Foreign Relations of the United States, 1964–1968, Volume VIII, International Monetary and Trade Policy

182. Current Economic Developments¹

Issue No. 800

Washington, February 27, 1968.

[Here follow articles on unrelated subjects.]

PRESIDENT’S TASK FORCE RECOMMENDS PROGRAM TO INCREASE TRAVEL TO US

The President’s Industry-Government Special Task Force on Travel recommended to the President last week a seven point program to increase foreign travel to this country; thereby improving our balance-of-payments position.² The report also covers actions already initiated by the travel industry to reduce the cost of travel by foreigners to the US and actions to stimulate foreign travel to the US.

One outcome of the Task Force’s endeavors was a meeting in New York February 20–23 of 21 airlines members of IATA engaged in transatlantic service to consider directional fares to encourage tourism to the US. The plan for a westbound family fare that emerged will be submitted to all IATA members for approval.

Point One—Actions to Lower the Cost of Travel to and within the US

The price of visiting the US must be attacked within each area of expenditure if potential tourist markets are to be tapped more effectively and profitably. Because of the urgency of action on costs, the Task Force concentrated on exploring with the travel industry the possibility of offering price reductions.

The response has been very good, with the following reductions already in effect:

• —Up to 40 percent reduction of regular rates in certain hotels and motels.
• —10 percent discount in the regular schedule of rates of the three largest car rental companies.
• —25 percent discount for visitors on sightseeing bus tours of one-day’s duration or less during 1968 and 1969.

Actions pending approval of regulatory bodies are:

• —50 percent reduction in the regular cost of domestic airlines fares. (These will be the lowest available rates anywhere in the world.) Application was filed with the Civil Aeronautics Board for approval.
• —Lower family plan airline fares to the US on tickets purchased in Europe.
• —Round-trip railway fares at approximately 75 percent of present one-way coach or first-class schedules. If the ICC does not object, new fares will become effective April 29.
• —Reduced directional steamship fares to the US. The International Committee of Passenger Lines will seek approval at the Atlantic Passenger Steamship Conference meeting during the week of March 10.
• —10 percent discount on charter coach rates for international travelers on trips involving 400 miles per day. If the ICC does not object, the new rates will become effective May 1.
• —Significantly reduced prices for packaged tours from Europe to the US will be made immediately available by major US tour operators as soon as cost reductions become effective.

Recommendations on Lowering Costs

Results of temporary price reductions for foreign visitors should be evaluated by October 1, 1968 and extended if they have proven to be effective in improving the US balance of payments, the Task Force report continues.

After the proposed reduced transatlantic fares have been agreed upon within IATA, the USG should take steps to obtain agreement on similar reduced directional fares from other areas of the world.

The USG should continue discussions with US railroads concerning establishment of a “Eurail Pass” system for unlimited 60-day railway travel in the United States.

Federal, state, and local governments should be requested to waive admission charges for foreign visitors at publicly owned parks, museums, national monuments, beaches, camp grounds, lodges and on local transportation.

Air, bus and railway industries should develop special reduced combination fares allowing foreign visitors to cross the US in one direction by air and return by rail or bus.

The hotel-motel and car rental industries should develop more package programs offering foreign visitors vacations in the United States with unlimited mileage in rented cars and accommodations at a greatly reduced flat rate.

Car rental companies should be asked to increase the discount allowed foreign visitors subject to the waiving of airport fees charged on car rentals by foreigners.

All special price reductions available to foreigners only if purchased abroad should also be made available to foreign visitors if purchased within the US, subject to appropriate safeguards.

US international carriers, with the support of the CAB, should urge IATA to relax “group inclusive tour” and “charter” regulations for in-bound traffic to: allow the airlines to carry one escort free of charge for every 15 paying passengers; create nonaffinity directional group and charter fares; and allow split-group charter flights.

The USG should take every appropriate opportunity, including bilateral negotiations, to encourage air fare proposals designed to increase traffic to the US.

The USG should seek to secure the necessary uplift rights in Europe and the Far East for charter flights to the United States by US air carrier.

Point Two—A Program to Promote Travel to the US

The Task Force recommended that a campaign mounted at once to convince millions of potential foreign travelers that America is an economical, manageable, and attractive tourist destination. The campaign should have two goals: 1) to convince potential visitors that during 1968 and 1969, they can visit the US at a cost they now finally can afford—possibly cheaper than ever again; and 2) to convince them that their travels will be easy, comfortable and pleasant.

