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Travel Weekly
5 days ago
- Business
- Travel Weekly
From air traffic control to visitor fees, travel groups find pros and cons in budget law
Hotel, aviation and agency groups praised the massive budget and policy bill signed into law on July 4, citing long-sought investments in infrastructure and business-friendly tax policies. But industry stakeholders also expressed concern with its steep cuts to Brand USA's federal funding and the sharp fee hike for international travelers, which could further deter inbound travel. Aviation groups cheered the $12.5 billion provided to overhaul air traffic control (ATC) systems, even while cautioning that substantially more funding will be needed to complete the ambitious ATC transformation, especially within Transportation Department secretary Sean Duffy's four-year timeline. The Modern Skies Coalition, a group of stakeholders that formed for the purpose of supporting an ATC overhaul, called the bill a "meaningful first step toward replacing outdated technology and aging facilities with the tools needed to keep our skies safe and efficient for decades to come." The group has estimated that completing the ATC overhaul will cost at least $31 billion. Geoff Freeman The bill also won praise from airports for the more than $6.1 billion included for Customs and Border Protection (CBP) personnel, which was lauded by U.S. Travel Association CEO Geoff Freeman. "This legislation is a giant step in the right direction when it comes to improving America's travel infrastructure and security," Freeman said. But Freeman was less complimentary when referring to the bill's provisions for visitor fees and travel funding. The law introduces a $250 Visa Integrity Fee for nonimmigrant visas and nearly doubles the Electronic System Travel Authorization (ESTA) fee charged to Visa Waiver Program travelers, raising it from $21 to $40. It also slashed Brand USA's federal matching funds. Previously, Brand USA received private-sector donations that were matched by up to $100 million in federal funding provided by a $17 portion of every ESTA fee. The law now only provides for $20 million in federal funding for Brand USA. According to U.S. Travel, a portion of the fees once used for Brand USA will go to CBP to operate ESTA and "accomplish CBP's mission," and some will offset general government spending. Freeman called the new fees "foolish." "The smart investments in the travel process make foolish new fees on foreign visitors and reductions to Brand USA, America's promotion arm, that much harder to swallow," Freeman said. Freeman said that by not reinvesting the fees in improving the travel experience, the hikes "do nothing but discourage visitation at a time when foreign travelers are already concerned about the welcome experience and high prices." Fred Dixon The higher fees come as inbound visitation continues to decline: in June, total overseas visitation was down 3.4%, according to the National Travel & Tourism Office, excluding Canada and land crossings from Mexico. International visitation for the year is down 1.2%. Fred Dixon, CEO of Brand USA, said the reduction in its funding will require "a significant recalibration" of its resources and programming. Still, he added, "we remain focused on growing legitimate international inbound travel and the vital boost it provides to the U.S. economy, especially with major global events on the immediate horizon like America250 and the FIFA World Cup." Two ASTA victories ASTA said the bill contained two victories it had been lobbying for: a tax break used by many advisors was made permanent, and education savings accounts were given greater flexibility. The tax break, which had been set to expire at the end of 2025, allows small businesses to deduct 20% of their qualified business income. ASTA said the law has been updated to raise income limits to $75,000 for individuals or $150,000 for couples filing jointly. It also guarantees a minimum deduction of $400 for those earning at least $1,000 in business income. The deduction is applicable to many advisors, ASTA said. Jessica Klement The approved uses of 529 savings plans also expanded from a U.S. college or university or an apprenticeship program to being applicable to postsecondary training and credentialing, like ASTA's Verified Travel Advisor certification. Vice president of advocacy Jessica Klement called it "a common-sense update." Within the U.S. hotel industry, the American Hotel & Lodging Association (AHLA) also praised the small-business tax break, which it said was crucial for hotel owners who operate as small businesses under licensing agreements with national brands. The expiration of the deduction would have significantly increased taxes for these operators, the AHLA said. The bill also permanently extends 100% bonus depreciation and expanded business interest deductibility, which the organization said would incentivize capital improvements and property modernization. Christina Jelski and Jamie Biesiada contributed to this report.
Travel Weekly
07-07-2025
- Business
- Travel Weekly
Aviation stakeholders praise the ATC overhaul in Trump's budget law
Aviation industry stakeholders are praising the budget and policy bill signed by President Trump on July 4, primarily due to the $12.5 billion it provides for an overhaul of air traffic control (ATC) systems. However, those same stakeholders are already noting that substantially more funding will be needed in the coming years to complete the ambitious ATC transformation, especially within the four-year timeline that Transportation Department Secretary Sean Duffy has laid out. Among the advocacy groups quick to praise the bill were Airports Council International -- North America, Airlines for America and the Modern Skies Coalition -- a group of 50-plus stakeholders that formed for the purpose of supporting an ATC overhaul. "This is a meaningful first step toward replacing outdated technology and aging facilities with the tools needed to keep our skies safe and efficient for decades to come," the Modern Skies Coalition said. The group, which has estimated that completing the ATC overhaul will cost at least $31 billion, also said that it "remains committed to working with lawmakers, regulators and industry partners to ensure that the system is fully staffed and that this investment translates into real progress, guaranteeing the United States will continue to have the safest aviation system in the world." The largest ATC components in the budget bill are $4.75 billion for ATC telecommunications infrastructure and $3 billion for radar systems replacement. Another $1.9 billion would go toward constructing a new air route traffic control center to handle midflight air traffic, above 20,000 feet. Airlines for America CEO Nick Calio was effusive in his praise of the White House. "Few people have had the gumption to take on the vast undertaking of modernizing our nation's complex ATC system, but President Trump and Secretary Duffy addressed the dire need quickly and are acting with urgency," Calio said. But he, too, stressed that more money will be needed. "We look forward to working with the administration as we continue to advocate for additional funding for staffing and technology to make President Trump's vision of a new golden age of air travel a reality." Aviation stakeholders have been calling for faster and more effective action in upgrading the ATC system for decades as the multibillion-dollar NextGen program that began in 2007 under-delivered and was implemented haltingly. But their calls gained more traction and vocal support from Trump and Duffy following the January collision of an Army helicopter with an American Airlines regional jet near Washington D.C. ATC failures this spring that led to ATC outages and flight delays at Newark Airport were also a rallying cry. The budget bill also won praise from airports for the more than $6.1 billion it includes for hiring and for bonuses for Customs and Border Protection personnel. "Funding 5,000 additional CBP officers will improve the processing experience for passengers and cargo moving through our airports, seaports, and land ports," Airports Council International -- North America said. The bill also has other impacts on aviation. Notably, it extends by two years, until 2029, a tax credit for of up to $1.75 for producers of sustainable aviation fuel. The credit survived despite the Trump administration's hostility to climate-change initiatives, due in large part to support from farmers. Farmers got an additional boost, receiving higher tax credits for the production of sustainable aviation fuel from corn ethanol and soybean oil.
