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OUTLOOK FOR U.S. TRAVEL AND TOURISM . “Get your facts first, then you can distort them as you please.” Mark Twain. Where Are We Now? 2005. Travel Performance* – 2005 . Domestic travel up 6% Leisure travel up 9%; business/ convention travel down slightly

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OUTLOOK FOR

U.S. TRAVEL AND TOURISM



Where are we now 2005

Where Are We Now? please.”2005


Travel performance 2005
Travel Performance* – 2005 please.”

  • Domestic travel up 6%

  • Leisure travel up 9%; business/ convention travel down slightly

  • Continued growth in air and hotel volume

  • Group meeting room-nights up but transient business room-nights down

  • International travel to U.S. exceeding expectations

    * in Terms of person-stays

Source: DK Shifflet & Associates/Travel Industry

Association of America


Gas prices peak in early september 2005
Gas Prices Peak in Early September 2005 please.”

Jan ‘04

July ‘04

Jan ‘05

July ‘05

Oct ‘05


Air traffic is back
Air Traffic is Back please.”

Millions of Passengers Enplanements

-

Source: Air Transport Association


U s hotel performance 2001 2005p
U.S. Hotel Performance, 2001-2005p please.”

% Change over Prior Year

Source: Smith Travel Research


Rv trends
RV Trends please.”

  • 7 million U.S. households own RVs

  • RV retail sales down slightly in 2005 but forecasted to be second best year for RV sales in 27 years

  • RV rentals by Americans up 22% in 2005 according to Cruise America

Source: RVIA

Source: Recreation Vehicle Industry Association


Cruise trends
Cruise Trends please.”

  • 5.5% increase in passengers on CLIA member cruise lines in 2005

  • North American passengers up 9.4%

  • 11 million passengers expected this year

  • Average length of cruise was 7.33 days versus 7.09 days last year

  • Growing number of cruise-ship theme voyages for a broad range of special interests

Source: RVIA

Source: Recreation Vehicle Industry Association


Estimated attendance at the all u s theme parks 1999 2005p
Estimated Attendance at the please.”All U.S. Theme Parks1999-2005p

Source: PricewaterhouseCoopers


Commercial casino gaming revenues up 7 percent in 2004
Commercial Casino Gaming Revenues up 7 Percent in 2004 please.”

Billions

Source: Christiansen Capital Advisors and

State Gaming Regulatory Agencies


Tour operator trends 2005 2003
Tour Operator Trends, 2005/2003 please.”

  • FIT Offerings up 26%; 17% of overall sales volume – up 42% since 2003

  • 56% of tours sold in 2005 were customized, up from 49% in 2003

  • 46% of customer base are Seniors (60+)

  • 33% Boomers (39 – 59)

  • 6% young adults (21 – 28)

  • 15% students (under 21)

  • 23% book 45 days or less in advance, up from 8% in 2003

Source: National Tour Association


Tour types with greatest growth among nta operators
Tour Types with Greatest Growth Among NTA Operators please.”

Percent of NTA Operators Offering

Source: National Tour Association


Tour types with greatest declines among nta operators
Tour Types with Greatest Declines Among NTA Operators please.”

Percent of NTA Operators Offering

Source: National Tour Association


International visitation to the u s approaches 2000 levels in 2005
International Visitation To The U.S. please.”Approaches 2000 Levels in 2005

Arrivals in Millions

Source: Office of Travel and Tourism Industries (OTTI)

One or more nights


International visitor arrivals to the u s
International Visitor Arrivals to the U.S. please.”

2005p %Change % Change

(In Millions)2005/20042005/2000

Canada 15.0 8% 2%

Mexico 12.7 6% 23%

Overseas 21.7 7% -17%

Europe 10.3 8% -10%

Asia 6.7 7% -17%

Latin America 2.4 6% -33%

Source: Global Insight Forecast; Office of Travel and Tourism Industries


Why not even greater growth
Why Not Even Greater Growth? please.”

  • The U.S. is on sale! Euro, Yen and Canadian dollar have all appreciated considerably.

  • One obvious problem – our deteriorating image around the world.


Several studies
Several Studies please.”

  • Validate magnitude of problem and how it is affecting the credibility and usage of U.S. brands

  • 20% of Europeans and Canadians say they are consciously avoiding U.S. brands

  • Those products seen as quintessentially American are avoided even more

  • 55% of Japanese, 36% of Germans and 32% of French say less likely to visit U.S.

  • 57% of Japanese, 42% of French and 38% of UK avoid flying U.S. air carriers

Source: GMI World Poll, The Pew Center for People & The Press


Visitation and image
Visitation and Image please.”

