Committee Hearing, March 2, 2010

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON LEGISLATIVE OVERSIGHT - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, March 2, 2010 10:05 a.m. - - - PRESENT: COUNCILMAN JAMES F. KENNEY, CHAIR COUNCILMAN WILLIAM GREENLEE COUNCILMAN CURTIS JONES, JR. COUNCILMAN W. WILSON GOODE, JR. RESOLUTION 090881 - Resolution authorizing City Council's Committee on Legislative Oversight to hold public hearings to evaluate Philadelphia International Airport's current resources for international travelers... RESOLUTION 100016 - Resolution authorizing City Council's Committee on Legislative Oversight to hold public hearings to investigate how the Philadelphia International Airport can expand its international flight options... - - - 2

Good morning, ladies and gentlemen. Thank you for your attendance today. Due to the fact this is two resolutions, we will not be requiring a quorum, because no 7 legislation will be leaving from the Committee. So we can kind of get started on time for a change, which is always nice in here. This is a hearing on the Committee of Legislative Oversight on two resolutions: Resolution No. 090881, a resolution authorizing City Council's Committee on Legislative Oversight to hold public hearings to evaluate Philadelphia International Airport's current resources for international travelers and explore current trends and opportunities to improve these services to improve our City's international image; and Resolution No. 100016, which is a resolution authorizing City Council's Committee on Legislative Oversight to 3 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. hold public hearings to investigate how the Philadelphia International Airport can expand its international flight options to position the City to become more competitive in serving area residents and more attractive for tourism and conventions. I'd just like to make a few opening comments, if I may, very short. Good morning. We're here today to discuss ways to improve Philadelphia's international appeal and accessibility by expanding flight options and resources for international travelers at Philadelphia's International Airport. Already PHL is one of the largest economic engines in Pennsylvania, generating $14 billion annually in the local economy. Currently, there are 22 airlines that operate out of the Airport, four of which offer international flights. Furthermore, the Airport has passenger assistance staff assigned to 4 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. greet international flights and offer language services through courtesy phones located in all terminals. However, room 5 remains for improvement. Compared to other airports in the region, PHL does not offer as many international flights. It does not have as many international or domestic carriers. In addition, opportunities exist to improve customer service through multi-language information kiosks, which the Chicago airport system uses. Improving these two areas will provide exponential benefits to the City. Increased international flight options would benefit residents, enhance business opportunities and bolster our city's economy. Expanding resources for international travelers would help improve the customer experience and help Philadelphia continue to emerge as a world-class city. As I mentioned, PHL is one of the largest economic engines in 5 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. Pennsylvania, and it has the potential to build on this foundation to better serve the City, the region and the economy. By finding ways to expand flight options and resources, we can do just that. And before we get started with the witnesses, would any members of the Committee like to say anything? (No response.)

Thank you very much. Our first witness is Mark Gale, the Director of Philadelphia International Airport. (Witnesses approached witness table.)

Before Mr. Gale gets started, I just want to thank you and your staff at the Airport for all your cooperation and sharing of information and making yourself accessible to my staff in preparing for this hearing and your ongoing improvements overall at the Airport. 6 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. Again, you were an integral part, before Mr. Isdell left, of our J.D. Power award last year or the year before, and we do have a great airport, and this hearing is to try to look at ways to make it even better than it is. So I thank you for all your cooperation and for your attendance this morning. Please identify --

Good morning and thank you, Chairman Kenney. I do appreciate the kind remarks, and also good morning to the members of the Committee. I trust you have a copy of the written testimony?

Yes.

Would you like me to read that testimony, Councilman?

No. You can just summarize.

I'll just summarize the testimony in general, if you would. Again, first, thank you very 7 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. much for the opportunity to speak before you today to talk a little bit about Philadelphia International Airport, some of the accomplishments that we've been able to achieve, particularly in the area of international air service development and growth over the past decade plus, but also talk a little bit about my new role as the CEO and some of the initiatives that I want to undertake, along with many of the stakeholders that are here in the room, for the same purposes that you've just identified. The Airport is one of the largest economic engines in this region. As I stated when I took the office, I believe that the Airport needs to be an epicenter for economic development activity, for jobs, for growth. But just as importantly, I think it needs to be our nexus, our connection to the globe. We do need to get out beyond the reaches that we currently have reached today, and I think we have some good plans that 8 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. we're going to be pursuing in the future hopefully that will enable us to do that. Just from the testimony, again, since 1997, we've been able to double our international traffic, going from two million passengers a year to four million passengers a year in 2009, added 9 additional international destinations in 10 that timeframe. Most notably, the banner 11 marked year was in 2003, which was the 12 opening of our new international 13 terminal, Terminal A-West, which added 13 14 gates to our existing complement of 15 international gates, bringing our total 16 to 21. At the end of that year, we 17 recognized that we added 11 new 18 destinations in Europe, one in the Middle 19 East since then. 20 Today, Philadelphia 21 International Airport offers 60 daily and seasonal non-stop flights to 18 cities in Europe, 12 destinations in the Caribbean, three cities in Canada, one city in the Middle East. And while that sounds 9 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. S. Airways for what they've been doing for the City of Philadelphia over these past number of years, if it were not for their ventures into other parts of the world and the backing of the building of new international facilities at the Airport, I don't think we would be where we are today. And they do operate roughly 75 percent of the international flights that arrive into the Airport. S. Airways, I also believe that strength comes from diversity, and what I've been saying is, I believe we need to diversify our air service portfolio. S. S. S. 10 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. Airways, and looking for ways and opportunities to grow what we currently have today. But I cannot do it in a vacuum. I need to do it together with our business community, with our tourism agencies in the area and with yourselves, because going after new international service cannot be done haphazardly. There needs to be a lot of research that goes into identifying what city pairs would make the most sense to launch service or attempt to launch service or attract service into the Philadelphia market. There are limited resources, both on our side as well as on the airlines' side. We need to be able to put together very strong business cases in order to approach either another city and/or another airline to potentially offer this service. So, again, while I think we've done a fairly good job, there remains a lot of work in front of us. The good 11 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. thing is, I believe that we're up to the task. We do need to make some improvements moving forward at the Airport. S. Airways and the service -- the additional service announcement that they made, three cities in particular - Tel Aviv, Oslo and Birmingham - that put us into a situation where a number of airplanes were hardstand in a remote park every single day. So we did fill up all gates 15 plus.

16 We used our mobile lounges or 17 passenger transfer vehicles last year to 18 convey passengers back and forth. A 19 total of almost 50,000 passengers went 20 back and forth between remotely parked 21 airplanes and the terminal facility. That's not the type of environment that we want to have for certainly visitors that are coming from abroad or the folks that are actually flying in and out of 12 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. Philadelphia on a regular basis, particularly those that would be the core that a new airline would look to serve here and that's within the business community. They want to make sure that if they're going to start service to a new city, that there's going to be folks dedicated to filling those seats on a regular basis. S. S. Airways international traffic is connecting traffic. That's what bolsters that service to be able to fly to and from Philadelphia. S. Airways, as a member of an airline alliance group, and particularly the Star Alliance, that there are opportunities there to be had going forth in the future to get us into other parts of the globe 13 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. that we currently do not serve, at least not on a non-stop basis. We have great access into Western Europe. We have great access into the Caribbean. We have access into Canada. We have now a direct service, albeit not non-stop, to South America and to Rio de Janeiro, but if you take a look at the globe, obviously we're not hitting the continents Asia, Africa, further into South America, off into India as well. S. Airways and other Star Alliance members, but if that's not attractive to them, my initiatives will not stop there. They will continue on to work with the business community to find how to make that happen. I do want to also touch upon in the resolution we -- specifically, the one in reference to amenities for 14 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. international travelers. Again, I think that the addition of our new international terminal in 2003 received a lot of acclaimed attention in terms of taking us into the 21st century with respect to an international facility that was designed to operate and feel like an international facility with first-class amenities in that facility. We do have staff members on board, as you mentioned, Chairman, that speak a total of 13 different foreign languages. We have 14 over 750 white courtesy telephones 15 throughout the Airport to be able to 16 connect our travelers with operators that 17 speak French, German and Spanish. We 18 also have access to a language hotline 19 through our Airport Communications Center 20 to over 100 additional languages. 21 With respect to the kiosks that 22 were referenced in Chicago, I would like 23 to say I think in terms of Philadelphia International being on the cutting edge, our Visitor Information Center kiosks 15 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. that are located in each one of our baggage claims that currently have touch-screen capability that were put in in 2005 were state of the art at that point in time, and I think we were one of the first airports to actually put them in. Admittedly, some other airports like Chicago have put in subsequent versions with upgraded software, now have the ability to offer those same type services and more in multiple languages, up to eight different languages. For Philadelphia, we can say today that, and also in speaking with Chicago, the provider that installed those devices in Chicago just happens to be the same provider for Philadelphia International Airport. We are reaching the end of our negotiation process with that provider. We are going through the contract extension, and through our negotiation, we were able to get from them a commitment that they will provide those upgrades to Philadelphia at no cost 16 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. to us.

