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  1. Title Goes here Outlook on U.S. Travel and Tourism Suzanne D. Cook, Ph.D. U.S. Travel Association

  2. Suzanne’s Top 10 Trends for 2010 & 2011 Outlook Improves from “Awful” to “Ho Hum”

  3. Trend #10…You call this a recovery?

  4. Economic Trends…“Uncertainty” rules the day • Recovery underway but has slowed. Gradual acceleration expected. • Business conditions remain favorable • Gains in employment starting to encourage spending, but unemployment remains high • Housing market remains key problem • Corporate and consumer uncertainty is slowing the recovery • Oxford Economics forecasts growth of 2.6% this year and 2.5% in 2011.

  5. Trend #9…It’s the Consumer, Stupid!

  6. Consumer Confidence Improves Slightly But, we consumers are still in a funk 111.9 61.4 50.2 25.3 1985 = 100 Source: The Conference Board, October 26, 2010

  7. Traveler Sentiment IndexTMReverses three quarter decline…just barely March 2007 = 100 Source: U.S. Travel Association/Ypartnership, travelhorizonsTM

  8. “Affordability of Travel” still positive, but…Down 16 points from October 2009 March 2007 = 100 Source: U.S. Travel Association/Ypartnership, travelhorizonsTM

  9. Travel prices up 4.2% YTDGas prices “only” 22% higher Percentage change through September 2010 Does not include various fees Source: Energy Information Administration Source: U.S. Travel Association Travel Price Index

  10. “Money Available for Travel” Continues to be troublesome March 2007 = 100 Source: U.S. Travel Association/Ypartnership, travelhorizonsTM

  11. “Interest in Travel” First increase in four quarters, but 9 points below October 2009 March 2007 = 100 Source: U.S. Travel Association/Ypartnership, travelhorizonsTM

  12. “Time for Travel” somewhat seasonal On par with October 2009 March 2007 = 100 Source: U.S. Travel Association/Ypartnership, travelhorizonsTM

  13. Trend #8… Travel finally getting off the bottom?

  14. It’s been a very rough ride…Enjoy the recovery!

  15. Change in U.S. visitation 2009 vs. 2008…How the year ended or things to forget - 2.4% - 3.4% -3.4 • 5.3% - 6.5% • 6.3% (Overseas) Sources: U.S. Travel Association; Oxford Economics/Tourism Economics; U.S. Department of Commerce-Office of Travel and Tourism Industries

  16. Visitation was down… but reduced spending really hurt, 2009 vs. 2008 - 7.3% - 7.9% - 8.8% - 12.2% - 14.4% *Excluding international airfares Sources: U.S. Travel Association; Oxford Economics/Tourism Economics; U.S. Department of Commerce-Office of Travel and Tourism Industries

  17. New Forecasts:Expected “gains” in U.S. travel in 2010 Domestic Leisure Volume Domestic Business Volume Domestic Spending International Visitors International Spending* 2.8% (-2.4%) 4.2% (-6.5%) 7.2% (-7.9%) 8.0% 7.9% (-5.3%) *Excluding international airfares Note: Numbers is parentheses are 2009 data Source: U.S. Travel Association and Tourism Economics; 2010 Projections (-14.4%)

  18. Trend #7…Leisure travel – back to normal?

  19. Percentage of U.S. adults traveling for leisure on the decline Percent of U.S. adults taking a leisure trip in past 12 months Source: U.S. Travel Association/Ypartnership, travelhorizonsTM

  20. But, leisure travel intentions for next six months up modestly Plan to take a leisure trip between November and April Source: U.S. Travel Association/Ypartnership, travelhorizonsTM

  21. Opportunities exist to entice over 49 million “not sures” to take a leisure trip Not Sure 21% 49 Million No Plans to Travel 24% 56 Million Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, October 2010

  22. Frequency of leisure travel plans unchangedLittle change in past five quarters Leisure travel plans for next six months compared to last year at this time Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, October 2010

  23. Average number of planned leisure trips stable Source: U.S. Travel Association/Ypartnership, travelhorizonsTM

  24. Leisure travel behavior…More spending & strong drive market Changes in leisure travel behavior in next 6 months compared to same period in 2008 and 2009 Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, October 2010

  25. Leading Travel Indicator declines…Six month outlook “worrisome”

  26. Most destinations report growth in domestic visitors in 2010…different picture than 2009 Source: U.S. Travel Association, October 2010

  27. And an even more positive picture for 2011…None expecting declines Source: U.S. Travel Association – Survey of 348states/cities, October 2010

  28. Attractions Industry Performance in 2009 • Segments that performed better than average: • Aquariums • Zoos • State/National Parks • Water Parks, and • Botanical Gardens • Segments that performed below average: • On and Off Broadway Shows • Science Centers • Sporting Events, and • Theme Parks +0.1%in 2009 Aggregate Attractions Industry Source: Jerry Henry, Herschend Family Entertainment

  29. Projection for 2010—and Beyond • Mixed bag of results once again. Only this time, it is the “destination attractions” that appear to be posting the largest increases while attractions in urban destinations appear to be trailing behind. • The diversity of the industry prevents wholesale decreases and likewise caps large increases. +0.9%in 2010 Aggregate Attractions Forecast

  30. Projection for 2011—and Beyond • 2011 and beyond expected to provide slow and steady improvement (+1.5%). But much is riding on a return of consumer confidence and an increase in employment. True recovery will not begin until these two factors return to a more normal range. 30

