tion, consumer protection, and minimum regulation of private industry. Nor are there any mechanisms for coordinating and implementing a tourism policy if one existed. As a consequence, the Federal involvement in tourism is chaotic at best.

According to the recently completed Arthur D. Little study, lack of policy guidance is responsible for poor to nonexistent interagency coordination in 24 agencies administering 29 programs which significantly affect travel and tourism. This lack of coordination also extends to State and local tourism officials.

It should come as no surprise that over one-half of the top-ranked needs of the tourism and travel industry ascertained in the meetings held with the industry during the study relate to coordination problems between two or more Federal agencies, or between Federal agencies on one hand, and State, local, public, and private sectors of the industry on the other.

The Arthur D. Little study concluded that the No. 1 problem in constructing a cohesive Federal involvement in tourism is the lack of an effective coordinating mechanism among the departments and agencies having important tourism and recreation related programs, or programs which significantly impact these activities.

The study also found a widespread lack of understanding among Federal officials as to the degree of their own agency's current involvement in, or impact on, tourism and travel. And, of 22 agencies administering 26 programs that had a program mandate which clearly included or supported travel-related goals and needs, one-half felt their mandate did not include these objectives.

It is not difficult therefore to understand why our vast Federal effort has been characterized as a grossly inefficient use of a valuable national

resource.

For precisely these reasons the Senate unanimously agreed to Senate Resolution 347, which authorized this committee to conduct an investigation and recommend legislation which would prescribe a national tourism policy and the mechanisms to implement and coordinate it. From the outset it was understood that whatever recommendations came from this committee, there would be none recommending:

A super agency for tourism-for example, Cabinet-level Department of Tourism;

A large-scale uprooting and consolidation of existing Federal agencies;

A substantially larger expenditure of Federal funds; and

Further Government regulation of the private sectors of the industry.

The study which Arthur D. Little has submitted represents that organization's recommendations on how best to achieve the objectives of Senate Resolution 347. At this point, I should emphasize that the committee has made no judgment one way or the other on the recommendations of Arthur D. Little.

During these hearings and others to follow the committee expects to hear the specific views and recommendations of the administration and numerous witnesses from the public and private sectors of the industry as to how each feels the purposes of Senate Resolution 347, may be realized most effectively and expeditiously.

Upon the completion of the hearings the committee will then have a basis for its recommendations on the study prepared by Arthur D. Little, and the testimony of Federal, State, and local witnesses as well as that of the private sector of the industry.

Because of the complex nature of the task before us, the 3 days of hearings scheduled for September will be concerned solely with the content of a national tourism policy statement itself, and the creation of a Federal mechanism to coordinate that policy among the many Federal agencies having travel and travel-related programs.

Next month the committee expects to conclude hearings on the study with 3 days of hearings on the issue of determining the most effective principal mechanism for implementing that policy.

During the final 3 days of hearings the committee will also be interested in recommendations as to how Congress can encourage State and local governments and the private sectors of the tourism and recreation industry to create, in close cooperation with Federal officials, a Federal-State-local coordinating body, and a Federal-private industry coordinating body for travel and recreation.

All segments of the industry have had the opportunity to participate fully in every phase of the committee's policy study and our effort to date may truly be described as a joint one. We are now approaching the conclusion of the work which we began over 4 years ago and I would hope that the open, frank, and constructive exchange of ideas that have characterized the study to date will continue during these hearings.

In my judgment, two of the central issues at the first 3 days of the hearings are the lack of an awareness of the importance of travel and tourism throughout the various agencies of government; and, the failure of the various agencies of government to coordinate their policies and programs affecting travel and tourism.

At the heart of the State Department's decision to close USTS/ London is a failure to understand the "unique" contribution a Federal presence in London can and should make to the marketing efforts of the private sectors of the travel industry to sell the United States as a travel destination; and, a complete failure from the beginning on the part of the State Department to inquire of the private sector as to whether the Federal presence does offer it "unique" assistance as well as a failure to coordinate with USTS in any meaningful sense its evaluation of the London office. And I may say that that could as well go for the office in Japan which was proposed to be closed. Fortunately, we have been able to turn that around, but I refer to that as the same short-sighted approach that the administration has taken comparable to the London action.

