Perspectives on Major Markets

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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
Intl 14.4 M 4
Source D. K. Shifflet Associates Ltd.
DIRECTIONSDESTINATION PERFORMANCE/MonitorSM CIC
Research California Tourism Research
3

• 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.
DIRECTIONSDESTINATION 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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• Domestic Markets

7
California Domestic Market Share( US
Person-Stays)
Source D. K. Shifflet Associates Ltd.
DIRECTIONSDESTINATION PERFORMANCE/MonitorSM
8
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.
DIRECTIONSDESTINATION PERFORMANCE/MonitorSM
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CA Resident Leisure Volume(Millions of
Person-Stays)
Source D. K. Shifflet Associates Ltd.
DIRECTIONSDESTINATION PERFORMANCE/MonitorSM
10
CA Non-Resident Leisure Volume(Millions of
Person-Stays)
Source D. K. Shifflet Associates Ltd.
DIRECTIONSDESTINATION 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's Economy.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 Transport Association
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Feeder Markets Top States( 2005 Person-Stays)

• Arizona
• Nevada
• Texas
• Oregon
• Washington

• 9.1 million
• 7.4
• 4.0
• 3.4
• 2.7

Source D. K. Shifflet Associates Ltd.
DIRECTIONSDESTINATION PERFORMANCE/MonitorSM
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Feeder Markets Top Metro Markets( 2005
Person-Stays)

• 4.4 million
• 4.0
• 1.8
• 1.3
• 1.2
• 1.1
• 1.1

• Phoenix
• Las Vegas
• Yuma
• Tucson
• Reno
• New York
• Portland

Source D. K. Shifflet Associates Ltd.
DIRECTIONSDESTINATION PERFORMANCE/MonitorSM
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Air Travel Vs. Air Fares To CaliforniaFrom
Phoenix
Source U.S. Department of Transportation, OD
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, OD
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, OD
Survey
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Air Travel Vs. Air Fares To CaliforniaFrom New
York
change year ago
Source U.S. Department of Transportation, OD
Survey
Fares From New York
Trips From New York
Source U.S. Department of Transportation, OD
Survey
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Air Travel Vs. Air Fares To California from
Seattle
change year ago
Source U.S. Department of Transportation, OD
Survey
Fares From Seattle
Trips From Seattle
Source U.S. Department of Transportation, OD
Survey
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Air Travel Vs. Air Fares To CaliforniaFrom
Chicago
change year ago
Source U.S. Department of Transportation, OD
Survey
Fares From Chicago
Trips From Chicago
Source U.S. Department of Transportation, OD
Survey
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• International Markets

81
Canada
Mexico
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Top CA International Markets(2005)

• 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

Source CIC Research Inc.
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International Visitors Vs Arrivals

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

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

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Intl 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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Californias 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
Depression Kids
Generation Y
Generation Z
1946-1964
Pre 1935
1977-1994
1965-1976
1995
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.
DIRECTIONSDESTINATION PERFORMANCE/MonitorSM
48
Visits to CA Theme/Amusement Parks (Domestic
Person-Stays)
Source D. K. Shifflet Associates Ltd.
DIRECTIONSDESTINATION PERFORMANCE/MonitorSM
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2007 Outlook
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Seasonal Outlook 2006-2007
Source D. K. Shifflet Associates Ltd.
DIRECTIONSDESTINATION PERFORMANCE/MonitorSM
51
CA Business vs Leisure Travel Seasonal Trends
and Outlook (Millions of Domestic Person-Stays)
Fall
Spring
Summer
Winter
Source D. K. Shifflet Associates Ltd.
DIRECTIONSDESTINATION PERFORMANCE/MonitorSM
52
Travel by California Residents Seasonal Trends
and Outlook (Millions of Domestic Person-Stays)
Fall
Spring
Summer
Winter
Source D. K. Shifflet Associates Ltd.
DIRECTIONSDESTINATION PERFORMANCE/MonitorSM
53
Travel by Non-Residents Seasonal Trends and
Outlook (Millions of Domestic Person-Stays)
Fall
Spring
Summer
Winter
Source D. K. Shifflet Associates Ltd.
DIRECTIONSDESTINATION 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
55

• Income, housing wealth, 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, and debt begin to
apply pressure
U.S. Metro Areas with 34 Housing Overvaluation
Housing wealth has provided consumers with the
confidence to add debt and spend
more Californias key domestic feeder markets
are poised for a correction.
34 overvaluation is trigger point for major
price correction.
Source Global Insight
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• US and California business travel should remain
  strong

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
58

• Only one of Californias 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. DIRECTIONSDESTINATION
PERFORMANCE/MonitorSM
59

• Most of CAs largest metropolitan feeder markets
  are growing faster than the US average

Source Global Insight D. K. Shifflet
Associates Ltd. DIRECTIONSDESTINATION
PERFORMANCE/MonitorSM
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• California Competitiveness
• Previously ranked 28th, heading up to 6th place
• 50 million may place in top 3

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• State Travel Budgets

• 2004-2005 Projected State Tourism Office
  Budgets compiled by TIA

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www.visitcalifornia.com Travel Industry Research
Statistics Research_at_cttc1.com