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Perspectives on Major Markets Southern California Visitor Industry Outlook Conference - 2006 Tiffany Urness Research Manager, California Tourism October 12, 2006. California Tourism 2005. In-State: 279.8 M 80%. Out-of-state: 55.5 M 16%. Int’l: 14.4 M 4%.

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Perspectives on Major Markets

Southern California

Visitor Industry Outlook Conference - 2006

Tiffany Urness

Research Manager, California Tourism

October 12, 2006


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California Tourism2005

In-State: 279.8 M

80%

Out-of-state: 55.5 M

16%

Int’l: 14.4 M

4%

Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM

CIC Research; California Tourism Research


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2005

= Banner year for California tourism.


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2005 in Review

US CA

Total domestic travel + 4.1% + 6.7%

Domestic leisure + 3.2% + 7.1%

Domestic business + 6.8% + 5.6%

Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM


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2005 in Review

US CA

Overseas visitors +6.9% + 14.3%

Hotel occupancy rates + 2.9% + 3.8%

RevPAR + 8.4% + 10.1%

Domestic air travelers + 4.1% + 2.6%

Source:CIC Research Inc., Smith Travel Research; Bureau of Transportation Statistics



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California Domestic Market Share(% US Person-Stays)

Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM


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CA Domestic Volume by Segment(Millions of Person-Stays)

Non-Resident Business

Non-Resident Leisure

Resident Business

Resident Leisure

Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM


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CA Resident Leisure Volume(Millions of Person-Stays)

Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM


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CA Non-Resident Leisure Volume(Millions of Person-Stays)

Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM


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Dynamics Affecting California Travel Trends

  • Headline Events

  • Market Conditions

  • California Competitiveness


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2006 Travel Industry YTD

Headline Events

  • Relative normality

  • Restrictions, regulations, and rudeness


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2006 Travel Industry YTD

Market Conditions

Higher prices

Tapering demand


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2006 Travel Industry YTD

TIA Aug.Travel Price Index + 6.2%

Gasoline + 19.6%

Lodging + 4.8%

Airfares + 5.8%

Source: TIA.org, August 2006


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Vehicle Miles Driven Vs. Regular Gas Prices

U.S., % change year ago

Gas Prices (R)

Vehicle Miles Driven (L)

Sources: Department of Transportation,Oil Price Information Service 


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California Hotel Room Rates Vs. Occupancy

% change year ago

Average Room Rate

Occupancy, percentage point difference

Source: Smith Travel Research;Moody'sEconomy.com


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California Hotel Room Rates Vs. Occupancy

Average Room Rate (R)

% change year ago

Trendline

Occupancy Rate (L)

Source: Smith Travel Research


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2006 Travel Industry YTD

August YTD

US room revenues + 6.8%

US average occupancies + 1.1%

CA room revenues + 8.2%

CA average occupancies + 1.1%

Month of August - 1.0%

Source: Smith Travel Research


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Revenue Passenger Air Miles

U.S., % change year ago

International

Domestic

Source: Air TransportAssociation


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Arizona

Nevada

Texas

Oregon

Washington

9.1 million

7.4

4.0

3.4

2.7

Feeder Markets: Top States( 2005 Person-Stays)

Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM


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4.4 million

4.0

1.8

1.3

1.2

1.1

1.1

Phoenix

Las Vegas

Yuma

Tucson

Reno

New York

Portland

Feeder Markets: Top Metro Markets( 2005 Person-Stays)

Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM


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% change year ago

Fares From

Phoenix

Trips From

Phoenix

Air Travel Vs. Air Fares To CaliforniaFrom Phoenix

Source: U.S. Department of Transportation, O&D Survey


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Air Travel Vs. Air Fares To CaliforniaFrom Las Vegas

% change year ago

Fares From

Las Vegas

Trips From

Las Vegas

Source: U.S. Department of Transportation, O&D Survey


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Air Travel Vs. Air Fares To CaliforniaFrom Portland

% change year ago

Fares From

Portland

Trips From

Portland

Source: U.S. Department of Transportation, O&D Survey


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Air Travel Vs. Air Fares To CaliforniaFrom New York

% change year ago

Source: U.S. Department of Transportation,

O&D Survey

Fares From

New York

Trips From

New York

Source: U.S. Department of Transportation, O&D Survey


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Air Travel Vs. Air Fares To California from Seattle

% change year ago

Source: U.S. Department of Transportation,

O&D Survey

Fares From

Seattle

Trips From

Seattle

Source: U.S. Department of Transportation, O&D Survey


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Air Travel Vs. Air Fares To CaliforniaFrom Chicago

% change year ago

Source: U.S. Department of Transportation,

O&D Survey

Fares From

Chicago

Trips From

Chicago

Source: U.S. Department of Transportation, O&D Survey


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UK

Germany

Japan

Australia

International Markets

81%

Canada

Mexico


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Mexico (Air/Land) 3,796,000

Day visitors 4,800,000

Canada 1,060,000

UK 778,000

Japan 722,000

Australia 313,000

Germany 309,000

Top CA International Markets(2005)

Source: CIC Research Inc.


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California Visitors:

Estimates based on in-flight surveys of non US residents reporting a California visit, supplemented with DHS data.

International Visitors Vs Arrivals

California Arrivals:

Non US residents arriving in California as their first US port of entry.


