This Just In

Despite Fiscal Cliff Legislation, Sequester Could Still Impact the Industry


Washington, DC – Despite legislation to avoid the fiscal cliff, Congress failed to address some key issues that could impact the meetings, convention and travel industries in the next two months. “The legislation does not resolve the so-called sequester that was enacted in 2011, requiring cuts to government agency budgets of approximately 8% for fiscal year 2013,” said Roger Dow, president and CEO, U.S. Travel Association (USTA). “Instead, the bill delays the effects of the sequester, which is now set to expire on March 27.”

Across-the-board cuts of 8% by governmental agencies could mean extensive reductions in travel budgets for public-sector employees to trade shows. “We are nervous about it,” said Dow. “Travel is typically one of the first of the things to go when it comes to budget cuts.”

USTA is also concerned about the ability of the U.S. Customs and Border Protection (CBP) and the Transportation Security Administration (TSA) to manage increased travel loads on a reduced budget. “The CBP is already stretched beyond capacity. Cuts to CBP could lead to regular, multi-hour long lines to clear customs at major gateway airports,” said Dow. “For shows with a high percentage of international attendees, the impact could be devastating.”

In addition, cuts to the State Department budget could mean increased wait times for visa applications. “The State Department has made great strides in recent years, reducing visa wait times for visitors from many countries, like China and Brazil,” said Dow. “Five years ago, visa applicants had to wait more than 100 days, and now that’s down to under five days in most cases.” In 2012, travel from China travel was up 36%. “We could lose all the ground that we’ve gained,” he said.

In the longer term, the sequester could jeopardize projects, such as the Federal Aviation Administration’s NextGen air traffic modernization program. Due for implementation across the U.S. between 2013 and 2025, NextGen proposes to transform America’s air traffic control system from an aging ground-based system to a satellite-based system. “FAA systems at airports across the U.S. are antiquated,” said Dow. “In the next decade, domestic airports are predicted to see an increase from 700 million travelers to 1 billion. Without major upgrades, we won’t have the infrastructure to handle the increase.”

Dow suggests that industry professionals join the Power of Travel Coalition at Since the coalition was launched two years ago, more than 500,000 industry professionals have joined the grassroots organization, which keeps members informed about issues and policies that promote travel to and within the United States. “We would like to have 1 million participants,” said Dow.

In January, USTA sent a letter to the industry that outlines the key issues. Here’s a link the letter:

Reach Roger at (202) 408-8422 or

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