We're talking, between the upgrades to the touch screen as well as to additional cell phone and laptop charging stations free for our passengers coming through the facility, we're talking almost a couple hundred thousand dollars worth of investment at no cost to us. At this time, I can say the timing for those improvements should occur prior to the summer season. But they're just another example of the things that we're working on to try to make the experience of coming through Philadelphia International Airport a much better experience. In terms of getting the messages out to our passengers about welcoming them to Philadelphia, being proud of our city, I've been meeting with the folks from the Pennsylvania Convention and Visitors Bureau, from GPTMC, from the Independence Visitors Center and others, the Chamber of 17 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. Commerce, in my new role to be an ambassador for the City and for the Airport to use the Airport essentially as a mouthpiece to announce ourselves to the world that we welcome visitors into our city and give them first-class amenities when they're coming through that. We've been playing welcome messages and advertisements from those agencies in our terminal building on our CNN monitors and soon on our flight display monitors, and I think as we continue on, we'll be looking for video messages, welcome messages, from the Mayor specifically tailored to be played at the Airport as well.

Will the Mayor be speaking any foreign languages?

I haven't asked if he'll be speaking, Chairman, foreign languages. I'm going to stick with English for the time being. I would say that with respect to air service development -- and then 18 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. I'll wrap up, Chairman -- there was an announcement. Some of the strategies that I've been talking to our staff, our air service development consultants and others in order to get Philadelphia into other parts of the world that we currently don't provide directly but at least to be able to get there without too much difficulty, U.S. Airways announced just a few days ago a new co-chair agreement with Brussels Airlines, and they're going to be using that co-chair agreement specifically to fly passengers to Philadelphia, potentially to Brussels, but then they will connect with Brussels Airlines and fly into other parts of the world that we currently don't get to directly, specifically places in Africa and off into the Middle East and Asia, but it will look like you're flying on U.S. Airways completely through as part of a co-chair agreement. It's a step in the right direction, I believe. I think some of the tests to be able to attract 19 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. new service if we were going to go, let's say, Tokyo-Philadelphia in the future is to be able to show that there is traffic and demand, and this is one of the ways to actually get there. They just announced that service. Pending DOT approval, they hope to be able to be off and running with that service by the summer as well. But, again, these things do take time. They do need to occur in some logical sequence. We do need to be able to match the resources that we have available at the Airport; i.e., gates for parking airplanes, ticketing counters, baggage claim areas, in order to make sure that the entire package works for somebody to come into the facility.

If you could add five cities over the next two years, what would be the five cities you'd choose? I mean, all things being equal and just your general desire, without any caveats, just what would be 20 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. the five cities you'd want to add.

I think I've been a little reluctant to identify specific cities and I've been focusing on strategy and asset management right now, but if I had my druthers, places that I would like to see -- certainly one of the painful things that happened within recent months is that U.S. Airways released the authority to fly Philadelphia-Beijing at the end of last year due to the economic recession and the difficulties there. I certainly would love to get us into Beijing. I would also love to be able to get us into Tokyo. There are a couple of other hot spots that when you look around very large cities, that whether it's Newark or Dulles, some of our direct competitors, further down into South America, into Buenos Aires, potentially into Lima, also into portions of Africa and South Africa into Johannesburg and some other locations in Africa as well. 21 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. So around the globe, Tokyo, Moscow, certainly Beijing. Dubai is a very hot spot right now with respect to economic activity that several airports are serving directly as well.

The further away the city is, are there strategic issues or operational issues relative to the size of the plane and the number of people that they need to be booked on that plane in order to make that route profitable for any city?

The route profitability has many factors to it. Obviously I think, again, one of the key stakeholders at a table to talk to a new airline or to prove to an airline like U.S. Airways that you could fly that route directly, obviously if we have businesses that are located in Philadelphia, whether they be pharmaceutical businesses, life science businesses, educational and the like, to get a commitment from them that they'll 22 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. actually -- instead of going up to JFK or Newark or going to Dulles, that they'll put seats in those aircraft. Certainly the length of the stage of the flight and what's in the individual airline's fleet mix is a challenge, and that's partly one of the issues that came into play with U.S. Airways into Beijing. They could potentially get there with something in their fleet mix today, but it would have been pushing the outer limits and they may have had to take some penalties; i.e., take some folks off the airplane and put more fuel on the airplane in order to stretch it out there. We have a lot of strengths that have to play into our decision. That's why I said about strategy moving forward, talking to the business community, their corporations, corporate members, where would they like to see us serve, where would they be willing to back us, ethnicity and demographics of our own 23 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. area, folks that would get on airplanes and go to some of these locations, and tourism, what are great hot spots for tourism. If you're talking about going up to Vancouver or you would like to go to Tokyo, there's a lot that goes into the mix, and because we have limited resources right now at the Airport, I think we need to be very careful as we move forward and concentrate on what the best moves will be for the City and for the region. At the same time, I will be looking for ways to expand our international capability at the Airport to attract additional airlines so that when they come to Philadelphia -- and I do want them to come to Philadelphia -- that they will be at a contact gate, they'll be at the terminal building, they won't have to park remotely and be bussed into the terminals.

Are there 24 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. contractual issues that are obstacles to the use of the international terminal by other carriers other than U.S. Air?

Our international gates right now are all done on a common-use basis, meaning no one can lay claim to any of those gates. Even if the gates went to the other version of an arrangement that we have with the airlines, what we call preferential use, that airline can use it preferentially as long as the traffic is coming in, as long as they can show that they're using the gate X number of times per day according to formulas that we have spelled out on our use and lease agreements with those carriers. When they don't or when they cannot meet those formula tests, then the gate would revert back to us in international in a common-use fashion. But for today, all our international gates that we have are being operated on a common-use basis.

Councilman 25 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. Jones.

Thank you, Mr. Chairman. And as Chair of Transportation and Public Utilities, I see a couple of our members on that Committee here. We have a keen interest in what you're doing, and thank you for holding these hearings. A couple of quick questions that come to mind. How has generally the economy impacted, upwards or downwards, our viability as an airport?

Great question, Councilman. Thank you. The end of 2009, we've completed the year about 3.7 percent down in total passenger traffic. We're sliding back. Last year at 31.8 million. We ended 2009 at 30.7 million passengers. So the economy has certainly worked against us in terms of drawing down some of our passenger traffic. At the same time, it's drawing down our aircraft operational traffic. 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc.

So until that time we had been trending up?

The last two years we've been trending downwards as part of the recession. The good news at least from this past year was that we realized an increase in international traffic. It was up two and a half percent. Now, some of that is due to the fact that U.S. Airways added three new cities this past summer, as I said, Oslo, Birmingham and Tel Aviv. Tel Aviv and Oslo did quite well, and U.S. Airways has retained those routes. Birmingham, which was a new city for them this past summer, did not perform as well. They opted to drop Birmingham at the end of the summer, along with a few other cities at the end of the summer that were essentially not performing to the level that they needed in order to make a profit on those runs. Globally, the international traffic, particularly in Europe, has been 27 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. down significantly, but all the things that we are looking at, both on the domestic side as well as on the international side, indicate that as we start to rebound from the recession, we should continue to look for growth in those sectors. On our side, Airport side, and the plans that we're working on, we are still forecasting -- this past year we had a little over 30 million passengers, 30.7 million passengers, or about 15.3 million passengers, enplaned at the Airport, roughly half of the total number of passengers that enplaned at the Airport. We're looking for those enplanements by the year 2020 to grow to million passengers enplaned out of 20 Philadelphia. And then as you get closer and you take the outer-lying years, if the forecasts hold true -- and I believe that they will -- we're looking at a total of almost 30 million enplaned passengers leaving out of Philadelphia or 28 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. 60 million passengers coming through our facility, twice what we have today, within the next to years. 5

In analyzing 6 your market, how would you describe, 7 other than transfers coming through the 8 Airport terminal, who is our local 9 market? Where do they come from and why 10 do they use us? 11

The Philadelphia 12 metropolitan area. And what we look at 13 as far as air service, we take into 14 consideration about an hour to an hour 15 and a half's drive time to get to the 16 Airport, which encompasses an 11-county 17 region around the facility. That's what 18 we refer to as our catchment area. 19 The total population in that 20 catchment area is about six to eight million of potential flyers that we've identified. To the north of us, we've always considered Newark Airport a competitor of ours, particularly with international traffic, and to the south 29 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. of us, Baltimore-Washington Airport was a competitor of ours for domestic traffic.

When you say "Newark," you're talking about New York as well?

Not so much JFK, but Newark Airport with direct competition with Philadelphia. Continental Airlines hubs out of Newark. They also run a gateway out of Newark, an international gateway out of Newark. Compared to what we do at Philadelphia with U.S. Airways, that's more of a direct competition. JFK is more of a melting pot. American Airlines and Delta do run out of JFK, but when you go through JFK, you can see a complete mix of foreign-flag carriers that service that airport from all parts of the world.

From your natural marketplace, eight million people, the 11-county catchment area, is there any -- I'm sure there is -- statistical analysis of who is flying 30 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. where and how to enhance that particular service, what's the frequency of those flyers?