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Int’l Visitors Vs Arrivals at California Ports of Entry(Percent Chg 04-05)

Visitors

Arrivals

Total Overseas

14.3%

5.8%

China

44.6%

21.7%

Mexico (Air)

21.3%

14.0%

Australia

20.8%

10.6%

So. Korea

-7.7%

2.0%

Japan

14.6%

-5.0%

UK

12.3%

2.1%

France

21.4%

19.8%

Germany

12.4%

8.4%

Source: DHS Port of entry arrivals, Form I-94; CIC Research Inc.


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Value of U.S. Dollar Vs. Foreign Currencies

Index: January 2003 = 100

Euro

Peso

Yen

Pound

Canadian $

Source: The Federal Reserve Board


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Canadian Travel Vs Exchange Rates

Source: Fedgazette, Federal Reserve Bank of Minneapolis, July 2006


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Value of Euro VS German Arrivals in CA

Index: January 2003 = 100

Euro

German Arrivals

Source: Federal Reserve Board; DHS Port of entry arrivals, Form I-94


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CA Overseas Visitor Market Share1994 - 2005

Source: CIC Research Inc.


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European Visitors to California(1999-2005)

Source: CIC Research Inc.


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Asian Visitors to California(1999-2005)

1999

2005

Source: CIC Research Inc.


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International Visitors Entering CA*(Percent Chg 05-06 July YTD Prelim.)

*Port of Entry Arrivals

-13.3%

-14.9%

Source: DHS Port of entry arrivals, Form I-94


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All Overseas Arrivals in CA*

% change year ago

*Port of Entry Arrivals

Source: DHS Port of entry arrivals, Form I-94


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Asian Arrivals in CA*

% change year ago

*Port of Entry Arrivals

Source: DHS Port of entry arrivals, Form I-94


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European Arrivals in CA*

% change year ago

*Point of Entry Arrivals

Source: DHS Port of entry arrivals, Form I-94


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Australia and Mexican Air Arrivals in CA*

% change year ago

*Point of Entry Arrivals

Source: DHS Port of entry arrivals, Form I-94


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Trends to Watch

  • Generation divide

  • Solo travel

  • Nature travel (tamed)

  • Voluntourism


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California’s Age Wave 2000 - 2010

Millions

The 45 to 64 Segment grows from 20 to 25 Percent of the Population

Source: Pulse Marketing/Newbridge Partners


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The Way We Look -- 2000

Boomers

Millions

Generation X

War Babies

Generation Y

Depression Kids

Generation Z

1946-1964

Pre 1935

1977-1994

1995 +

1965-1976

1936-1945

Source: Pulse Marketing/Newbridge Partners


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The Way We Look -- 2010

Millions

Boomers

Generation X

War Babies

Generation Y

Generation Z

Depression Kids

1946-1964

Pre 1935

1977-1994

1995 +

1936-1945

1965-1976

Source: Pulse Marketing/Newbridge Partners


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Visits to CA State/National Parks (Domestic Person-Stays)

Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM


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Visits to CA Theme/Amusement Parks (Domestic Person-Stays)

Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM



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Winter

06/07

Spring

07

Summer

07

Fall

07

US Leisure

+3.2%

+4.4%

+3.1%

+4.8%

CA Leisure

+2.6%

+7.1%

+6.3%

+7.2%

US Business

+4.2%

+7.6%

+2.1%

-0.5%

CA Business

+5.4%

+5.2%

-2.8%

-2.0%

CA Resident

+2.9%

+6.5%

+3.3%

+6.2%

CA Non-Resident

+6.0%

+7.0%

+7.4%

-2.8%

Seasonal Outlook 2006-2007

Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM


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CA Business vs Leisure Travel Seasonal Trends and Outlook (Millions of Domestic Person-Stays)

Fall

Winter

Spring

Summer

Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM


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Travel by California Residents Seasonal Trends and Outlook (Millions of Domestic Person-Stays)

Fall

Winter

Spring

Summer

Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM


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Travel by Non-Residents Seasonal Trends and Outlook (Millions of Domestic Person-Stays)

Winter

Spring

Summer

Fall

Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM


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Key CA domestic origin markets will slow but growth is still above US average

Forecast

Source: BEA, Global Insight


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Income, housing wealth, above US average and debt begin to apply pressure…

Savings rate is currently below zero and (w/o/ rising housing wealth) unsustainable…

Time for the consumer to regroup, retire debt, and get spending back in line with income growth

(Percent change)

Prepared by: Global Insight


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Income, housing wealth, above US average and debt begin to apply pressure…

U.S. Metro Areas with 34%+HousingOvervaluation

Housing wealth has provided consumers with the confidence to add debt and spend more…

California’s key domestic feeder markets are poised for a correction.

34% overvaluation is trigger point for major price correction.

Source:GlobalInsight


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US and California business travel should remain strong… above US average

US corporations are flush with cash and profits are relatively strong

Leading to a rise in bricks & mortar, equipment, and…

travel spending

Prepared by: Global Insight


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Only one of California’s top 10 feeder markets is a slower growth state (NY)…

Growth in Personal Income

Bodes well for U.S. non-resident leisure travel…

Source: Global Insight;;

D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM


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Most of CA’s largest metropolitan feeder markets are growing faster than the US average…

Source: Global Insight;;

D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM


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California Competitiveness growing faster than the US average…

  • Previously ranked 28th, heading up to 6th place

  • $50 million may place in top 3


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State Travel Budgets growing faster than the US average…

NEW CA 06-07

CA 07-08

CA 06-07

2004-2005 Projected State Tourism Office Budgets compiled by TIA


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www. growing faster than the US average…visitcalifornia.com

Travel Industry: Research & Statistics

[email protected]


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