online, but you physically go to Arizona to see the Grand Canyon. That act of becoming a tourist provides a lot of jobs for many, many people.

What about companies like Boeing, the airlines' pilots and flight attendants, airport workers and the taxi and bus drivers who get tourists from the airport to the local hotels and sites – like the Grand Canyon? What about the tour guides? Could any of these jobs be done by Internet automation – or by virtual workers in a foreign nation?

In fact, tourism is one of the most important domestic businesses in the United States. Best of all, this industry brings in foreign dollars and keeps them in the U.S. – One of the few industries where this nation does not have a trade deficit.

Getting back to the President summing up the entire industry with a single unenlightened remark; this is on par with George H.W, Bush not knowing about grocery store scanners in my opinion. This remark only goes to show two things – first, that Obama has a one-dimensional view of the economy. When he sees "the travel industry" he only sees the sales - not the fulfillment. Secondly, travel agents were a very bad example. The airlines stopped paying travel agent commissions over a decade ago. It is cruises, hotels, taxis, busses, tour guides, resorts, bed & breakfasts and tour guides that make money in the travel business. It is the destinations themselves. Travel agents still make plenty of money even though the sales of airline tickets has now been outsourced to the Internet.

In fact, according to the the U.S. Travel Association the U.S. tourism industry is still alive and well. Here is some research from its web site:

  • International travelers paid a total of $31.3 billion to U.S. air carriers on international passenger fares in 2010, an increase of 18.4 percent from 2009.
  • U.S. travel "exports," which includes international traveler spending in the U.S. and receipts on international passenger fares, totaled $134.4 billion in 2010 - up 11.7 percent.
  • During the same year, U.S. travel imports, which include U.S. resident traveler expenditures in foreign countries and international passenger fares paid to foreign carriers, was $102.7 billion. As a result, $31.7 billion was generated as a U.S. travel trade surplus in 2010, $10.5 billion more than 2009.
  • Direct travel-supported employment decreased slightly from 2009 (-0.2%) for the year 2010, after decreasing 4.3 percent in 2009. By comparison, total U.S. non-farm employment decreased 0.8% for the year 2010. Travel expenditures directly generated $188.4 billion in payroll.

What Our President Apparently Missed

Travel is one of the leading "domestic" U.S.-based businesses today – one where jobs cannot be exported. While Arizona can't compete with China for selling low-cost televisions, for example, China will never be able to sell tours to the Grand Canyon.

Once again, President Obama's remark shows that he just doesn't understand the incredible importance of travel and tourism to our economy and the entire world. In fact, if there is any one thing that will ever keep the Middle East from exploding – especially in countries like Egypt that do not have reserves of oil - it is their continued reliance upon foreign tourism from Europe, Asia and the United States.

Perhaps the next time President Obama buys an ice cream cone on Martha's Vineyard, he should reflect upon the people who brought him that ice cream cone – and realize that tourism is one of the few domestic private enterprises that America will always "own" and can never be taken away.

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