Bailout rules could dampen business travel

US Sen. Mark Begich supports TARP, but wants to make sure visitor industry isn't unduly harmed

Posted: Tuesday, April 07, 2009

Proposed federal legislation placing restrictions on companies that have received bailout money could diminish business and convention travel to Alaska.

Sen. John Kerry, D-Mass., introduced Feb. 24 the Taxpayer Protection and Corporate Responsibility Act, which would prevent any business that received money under the Troubled Asset Relief Program from paying for travel, meetings, gatherings, parties or conventions.

"This could mean a huge hit to the hotel and hospitality industries here in Alaska," said Buddy Whitt, government affairs representative with the Alaska Business Travelers Association. "This could have a domino-type effect on meetings already booked."

Businesses that violate the terms of the proposed legislation would be forced to pay back the money spent, in addition to a fine of $100,000.

Officials at the Anchorage Visitor and Convention Bureau are monitoring the legislation.

"That could bar some business travel. Some delegates could no longer travel to association-type conventions," said Julie Saupe, president and CEO of the Anchorage Visitor and Convention Bureau.

Business travel nationally creates 2.4 million jobs, injects more than $240 billion into the national economy annually and generates $39 billion in federal, state and local tax revenues, according to the National Business Travelers Association.

Sens. Kerry, Chris Dodd, D-Conn., and Dianne Feinstein, D-Calif., as well as Reps. Elijah Cumming, D-Md., and Carolyn Maloney D-N.Y., have all introduced legislation seeking to place greater limits on TARP recipients' executive pay and company spending, particularly in the meetings, event and incentive travel programs, according to the National Business Travelers Association.

As far as Alaska is concerned, Sen. Mark Begich is paying attention to the details.

"Senator Begich supports the overall goals of the Kerry bill to ensure taxpayers' money is used wisely," said Begich spokeswoman Julie Hasquet. "He has repeatedly questioned actions of companies receiving TARP funds for extravagant bonuses and parties. We need to protect taxpayers' investments and watch these funds closely. However, Senator Begich wants to work with Senator Kerry to make sure our already-hurting visitor industry doesn't get unduly harmed by this bill.

"There are many legitimate conferences to locations such as Anchorage's new convention center, which he wants to encourage," Hasquet added.

She said that Begich also is working to help the visitor industry recover through supporting the Travel Promotion Act, an expanded visa waiver program to streamline international visitor traffic, and investing money from the economic recovery package in visitor facilities.

Alaska hotels rely on business travel. Whitt said his company, Westmark Hotels, takes in nearly 40 percent of its revenue through corporate travel.

"This (legislation) only applies to businesses that have gotten the funds," Whitt said. "But still, it is scaring the industry and scaring big business."

Nationally the sentiment is that the restrictions may increase losses to the industry.

"If passed, I don't need to tell you the profound impact on the business travel industry and the nation's economy it would have," said Kevin Maquire, president of the NBTA. "This legislation would not only impact the affected companies, it would have a chilling, immediate impact on all companies. This hurts travel managers, hotels, airlines and rental cars."

Maquire estimated that unemployment would jump from 7.6 to 8.2 percent without the jobs generated by meetings and conventions.

On a local level, ACVB's Saupe says that only a few individual business travelers will likely be affected.

"We have not catered to the corporate meeting-type travel, but mainly the association and tradeshow conventions," Saupe said. "We have only seen one cancellation, and that was not related in any way to this issue."

Saupe added that bookings in Anchorage's two convention centers are as strong as last season, and are expected to have more than $100 million in economic impact to the city.

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