Outlook for U.S. Travel and Tourism

1. LOOKING AHEAD TOGETHER: The ACVA Annual Meeting Outlook for U.S. Travel and Tourism

2. Travel – Taking its Punches 9-11 FLU

3. Where we stand – Down but some positive signs

4. Leisure Travel Trends • In decline since Q3 ‘08 • Travel still viewed as a “right” • Shorter, closer-to-home trips • Trading down, not out • Frugality reigns – a “New Normal”? • Some early signs of recovery in leisure travel

5. Business Travel Trends • 51% of executives report declines in business travel and reductions in budgets, averaging 35% (Kellogg Study) • Contraction expected to continue across nearly all business trip types (Oxford Economics Study) • A trio of challenges – business conditions, image and technology • A “New Normal” here too?

6. Visitor Volume Through First Six Months - 3.5% - 4.5% - 6.3% - 10.2% Sources: U.S. Travel Association; Oxford Economics/Tourism Economics; U.S. Department of Commerce-Office of Travel and Tourism Industries

7. Visitor Spending Through First Six Months - 11.0% - 11.9% - 12.5% - 14.7% Sources: U.S. Travel Association; Oxford Economics/Tourism Economics; U.S. Department of Commerce-Office of Travel and Tourism Industries

8. But some light on the horizon

9. Transportation demand beginning to rise

10. Declines in U.S. airline traffic “less bad”

11. Hotel demand “improving” as well

12. But at a great cost to lodging industry

13. Top 25 Markets - RevPAR Percent ChangeAugust 2009 YTD Most of Top 25 markets below US average

14. Lodging Industry Performance in Alexandria Area, January – August 2009 Source: Smith Travel Research

15. Alexandria Lodging Performance - 2009 y-o-y % change Source: Smith Travel Research

16. Alexandria Lodging Performance - 2009 y-o-y % change Source: Smith Travel Research

17. Alexandria Lodging Performance - 2009 y-o-y % change Source: Smith Travel Research

18. Alexandria Lodging Performance - 2009 y-o-y % change Source: Smith Travel Research

19. International visitation to U.S. continues to be depressed

20. Some destinations doing better than others • Larger attractions with bigger price tags having more difficult time than smaller attractions • Theme park attendance down in most places • Casino operators are struggling • Museums tending to do better with attendance but hurt by declining donations and public financing • Zoo attendance up across the Midwest • County fairs doing booming business • National park visitation up 4.5 percent during first half

21. Traveler Sentiment IndexTM (TSI) improving Source: U.S. Travel Association/YPartnership travelhorizons™

22. “Affordability” Index surges Source: U.S. Travel Association/YPartnership travelhorizons™

23. But, “Money Available for Travel” Index still weak Source: U.S. Travel Association/YPartnership travelhorizons™

24. Looking Forward Through Early 2010

25. Leading Travel Indicator heading up

26. Leisure travel intentions higher than same point last year Percent of U.S. adults intending to take leisure trip in next six months Equates to potential 5 million more U.S. adult leisure travelers Source: U.S. Travel Association and Ypartnership’s Travelhorizons™

27. Meetings Under Assault

28. Business travel intentions down compared to last year Percent of U.S. adults intending to take business trip in next six months Source: U.S. Travel Association/Ypartnership’s Travelhorizons™

29. Travel: Frivolous or Necessary? Necessary Core Business Function Commonplace Unnecessary Dispensable Frivolous / Luxury

30. The Return on Investment of U.S. Business Travel • Study conducted by Oxford Economics and Synovate with oversight by U.S. Travel Association. • Informed by 3 surveys: 500 U.S. business travelers (Synovate); 300 U.S. corporate executives/business travel decision makers (Synovate); and 400 corporate executives/business travel decision makers (U.S. Travel/Kellogg School). • Econometric Analysis (Multi-factor productivity).

31. Business Travel: Key Findings Sources: U.S. Travel Association; Oxford Economics; Synovate

32. Benefits of Business Travel, Meetings and Incentives Sources: U.S. Travel Association; Oxford Economics; Synovate

33. Travel Snapshot for 2009 Sources: U.S. Travel Association; Tourism Economics; U.S. Department of Commerce-Office of Travel and Tourism Industries; TNS TravelsAmerica

34. What to Expect in 2010 (Assuming no swine flu pandemic in U.S) • Slow improvement in the economy and the travel and tourism industry; • Often smaller losses rather than positive gains; • More reductions in air flights – return to immediate post-9/11 levels • Increases in international visitation, but return to previous levels not likely to occur until 2013; • Consumers still wary of spending money on large-ticket items; • Rising unemployment dampening ability of consumers to support economic growth • A “New Normal” in both leisure and business travel?

35. Expected “gains” in 2010 Domestic Leisure Volume Domestic Business Volume Domestic Spending International Visitors Int’l Spending 1.1% 2.2% 3.0% 3.1% Remember: Increases coming off a really bad year 6.4%

36. The U.S. lodging industry – Nothing to write home about Source: Smith Travel Research

37. International Visitors to U.S. (2000-2010) Arrivals in Millions 2000: Unmatched record year for overseas arrivals (26.0 m) Sources: U.S. Travel Association; Tourism Economics; U.S. Department of Commerce-Office of Travel and Tourism Industries; Secretaria de Turismo (Mexico); Statistics Canada

38. If swine flu reaches pandemic “porkportions” in U.S. – All bets are off

39. 2009 U.S. Travel Association Priorities • Addressing Industry Needs in a Struggling Economy • Effectively Working With the New Washington

40. The New Normal October 26-28, 2009 - Little Rock, Arkansas

41. Questions to be Addressed at 2009 MOF • When will the recovery arrive? • What will it look like? • Who will benefit? • And why? • How can you succeed in the “new normal”?

42. www.ustravel.org scook@ustravel.org