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Bringing the Green to Bowling Green February 23, 2009

Bringing the Green to Bowling Green February 23, 2009 PPORTUNITY OSITIVE Welcome – Mayor Elaine Walker World, U.S. and Kentucky Economic Conditions and Forecasts Trends 2009 & 2010 Bookings Marketing Opportunities Mayor Elaine Walker

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Bringing the Green to Bowling Green February 23, 2009

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  1. Bringing the Green to Bowling Green February 23, 2009

  2. PPORTUNITY OSITIVE Welcome – Mayor Elaine Walker World, U.S. and Kentucky Economic Conditions and Forecasts Trends 2009 & 2010 Bookings Marketing Opportunities

  3. Mayor Elaine Walker

  4. January 26, 2009 -Davos, Switzerland, World Economic Forum PricewaterhouseCoopers surveyed 1,124 corporate CEO’s from 50 countries in attendance….. Most executives said they expect any recovery to be gradual and extend over three years Confidence among CEO’s around the world is at its lowest point since 2003 Only about a third is confident about growth in the next three years, down from 42 percent last year. Almost 7 in 10 said their companies will be affected by thecredit crisis, and 70 percent of those said they will delay planned investments as a result.

  5. The U.N. World Tourism Organization says global tourism could decline by up to 2 percent in 2009 amid the financial crisis. The Madrid-based organization states Europe will be the most affected.

  6. According to the National Bureau of Economic Research, the U.S. economy officially entered into a recession in December 2007

  7. State of the U.S. Economy Recessions tend to hit the tourism industry about 6 months after they begin. That holds true here. We are fortunate that BG hasn’t suffered in recessions as severely as the national economy – slower coming in, faster coming out. Even though our industry lags behind about 6 months, we are hopeful that BG will come out sooner this time too. We are in our 11th recession since post WWII Current recession 15 months Longest Recessions –16 months (twice) Average Recession –11 months Source: Louisville Tourism Summit, February 9, 2009

  8. State of the U.S. Economy What is the net job loss in BG in 2008? Is it as severe as other places in the nation? Kentucky? Not according to a Daily News article on February 4. Jobs in the United States December 2007 –138,078,000 December 2008 –135,489,000 Loss of 2.5 million jobs since last December Source: U.S. Bureau of Labor Statistics, Current Employment Survey

  9. State of the Travel Economy We normally have a good amount of snowbirds staying here and we will loose some because they won’t be able to travel, but we may pick up others who are still traveling – ones who traditionally have stayed in larger, more expensive markets. The senior market accounts for 25% of the leisure travel segment. Erosion in 401(k) accounts will slow down senior leisure travel in 2009. Source: Louisville Tourism Summit, February 9, 2009

  10. State of the Travel Economy Americans feel they deserve a vacation and some will still travel. We are an affordable city that many people may not have thought to visit in the past. Maritz Research Hospitality Group (MRHG) conducted a poll to see how current economic circumstances are impacting people's travel intentions for the first part of 2009. • 41% of Americans are planning to cut back on personal entertainment costs, such as movies, theater, and sporting events • 34% plan to cut back on the number of times they dine out • 20% plan to downgrade the class of restaurants at which they dine out

  11. State of the Travel Economy Since we are primarily a drive market, we hope to pick up some of those leisure air travelers who are driving on their vacations. The MRHG survey also stated those that travel by air for leisure… • 26% expected a decrease in leisure air travel over the next six months • 12% indicated that their personal leisure travel would be 'significant' • 38% said they would be staying at hotels for leisure less often in the foreseeable future

  12. State of the Travel Economy PKF-HR is forecasting hotel occupancy for 2009 to be the lowest in 20 years! Source: Meeting News, December 15, 2008

  13. Jan Freitag, Vice President -Smith Travel Research suggests “hotels should provide more value rather than simply play with rates.” •Free Breakfast •Free Internet Access •Free Bottled Water •Free Newspapers •Free Parking •Packaging

  14. 2008 in Review – Air Travel The price of jet fuel reached record levels in 2008 resulting in massive reductions in seat capacity nationwide. •30-50 seat regional jets grounded or sold •Most “point to point” flying discontinued •Leisure flying discontinued (Florida, Las Vegas) •Long-haul domestic flying curtailed •New menu of fees for services introduced by airlines •Seven airlines fail; two airlines merge, bankruptcies increase •Airlines cut 10-15% of total seat capacity in U.S. during 4Q 2008 Source: Tom Tyra, Louisville International Airport, Louisville Tourism Summit, February 9, 2009

