1. 2011 So. Cal. Visitor Industry Conference Outlook on U.S. Travel and Tourism Lauren Schlau

2. Acknowledgement to Suzanne D. Cook, Ph.D. Marketing Outlook Forum General Manager and Senior Advisor, U.S. Travel Association

3. Looking back…2001 – 2011… A Decade for the Record books!

4. Resignation Resilience Renewal Resourcefulness Reevaluation (priorities) Roller-coaster ride RECOVERY … but how strong and for how long? and of many other Rs…….……

5. Looking ahead – A confusing economic and consumer environment!

6. Turning the economic corner… Really? When? Weak housing market Lack of recovery in labor markets Real median HH incomes down 7% from 2000 Shrinking middle-class Inflationary pressures still high in travel Ongoing debt crisis and political stalemates Higher taxes? Threat of a double-dip recession Americans’ spending plans still on hold

7. 7 U.S. Economic Factors are inconsistent and the consumer is reluctant to spend While short term indicators do not indicate stall speed Companies are in strong position And Housing is recovering in parts of the country With highly expansionary Monetary policy Spurring New growth sectors… The U.S. consumer is complex, uncertain and lacking confidence.  Most likely scenario in 2012 = growth slowdown

8. Consumer Confidence… Remains very depressed 1985 = 100 Source: The Conference Board 25.3 39.8 90 considered “healthy”

9. Traveler Sentiment Index TM Down again… Source: U.S. Travel Association/Ypartnership, travelhorizons TM, October 2011 March 2007 = 100 Interest in travel Time for travel Money available for travel Affordability of travel Quality of service Safety of travel in U.S.

10. Affordability of Travel Index… Again heading in the right direction Source: U.S. Travel Association/Ypartnership, travelhorizons TM March 2007 = 100; the indices run counter to costs Gas prices rise

11. But…travel prices continue to outpace overall inflation

12. Led by still-high gas prices and rising air fares Source: U.S. Travel Association Travel Price Index Percentage change through September 2011 YTD TPI = +6.9% YTD CPI = +3.1% excludes various fees

13. Travel Spending : Will exceed $800 billion for first time ever in 2011 Source: U.S. Travel Association and Tourism Economics Billions of Dollars (in nominal terms)

14. Good News: Travel spending will continue to rise at about 5% over next two years Source: U.S. Travel Association and Tourism Economics Billions of Dollars

15. Recovery began in 2010 and continued in 2011… but is growth softening thru 2011? Source: U.S. Travel Association and Tourism Economics % Chg. Over prior year

16. Domestic Visitors… 2011 Volume to slightly exceed 2007 record. Slow but positive 1.5% - 2.5% growth in next 1-2 years. Forecasts as of October 2011 Source: U.S. Travel Association and Tourism Economics Millions of person-trips

17. Leisure travel: intentions soft…but opportunity to entice 45 million “not sures” Source: U.S. Travel Association/YPartnership travelhorizons™ Plan to take a leisure trip between November 2011 and April 2012

18. Moderate gains in domestic leisure travel Source: U.S. Travel Association and Tourism Economics Forecasts

19. Domestic Leisure Visitors Will continue to set new records * Forecast as of October 2011 Source: U.S. Travel Association and Tourism Economics Millions of Person-trips

20. Total International Inbound Visitor Volume Will peak again this year after record in 2010 Forecast as of October 2011 Source: U.S. Department of Commerce; U.S. Travel Association and Tourism Economics Millions of Visitors – includes all overseas, Canada and Mexico

21. Overseas Visitors - The Lost Decade: We are now where were in 2000 as US lost market share Forecast as of October 2011 Source: U.S. Department of Commerce; U.S. Travel Association and Tourism Economics Millions of Visitors

22. International and Overseas arrivals - slowing growth expected *Forecasts as of October 2011 Source: U.S. Travel Association; Tourism Economics

23. Percentage Change in International Arrivals Through July 2011 8 of 10 top countries showing increases Source: Office of Travel and Tourism Industries

24. Attraction Trends – Domain of US and Int’l leisure travelers, seeing a recovery (versus public parks) Attraction attendance +1.2% and average rates +3% in 2011 Forecast for 2012 = +0.5% Larger attractions that lost attendance over past few years experienced greater rebound – driven by families with children Growth in “grandtrippers” Offering increased value Source: Herschend Family Entertainment

25. Business Travel.… Not what it used to be

26. Incidence of Business Travel Down 15 Points Over Past 5 Years, but Stabilizing Source: U.S. Travel Association/Ypartnership, travelhorizons TM October 2011 Percent taking business trip in past year

27. Business travel intentions… Stability reigns Source: U.S. Travel Association/Ypartnership, travelhorizons TM Plan to take a business trip in next six months

28. In millions US business travel improves… But still well below 1998 record high * Forecast as of May 11, 2011 Source: U.S. Travel Association and Tourism Economics

29. Business travel… Increasingly the province of the young Plan to take a business trip between November 2011 and April 2012 Source: U.S. Travel Association/Ypartnership, travelhorizons TM, October 2011

30. Changing Households: fewer kids, more intergenerational, more singles Four 2010 Census Findings Aging Population Shrinking Wallets Growing Diversity: ethnicity, lifestyle

31. There is light at the end of the tunnel… but will it be as bright as we’d like in the next 2 years? Thank You!