Sure. We have statistical data on what our top markets are domestically. Chicago, Orlando, Atlanta end up always being in the top realm of whether we're talking about folks that are connecting through Philadelphia or they're getting on the planes in Philadelphia. They're some of our top markets, and the list is 50 to 100 cities long, but we have all that statistical data.

What about on the international?

International side, the market, the top international market, flying out of Philadelphia is Cancun.

Imagine that.

That's a college town, isn't it?

But we have those 31 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. statistics as well, Councilman, and they're published. We could get those to you. In terms of the demographics of the traveler at Philadelphia International Airport, an airport's strength lies strongly in many cases in its origin/destination traffic, meaning I got on the plane here or I ended my trip here, I live in this area. And for Philadelphia, our origin/destination, or our O&D traffic, is about 60 percent. It's quite strong. As opposed to a location, let's say, Pittsburgh a half a dozen years ago when U.S. Airways operated a very big hub facility at Pittsburgh, their transfer traffic was 80 percent and their origin/destination traffic was down around 20 percent. So when U.S. Airways pulled the plug on the hub operation there, they lost all their traffic and Pittsburgh Airport became almost a ghost town with that respect. In Philadelphia, we don't 32 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. believe that we have the same vulnerability. Certainly we'd like to see it bolstered even further than what it is today, and we look at it quite closely, particularly in the age where airline bankruptcies become quite common. In an economic recession, that's even more of a vulnerability, but we continue to look at it. The other demographic that we look at in terms of the strength of our O&D market is the split between business and leisure traffic. Historically, the traffic in Philadelphia is about 65 percent business traffic, 35 percent leisure traffic. Now, over the past 18 months to 24 months, that business traffic has dropped off significantly. That's where we believe when you take a look at the losses that we've incurred passenger-wise, it's because the business traveler had stopped flying for a while. Businesses were withholding travel for a lot of their corporate employees. 33 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. We're starting to see some of that come back. We're talking to the airlines. They're starting to see what they call their premium passengers, the higher yield, pay the higher fares, last-minute fares, the book-up in First Class. That's where airlines tend to make their money a lot of the time. We're seeing a lot more of that starting to rebound, and that's why we feel confident that we're going to continue to see a surge as we come out of the economic recession. This is really an interesting time for Philadelphia being located between Washington and New York and coming out of the economic recession. I think that with some of the things that we're doing, we're well poised to strike and do good things.

I want to ask a couple of bullet questions so my colleague can get in, but very quickly, these improvements that you're talking 34 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. about under your fee structure, who pays for them?

Which improvements, Councilman?

If we're talking about increasing kiosks that are -- does the airline pay? Does the City pay? How does that work?

Well, in this case, in terms of the contract extension for a vendor that we have that provides the advertising at the Airport, that remits revenues to the Airport and because of the recession, instead of putting it back out to bid again, we signed two one-year extension deals with them to continue on until the economy improves so that we can put it back on the streets so we can match what we believe will be a better deal coming forward in terms of revenue.

And how much revenue does that --

The net revenue to the Airport on an annual basis is -- 35 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. well, last year I think it was about 3.5 million that comes into -- I should say that the Airport is operated totally, totally with dollars that are generated at the Airport. There are no taxpayer dollars that are infused in the Airport. We're not part of the General Fund. We operate the Airport on funds that are generated at the Airport. And so split between what we refer to as airline revenues, what the airlines pay for landing fees, for renting space at the Airport, and non-airline revenues, parking revenues from the garages, concession revenues from the food and beverage and retail shops throughout the Airport, advertising, things that we're talking about right now, all of those revenues are what drive the budget at the Airport, and in hard times, when the airlines were losing money, just as the City was going about its budget woes last year, the Airport was going around its own budget woes with the airlines, 36 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. because they were losing money significantly and they were looking for the Airport to cut costs due to revenue projection shortfalls. That's pretty much what we operate at.

It's not me. He answers long, I'm just saying.

I didn't say anything.

Two quick questions and I'll pass the mike. How are we doing on diversity and participation, both on the contract side and on the concession side? And I want to commend you again on your greening and recycling efforts. I believe out of all of our departments, you may have been on the cutting edge of that in a cost-containment component, but also doing what's right for the environment. So I want to say that. I remember that as a very, very fresh freshman that that was probably the gold standard of departments, and I want to give you your, 37 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. on the record, accolades.

Thank you, Councilman. One of my deputies is in the audience, Calvin Davenger, who spearheads our Planning and Environmental Stewardship Program and has done a lot of great things at the Airport and continues to do great things at the Airport on the environment side, and I do thank you. Our Acting Director for Compliance is also with me today, Caleb Gaines, who has the specific diversity numbers. I'll give you the general numbers, but if you take our DBE average between professional services and public works and add in concessions, our average is at roughly 32 percent right now. It's a little higher on the one side and about 27 percent -- 38 percent on one side, 27 percent right on the other side. I think we're right at about 32 percent. Is that right, Caleb?

He has no 25 credibility. I know him from -- 38 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc.

He's got the numbers better in his head than I do.

I know him from way back. He used to work for me, so I know -- no. He is absolutely great. Thank you, Mr. Chairman.

You're welcome. Councilman Greenlee.

Thank you, Mr. Chairman. Good morning, gentlemen. Thank you for all the work you do at the Airport. Just one follow-up on one of the questions Councilman Jones had. You mentioned that 65/35 split. Was that international or is that all travelers?

That's all travelers.

Have you ever done any study of the international?

I don't believe that we have, Councilman, but I think that something in talking to our air service 39 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. development folks as we get into identifying which particular markets would be beneficial for us to fly in, that's certainly information in the demographics that we need to look at.

The Chairman asked a question about the contractual agreement of U.S. Air as far as the gates go, and I know you said you're working with U.S. Air and it's a cooperative effort, but is there any contractual limits at all with U.S. Air that you would see as something you have to deal with or any hindrance at all in your long-range plans to expand more travel places?

I would say this: In 2006, the Airport came to the end of a 32-year use and lease agreement, a use and lease agreement with the Airport that was signed back in 1974, that allowed the airlines exclusive rights to the gates that they operated on, and that was done, in large part, to get a commitment from 40 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. them for capital improvement at the Airport going forth; i.e., back bonds off into the future. We're currently in a four-year agreement, and exclusive rights as part of that agreement to any airline were removed. So the airlines either have to operate on a common use, if it's sporadic activity, you want to use the gate, you file with us, and as long as the gate is available for that timeframe, you can use it, and there are certain charges for that. An airline like U.S. Airways or Southwest or United or American, they all operate under what we refer to as preferential use, meaning if United has five gates and our average number of turns -- an average turn for that gate is four or five times per day, United has 22 flights a day, they have to use it an 23 average of five times per day. When it 24 drops below that average, they start to 25 have to do some things at that point in 41 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. time. They either need to bring the average back up in a given period of time or they have to give the gate back to us. It's a way that we have better control of our facility moving forth in the future, and that's quite common in our industry the way they're set up right now.

So you have pretty good control of what goes on.

And on the international side, for the most part, as I said, it's pretty much all common use in that arena.

Is there any other airports -- I know you talked about the ones that are sort of your competitors, if you will, but I'm sure you study the airports all over the place in the United States. Are there any airports you can use as an example that had been able to expand that international travel comparable to what you're looking at or what you'd like to do? 42 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc.

I think the expansion question again goes to two individual elements. One, does the Airport have the assets capable to offer either to an existing airline like a U.S. Airways or a new entry carrier to come in and operate at the level that we want to operate and service offerings that they want to operate. We just relocated -- this past January, Delta and Northwest Airlines merged. We moved the Delta operation that was located in Terminal A-East on international capable gates out of A-East and into Terminal E. That freed up three gates now that can be used for international traffic. We have a couple other moves that we're looking at like that in order to put more international-capable gates in our asset bank that we can use in order to market ourselves going forth in the future. Obviously the other piece is work that I need to be doing with the 43 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. business community and with the marketing and tourism groups to identify those locations that will be good service routes for Philadelphia to go forth in the future. Airports that have done a great job in terms of growing international side, obviously Atlanta is the busiest airport in the world. We're sitting at 30 million passengers total annually right now. Atlanta is at 90 million passengers total. They far outpace the rest of the industry. But airports that are hotbeds for not only business but for tourism, some of the ones I mentioned before that are going through expansion plans, LAX, Chicago is in the midst of an $8 billion expansion program, Miami and others are also in the midst of expansion programs, just to be able to do some of the things that we're talking about, and that's exactly where Philadelphia is headed in terms of our expansion plans. 44 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc.

One last, if I could. You say in your statement about you currently offer 60 daily and seasonal non-stop flights. Do you have what you would call a reasonable target of how much you would like to improve that over a given amount of time, roughly?