  15. 2008 in Review – Air Travel In response to slowing economy and flight reductions consumption of jet fuel decreases. However, consumer demand drops faster than the price of fuel. Airlines announce further cuts in capacity for 2009. Most large corporations have slowed travel or placed restrictions in place for 2009 Financials (North America) - First half of 2008 – $1.8 Billion Profit - Second half of 2008 - $3.9 Billion Loss! Source: Tom Tyra, Louisville International Airport, Louisville Tourism Summit, February 9, 2009

  16. MORE PEOPLE WILL DRIVE!!! More billboards. According to TIA, 28% of air travelers avoided at least one trip during the prior 12-month period due to the problems in the air travel process avoiding 41 million trips (12 million business trips and 29 million leisure trips)

  17. January 2009-The Travel Industry Association’s (TIA) latest survey predicts a drop of at least 1.3% in over all leisure travel in 2009

  18. Travel is a $10.7 billion industry in Kentucky • Vacations are needed now more than ever • People are still going to travel • 71% of U.S. adults say they plan to take an overnight leisure trip in the next 6 months • U.S. adults rated travel second to dining out as the leisure activity they are trying to afford Source: Smith Travel Research (Kentucky Department of Tourism)

  19. Shorter, closer trips Less discretionary spending during a trip Trading down, not out Packages Destinations that are seen as a value Source: Kentucky Department of Tourism

  20. 71% of parents surveyed wish their family spent more time together as a group • 69% wish they had more time to just sit and talk with their kids • Travel with children increased from 26% to 36% from 2000-2008 • Multi-generational travel • 38% of leisure travelers are grandparents • 27% took at least 1 trip with grandparents Source: YPartnership (Kentucky Department of Tourism)

  21. -The “time poor” traveler likes to have his trip wrapped up in a nice package. -The “All Access Pass” is admission to about 8 local attractions. The pass is good through 2009 and offers single admission to each attraction. Great deal – about 30% discount. -Itineraries are growing in popularity. Visitors want to know where to go, how to get there and how long they can expect to spend at each stop. Online packages with a la carte tickets Attraction “All Access Pass” Sample itineraries

  22. Class reunions, weddings and other potential event attendees  Custom sample itineraries and sending them to the guests along with a Visitors Guide Goal is to get the guest to come in a day early and/or stay an extra day to participate in leisure activities with their families

  23. Business Travel Forecast Can BG pick up business here? A June 2008 survey by Orbitz, conducted in conjunction with the Business Traveler, found that more than 2/3 of business travelers were staying in less expensive hotels or, when possible, avoiding a hotel altogether by returning home the same day.

  24. Business Travel Forecast Should we maintain our prices instead of increasing them in order to retain customers? National Business Travel Association 2009 Overview & Cost Forecast •Business travel costs will increase from 5%-8% •Business trips will be lower than averages of 2004-2007 •Published airfares will increase 7% -10% •Hotel rates will increase 1% -4% •Car rental will increase 1%-3%

  25. Meeting & Convention Trends Things to Watch for in 2009 • Sourcing more hotels for each bid • Using the Internet to drive down prices • Length of meetings shortened • Reducing F&B offerings • Trading down from luxury to lower-tiered properties • Bargain hunting by shopping at smaller markets • Reduced number of attendees (attrition) Source: Louisville Tourism Summit, February 9, 2009

  26. Meeting & Convention Trends Green Meetings • In 2006 3.7% of planners were interested in green meetings • In 2008 37% of planners were interested in green meetings • Recommendation: Make sure you include a green initiative in all your future proposals Source: Nancy Wilson, CMP, Meetings Strategies Worldwide

  27. Meeting & Convention Trends On the corporate client side…Corporations are moving forward by changing their travel departments to –“Strategic Meetings Management Departments” •Offer clear objectives for every meeting •Demonstrate value of their meetings when they sit down with management •Demonstrate ROI for a meeting Source: Louisville Tourism Summit, February 9, 2009

  28. Park free in BG! Respond and respond quickly to RFPs. Welcome signs. Attracted to meeting facilities/hotels looking for ways to say yes, even if they sometimes have to say no. Attracted to meeting facilities/hotels that “get it.” Weaknesses in coming to a city: - Parking fees - Some hotels don’t want to participate in RFPs for citywide bookings Suggestions: - Put welcome signs in windows (downtown bars, shops, restaurants) Source: Richard “Dick” Holmes, Director of Conventions & Meetings, The American Legion, Louisville Tourism Summit, February 9, 2009

  29. Hospitality Technology Trends •In 2008 there were 66 million online travel purchases •In 2009 68 million online travel purchases are expected •$26 billion of leisure travel is purchased online •$8 billion of corporate travel is bought online Source: Louisville Tourism Summit, February 9, 2009