Actions initiated include the following:

US flag transatlantic and domestic air carriers will spend $16.5 million outside the Western Hemisphere in 1968 to promote travel to the US, a $5.5 million increase over 1967.

Foreign flag air and sea carriers will take immediate steps to accelerate the development of European travel to the US.

US air carriers will bring more than 2,000 travel agents, tour operators, and travel editors to the US for familiarization tours in 1968.

Other US industries and news and entertainment media will significantly increase promotional efforts abroad to attract foreign visitors to the US.

Recommendations in the travel promotion category include the following:

The US Travel Service should issue to foreign visitors hospitality cards entitling holders to discounts on expenditures in this country.

US-based international corporations should be encouraged … to devise financial and professional incentives, including assistance with vacation arrangements for group and individual travel of foreign employees to the US in 1968 and 1969.

The Administration should appeal to the individual state governors to increase their promotional budgets and appropriately gear them toward attracting foreign tourists.

The US Travel Service should promote travel by foreign professional and “special activity” groups to the US, and assure that qualified travel agents are offering specific, attractive package tours for this purpose.

The National Park Service, Forest Service, and Bureau of Indian Affairs should prepare travel brochures and translate them into foreign languages so that they can be distributed worldwide.

The US Travel Service, air carriers, and travel organizations should publicize widely abroad the applicability of standby domestic fares to foreign youths.

All USG agencies, their employees and families, operating abroad should be directed, in cooperation with the US Travel Service, to encourage and facilitate the flow of foreign visitors to the US.

The travel industry and the US Travel Service should vigorously promote side trips or stopovers in the US by international visitors drawn to Mexico City by the 1968 Olympic games.

Ethnic groups in the US should mount letter campaigns to relatives and friends abroad informing them of the new economy and facility of travel to and in the US, inviting them to visit America in 1968–69.

Particular attention must be given to launching intensive promotion programs in Canada and Mexico to attract more visitors to the US.

Point Three—Recommendations on Removing Barriers

Existing immigration laws which authorize the Secretary of State and the Attorney General to waive the visa requirements for citizens of contiguous countries and adjacent islands should be implemented to the fullest.

US laws and regulations should be changed for business and leisure visitors. (Legislation which would grant the Secretary of State and Attorney General broad authority to waive visa requirements for business and pleasure visits of up to 90 days on the basis of reciprocity or for other reasons determined by the Secretary of State to be in the national interest was submitted by the President to the Congress on February 23.)³

Existing health, immigration, customs, and agricultural inspection functions at ports of entry should be consolidated to provide a one-stop entry procedure for foreign visitors.

Customs should adopt procedures for oral declarations by foreign visitors.

Special entry facilities should be provided for group visits.

The favorable treatment granted to Canada in regard to the proposed duty-free allowances, expenditure tax, and ticket tax should be withheld until Canada grants substantial reciprocity with regard to duty-free allowances granted by the US to its residents returning from Canada.

Preclearance procedures should be instituted at international terminals abroad whenever it is determined by industry and Government to be advantageous in facilitating the clearance of passengers entering the US. The reciprocal exchange of administration support between different governments inspection agencies should be explored.

The Department of Agriculture should undertake a substantially expanded educational program abroad to inform visitors of those agricultural products, imports of which is prohibited. Agriculture should also be directed to devise new procedures to expedite agricultural inspection.

The USG should press for acceptance by all OECD member governments of those provisions of the Code of Liberalization, without reservations or derogations, which call on all member countries to allow their citizens at least $700 of travel expenditure per trip.

USG agencies should make every effort to eliminate the necessity for visas for East Europeans attending international conferences in the US, so that the US can compete in the international convention market with nations that do not require visas.

To encourage the inclusion of US ports in cruise itineraries, Federal regulations should be amended to permit steamship operators to schedule cruises from abroad to include visits to two or more ports in the US.