  31. National Parks Outlook • After a surge in visitors in 2009, slight retreat in 2010 • But, Yellowstone set a new record; Yosemite and Glacier also saw increases • Lesser known parks doing better than iconic parks • Value-driven itineraries • Deepwater Horizon Oil Spill – negatively affected several parks • 2011 expect 0.9% increase – greatest strength in National Capital, Intermountain and Northeast regions • Implementation of Strategic Plan – key demonstration projects: • Discover our Shared Heritage Travel Itinerary Series • CW150 – Sesquicentennial of Civil war (4 year campaign) Source: National Park Service

  32. Civil War Sesquicentennial… Marketing opportunity • 17 states have programs in place; 80 sites in NPS have primary focus on Civil War • 31% of U.S. adults (72.2 million) are Civil War Enthusiasts • Interest across all demographic sectors and regions of U.S. • Civil War Enthusiasts have a higher interest in many other activities than travelers overall • Excellent marketing opportunity to promote domestic and international visitation Source: David Sheatsley, Jason Stienmetz and Dean Reeder; travelhorizons™ – U.S. travel Association and Ypartnership

  33. Other nature-based tourism trends positive • Most components of the recreation industry reported gains in 2010; outlook for 2011 is optimistic. • Many state parks saw increases this summer but some faced budget-related park closures. • RV parks and campgrounds generally comparable with last year • Ski industry – strong 2009-10 season (skier visits up 4.2% and spending up); even better 2010-11 season forecasted • Snowmobile industry optimistic – show attendance up • Purchases of expensive recreational items/adventures recovering unevenly from large declines. • RV shipments up 44.8% in 2010; for 2011 expect another 8.2% gain Source: American Recreation Coalition, Recreation Vehicle Industry Association

  34. Trend #6…Business travel climbing by seat of its pants

  35. Percentage of U.S. adults taking business trips continues to fall Percent of U.S. adults taking a business trip in past 12 months Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, October 2010

  36. Shares of business travel by type… Percent of U.S. adults taking a business trip in past 12 months Source: U.S. Travel Association/Ypartnership, travelhorizonsTM

  37. Average number of business trips taken…Transient business up, but the rest? * Percent of U.S. adults taking a business trip in past 12 months Source: U.S. Travel Association/Ypartnership, travelhorizonsTM

  38. Title Goes here Convention & Trade Show Attendance… Looking to 2014 as the new target Average attendance to U.S. convention centers Source: PriceWaterhouseCoopers

  39. Exhibition and Events Trends… Coming off of “dreadful” Title Goes here • 10,000 exhibitions and trade events in U.S. each year • 2008 and 2009 Experience “dreadful”! • Q2 ‘10 CEIR Index : Overall -1.4% • Both exhibit space and number of exhibiting companies down but attendance up (+4.5% ) • Modest recovery forecasted for Q4 ’10 • Outperforming sectors include energy, (particularly “green”), healthcare, and technology • Sectors performing most poorly include automobile, construction, manufacturing and food Source: International Association of Exhibitions and Events

  40. Title Goes here A New Era: Meetings and Corporate Social Responsibility • “Using sustainability to strengthen my business while also having a positive impact on society” • McKinsey Global Survey - positive economic results from sustainability initiatives: • 53% report improved operational efficiency • 48% report increase in brand loyalty • 39% report gaining access to new markets • MPI Survey: • 80% report increased requests for CSR meeting components • 90% believe will grow even more in future • Skeptic/distrustful consumers • 74% skeptical of hotels environmental claims • 25% skeptical of all green claims • More than 40% look for third-party certification • Booming sector for certification and standards Source: Meeting Professionals International

  41. Business travel intentions…Stability reigns Plan to take a business trip between November 2010 and April 2011 Source: U.S. Travel Association/Ypartnership, travelhorizonsTM

  42. Frequency of business travel plans…No change in past five surveys Percent of U.S. business travelers’ plans during November 2010 through April 2011 Source: U.S. Travel Association/Ypartnership, travelhorizonsTM

  43. Trend #5…Hotel Industry – positive signs

  44. Hotel demand… 2010 gains outpacing 2009 declines Aug Oct Nov Sep Sep Jun Dec May Mar Feb Aug Jan Apr Jul Source: Smith Travel Research

  45. Scales – Demand Percent Change September YTD 2008, 2009, and 2010 2010 Smith Travel Research, Inc. Largest Demand recovery at upper end, esp. Upscale (trade-up)

  46. US Regions – Demand Percent ChangeSeptember YTD 2008, 2009, and 2010 2010 Smith Travel Research, Inc. New England & Mid Atlantic strongest

  47. Revenue Per Available Room positive…But a lot of ground to make up Jan Dec Feb Mar Aug Oct Nov Sep Aug Jun Jul Apr May Sep Source: Smith Travel Research

  48. % change in RevPAR through Sep 2010 7.5% or more 5.0% to 7.4% 2.5% to 4.9% 0% to 2.4% Decrease Source: Smith Travel Research

  49. What we see in Q4 2010Key Performance Indicator Outlook Scenario (% change vs. Prior Year)Year-end 2010F YTD Aug 2.3 7.4 5.0 -1.0 4.0

  50. Total United StatesKey Performance Indicator Outlook Scenario (% change vs. Prior Year)2011F