This Statement forms the basis for the work of the Travelers

Security Policy Council.

While we do not pretend that our efforts will solve what is

essentially a political problem, we feel that the industry must

act together. All of us hope to be able to soon concentrate our

energies more on discussing the benefits of travel and tourism.

In economic terms, we are discussing over $225 billion dollars

spent on travel and tourism in 1984. This represented 6.2

percent of the U.S. Gross National Product, and at that time

tourism expenditures were rising at a rate of 10.3 percent

annually. The travel industry is the nation's third largest

retail or service industry. It employs 4.1 million Americans

directly, and generated $50.9 billion dollars in U.S. wages and

salaries in 1984, and ranked as the first, second, or third

largest employer in forty-one states; in fourteen states, it was

the number-one employer.

But travel represents more than money. ASTA held its most

recent Congress in Rome in November, and we were fortunate to

have an audience with Pope John Paul at the Vatican. I would to

close my comments today with some of his remarks.

"There are many human values which are encouraged and enhanced by

tourism.... Yet, I cannot overlook certain negative factors also

connected with tourism. I refer to those practices which can

demean the tourists themselves or serve to exploit the countries

visited. What is important is that the basic dignity of every

person be respected, both the dignity of the visitor and that of

the people being visited.

In considering the positive developments that have taken place

during the last several decades we can see in many cases how

tourism has strengthened unity and fraternal solidarity between

individuals and between nations. The world is becoming a global

village in which people from different continents are made to

feel like nextdoor neighbors. Modern transportation has removed

many of the obstacles formerly imposed by geographical distances.

It has enabled people to appreciate each other better and to

engage in fruitful dialogue and mutual exchange.

Through the recreation and leisure made possible by travel,

people are restored and renewed, body and spirit. They return

home to family and work with new perspective and enthusiam for

life."

Mr. Chairman, I look forward to the day when Americans and people

everywhere can travel safely and without fear. Thank you for the

opportunity to address your subcommittee, and I will try to

answer any questions you may have.

Mr. MICA. Mr. Hansen-Sturm, let me indicate all of the prepared testimony will be included in the record.

STATEMENT OF CORD D. HANSEN-STURM, VICE PRESIDENT FOR GOVERNMENT AFFAIRS, FIRST FAMILY OF TRAVEL

Mr. HANSEN-STURM. Thank you, Mr. Chairman. I will try to keep this short. Thank you for the opportunity to comment on how severely the national reaction to terrorism is impacting on the travel economy. I am an economist of the First Family of Travel, a group of U.S. tour operators whose raison d'etre is diversification in many regional markets in order to survive sudden shifts in travel patterns. The confusion, fear, and anger that is dramatically reducing American travel flows to Europe and the Mediterranean this year is a severe test of the transatlantic travel industry.

NATIONAL HYSTERIA OVER TERRORISM

I will abbreviate my written testimony into a few observations on cause and effect. First, what caused the hysterical U.S. public reaction to the threat of terrorism? Terrorism is an historical phenomenon with which most political cultures have learned to live much as Americans accept violent crime. Terrorism directed at the symbols of American overseas power such as embassies, military bases, airlines, and citizens has only recently caught the U.S. media's full and protracted attention, resulting in what can only be called a national hysteria.

Whereas the combination of unfamiliarity and television hype had a noticeable impact on U.S. travel decisions in 1985, it was not until the U.S. Government decided to wage economic and military war on one terrorist haven that the bottom dropped out of the transatlantic travel market. After the Rome and Vienna airport attacks in December 1985, the U.S. Government generated more terrorism news than all the subsequent world terrorist incidents combined by announcing that it would first seek to isolate Libya economically, and if economic embargo failed to deter Qadhafi, the United States would punish Libya militarily. The considerable ability of the White House and national security and foreign policy agencies to focus media attention has concentrated American hopes and fears for 5 months on an escalating battle with no end in sight.

MILITARIZATION OF COUNTERTERRORISM POLICY

Guns and tourism do not mix. Tourists avoid war zones. Despite the reality that Europe is as peaceful and safe as America, potential travelers perceive Europe to be dangerous and millions of them are avoiding the continent this year. I want to emphasize the point that the militarization of counterterrorism policy has dramatically increased the economic damage over what it would have been had the United States chosen to continue as other countries have done to treat terrorism as a crime of individuals rather than as guerilla wars of national states.

ECONOMIC DAMAGE

My next comments are about the economic damage brought about by changed perceptions in the United States about the safety of travel to Europe. We know it will be reckoned in billions of dollars in losses to the transatlantic travel industry in 1986. The suppliers to that industry will suffer additionally the decline of their travel company customers. A greater, yet incalculable economic and social cost will be borne by the United States, European, and Mediterranean nations from the restriction of direct person-toperson communication.

It is not generally considered to be so, but I believe it to be, that travel is the Nation's principal international communications medium, perhaps even more significant to the information-based political economy than either telecommunications or print. When several million American brains are deterred from directly observing and communicating with the real world outside our borders, a far greater calamity has occurred than were there a proportional blackout of satellite telecommunications.

INTERNATIONAL TRAVEL INFRASTRUCTURE VITAL TO NATION'S

INTERNATIONAL COMMUNICATIONS

The international airlines, cruise lines, land transport companies, hotel chains, tour operators and travel agents that comprise much of the U.S. portion of the international travel infrastructure are vital to the Nation's international communications. The context of American foreign policy is more dependent on flag carriers than it is on satellites-yet preserving U.S. overseas travel flows and the U.S. travel infrastructure has not been a priority of U.S. counterterrorism policy.

On the contrary, instead of trying to minimize distortions in travel patterns while maximizing travelers' safety, U.S. counterterrorism policy has tended to maximize travel distortions and to minimize travelers' safety, at least in the short run while military and economic force is being applied in ever larger doses to a single terrorist operations base that is striking back. The effect is to reduce both travel flows and travelers' security. In the short run terrorists clearly have the upper hand as they have co-opted U.S. policy to help them isolate destinations and thus increase their prestige and leverage.

NATIONS MOST AFFECTED

What countries and what industry sectors are suffering most? Israel, Egypt, Greece, Yugoslavia and Turkey are critical strategic Mediterranean countries vital to United States foreign policy. Collectively they receive tens of billions of U.S. military and economic assistance each year to keep them economically and militarily afloat. Tourism is the largest dollar income generator of the first four of the five, and U.S. travel dollars lost to these countries will be replaced by U.S. taxpayers in direct grants.

Western Europe as a whole will lose billions of dollars in 1986 as millions of Americans avoid the continent. The countries closest to and most integrated with the Arab world are perceived as the most