1. Presented By: Douglas B. Baker Deputy Assistant Secretary for Service Industries, Tourism and Finance International Trade Administration U.S. Department of Commerce February 6, 2002 2002 PROFESSIONAL DEVELOPMENT INSTITUTE Hospitality Industry Trends

2. January 2002 AFTER-EFFECTS OF SEPTEMBER 11 ATTACKS Prior to 9/11/01 –Slowdown in U.S. economy –Slowdown in growth of travel 9/11/01 and Aftermath –Immediate and devastating effects –Deepening the downturn –Have begun to see slow recovery Prior to 9/11/01 –Slowdown in U.S. economy –Slowdown in growth of travel 9/11/01 and Aftermath –Immediate and devastating effects –Deepening the downturn –Have begun to see slow recovery Source: U.S. Department of Commerce, ITA, Office of Travel and Tourism Industries and Travel Industry Association of America

3. January 2002 POST 9/11/01 U.S. AIRLINE PERFORMANCE SEPT NOVDEC CAPACITY: Domestic-20.1%-14.8%-11.2% International-16.8%-18.4%-17.0% ENPLANEMENTS: Domestic -34.9%-19.5%-14.7% International -28.1%-23.4%- 9.9% SEPT NOVDEC CAPACITY: Domestic-20.1%-14.8%-11.2% International-16.8%-18.4%-17.0% ENPLANEMENTS: Domestic -34.9%-19.5%-14.7% International -28.1%-23.4%- 9.9% Source: American Transport Association; Tourism Industries

4. January 2002 U.S. AIR TRAVEL FORECASTED PERFORMANCE Percent Change in Total Revenue Passenger Miles from Same Period of Prior Year 4th Q, 2001-20 to - 25% 1st Q, 2002-10 to -15% 2nd Q, 2002-5 to - 10% 3rd Q, 2002Flat or down slightly Percent Change in Total Revenue Passenger Miles from Same Period of Prior Year 4th Q, 2001-20 to - 25% 1st Q, 2002-10 to -15% 2nd Q, 2002-5 to - 10% 3rd Q, 2002Flat or down slightly Source: Air Transport Association; Tourism Industries and Travel Industry Association of America

5. January 2002 INTERNATIONAL ARRIVALS TO THE UNITED STATES AND PROJECTIONS 1995 - 2005(p) Arrivals in Millions Source: U.S. Department of Commerce, ITA, Office of Travel and Tourism Industries; Secretaria de Turismo (Mexico); Statistics Canada p = projection; One or more nights

6. January 2002 LONG-TERM FORECAST OF NORTH AMERICAN AND OVERSEAS VISITORS 2000 and 2005(p) Source: U.S. Department of Commerce, ITA, Office of Travel and Tourism Industries; Secretaria de Turismo (Mexico); Statistics Canada; DRI - WEFA p = projection Some variance in data may occur due to rounding.

7. January 2002 ESTIMATES AND PROJECTIONS FOR TOP 5 OVERSEAS MARKETS (in thousands) Source: U.S. Department of Commerce, ITA, Office of Travel and Tourism Industries Some variance in data may occur due to rounding. p = projection Overseas does not include Mexico or Canada

8. January 2002 U.S. TRAVEL INDUSTRY FORECASTED PERFORMANCE % Chg over Prior Year 20012002 Domestic Travel Volume -3.5% +0.3% Domestic Travel Expenditures -7.0 +1.4 International Travel to U.S.-12.6+4.3 International Travel Expenditures-11.2 +6.7 Direct Travel Employment -5.8 -1.0 Number of Jobs Lost (Thousands) 45374 % Chg over Prior Year 20012002 Domestic Travel Volume -3.5% +0.3% Domestic Travel Expenditures -7.0 +1.4 International Travel to U.S.-12.6+4.3 International Travel Expenditures-11.2 +6.7 Direct Travel Employment -5.8 -1.0 Number of Jobs Lost (Thousands) 45374 Source: U.S. Department of Commerce, ITA, Office of Travel and Tourism Industries; DRI-WEFA

9. January 2002 U.S. GOVERNMENT: What are we doing? Creation of the Tourism Policy Council Involvement of 14 government agencies including: –Commerce –State –Justice –Interior –Transportation Cooperation and coordination with tourism industry Special research programs established Travel Trade Recovery Barometer Global Travel Visions Survey Creation of the Tourism Policy Council Involvement of 14 government agencies including: –Commerce –State –Justice –Interior –Transportation Cooperation and coordination with tourism industry Special research programs established Travel Trade Recovery Barometer Global Travel Visions Survey Source: U.S. Department of Commerce, ITA, Office of Travel and Tourism Industries