I think the flights that we have today -- as I said, we have great reach into Western Europe and great reach into the Caribbean, a little bit into Canada. When U.S. Airways announced service to Rio de Janeiro, it's direct service, one stop. It stops in Charlotte and continues on down. The passengers don't have to get off the airplane until they come back. Then they have to get off the airplane in Charlotte and go through customs. Then they get back on the plane and come back. So, again, we're able to get people to certain parts of the world, but not in the fashion that I'd like to. 45 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. Going forth in the future, I would love for us to be able to pick up some additional cities, Star Alliance members with U.S. Airways, and then maybe some non-Alliance members from foreign-flag carriers. Five years out from now, if we had another five to ten cities that we served around the globe, I think that that is a good target, but, more importantly, I think as part of what we're trying to do with our world-class image, working with members from the Economy League, with PCVB, with the Chamber, I think that we need to penetrate markets directly into continents that we currently don't serve directly and get Philadelphia non-stop service, whether it's into Johannesburg or over to the Pacific Rim in Tokyo. That's what I think is going to put Philadelphia on the global map and start to raise our attention around the world.

Thank 46 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. you. Good luck. Thank you.

Councilman Jones, you have a follow-up?

Yes. Very briefly, and I admit I'm a democrat and sometimes we like to tax and we definitely like to spend, but in our financial condition as a municipality, we are checking in the cushions of sofas to find coins to add to our treasury. Former mayoral candidate, Congressman Chaka Fattah, had an interesting proposal about a toll road in or out of the Airport, one time, and probably as people have dropped off. Has there ever been any thought given to that as a possible revenue source to the City of Philadelphia?

To sell the Airport?

No. I don't want to sell the Airport. That was his --

For tolling? 47 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc.

Yeah, for a road, a one-time access or departing auto gate that might get us -- if you're talking about 38 million people that drop off there, that's $38 million new revenue, minus whatever the cost to actually implement it. That's a couple of quarters in the couch.

Some airports are using access tolling as ways to generate revenues. Some municipalities or governing entities are also looking at those. The issue with respect to raising revenue at the Airport, Councilman, whether it be through a landing fee, through a space rental or through our concessions or parking, is, there's a federal law on the books that says any airport -- or any revenue that is generated at the Airport from activities happening at the Airport is revenue that must stay at the Airport. It's not permitted to be diverted 48 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. anywhere else.

That's why I said the road leading to the Airport.

The road leading to the Airport, if an agreement was made, if we owned the roads coming into the Airport; i.e., the City owned the roads, then that's possible that the City could look into doing those things as a revenue source, but given that the access ramps right off of I-95 belong to PennDOT, I'm not sure if that necessarily would fly.

Okay.

No pun intended. I'm sorry.

I got it.

Just one last question relative to regional demographics, which you had mentioned in your testimony earlier was one of the factors in determining what would be a viable route. It would seem to me a natural viable nation for this region would be India. I mean, Philadelphia 49 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. alone has a substantial Indian population. I know the region does, and I know there's a large number of business interests in the region. Is that a problematic country as far as trying to establish either Mumbai or another --

No. I think that places in India are certainly opportune markets. We need to, again, make sure that we do our homework. When we start talking about India and Saudi Arabia area, again, Dubai, Riyadh, Jeddah, all those locations become potential targets for going after to get the direct service, whether we're getting the service into Pakistan. We are continuing to look at India. Again, if not directly with a carrier, can we get there at least in the beginning indirectly through an alliance with U.S. Airways or somebody else.

Thank you very much for your testimony. Just one 50 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. final comment. I recently finished a book by Robert Caro called The Power Broker, which is a pretty famous piece of writing, and I didn't realize until I read it that at the end of World War II, Philadelphia had the deal cut for the United Nations, and Rockefeller and some other folks with Moses drug it back. And I keep on thinking to myself what a different city this would have been if we had kept the United Nations and moved on with that as a major element of our city's culture. Just a would-have, should-have, could-have moment.

Yes, sir.

We wouldn't be having this discussion today, I wouldn't think.

Hopefully we'll be able to produce great things, Chairman.

Thank you very much. Thanks for coming.

Thank you.

We're going 51 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. to allow Mr. Sakiewicz to come up with Nancy Gilboy. Nick has to, it's a shame, he's got to get to Paris sometime this morning. Nancy, you can come up with him, if you'd like. You were scheduled with Nick on this panel, so I figured I would call you up also. (Witnesses approached witness table.)

Please identify yourself for the record.

Nick Sakiewicz, CEO and Operating Partner of the Philadelphia Union.

Please proceed. Do you have written testimony or are you going to just give us some verbal testimony?

Both. Whatever you'd like, Councilman.

Okay.

I just wanted to come here and support the effort. 52 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. Obviously the Philadelphia Union plays the world's game, and international travel is vital to our business and many of our colleagues around the globe. Ironically, I'm scheduled to leave tonight for Paris and have to leave out of Newark Airport and pay a lot of money to go there because of the scheduling and the seating availability wasn't here. Our team travels overseas. They're currently in Mexico, and it was an interesting comment about Cancun. They're training for two weeks in Guadalajara, had to connect through Dallas. So we as a business have many needs from an international travel standpoint, but, conversely, in terms of marketing Philadelphia and being a centerpiece of international football here in Philadelphia, we're going to be bringing many fans and teams here over the years. Last year in the summer, we brought the Gold Cup Tournament here that 53 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. featured teams from Panama and Honduras that traveled here to Philadelphia. This summer we have three international games scheduled from Great Britain and Spain, and each year we'll be doing more and more of that. And also my comment about international business, in this economy the field has changed. The playing field has changed dramatically for not only our business, but many businesses that do business internationally. Greater access to international travel would be key to not only us, but all of those companies that do business internationally to be able to access Philadelphia and also to help sell Philadelphia as an international destination. I'll say that many of our colleagues in Western Europe and Asia and South America, counterparts, find it a lot easier to travel into New York and get to Philadelphia versus coming here directly, and that's just been my 54 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. experience in the last couple of years. So we would love to see expanded international travel in and out of Philadelphia.

One of my favorite sporting events is going to start again, I guess, in June. I think it's one of the best events every four years, I guess it is, that we see. I happened to be in Italy during the last World Cup when the United States lost that we were in Rome and it was like when they won, it was crazy. It was craziness. But I'm wondering -- I know the answer to the question, but I need you to maybe elaborate on it. What does that do to our inability to be an attractive city in the event that the effort is made to bring it to the United States?

Well, it's huge. We're competing with a number of other countries for the World Cup. South Africa again, the second World Cup in a 55 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. row where more Americans have bought tickets to that World Cup than any other country on the planet, which means the sport in this country is just becoming more and more important. And in our -- we're not only competing with other nations for the 2018 and 2022 World Cup, but we're also competing with other cities. We made the short list of 11 cities, but that will get cut down to 12. 12 And we're competing against markets like 13 New York and Baltimore and Washington, DC 14 and other big cities that have major 15 international travel to them. So 16 enhancing our international travel would 17 greatly benefit the World Cup bid. 18

Thank you. Thank you very much for your testimony. You're free to get going and get where you got to be.

Thank you, Councilman.

But thanks for coming in, and good luck this year. 56 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. We're looking forward to a lot of fun. Are you going to play your first few games at the Linc?

We're going to play our first two games at the Linc and then open up the stadium in Chester on June 27th.

Very exciting. Thank you.

Very exciting. We're also bringing U.S. against Turkey for their final send-off game.

I will be there. Thank you very much.

That will be exciting. Thank you.

Please identify yourself for the record.

I'm Nancy Gilboy.

Pull the microphone a little closer.

Nancy Gilboy, 57 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. President of IVC Philadelphia.

Please proceed.

Thank you so much for inviting me to present today. S. government's highest exchange program. Our visitors are not tourists. They are members of city council, they are members of Parliament, they are economists and judges and people from all over the world who have come here to gain a better understanding of the United States and form their own opinion of us. Our work is known as citizen diplomacy, and it's now considered an important part of homeland security. We're also a private-sector partner for the City of Philadelphia, and we administer the Sister Cities Program, which links us with ten cities in nine 58 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. countries. And every year I meet people from more than 100 countries, and because of that, this is very personal to me and to the people involved with IVC, that these are not statistics. People going through the Airport are not statistics. They are people who will be forming their opinion of the United States and of Philadelphia based on what they see there. I'd like to say I've traveled a lot and I can say that our airport is among the world's best, and it is very, very impressive. And I was reminded of this just last week where I had to spend eight hours in Terminal A as I waited for my flight to take me to a warm island. So I explored every restaurant, every shop, everything that was there, and it was very, very impressive, especially the artwork. I don't think any city has anything like ours. It really sets us apart. But I'd like to talk also about 59 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. the importance of languages or the absence of languages. And years ago, 4 my first trip to China, and my husband 5 and I were traveling with a Chinese 6 family and we wanted to get away by 7 ourselves, so we jumped out of a taxi in 8 Shanghai and we just wanted to get lost, 9 and after about 20 minutes, we realized 10 that we really were lost. There was 11 absolutely nothing in English anywhere, and it was probably the most frightening experience that we've had. And as time went on, we just got more and more alarmed, and then we saw two words, two magic words, that changed for us, gave us comfort level, and that was "food court," and we immediately rushed in, going to buy lunch and spend money there, but there was nothing else in English. So we finally left, got back to the hotel. We realized that had there been something in English, we would have spent money. It really would have made a big, big difference for us. 60 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. So when I got back, I started working on a project of making Philadelphia the easiest city in the United States for non-English speakers and limited English speakers to visit, live and work. This impacts tourists. It impacts businesses. It impacts our immigrants. So there are two areas I'd like to address and two recommendations that I'd like to make. The first area is business and language, and when Rendell was the Mayor, he wasn't that interested in things international. He was focused on the City. But almost as soon as he became Governor, he quickly tripled the budget for international for the state, and he must have seen that there is a big economic advantage to that. And he's cut it a bit because of the economy, but he hasn't cut it as much as other states. Some states have just wiped it out all together. However, last year, according 61 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. to Dun & Bradstreet, Philadelphia had 825 foreign-owned companies employing 20,392 people. In the five counties, there were almost 2,700 foreign-owned companies employing 92,000 people. And in all of Pennsylvania, there are 6,600 foreign companies employing 246,000 people. And Tom Morr, when he speaks later, can tell you more about this. But we need to remember that foreign companies not only hire American workers, they send their own people here and their families.