Accordingly, today the Chairman of the National Tourism Policy Study (NTPS) and I have requested the following representatives of Government and industry to meet privately with us to discuss the "unique" contribution a Federal presence in London can make to the marketing efforts of the private sector and to afford the Secretary of State an opportunity to discuss the Federal role with the industry leaders: Secretary Vance, Secretary of Commerce Kreps; the White House: the U.S.-scheduled airlines serving London; representatives of U.S. hotel and motel properties; the American Express Co.; the Hotel

and Restaurant Employees and Bartenders International Union, AFL-CIO; the International Association of Convention and Visitor Bureaus; Discover America Travel Organization; the Air Transport Association and the American Hotel and Motel Association.

I will turn it over to Senator Inouye now. If you will excuse me, I have to review a file in the backroom and I will be back shortly.

OPENING STATEMENT BY SENATOR INUOYE

Senator INOUYE [presiding]. First of all, my apologies for being late.

In April of 1974, the travel industry, in public testimony before this committee, recommended that we complete the work begun by the National Tourism Resources Review Commission, and undertake a study which would recommend legislation establishing a national tourism policy and mechanisms to coordinate and implement that policy.

From that industry recommendation, our own estimates of the national importance of travel and tourism, and our failure as a government to recognize that importance, came Senate Resolution 347. That resolution was cosponsored by 71 Senators and unanimously agreed to by the full Senate.

Now, 412 years later, the committee is nearing completion of its work under the mandate of Senate Resolution 347. After these hearings, and the later ones to be held before the year is out, the committee will have a comprehensive record on which to draft legislation for consideration by the Senate early next year. Significantly, the record on which we will make our recommendations will reflect the views and opinions expressed by all segments of the travel industry throughout our study.

When the industry testified before the committee in 1974, it expressly said that overall responsibility for travel and tourism should not be placed in the Department of Commerce but proposed that it be put in an independent entity. The industry spokesman explained, and I quote:

Our reasons*** are that the scope of tourism cuts across departmental lines, *** and (an entity with overall responsibility) * * * could function more effectively without the limitations in scope that would be realized in any established department.

During those same hearings in 1974, the administration witnesses told the committee that Representatives of 14 government agencies with tourism responsibilities sat down to consider their roles in officially promoting and providing for tourism, and that one outstanding resolve came out of the discussions: that the various agencies dealing with tourism should meet on a regular basis and in an established forum to coordinate their individual tourism programs.

The administration witnesses went on to say that no Federal reorganization was necessary to accommodate tourism because-

the White House had formed an interagency Federal Tourism Resources Board to be chaired by the Secretary of Commerce which will give immediate attention to establishment and coordination of Government [tourism] programs.

These efforts, of course, never materialized. It is therefore, neither surprising that the recent study done by Arthur D. Little found poor to nonexistent interagency coordination in 24 agencies administering 29 programs significantly affecting tourism; nor that it concluded that

historically, Secretaries of Commerce have failed to demonstrate any significant support for tourism interests.

Because of this history, and because these hearings involve organization and policy issues to be resolved at the highest levels of Government and transcend any one agency or department, the committee contacted the White House staff person who had been given responsibility for tourism and expressed its hope that the administration would consider these issues at a level commensurate with their importance to the national economy and social well-being.

Specifically, the issues in these 3 days of hearings will involve Federal policy with respect to tourism, and how to assure that in view of its economic and social importance tourism interests get a "fair shake" at the highest administration levels vis-a-vis other public policy principles and considerations such as energy conservations, full employment, and equitable taxation.

To help assure that the industry gets a "fair shake," Senate Resolution 347 assumed that as a first step there must be a statement of national policy which is articulate-as specific as a policy can be—and that has the permanency and effect of a legislative enactment; that is, a law.