PositiveNegative

The United States

Visited the U.S. Before 54%46%

Have Not Visited the U.S. 38% 62%

The American People

Visited the U.S. Before 72%28%

Have Not Visited the U.S. 61% 39%

Quality of Life in America

Visited the U.S. Before 68%32%

Have Not Visited the U.S. 48% 52%

* Among online residents of six countries (Source: GMI)


Travel Expenditures Up Nearly 8 Percent in 2005 please.”

Billions

p = preliminary; f = forecast

International traveler spending on U.S. carriers made outside the U.S. not included

Source: TIA; OTTI



The shifting travel landscape
The Shifting Travel Landscape please.”

  • Business Indicators Vacillating GDP, Dow, Unemployment, Consumer Confidence, National mood shift

  • International Issues – Currencies, USA Image Abroad, Biometric Passports – Visa Hassles, War, Disease, Terror, Hurricanes

  • Product/Marketing Issues: Online Distribution, Internet Connections, Teleconferencing, Flat Screens, Bed Systems…


Consumer confidence at a two year low
Consumer Confidence At A Two-Year Low please.”

Source: The Conference Board


Tia s traveler sentiment index remains weak
TIA’s Traveler Sentiment Index Remains Weak please.”

Seasonally Adjusted, 1st Quarter 2000 = 100

Source: TIA’s Traveler Sentiment Index


AFFORDABILITY INDEX please.”

(U.S. Average, 2000 = 100 for Perceived Affordability of Travel )

U.S. Average, 2000=100

Source: TIA’s Traveler Sentiment Index


FINANCIAL INDEX please.”

(U.S. Average, 2000 = 100 for Ability to Take Pleasure/Vacation Trip Based on Personal Finances

U.S. Average, 2000=100

Source: TIA’s Traveler Sentiment Index


Energy woes
Energy Woes please.”

  • Worst is over for gasoline – prices should fall back to around $2.50/gallon by year-end

  • But, home heating will cost Americans about one-third more this winter on average than last winter, assuming typical weather. A colder-than normal winter could lift energy costs nearly 50 percent.

Source: Global Insight, Energy Information Administration


Consumer spending growth to slow significantly in 4 th quarter 2005
Consumer Spending Growth to Slow Significantly in 4 please.”th Quarter, 2005

Percent Change

Source: Global Insight


Wanning ceo confidence
Wanning CEO Confidence please.”

  • CEO confidence fell to its lowest level in four years in the third quarter and will likely remain subdued for rest of 2005

  • Noticeable less optimistic about short-term outlook – one-third expect economic conditions to worsen in next 6 months

Source: The Conference Board


Economic trends
Economic Trends please.”

  • GDP growth in fourth quarter will slow to 2.8% but economy will pick up steam in first quarter 2006 on post-hurricane bounce

  • Underlying trend, however, for slower economic growth in 2006 and 2007

Source: Global Insight


U s economic growth to slow
U.S. Economic Growth to Slow please.”

20042005p2006f

Real GDP 4.2% 3.5% 3.3%

Payroll Employment 1.1 1.6 1.5

Unemployment Rate 5.5 5.1 4.9

Real Disposable

Income 3.4 1.6 3.8

Consumer Prices 2.7 3.5 2.7

Total Consumption 3.9 3.4 2.8

Source: Global Insight


2005 hurricane season impact study

2005 Hurricane Season please.”Impact Study

Provided By:

Donna Larsen Lisa Araj, Ph.D.

DataPath Systems Cunningham Research


Expected leisure travel changes in 2006
Expected Leisure Travel Changes please.”in 2006

16. Now thinking about all your travel plans, compared to last year, please indicate the statement that best describes your future travel plans.

Base: All Travelers


Impact of 2005 hurricane season gas prices on auto travel
Impact of 2005 Hurricane Season please.”& Gas Prices On Auto Travel

Among those planning to decrease travel ..."is this primarily due to the price of gasoline?"

16. Now thinking about all your travel plans, compared to last year, please indicate the statement that best describes your future travel plans.

Base: All Travelers


Impact of 2005 hurricane season gas prices on long haul auto travel
Impact of 2005 Hurricane Season please.”& Gas Prices On Long Haul Auto Travel

Among those who had planned a trip…

Do you still plan on taking the long-haul driving vacation?

17. Prior to the 2005 hurricane season, were you planning on taking a “long-haul” driving vacation in the next 12 months?