So when they arrive, that first impression of Philadelphia is going to be our airport. So the more international signage and things that are there, I think will really create a positive impression. These people invest millions of dollars in our economy, the Philadelphia economy, and they really have earned the right to feel welcomed and comfortable by seeing their own language. Area number two are 62 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. international students, and I've left some information with Sarah about this, but international students at our universities and colleges is a huge, huge part of our economy, and it's one segment that is usually overlooked. S. economy. 6 billion. 15 So Pennsylvania's slice of this pie is 16 820 million, and that includes students 17 at schools in Pittsburgh and across the 18 state, most of whom flew into the 19 Philadelphia Airport to get to their 20 school. So the economic impact on 21 Philadelphia County alone was 313 million. And in areas represented by the congressional reps - Brady, Fattah, Gerlach, Sestak, Murphy and Schwartz - it was $380 million, with 11,609 students 63 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. studying here. Now, students have to pass a TOEFL exam to be able to come here, and that's a test of English as a foreign language, but their families don't and the families come to visit them. These are people who really do need international signage for them, not just pictograms, but to feel comfortable here, they want to have things in their language. So as the front door to Philadelphia, our airport really sets the stage as to whether it's going to be a positive experience or not, and generally it is a most positive experience. So my two recommendations. Recommendation number one, create the most user-friendly airport in the world. We're already almost there, but we just have to go up a little bit more. And how do we do this? By having foreign language signage in every terminal, even the domestic ones, and by having multi-lingual staff a priority for all 64 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. terminals. When I'm in airports around the world, I see that languages available are largely based on the country to which they're going or coming from. What needs to be considered is that people arriving on domestic flights may not speak English. For example, IVC's State Department visitors visit five cities, and every year we have hundreds and hundreds of people who are flying from Philadelphia who don't speak English, from Philadelphia to Cincinnati, Kansas City, Little Rock, et cetera. They do travel with a State Department interpreter and escort, but if they didn't have them, it would be pretty much a frightening experience. Recommendation number two, provide Internet cafes and foreign language signage in shops and restaurants. And over the years, I've been asking my State Department visitors what is it that would make this a more 65 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. user-friendly city, and I have literally thousands of these surveys. And it's in English, so that sort of skews the results, but they do fill it out also with their interpreters. And I'm hearing over and over and over again the main thing that they want are Internet cafes, and I don't think -- Philadelphia has a dearth of them. It's not just the Airport, but you just can't find them really in Philadelphia unless you go over to 17th and Walnut. So in addition to that, last week I asked a Chinese student at Penn's Law School what he thought would be important for him and other students at the Airport. So he started asking others, and what he sent me was this. He wrote that we should provide signs and directions in major international languages, provide audio announcements in major international languages, train existing staff in major international languages or hire new staff of targeted 66 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc.

international languages, and provide more offerings of international cuisine by food vendors. And he also went on to say that quite a few people have indicated they would like to see direct flights between Philadelphia and major Chinese cities. S. city and the foreign city following the establishment of direct flights. So Philadelphia Airport really is our front door for businesses, students, immigrants, tourists and residents. It's already among the best in the world, but let's raise the bar a little higher and make it the best. And if we really are going to be the hospitality city, let's have the most language-friendly and user-friendly airport in the world for internationals. , build civic pride, bring international recognition to Philadelphia and a 67 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. stronger economy that will exponentially benefit our city and region. Over the last few years, we've had funding from the William Penn Foundation for an international language project, and I'm happy to share the results with you. I'm happy to work with you in the future surveying our visitors, talking to the international graduate students and everything, helping you in any way we can to make this the most international city and the most international airport in the world.

Thank you very much. Councilman Greenlee.

Thank you, Mr. Chairman. Just quickly. Ms. Gilboy, first, as somebody who has been lucky enough to travel a little bit, I share your experience that you said you had in Shanghai, because it is very scary when all the sudden you just have no way to 68 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. communicate and know either directions or where to get food or anything like that. Is the lack of signage in our airport, is that kind of a problem nationwide?

Around the world. Absolutely.

Around the world, too?

Around the world, yeah. We've done research on other cities, and not necessarily the airport but what they have for signage, and no 15 one city is doing it well. So that's an opportunity for us.

So even around the world.

Even around the world. Everybody is relying on pictograms, which are nice, but it's nice if you see it in your language.

Agreed. Okay. Thank you.

Thank you 69 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. very much. Mr. Aichele and Tom Morr, please. (Witnesses approached witness table.)

Good morning. Please identify yourself for the record.

While Steve is doing that, I'll introduce myself. I'm Tom Morr. I am the President and Chief Executive of Select Greater Philadelphia, which is a regional economic development marketing organization that promotes Philadelphia and ten other counties that are in the metropolitan region here in the City.

Good morning.

Good morning, Mr. Chairman. My name is Steve Aichele.

I'm sorry. Please proceed. I'm just trying to get a witness list straightened out. 70 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc.

My name is Steve Aichele and I'm here today on behalf of CEO Council for Growth. The CEO Council for Growth is the governing board of Select Philadelphia. You just heard Tom Morr introduce himself. And it's an affiliate of the Greater Philadelphia Chamber of Commerce. The CEO Council for Growth, which is called CEO Council, is a group of 60-plus CEOs from an 11-county region throughout the area. We bring together top business executives to set and implement an economic development agenda that we hope will create growth and nurture collaboration among the many economic development interests. As you're aware, we're sort of a byzantine group in our region of various economic development councils, and Tom's job is to coordinate all of that and make it a regional effort. We believe that as our regional economy grows, the transportation infrastructure, particularly Philadelphia 71 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. International Airport, lovingly known as PHL, must be improved and expanded in order to compete globally and to meet increased demand all over, from all over. The CEO Council is here today because we recognize the importance of PHL as a key driver in the Greater Philadelphia region and in Greater Philadelphia's economic competitiveness. In fact, PHL currently has a $14 billion economic impact on the region, making it one of the largest economic engines in all of Pennsylvania and even nationally. To that end, we support actions and any facility projects which, over the next ten years, will serve to improve the quality of customer service, increase the availability of non-stop international flights and maximize the contribution of PHL to the quality of life and growth in the region. There's some facts here, which you can read, but the 11-county tri-state greater region is the fourth largest 72 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. population center in the United States. 46 trillion in total economic impact. And this is the one that's really surprising to me: Roughly 60 percent of the populations of both the United States and Canada reside within just over two hours by air from Philadelphia. The population concentration between Boston and Charlotte, an area approximately the size of America's largest state, is actually twice as great as the population state of California. So if you see PHL as a central factor in that economic, Tom calls it, catchment area, then you understand the importance of PHL to the region and to the country, actually. Clearly, we're in one of the most important market areas in the states, and over the last decade alone, we've seen tremendous strides at the Airport and tremendous efforts to upgrade the Airport. Since 2000, the Airport has 73 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. undergone more than $1 billion in capital improvements. As we've all been discussing, we added a new international terminal, new state-of-the-art security screening facilities, and we've added 59 new boarding gates, all of which have helped bring us into the modern era. Today, 28 airlines offer 583 daily departures and more than 54 daily flights to 36 international venues. I should say at this point, Tom and his staff have done a marvelous job of putting together data, facts, literature on any -- on the impact of PHL economically on the region, and we would love to work with you, with your staffs, in any effort Council wants to undertake in terms of bettering PHL. In fact, as you know, Mr. Chairman, I was an elected official for a couple of terms. Most of what we do, you're excruciatingly trying to divide up an existing pie. The good thing about what you're doing here today is, you're trying to grow the pie. It's 74 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. a different kind of problem-solving, and if we look at it that way, there's really no end to what we can accomplish. But in addition -- that was off the record. S.