The point is, if a policy is definite and has the effect of law, all agencies having programs and policies affecting tourism will have guidelines which they will be required to follow in formulating and administering their programs. And the Federal coordinating mechanism will have something to coordinate.

After a national policy is enacted, Senate Resolution 347 contemplated a mechanism to coordinate that policy to assure the industry gets the "fair shake" to which it would then be entitled by law. That mechanism should:

Coordinate tourism related activities and policies at the highest levels in the various Federal agencies;

Monitor Federal agencies' compliance with it;

Resolve conflicts that involve two or more Federal agencies and involve issues of national or regional significance;

Identify for potential elimination program duplication and overlap among agencies; and,

Continuously update Federal policies related to tourism.

In emphasizing, as a principal issue of these hearings, the importance of coordination at the highest levels of Government, the committee was mindful of past testimony on the importance of that issue; the A. D. Little conclusion that the No. 1 problem in constructing a cohesive Federal involvement in tourism is the lack of an effective coordinating mechanism among the departments and agencies having important tourism and recreation related programs; and the administration's commitment to interagency coordination in the interest of more efficient and effective Government.

In connection with this administration's commitment to interagency coordination, I would like to quote from a White House press release, dated August 16, 1978:

As part of the Carter administration's commitment to make more effective use of existing urban programs, the President created the Interagency Coordinating Council on March 27, 1978. The Council is a unique vehicle for coordinating day-to-day operations of urban programs across agency lines.

It brings together high-level agency officials with direct program operating responsibilities to discuss needed improvements, examine specific local development plans, and resolve interagency conflicts as these arise. Because it is chaired by an assistant to the President, the Council functions as a direct arm of the President and raises coordination to a high level of priority.

The first witness today will tell the committee and the travel industry, which contributes $115 billion annually to our economy and sustains 5 million jobs, of the administration's "commitment to make more effective use" of the existing 100 or so programs administered by 50 or more Federal agencies which significantly affect travel and tourism.

Mr. Patrick O'Malley, chairman of the board of Canteen Corp., was scheduled to appear and testify today, but an unavoidable conflict arose and he will not be able to do so.

Our first witness is the Honorable Elsa Porter, the Assistant Secretary for Administration, Department of Commerce, who is appearing on behalf of the administration.

Mrs. Porter, welcome.

STATEMENT OF HON. ELSA A. PORTER, ASSISTANT SECRETARY FOR ADMINISTRATION, DEPARTMENT OF COMMERCE

Mrs. PORTER. Thank you, Mr. Chairman.

I am very pleased to be here to provide you with some of the administration's initial views on the development of a national tourism policy and on the implications which such a policy might have for the organization of the Federal Government's tourism program. My remarks will focus primarily on the broader issues and briefly on our plans to analyze some of these issues in greater detail.

Let me say at the outset that I think it is clear that we must have some reassessment of the policies and directions for the Federal role in travel and tourism. But identifying these directions is not easy. We need to ask and answer: What is the appropriate Federal role in this area?

In this context, I think you would agree that tourism in this country today is not faced with the critical problems confronting some of the other sectors of our economy. Data for the full year 1977 show that the 18.6 million international travelers to the United States was up 6.2 percent over the 1976 level and that foreign exchange earnings associated with these visitors was an estimated $7.4 billion, up 7.2 percent from the level during our Bicentennial year. Moreover, data for the first 6 months of 1978 show that two of the most important tourismrelated industries-airlines and food and lodging-had significant increases in both revenues and profits over the comparable period for 1977. Airline revenues were up 15 percent and profits were up by 174 percent. In food and lodging, revenues were up 16 percent while profits were up 32 percent. These data suggest that, at least in general terms, the tourism industry in this country is today in a reasonably healthy condition.

The NTPS does, however, give us some indication as to the kinds of problems which even an otherwise healthy industry might have to face in the future. These problems, in turn, provide some direction for adjusting Federal involvement in tourism. For example, the study notes that there are considerable differences in the way tourism-related terms are defined and tourism data are collected. Given the complex