Base: All Travelers


Trip planning and contingency plans for travel to the south southeastern region
Trip Planning and Contingency Plans for Travel to the South/Southeastern Region

% Travelers who had planned or were in the process of planning a leisure trip to the South/Southeastern Region

Among those who had planned a trip…

% who have decided to…

9. For travel in the next 12 months, had you planned or were you in the process of planning a leisure trip to any of the following states prior to the onset of the 2005 hurricane season?

Base: All Travelers


Ways to significantly increase interest in region
Ways to Significantly Increase South/Southeastern RegionInterest in Region

8. Which of the following might significantly increase your interest in visiting the region?

Base: Those previously interested in travel to any state in the Region


For more information please contact
For More Information Please Contact… South/Southeastern Region

Donna Larsen

Partner

DataPath Systems

867-660-4600

[email protected]

Lisa Araj, Ph.D.

Vice President

Cunningham Research

866-876-5472

[email protected]


U s leisure travel outlook
U.S. Leisure Travel Outlook South/Southeastern Region

  • Leisure travel intentions have weakened

  • Expect slower growth in remaining months of 2005 and first quarter of 2006

  • Up 4% in 2005; 2% in 2006

  • Growth in travel spending will also slow

Source: Travel Industry Association of America


Estimated attendance at the all u s theme parks 1999 2009
Estimated Attendance at the South/Southeastern RegionAll U.S. Theme Parks1999-2009

1999-2004 CAGR = +0.9%

2005-2009 CAGR = +1.8%

Source: PricewaterhouseCoopers


Nationwide interest in theme park travel
Nationwide Interest in Theme Park Travel South/Southeastern Region

-5 points from 2004

Source: YPB&R/ Yankelovich National Leisure Monitor


Nationwide interest in theme park travel1
Nationwide Interest in Theme Park Travel South/Southeastern Region

SOURCE: YPB&R/ Yankelovich National Leisure Monitor


U s business travel outlook
U.S. Business Travel Outlook South/Southeastern Region

  • Domestic business travel also likely to be constrained in short-term

  • Weak CEO confidence, much slower growth in corporate profits and rising travel costs

  • Up 1% in 2005; 1 – 2% in 2006

Source: Travel Industry Association of America


Outlook for air travel
Outlook for Air Travel South/Southeastern Region

  • Not out of the woods yet

  • Mainland carriers:

    -2% in domestic passengers

    +6.5% in international passengers

    -1.5% in domestic available seat miles

    +8% in international available seat miles

  • Load factors will remain at record levels

  • Fares will rise

Source: Air Transport Association


U s hotel performance 2003 2006
U.S. Hotel Performance, 2003-2006 South/Southeastern Region

% Change over Prior Year

Source: Smith Travel Research


International visits expected to surpass 2000 level next year
International Visits Expected to Surpass 2000 Level Next Year

Arrivals in Millions

Source: Office of Travel and Tourism Industries (OTTI)


Travel Expenditures Will Continue to Rise Year

Billions

p = preliminary; f = forecast

Source: TIA; OTTI



Travel is top online category
Travel is Top Online Category Year

  • Online sales now exceed $100 billion; expected to reach $316 billion by 2010 (Forrester Research)

  • Travel = $45 – 65 billion (JupiterResearch, eMarketer, PhocusWright)

  • 27% of U.S. leisure/unmanaged business travel booked online in 2004; 35% by 2006 (PhocusWright)

  • Internet is information source used by majority of Americans planning vacations (51%) and majority of business travelers (54%) (YPBR)


Online travel planning and booking continue to rise
Online Travel Planning and Booking Continue to Rise Year

Millions

Source: Travel Industry Association of America


Online trip planning activities 2005
Online Trip Planning YearActivities, 2005

Millions of U.S. Online Travelers

Source: Travel Industry Association of America


Travel products services purchased online 2005
Travel Products/Services Purchased YearOnline, 2005

Millions of U.S. Online Travelers

Source: Travel Industry Association of America


Technology Trends Year

  • Mobile Technologies

  • On-Demand Devices

  • TIVO

  • Podcasts

  • Weblogs

  • Mobile Search


Marketing revolution
Marketing Revolution Year

  • Ad spending in U.S. up 7.6% in 2004, online ad spending up 28.8% (eMarketer)

  • E-commerce still only 3 – 4% of all multi-channel retail sales

  • 84% of online adults use search engines (Pew Internet & American Life Project)

  • Search the most popular online ad format (40%), followed by banners and classified (IAB and PwC)


“Imagination is more important than knowledge …Because everything we know, first had to be imagined.” (Albert Einstein)


www.tia.org everything we know, first had to be imagined.” (Albert Einstein)


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