  30. Hospitality Technology Trends • Customers will increase their online search for price deals from 4 searches (2008 average) to 8 searches in 2009 • Another third of hotel bookings will be directly influenced by online search, but booked offline • In 2010 the Internet will contribute over 45% of all hotel bookings in North America Source: Louisville Tourism Summit, February 9, 2009

  31. Hospitality Technology Trends • More hospitality brands will be getting into social media (Facebook, Twitter, etc.) • Success will come from understanding and valuing online feedback from blogs and forums and acting on it • Facebook and Twitter being used to create social network communities for registered delegates before a meeting happens Source: Louisville Tourism Summit, February 9, 2009

  32. Hospitality Technology Trends Do you offer video conferencing at your business? Videoconferencing back in vogue DALLAS, TX -The Regus Group, operator of the world's largest network of public access studios with more than 600 global locations, reported a 40 percent spike in videoconferencing bookings as cutbacks in business travel forced companies to change the way they do business. "The quality of virtual tools available have improved so dramatically in recent years, I can't imagine any company reverting back to its old way of conducting a meeting." Mark Dixon, CEO, Regus Group

  33. “In 2010, the relevant economic indicators are forecasted to begin to drive lodging demand upward. This will happen simultaneously with diminished levels of new supply, thus resulting in gains in occupancy and, eventually, pricing power.” Source: Mark Woodworth, President PKF-HR

  34. John Hach, Senior Executive at Travelclick, a hotel intelligence and marketing firm based in Chicago noted what stimulates demand is destination appeal... New/Expanded Product Development - National Corvette Museum Expansion - Civil War Heritage Trail - Historic Railpark & Train Museum New Exhibits/Railcars - Kentucky Museum New Exhibits - Aviation Heritage Park New Display/MiG Pilot Visit - Bowling Green Hot Rods

  35. Major Nearby Expansion Nashville - Music City Convention Center $600 million project Opening tentatively scheduled for the end of 2012 1.2 million sq. ft. 375,000 sq. ft. Exhibit Hall 80 Meeting Rooms 40 Loading Docks Source: Louisville Tourism Summit, February 9, 2009

  36. Major Nearby Expansion When our region brings in new business, we have an opportunity to expose them to BG. Nashville - Music City Convention Center New citywide definite bookings (100,000 room nights): - Academy of General Dentistry – June 2013 - Association of School Administrators – February 2014 - American Alliance for Health, Physical Education, Recreation and Dance - 2018 - Southern Baptist Convention - June 2013 & June 2019 Source: Louisville Tourism Summit, February 9, 2009

  37. Kentucky dropped 3.9% in hotel occupancy in 2008 1% statewide lodging tax is 1% ahead of this time last year (Ryder Cup) Source: Marcheta Sparrow, Tourism, Arts & Heritage Cabinet Secretary, Louisville Tourism Summit, February 9, 2009

  38. Harley Owners Group American Muscle Tour (National event-Bowling Green to Milwaukee) July 13-15, 2009 (in Bowling Green) 1,000 participants expected First time event in Bowling Green Big plus to be starting point of this tour

  39. Woodman of the World March 27-28, 2009 700 room nights expected Kentucky, Indiana, Ohio Vietnam Helicopter Pilots Association February or March 2010

  40. Super Chevy Show August 14-16, 2009 New event to Bowling Green Expected to make similar impact as GoodGuys Nostalgia Nationals

  41. KHSAA Football Championships (Commonwealth Gridiron Bowl) December 3, 2009 and December 4, 2010 ASA All Divisions State Tournament ASA 14 and Under Midwest Nationals ASA 16 and Under Midwest Nationals ASA 12 and Under Northern Nationals ASA 18 National Qualifier

  42. Marketing Opportunities/Ideas Welcome on Marquees Post weekly What's Happening Hang event posters Let us know your events in advance Subscribe to and read Bureau Brief Participate in applicable opportunities in Bureau Brief Provide trinkets for Ditty Bags for special events

  43. Marketing Opportunities/Ideas Provide certificates that we can use for sweepstakes, contests and door prizes Display rack with Visitor's Guides / coupon books in your business Refer visitors to area attractions and events Volunteer to survey your guests / customers Let us know any kids activities or specials you have (kids eat free, etc)

  44. Marketing Opportunities/Ideas Let us know if you have free wifi, are smoke-free or have green practices Encourage your satisfied guests to post a review on Trip Advisor Participate in City Vision Become a Visitor's Guide advertiser or get listed on our website Group dining options and restaurants taking advance reservations for Corvette Caravan attendees

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