Airways, a leading network carrier, and we can never lose sight of the fact that they're a major asset to our region and critical to the economic vitality of our city and our state. As we've discussed today, as you can see with your own eyes, we've made tremendous progress and continue to make tremendous progress through Mayor Nutter, Deputy Mayor Rina Cutler and the new PHL management. It's exciting to be on board at this time with the turnover in management. With the newly appointed Chief Executive Officer Mark Gale, we're confident that great things that can happen and are going to happen at the Airport, and we look forward to working 75 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. with Mr. Gale and supporting him in those efforts. There's no doubt getting to where you want to be today, there's no 6 doubt that additional non-stop international flights into and out of PHL will be an important driver in our region's future economic success. As we're all well aware, the Greater Philadelphia region is home to a knowledge-based service economy. It's a leader in healthcare and life sciences, financial services and alternative energy sectors. That's where we're headed, where our future is. If you think about the current mergers in the life sciences among international corporations, you think about the international nature of financial services in the banking industry, you think about names like Gamesa and Helios in terms of the alternative energy, it's clear that improving the quality of service between 76 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. Philadelphia and international destinations will facilitate business and specifically those businesses at which we're going to be good and have an opportunity to grow. So we need to continue to focus on that. Expanding the availability of international destinations as well as carriers will undoubtedly enhance PHL's contribution to our regional prosperity. While increasing international destination is important, that's an important goal, it's also important that we take steps to enhance the customer service for both domestic and international travelers that utilize Philadelphia International. You can look at our testimony. We've done some calling around. We've done some studies of other airports. Atlanta, Hartsfield-Jackson International Airport, which we talked about, 90 million passengers a year. 4 billion terminal that will have 77 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. its own dedicated access from their Interstate 75, easing traffic into the airport, reducing waits at security checkpoints. They have nine new security gates and luggage-handling services. So while we're focused on the international, anything we do at the Airport to increase the access or increase the experience of the traveler will also help our domestic flights, which we can't forget. Chicago -- we've already been through the kiosks at Chicago. I'll skip that. We've talked about the importance of international Sea-Tac International. You can read about having 150 languages available by phone. Those are all important steps to assure that our region makes foreign visitors feel welcome. If we're truly going to compete in the 21st century, Philadelphia International Airport must focus its attention on increasing the number of international destinations. You've heard 78 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. Mr. Gale is trying. But improve service for all travelers who come into the Greater Philadelphia region. Mr. Chairman, for all these reasons, we support actions which will serve to improve access to PHL, improve the quality of customer service once they're there, increase the availability of more non-stop international flights and maximize the contribution of PHL to the quality of life and growth of regional prosperity. Thanks for the opportunity to speak today. Tom Morr, you've heard about his role.

I've told you about what he and his staff have done to contribute a wealth of data, and we'll be happy to answer any questions you have.

Mr. Morr, do you have anything to add?

Thank you, Mr. Chairman. Just a few things. My career in economic development began running a non-profit in 79 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. Washington that did air service development for Washington Dulles International Airport. When we started that organization, Dulles had 47 flights a day. When I left it, it had 600 flights a day. And so I have some experience in helping to attract air service to a community. Now, the times are different and communities are different, but I've learned some things in that effort, and I think we have great assets here. We have grown the domestic service at Philadelphia International of the City, and the Airport has over the years. S. Airways provides, as a, primarily today, a European hub operator, tremendous lift that bring people -- make this a natural European gateway for many, many people. S. communities to be able to support more profitable non-stop flights from Philadelphia. So we benefit from that 80 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. hub operation. S. Airways' Alliance carriers will benefit in reverse. S. Airways announced that Mr. Gale mentioned with Brussels will allow Brussels to offer the on-service to the United States for many cities, not just Philadelphia, and that will grow the international traffic between those two systems. In doing air service development work for Washington, I learned several things. Number one, you have to be very sensitive to the economics of the airline industry, that today many carriers are struggling to survive, and while we want them to expand and grow here, we're going to have to do it in a way that allows them to be profitable with those services so they can continue to provide service. We don't want them to collapse and lose all of what we have from that hub operator. Number two, in looking for new 81 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. routes, we should be looking for routes that can be supported with domestic service, that can be supported by our origination and destination traffic from this region, and that can be successful markets, and that should be a key, that we should not try to get service that isn't going to be successful at the outset, because if it fails, it will actually harm our future growth. Third, one of the things we learned in doing this work in Washington was that this non-profit that I ran was driven by the business community, and that was done for a unique reason. At the time, the FAA owned Dulles International Airports, and they would not market those airports because they owned them, yet they regulated other airports. So the business leadership in Washington said, We're going to do this, and we developed a collaborative relationship with the airports to make that happen. 82 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. What we learned was that the airlines were always happy to talk to customers, and so when we brought business leaders to meet with airline executives, that gave us a priority, if you will, in consideration, because we were taking customers to tell the airlines they needed their service, and that was impactful. I think in terms of approach, that we need to continue to grow the domestic service, and Southwest's announcement a week or two ago about additional flights here is an example of increasing the base of traffic that can support international flights. S. Airways' system with them, try to figure out the potential for additional feed for new markets from throughout their domestic system, and that will help us identify international markets to pursue. We need to do the same thing with their Star Alliance partners so that we can analyze and use 83 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. data. The obvious voids that we have here, probably the largest are cities in Asia. The second largest would be South America, the Middle East and then ultimately Africa. We will want to reach out to international flight carriers to grow this market. I agree with what Mr.

Gale said about diversity, that we don't want to be dependent only on one carrier, and the key to that will be identifying the places where we either have enough local traffic or enough potential feed for that traffic that can make it successful for those companies. We can do things to increase the size of our catchment area. For example, if it were possible at some point in the future to bring Amtrak closer to the terminal, Amtrak service could bring passengers from further away to help increase the size of the pool of passengers available here. All of that I think would add to the success of the air 84 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. service development effort. The last thing I'd like to suggest is, I think we need to be smart about how we provide quality service for international travelers. I agree with the notion that we want to be as welcoming and we want to provide as much assistance as we can. I would submit that's important not just at the Airport but it's important throughout our community, that there are many places where we need to be providing foreign language capability. But I think we need to also think about new ways to do it. For example, I was at the Art Museum, Philadelphia Art Museum, for an exhibit not long ago, and as I approached the exhibit, I realized that it was instructing me to dial a number on my cell phone, and I got an explanation of what the exhibit was about. Well, there's no reason that kind of technology couldn't be available in multiple languages to answer questions for people 85 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. at the Airport. So we could each use our cell phones to get the service that we need directly in our hands wherever we are. And I think one of the reasons you see airlines going to -- or airports going to international symbols is that there are so many international travelers today that if you provided foreign language signage for each of them, it would be a jumble of information. People would have a difficult time finding the information they need. So they tend to use internationally accepted symbols, but I think we ought to look at using new technologies, like kiosks, like cell phones in multiple -- with language capability in multiple languages to provide a quality service that is welcoming, but is also personally available to people wherever they happen to be. I think we need to be creative about that. With that, I'll stop. Thank 86 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. you.

Thank you very much for your testimony. Any questions? (No response.)

Thank you very much for coming in. We appreciate it.

Thank you for doing this.

Mr. Momjian, please. (Witnesses approached witness table.)

Good morning. Thank you very much your patience. Please identify yourself for the record.

Thank you very much, Mr. Chairman, for having us here representing the diplomatic community. May I introduce the people who are here with me today?

Absolutely. 87 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc.

I'm the Consul Honorary to the Republic of Haiti, but also the President of the Philadelphia Consular Corps. The gentleman to my left is?

Good morning. My name is Michael Scullin and I'm the Vice-President of the Consular Corps Association of Philadelphia and the Honorary Consul of France in Philadelphia.

Good morning.

And the third person is someone that we hooked in as a member of our Consul Corps now. Brazil is now a member of the Consular Corps, and the designated Consul is Paul Johnson. Paul, are you happy to be here?

Yes. Thank you.

Thank you. Good morning.

I'm also as 88 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. Honorary Consul to the Republic of Haiti, there are about 150,000 Haitians living in the Greater Philadelphia area, and may I introduce two of them here, Dr. Michel Francois and Mr. Giordani Jean-Baptiste, which is a good name for Haitians, and they are the members of the Haitian community, President and Vice-President.

Welcome. Thank you.

I think that I start out by telling you that the diplomatic community is something that is so attracted to air travel, because they go back and forth. This is not something where they're driving to Nevada, driving to Chicago. They're going all over the world, and we have countries -- 33 20 countries, and we're trying to get within 21 the next five or ten years maybe 50 22 countries. And the more countries there 23 are in the diplomatic community, the better off we're going to be in terms of promoting what we're trying to do, which 89 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. is promote tourism and trade between the countries. When I became the Consul in 1978 anointed by Baby Doc Duvalier, who now is in France hiding, I was passing out tracks for people in the Philadelphia area to go to Haiti for tourism. That's not the case anymore. Haiti became a poor country, and even now with the catastrophe that occurred by the earthquakes, we have so much air travel going back and forth to Haiti that we don't have enough planes to go there. They can't go there. The airport is not good there. Children's Hospital is sending pediatric surgeons, pediatric nurses. We are sending search dogs down there at the time, and it's going to be two, three, four, five, six, seven, eight, nine, ten years before Haiti is restored to what it could be, and air travel just between that country and the people here is critical. 90 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. The Philadelphia Consular Corps was founded in 1880. It was the first Consular Corps established in the United States. And, again, as I mentioned before, our responsibility as Consul officials is to promote trade and tourism here in Philadelphia, and for people in Philadelphia to be able to go to the foreign countries that have tourism there and to promote trade there as well, too. At the last meeting of the Consular Corps, the Consular Corps took up the two resolutions that you had made, and it was without reservation, that is the greatest thing that we could probably do for the diplomatic community, which probably uses air travel more than anyone else, and we're here to support the resolutions and tell you it's critical for the work that we do. If we didn't have airplanes, we wouldn't know where to go. We couldn't go to China, to Japan, to Russia, to places that we were obligated to go. And we are here. We 91 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. promised to be less than five minutes, and that's it, but I'm going to ask that, Michael, maybe if you want to make a few comments, you're welcome to also.

