Chris Romer
With ski season coming to an end and summer vacation just around the corner, it’s important to recognize the significant impact tourism has on Colorado’s economy. In 2022, more than 90 million visitors visited our state and spent a record $27.7 billion. This level of tourism supports our small businesses, supports job growth and provides tax revenue for our cities. Unfortunately, the benefits of this economic impact are now at risk.
Every year, millions of Americans use credit card rewards to book vacations and trips to see loved ones. Credit card rewards like cash back, airline miles and hotel points can help reduce out-of-pocket travel costs and make travel more affordable. A recent study by an airline trade group found that more than 700,000 visitors used airline credit card miles to pay for their trip to Colorado in 2022. This figure does not include the many other visitors who used rewards like cash back to pay for gas, rental cars and meals, or used hotel points to pay for lodging.
Credit card rewards not only make travel more affordable for consumers, but they are also critical to the millions of small businesses across the country that rely on tourist spending. In my role with the Vail Valley Partnership, I know how much local businesses rely on these funds. If these rewards were reduced or eliminated, communities like my own would certainly see reduced spending, jeopardizing our ability to operate and putting employees’ jobs at risk.
A new survey by the American Tourism Economics Federation confirms my concerns. The survey found that of the roughly 80% of Americans who have rewards credit cards, more than 70% would cut back on their travel spending if the rewards were reduced or eliminated. This would be a devastating decline in tourism spending that would be felt by businesses across the state, which is why I am so disturbed to learn that Congress is considering a bill to effectively eliminate rewards points on credit cards.
Currently, when consumers make a purchase with a credit card, retailers pay a small percentage of the total cost, usually 1-3%, known as interchange. Banks use this money to secure the transaction and protect both consumers and retailers from fraud. Banks also fund popular rewards programs that consumers use to book travel. The Durbin-Marshall Credit Card Act, currently before the Senate, would allow retailers to choose cheaper, less secure networks, reducing the funds used for credit card points and further exposing consumers to fraud.
Eliminating credit card rewards would increase out-of-pocket expenses for travel to Colorado, leading travelers to either forgo the trip altogether or have less discretionary money after paying for key components of the trip like airfare, rental car and hotel. Middle-class travelers would be especially hurt by the loss of rewards: Nationwide, two-thirds of households making less than $75,000 a year have a rewards credit card, according to a USTEA survey. Nearly one-third of this group said they would reduce non-business travel if they lost access to rewards.
This means less money will be spent at Colorado restaurants, tour operators, entertainment venues and retail stores. This cutback will hurt small businesses, hospitality industry employees and local governments that rely on tax revenue to fund essential services.
America’s travel and tourism industry supports more than 16 million jobs nationwide and contributes more than $2 trillion to the economy each year, including more than $27 billion in Colorado. We should do everything we can to not only protect this industry, but to support and expand it. Senators Michael Bennet and John Hickenlooper have not yet said how they will vote on this bill, but I urge them to consider the serious impact this bill will have on our state. Colorado cannot afford to pass this bill.
Chris Romer is president and CEO of the Vail Valley Partnership.
