Industry Trends in the Hospitality Sector

1

• Industry Trends in the Hospitality Sector
• March 7, 2007

2
Table of Contents
Trends and Forecasts . . . . . . . . . . . . . .
. . Managed Travel . . . . . . . . . . . . . . .
. . . . . Misc Information. . . . . . . . . . .
. . . . . . . . . .
3
I. TRENDS AND FORECASTS
4
World Travel Tourism 2006

• In 2006, the Travel Tourism Industry around the
  world generated approximately
• 6,477.2 billion US of economic activity
• 10.3 of the total global Gross Domestic
  Product
• 234,305,000 jobs representing 8.7 of total
  employment

Source World Travel Tourism Council
2006Economic Research
5
International Economic Growth Outlook
Tourism 2020 Vision
Source WTO Tourism 2020 Vision
6
International Economic Growth

• Countries with the largest Travel Tourism
  Demand in 2006 (US Million)
• United States 1,652,646
• Japan 522,894
• Germany 412,607
• China 353,672
• France 336,535
• United Kingdom 328,298
• Spain 251,972
• Italy 246,927
• Canada 189,082
• Mexico 140,450

Sources WTTO The 2006 Travel Tourism
Economic Research
7
The Historic Lodging Industry Cycle
Source John (Jack) B. Corgel, Ph.D, Cornell
University School of Hotel Administration
8
U.S. Key Performance Indicators
Key Performance Indicators Percent Change 2004,
2005 and October 2006 YTD
Source Smith Travel Research Presentation
Mark Lomanno October 2006
9
U.S. Historic RevPAR
Real U.S. RevPAR Levels Will Achieve 2000 Q4
Levels by 2007 Q1
SourcePricewaterhouse Coopers LLP, Smith Travel
Research, Bureau of Labor Statistics, Macroeconic
Advisors L.L.C.
10
U.S. Industry Forecasts
Sources PWC Forecasts October 2006
11
U.S. Industry Chain Type
Occupancy, ADR and RevPAR will Have Strong Growth
Through 2006
Source PWC U.S. Lodging Industry Briefing 4/06
12
International Travel and Tourism
Sources WTTC 2006 TSA Research, Super Summary
13
II. MANAGED TRAVEL
14
Business Travel Trends 2007

• U.S. TRIP COST INCREASE
• 1,060 including air transportation, car rental
  and lodging for total trip cost
• Increase of 4.5 from 06 to 07
• Approximately 46 increase per trip
• INTERNATIONAL TRIP COST INCREASE
• 4,090 including air and lodging for total trip
  cost
• Increase of 4.6 from 06 to 07
• Approximately 180 increase per trip

Source 2007 Forecast, American Express Corporate
Travel
15
Corporate Travel rates on the rise North America
and Europe
Source 2007 Forecast, American Express Corporate
Travel
16
Corporate Travel rates on the rise Latin
American and Asia-Pacific
Source 2007 Forecast, American Express Corporate
Travel
17
Travel Managers Surveyed Say...
U.S Managed Business Travel

• that company travelers will take more trips in
  2007 than 2006.
• that efforts will be made to trim costs
• Implementing e-folio hotel data
• Bidding TMC contracts
• Ramping up policy mandates
• Reducing the number of preferred airlines, hotels
  or car rental contracts

Source NBTA Report Continue Strength in BT
Market, 11/22/06
18
U.S Managed Business Travel
Significant Increase in quantity of trips in 2007
Source 2007 NBTA Business Travel Overview and
Cost Forecast
19
Top 10 Global Issues Challenges for Hospitality
Industry in 2007

• Labor Skills Shortage
• Construction Costs
• Technology
• Changing Demographics Their Impact on Travel
  trends
• Future of Hotel Profits
• Branding
• Distribution revolution
• Travel Restrictions
• Global Emerging Markets
• Capital Availability

Sources International Society of Hospitality
Consultants (ISHC), Top Ten issues in the
Hospitality Industry fo 2007
20
THANK YOU !