Okay. Thank you. I just wanted to reiterate that we represent 33 countries, and so we are the connection to our respective communities and our nations. So I think we can be an important resource for you going forward, because we fill that connection. I would have made many of the points that Ms. Nancy Gilboy made about the importance of the business communities and the student communities here and also the importance of foreign language accessibility at the Airport. I think that's very important, but I'll just merely underscore what she said. The -- and I think I'll leave it at that. Thank you.

Thank you very much. 92 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc.

I just wanted to edify some of the earlier comments that were made, and I think, Councilman, you asked a really pertinent question when you asked about India, because I think that for the region, we have to look at where the growth is in the world, and a lot of the big emerging markets, like India, like Brazil, like China, like Russia, like Turkey, like South Africa, are places where we need to find a way to connect the region to those markets and to those places. I would also like to add that travel does not just consist of travel of persons. There's also cargo. There's a brisk business in terms of moving some goods and services to a lot of these markets, which is also something that we need to consider and we need to take into account. And just --

Does cargo shipments leave -- what's the frequency of the cargo shipments out of 93 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. Philadelphia or into Philadelphia by air?

I think that the official at the Airport and the air carriers can probably speak better to that, but just the fact that I think it's important to be mindful that travel, it's not just individuals and persons going on vacations. It's --

Goods.

-- the supply chain. It's the movement of goods and services that is a brisk business as well. I know that BDP, for example, is a Philadelphia company with a large -- with a long history, and they do a lot of business around the world, and having more access and more carriers in the Airport, I think that would be helpful. One more comment that I wanted to make just to bring home the point with respect to Brazil. You might have read in the paper that the chemical business of Sunoco was bought by a Brazilian 94 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. company, and that is illustrative of the trend of emerging market companies buying assets in western markets. So it's not just a company from Philadelphia going into Brazil or going into Haiti or going into Chile or France or what-have-you. The reverse trend is happening, and I think that as you think about trying to grow the region, that's something that you need to consider and think about, too. And travel, cargo, movement of people are the main conduits from which to do that, and us as a diplomatic corps, as Al and as Michael said, we have over 30 dedicated bilateral relationships that are very high level and that can help to facilitate that.

Have you had any formal or informal conversations with the folks at the Airport or any of our airlines, especially U.S. Air? Is there any relationship that --

I don't think so.

Because one 95 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. of the things that occurred to me is that perhaps as our Airport officials are sitting here and at some point in time because of a scheduling conflict, U.S. Air could not be here to testify -- there's an individual who wanted to testify at a certain level and was not able to be here today, so we're going to either do another hearing or have a discussion -- have a meeting and talk about these issues with them. But I was wondering if, Mark Gale, as you're sitting here if there's some way we can kind of plug this Consular Corps into planning or discussions or in some way utilize their --

Anything that you can give us to think about, we'd be happy to do that. We met with Mayor Nutter yesterday. He invited the Consular Corps executive committee to come to a meeting that he gave, and it was very helpful, and he expects us to do things for the City of Philadelphia also. 96 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. By way of just background, my heritage is Armenian and I'm working on the Armenian government to give us a Consul official here, but even if they give us a Consul official in Armenia here, I'm going to stay with the Republic of Haiti. I'm too committed to them, 1978.

Well, at least Baby Doc made one good decision, appointing you. But thank you very much for your testimony. Thank you for your patience.

Thank you. It's a great two resolutions, and there's no 17 way in the world that the diplomatic community wouldn't say everything you can do to enhance the City's Airport and make it a greater international city, which we're all willing to do. We're out really seeking more countries to come here, and I think the greater the Airport will be, the greater the diplomatic community will be. 97 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc.

Well, Mr. Gale was shaking his head, so hopefully you can develop a relationship formally with the Airport.

Thank you so much.

Thank you very much. Fritz Smith and Tanya Hall from the Philadelphia Convention and Visitors Bureau. This should be our last panel. (Witnesses approached witness table.)

First of all, thank you for your patience. We've had a jumble of panels because of other persons' scheduling requirements and issues, so I do appreciate you staying here. We haven't been too bad. I think we started at 10:00. It's 11:30. So we're pretty concise on our testimony. So thanks for coming and please identify yourself for the record.

Thank you, 98 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. Mr. Chairman. I'm Fritz Smith, Vice-President of Tourism for the Philadelphia Convention and Visitors Bureau. And my colleague?

Tanya Hall, Executive Director for the Philadelphia Multi-Cultural Affairs Congress.

Please proceed.

I've been here much longer before, Mr. Chairman, so this one is actually doing good.

Thank you.

I just want to say that on behalf of our President, Tom Muldoon, our incoming President, Jack Ferguson, and our Chairman, Nick DeBenedictis, and our Board of Directors of the Philadelphia Convention and Visitors Bureau, thank you, Chairman Kenney and members of the Committee, for the opportunity to address these issues, these important issues today. As a private non-profit 99 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. membership corporation, the Philadelphia Convention and Visitors Bureau is the official Tourism Promotion Agency for the City of Philadelphia and is also the primary sales and marketing agency for the Pennsylvania Convention Center. The organization has departments dedicated to the multi-cultural, sports and life sciences markets also. And I'll read excerpts from here of the written prepared testimony. A couple of important points. The Convention and Visitors Bureau's efforts to bring meetings to Philadelphia are increasingly taking on an international flavor. Over 40 percent of our meetings in the City are related to the life sciences industry, and these events draw attendees from all over the world, and this segment is growing. These meetings are currently averaging about 30 percent international attendance, and many of these attendees are high-spend delegates, from the 100 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. S. for medical-related meetings, because those held here are considered to be the most important in the world, medical training and medical update and product rollout, so forth. And Philadelphia hosts some of the biggest of these meetings, from rheumatology and nephrology to oncology, are some of the recent meetings we've had here, and the direct air lift that the City features is a crucial component to maximizing the international attendance at these events. Another important function of the Convention and Visitors Bureau is to sell and market the City as a tourism destination for international travelers. Just a couple of quick statistics. In 2009, international visitors spent in Philadelphia from the top ten feeder markets nearly $80 million, and those are just figures from one major credit card company. So the CVB has been 101 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. aggressively marketing the City's tourism assets overseas for over a decade, utilizing a plethora of sales and marketing techniques. We feel that those efforts have been very successful. S. travelers has declined by about nine percent from overseas during a comparable time period. So the cities that -- we've moved from 21st most visited city internationally to the 11th most visited city. 2 million or roughly 400,000 more visitors per year. And if you look at what is kind of the difference in the composition of those visitors, we find that, again, our visitorship sort of mirrors what some of 102 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. the previous speakers said, that it's very Western European focused. It sort of follows the direct air lift that we have. So we think that in terms of missing out on the opportunities and why are we behind some of those other cities, I think it's primarily driven by not as robust numbers from Asia, Latin America, Middle East. So I'd also point out that we feel, along those lines, that our international visitations will be limited if we don't begin to grow our direct air service capacity beyond the current markets of Western Europe and Caribbean. We see great potential in particular to capitalize on the large and growing number of international students from Asia. S. are from India, China and South Korea, and we think that our colleges and universities are well positioned to benefit from this growth. The exposure we get to these 103 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. students and their parents, who tend to stay for weeks at a time, provide spillover benefits to the tourism marketing efforts. S. in the last few years have been India and Brazil.

So I also wanted to take this opportunity to mention a very significant piece of legislation that passed at the federal level last week. It's called the Travel Promotion Act. S. The corporation hopes to visit about -- to raise about $200 million. , it also holds, I think, some challenges for Philadelphia specifically, and that the most -- if that voice is out there marketing the 104 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. United States, there is the potential that some of the most -- the already popular destinations, like New York, Las Vegas, Orlando, Miami, are just going to do that much better and will places like Philadelphia perhaps get overshadowed. So we think that it's important that we step out, that we stay out there very aggressively and maybe even more so.

In your experience, how important are direct flights?