Point Four—Changing Attitudes

The Task Force thought that much needs to be done to make the tourists’ stay pleasant and stimulating. In the short run, this could best be accomplished by an intensive public service advertising campaign and by a special Presidential appeal. The campaign would be primarily directed toward the people with whom the foreign visitors may be expected to have the most contact: policemen, taxi drivers, air, rail and bus employees, hotel and motel staffs, government employees at all ports of entry and personnel at tourist attractions. However, for the campaign to be successful, every American should be prepared to render assistance to foreign visitors. Among the recommendations of the Task Force in this area are: a major public service campaign, under the Advertising Council, Inc. urging all Americans to be friendly and hospitable to foreign guests, US residents to invite foreign friends and relatives to be guests in their homes this summer; and a special orientation campaign addressed to business firms and organizations.

Point Five—Improving Services

Some fifteen recommendations of the Task Force pertain to improving services rendered foreign visitors in the US. These include such things as: a) a program to improve the foreign languages facilities at major US ports of entry, municipal reception centers; b) availability of low cost, short-term medical insurance for foreign visitors; c) a comprehensive guidebook of the US, translated into major languages; d) a national steering committee to organize volunteer hospitality groups throughout the country; e) programs to expand foreign exchange facilities to cover all international arrivals at international ports of entry; f) availability of automobile insurance at nominal cost; g) a wider variety of short courses during summer sessions of educational institutions that would be attractive to foreign students and teachers; and h) authorization by the CAB to US air carriers and foreign charter carriers to charter aircraft to foreign tour operators for tours destined for the US.

Point Six—Studying Markets

With the present jet fleets of the international air carriers and the sizable number of jumbo jets which will come on line by 1970, capacity will be available for a very substantial increase in foreign visitors. Market studies are urgently needed to take advantage of this available capacity and of the cost reductions that are already taking effect.

Recommendations include the following:

The US Travel Service should devote a portion of the budget increase recommended for urgent market research in Western Europe, Canada, and Mexico.

The US should seek the cooperation of other governments and segments of the private and travel industry in developing market data and in researching the potential markets for regional multi-country tours from Europe and the Far East to North America and the Caribbean area. Canada, Mexico, and the US have agreed to share the cost of a market survey in the Federal Republic of Germany.

Several suggestions are aimed at improving estimates of travel expenditure and receipts in the balance of international payments.

Point Seven—National Tourist Office

The Task Force recommended that a strong national tourist organization be created to coordinate and direct the entire US travel effort. Whatever the organization’s structure, it should be responsible for: continued market research, a vastly stepped up, balanced tourism promotion program; cooperation with state and local organizations, banks, and Federal agencies concerned with or involved in the financing of transportation facilities; accommodations and special attractions; improving handling of foreign travelers; assisting in or sponsoring of training facilities for services needed at points visited by foreign tourists; and coordinating the widespread activities of the Federal government affecting international travel business. Initially the work of the proposed organization should be limited to travel by foreign visitors.

The Task Force recognized that it would take some months to set up the proposed travel organization and recommended that in the meantime the budget of the US Travel Service (USTS) be increased by $1.7 million over the $3 million already appropriated. Also, the function of the Travel Service should be expanded to permit it to launch an immediate promotion program abroad and to strengthen its existing operation. For fiscal year 1969, the Task Force recommended that the authorization for the US Travel Service be increased to $30 million. When the new travel development organization is launched, the USTS should be incorporated into it.

IATA Plan

Twenty-one airline members of the International Air Transport Association (IATA) engaged in transatlantic service met in New York February 20–23 and agreed upon a westbound family fare (to the US or Canada and return) which would permit dependents of a traveler to enjoy a 50% reduction in normal fares, either first class or economy class. If a traveler purchases an excursion fare ticket instead of first or economy class, his dependents may still travel at 50% of the economy class fares, which is approximately one-third less than the excursion fare price. Tickets must be purchased in Europe or the Middle East and the fare is good throughout the year. This action will now be circulated by mail to IATA members who have three weeks in which to respond.

[Here follow articles on unrelated subjects.]

1. Source: Washington National Records Center, RG 59, E/CBA/REP Files: FRC 72 A 6248, Current Economic Developments. Unclassified. The source text comprises pages 9–14 of the issue.
2. Reference is to Report to the President of the United States From the Industry-Government Special Task Force on Travel (Washington: Government Printing Office, 1968), 48 pp., which was submitted to the President on February 19. Regarding the appointment of this committee, see Document 153.
3. Regarding this legislative initiative, see President Johnson’s letter to the President of the Senate and Speaker of the House of Representatives, February 23, Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1968–69, Book I, pp. 263–264. The proposed legislation was not enacted during 1968.