Hold the phone. Yes, there should be consequences for those in high positions who make poor choices and leave taxpayers little choice but to bail them out (hello, AIG and Wells Fargo). And yes, those consequences should include a ban on lavish retreats to posh resorts disguised as “business travel.” But note that I said lavish expenses. The media has made great political hay out of the expense reports from some of the bailed-out institutions, especially those who held retreats after they received government funds. However, we have to be careful not to kill a fly with a sledgehammer, or we may end up killing the tourism industry, which has a huge impact on our economy.
The Troubled Asset Relief Program (TARP) is the legislation Congress adopted to provide financial assistance to lending institutions on the brink of collapse. I will not argue whether or not TARP is good government. I remain confident that our elected federal leaders are responding to this country’s financial crisis in a fashion they believe is most responsible. But now, those same federal leaders are hearing the cries of average taxpayers who have seen news reports of AIG’s weeklong meeting in California that cost $440,000, or an expensive event Northern Trust held in connection with a golf tournament it sponsored, or a planned event by Goldman Sachs in Las Vegas…
That has lawmakers setting their sights on the CEOs of these companies. In response, thousands of others—and not just TARP recipients—are canceling meetings across the country. And the 2.4 million workers in the tourism industry are caught in the crossfire, the unintended victims who may become collateral damage if we’re not careful.
One out of every eight jobs in this country is related to travel and tourism, according to the U.S. Travel Association. “Policymakers must realize that meetings and events are the lifeblood of local communities,” says U.S. Travel Association CEO Roger Dow. “They are responsible for 15 percent of all travel and create more than $100 billion in spending and $16 billion in tax revenue.” Further, the Department of Labor is reporting 200,000 tourism jobs were lost in 2008, with another 247,000 expected to be lost in 2009. “That number could grow if the rhetoric is not toned down,” says Dow.
Make no mistake, I join my industry colleagues in decrying wasteful spending. We are as outraged as anyone when it happens with taxpayer dollars. Companies that receive bailout money need to be held to a different standard to conduct their business in a transparent, responsible manner. All we are saying is: don’t let some bad apples spoil the bunch. “For every case of wasteful spending, we are seeing scores of instances in which the game of ‘gotcha’ has forced businesses to cancel legitimate activities that would have grown their bottom lines and generated jobs and economic growth for local communities,” says Dow.
Somewhere between the need to prevent wasteful spending and the need to save American tourism jobs lies common ground in the form of compromise. An amendment to TARP calls for companies receiving assistance to create policies governing travel, sponsorship and entertainment. Meanwhile, travel industry leaders are also adopting model policies for Congress to consider. The bottom line, for companies and communities, is meetings are necessary for business. iBi