We find that when we go overseas -- in our capacity at the Philadelphia Convention and Visitors Bureau, we go overseas quite a bit and we visit the companies that are generating travel; i.e., tour operators, travel agencies, incentive planners, and that is always either if not at the top of the list, number two in terms of what are the things that your destination must have if it's going to grow as a tourism destination. You got to have the direct 105 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. flight. So back to this corporation, it's a twofold purpose. One is, it's going to market, advertise the United States, but it's also geared towards trying to get the message out about explaining our homeland security procedures, our immigration and custom procedures at the Airport a lot more clearly. And there is a perception out there that the procedures implemented in the post 9/11 period are a deterrent to international visitation to the country as a whole. And so to Nancy Gilboy's point, I think that there's real potential for us to stand out if we can carve out a niche, so to speak, as the most welcoming airport, because I think that that phenomenon of the fear of the increased scrutiny at the entry point, at customs, is probably responsible for much of that nine percent drop to the country as a whole. So the last thing I'd say 106 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. before turning it over --

Is that an immigration and customs issue? It's not the security folks at each individual airport, but it's a federal agency's procedures and --

It's their policies and procedures. I think what we find is that there is pretty significant variety in how those procedures are implemented at the airport level. I mean, I would say that our folks here -- and Mark and his team can speak to this, but my personal observation as somebody who is in and out of these airports a lot around the country is that I think our particular Philadelphia team, from customs and immigration, is probably doing a better job than most and is more sensitive. But to some degree, it's overall federal policies, but I think there's some latitude at the local level.

For example, in the minimal amount of times 107 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. that I've traveled internationally, which has not been all that much, there's always that sense of getting off the plane in a foreign country that I kind of like become extremely polite and yes, ma'am and no, ma'am and yes, sir and no, sir everybody, because you never know what power they have to yank you out of line and put you in a cell somewhere. I mean, it sometimes can be even in some smaller Caribbean countries a little frightening, because you're the American coming in and this person that's probably a relatively low-paid bureaucrat has your kind of week or two weeks in their hand for one reason or another, and it can be a little unsettling. Italy I found was fun. They actually were like --

I agree. It's an intimidating process for anybody, but my observation over the last few years has been that they seem to be more scared on that end of coming into our country than 108 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. the other way around.

Okay.

And I think we have a long way to go as a country to sort of combat that perception. So I think any effort that we make to go above and beyond to be extra welcoming is --

How important is training personnel, whether they're concession people, whether they're baggage people, whether they're ground transportation folks, in various cultural differences of things you do not do or should not do or should do in your interaction with the foreign visitor or tourist? I have a business book called Kiss, Bow or Shake Hands, which is kind of a continuum of who you're meeting with and what you should avoid touching or doing or how you should sit and business card exchange and all that kind of stuff. Is there any type of training that we need for our own folks? 109 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc.

Well, I think it's very much needed. It's a subject we talk about at the Convention and Visitors Bureau a lot, that in particular we'd like to implement some training programs for the hotel employees and the restaurant employees. Obviously the Airport is frequently the first point of entry, but the reality is that many of our international travelers come in other cities. They may enter New York, spend some time there. So it's a broader question than just airport employees. We think that the critical ones are really the cab drivers, the hotels and the restaurants and the tourism attractions. There is no formal training process now. There's been a lot of discussion about the fact that China -- we expect a wave of Chinese visitors to this country in the next coming ten years and --

Why is that? 110 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc.

Well, there are a number of reasons. One, to make a long story short, the two governments, the U.S. and China, have greatly liberalized the restrictions that were on Chinese travelers, particularly as it relates to group tour travel. Most travel from China up until now has been business, corporate or students, but a lot of the tourism restrictions have eased up and so we anticipate a large influx. And there's been a lot of discussion about what do we do to get our hotel and restaurant server employees ready for that, but there is no formal process at this point. I just want to emphasize that we're excited about Mark Gale's elevation to the CEO position at the Airport, and we applaud his vision, think that they're on the right track, but want to be helpful from a community standpoint and keep trying to carve out a niche for Philadelphia Airport as the most 111 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. welcoming and hospitable place for international travelers.

Thank you.

So you saved the best for last. So thank you for having us here today. The Philadelphia Multi-Cultural Affairs Congress, also known as MAC, was founded in 1987 actually as a division of the Convention and Visitors Bureau. We're governed by a Board of ethically diverse people from both the public and private sectors, and to put it simply, our mission is to increase Philadelphia's share of the multi-cultural convention and tourism markets. So we work very closely with our convention sales and tourism sales departments to do that. Our ability to be successful lies in the fact that we maximize opportunities for our residents and businesses by promoting Philadelphia as a destination that encourages both multi-cultural business and social 112 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. responsibility. Our core value is that we believe the varying multi-cultural communities that enhance our city's hospitality and tourism industry should also benefit from its success. 5 billion in multi-cultural meetings business, as well as an increase of more than 600 percent in the hiring of multi-cultural professionals in sales and management positions in Philadelphia's leading hotels. Additionally, we stay committed to our efforts to increase procurement opportunities for multi-cultural businesses, and our work with diverse high school and college students have proved beneficial in producing a top-notch hospitality workforce. That's all the fluff. So why are we here today? We have more opportunities now than ever to have a greater impact. Since the creation of the Bureau's international 113 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. marketing efforts led by my colleague, Fritz Smith, MAC has been a primary proponent for its growth to reach prospective travelers outside of Western Europe. Countries located on the continents of Asia, South America and Africa each possess great market potential for international visitation opportunities to Philadelphia, which everybody has already talked about. As mentioned in Mr. Smith's testimony, we need to seize the opportunity to head off any potential perception of being an unwelcoming destination. We need to make sure that people understand that we are indeed a welcoming one, and this has really been a key strength of MAC since our inception. Our approach has been to work directly with local cultural communities of those who we seek to bring to Philadelphia as visitors. We work with Dominicans to influence Dominicans, Chinese to influence Chinese and Indians to 114 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. influence those from India. This strength is routed in our Board of Directors, which has been described as the most diverse in Philadelphia. With an expanded international marketing effort, the MAC Board is already well positioned to assist with representation from the following cultures: African countries, Caribbean, Chinese, Columbian, Indian, Korean, Japanese, Dominican and Filipino. Our Board members serve as our key partners in community relationships and activities. Additionally, this influential group of business and cultural leaders provide direct access to many key decision-makers both here and abroad. In addition to serving as an extension of our sales and marketing efforts, our Board is our greatest resource and link to Philadelphia's diverse multi-cultural communities. With that being said, MAC has a vested 115 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. interest in continuing to work to bring a greater share of diverse tourists that will benefit our diverse residents and businesses. And I've actually included a list of our Board, as well as an ethnic breakdown in your packets. I do want to address one question, Councilman Kenney, that you had about training, and one of the key areas that we've been able to provide assistance to the hospitality and tourism industry has really been on that cultural and sensitivity training. I can give a recent example.

We hosted the Brihan Maharashtra Mandal, which is a little bit of a tongue twister, called BMM. It was the largest Indian convention group that we've ever hosted in Philadelphia, and we hosted them last summer. I think it was summer of 2009. And what we did was, we actually worked directly with the hotels and the restaurants and the hospitality and tourism industry about educating them about the cultural differences and the 116 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. nuances of the Indian traveler. Some of the people who came to the convention were already living in America, but some of them also were traveling directly from India. So being able to sensitize some of the workers to help them understand that if you ask someone from India how was your meal and they say, I didn't like it, it's not that the person was being rude, but the manner in which they communicate in India is much more direct, a lot less fluff than we do here in America. So helping people to understand those differences, helping people to understand that if they're going to greet someone with the last name is Santiago or Rivera and if they're here in Philadelphia, it doesn't mean that you should say to them, trying to be friendly, So how long have you been here from Puerto Rico? Maybe in fact they came from Columbia. Maybe they're here from Mexico. We don't know. So helping people to understand those differences is 117 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. very key in making sure that we're perceived as a welcoming destination.

How many people were at that event?

The BMM?

Yes.

You don't want to try and say it? It was about 4,500, and it was at the Marriott.

Of those 4,500, how many were domestically transported here?

I think about only 15 percent of them were international, but I can get back to you.

How did they get here?

They flew.

Well, they didn't swim.

Not necessarily direct.

Where did they come in? What would be their 118 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. connections?

I'm not really sure. It could have been --

I'm just curious as to what method they used to what -- where they flew into and then connected from.

It may have been out of New York. I would imagine New York and Washington, DC. We could probably look back at the airport records to see, right, Mark? We can look --

We get some fairly extensive, Mr. Chairman, records that come from the U.S. Department of Commerce that show where our visitors are coming from internationally. It will show that probably about 40 to 45 percent of our international travelers actually enter through Newark or JFK.

Okay. And then that's a train ride down?

In many cases it's a train ride. In some cases they're 119 3/2/10-LEGISLATIVE OVERSIGHT-RES. 090881, etc. connection on another flight, sometimes Amtrak, sometimes they're renting a car.

Okay. Thank you.

Thank you very much for your time.

Thank you very much. Thanks for your patience. We appreciate your input. Anyone else to testify on these resolutions? (No response.)

Seeing none, we thank everyone for your attendance, and have a nice day. Thank you.

Thank you. (Committee on Legislative Oversight concluded at 11:50 a.m.) - - - 120 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on March 2, 2010, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)