Corporation for Travel Promotion:

Establishment and Planned Programmatic Activities

GAO-12-485R: Published: Mar 21, 2012. Publicly Released: Mar 21, 2012.

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Jose A. Gomez
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What GAO Found

In September 2010, as directed by the Travel Promotion Act, the Secretary of Commerce appointed a board of 11 directors to govern CTP. Board members represent private and public sector areas related to travel and tourism—including lodging, city and state convention and visitors’ bureaus, small business, travel distributors, airlines, and others. Subsequently, under the direction of the board, CTP was incorporated in November 2010 as a nonprofit corporation in Washington, D.C. Once incorporated, CTP was able to initiate operating activities such as hiring staff and entering into contracts. Thus, the board conducted a search and hired a Chief Executive Officer (CEO) in May 2011. By December 2011, other senior staff positions had been filled. With the CEO in place, CTP began operations and has worked to develop strategic objectives, establish an organizational structure, and plan programmatic activities.

The CEO organized CTP into four teams, each responsible for meeting one of its four strategic objectives. Led by the CEO, the four teams cover marketing, business development, strategic outreach, and operations. Specifically,

  • the marketing team is responsible for overseeing and coordinating development and implementation of a marketing strategy designed to attract increased international travel to the United States;

  • the business development team is responsible for attracting the necessary private investment through different revenue programs to encourage participation from the U.S. private sector;

  • the strategic outreach team is tasked with maintaining communications with stakeholders, which include Congress, the private sector, and the general public; and

  • the operations team has responsibility for general administrative activities, including budget operations.

CTP has taken initial steps to implement preliminary programmatic activities to promote international travel to the United States, but core programmatic activities are still under development and are expected to be implemented beginning in May 2012. To begin implementing these activities, CTP with the creative assistance of JWT has created a new brand identity with a globally relevant name and brand attributes—Brand USA—that will serve as the platform for a global advertising campaign. Since the introduction of the brand at the World Travel Market Show in London in November 2011, CTP has been operating as “Brand USA.” CTP considers launching the brand a major step because this is the brand and logo that international travelers will recognize as part of the advertising campaign.

CTP’s major planned programmatic activity will be coordinating the global marketing campaign it is designing and implementing with JWT. According to CTP officials, as Brand USA, they expect to work with JWT and other partners to execute a marketing program that includes a global advertising campaign, public relations strategies, a social media outreach plan, promotional and incentive campaigns, trade shows and sales missions, and educational campaigns for prospective visitors about U.S. entry policies. CTP expects the global advertising campaign to be launched at a trade shown known as the International Pow Wow, in Los Angeles in April 2012. The advertising campaign will include a variety of media types, including television, print, billboards, digital, and mobile ads. After the trade show in Los Angeles, CTP plans to launch advertising campaigns in three major markets for U.S. travel, including Canada, Japan, and the United Kingdom, later followed by emerging markets, such as Brazil and South Korea. The marketing tools and audiences in each country will be determined by an analysis of existing and original market research, and tactics will be geared toward the cultural preferences of the markets in which they are deployed.

Why GAO Did This Study

According to the Department of Commerce (Commerce), the travel and tourism industry generates nearly $1.1 trillion in economic output for the U.S. economy and supports more than 7.5 million U.S. jobs each year. Even though the United States received more than 60 million visitors in 2010, a 2009 congressional report noted a decline in the U.S. share of the international travel market from 9.4 percent in 1992 to 6.2 percent in 2007. Concern over this decline led Congress to explore efforts to reinvigorate the tourism industry and recapture lost market share. According to the report, government officials and other experts identified the lack of a coordinated international marketing campaign as a primary factor contributing to this decline. The U.S. Travel and Tourism Advisory Board, which advises Commerce, also cited this lack of coordination and recommended the creation of a national tourism policy. To address this issue, Congress established the Corporation for Travel Promotion (CTP) under the Travel Promotion Act of 2009 to create and execute a nationally coordinated travel promotion program. This legislation, enacted in March of 2010, also mandates GAO to review CTP’s programmatic activities within 2 years of its enactment.

As we informed Congress in briefings and other communications on our preliminary findings in December 2011, the CTP is in the early stages of planning and is beginning to implement major programmatic activities to promote travel to the United States. In this report, we expand upon our earlier briefings to describe (1) the status of CTP’s establishment and (2) the activities CTP has planned and undertaken to promote travel and tourism to the United States.

What GAO Recommends

To help CTP comply with the accountability provisions established under the Travel Promotion Act of 2009, GAO recommends that, as a good practice, the CEO of CTP consider adopting federal policies and procedures such as OMB circulars A-110 and A-133, to the extent possible, for use in carrying out the corporation’s programs and activities.

For more information, please contact me Alfredo Gomez at (202) 512-4104 or gomezj@gao.gov.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: GAO recommended that, as a good practice, the Chief Executive Officer of CTP consider adopting federal policies and procedures, such as OMB circulars A-110 and A-133, to the extent possible, for use in carrying out the corporation's programs and activities. In response to the recommendation, CTP sought external legal counsel to examine the audit requirements and cost restrictions that apply to CTP. In March 2012 the legal counsel provided CTP a summary of the analysis, which concluded that the TPA prescribed a specific regulatory regime for CTP concerning audits, audit reporting, and cost limitations. The summary further concluded that Congress intended this specific regime, and not the OMB circulars, to apply to CTP. CTP officials stated that CTP will comply with OMB circular A-110 to the extent that its guidelines apply to CTP's operations, but CTP would not conduct an audit under OMB circular A-133, as the guidelines are not applicable.

    Recommendation: To help CTP comply with the accountability provisions established under the Travel Promotion Act of 2009, as a good practice, the CEO of CTP should consider adopting federal policies and procedures such as OMB circulars A-110 and A-133, to the extent possible, for use in carrying out the corporation's programs and activities.

    Agency Affected: Corporation for Travel Promotion

 

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