Destination Day Mexico GMS

1. Destination DayMexico GMS

2. Market Overview • Official Name: United Mexican States • Land area: 1,972,550 sq kms (almost 3 times the size of Texas) • Population: 104,959,594 (2003) • Population growth: 1.8% (average) • Fiscal year: Starts January 1st • Currency: Mexican peso (Ps) Ps 13.50: US$1 (Jan 2009) • Political division: 31 States and the Federal District (Mexico City) States are divided into municipalities.

3. MARKET OVERVIEW Five states reported the highest population increases in the last decade: Mexico, Jalisco, Puebla, Baja California and Nuevo Leon.. Mexico is divided in three main demographic regions NORTHERN REGION CENTRAL REGION SOUTHERN REGION

4. Market Overview • Mexico is a leading player in the International Economy, ranking as the Eighth World Exporter and Second Trade Partner of the U.S. • According to TIA’s research, Mexico generates nearly 160 billion dollars annually and provides employment to more than 200,000 Californians. • According to CIC Research, 1,878,000 Mexican visitors arrived by air in 2007(up 9.6% from 2006). 428,000 (22.8%) visited California. • Airlines dramatically reduced airfare, thus creating a competitive environment in the market place. Both Mexicana and Aeromexico are discounting up to 50% on both, local and international fares.

5. Economic Trends • Mexico's GDP growth will slow sharply. We currently forecast a rebound to 3% in 2010. An estimated year-end inflation of 7.1% in 2008. • It is expected a much weaker peso, in the short term it will impact on the economy and travel patterns. Almost 40% devaluation in January 2009. • CHALLENGING TIMES CREATES NEW OPPORTUNITIES AND NEW DEVELOPMENTS: • Over 4,000 travel agencies throughout the country. Travel Agents are the main distribution channel.

6. New Research Data • Air travelers from Mexico represents one of the largest international markets for California with approximately 428,000 visitors to the state in 2007 and 7.4 million by land. Collectively visitors from Mexico arriving to California by air spent approximately $389 million. • Mexican Tourists can be classified into four categories based on the purpose of the trip to California: Vacation, business, attending conventions, visiting Relatives being this, one of the main reason on why the Mexican market travels more often to the southern region of California. • Attracted to the wide range of activities: Shopping, Theme Parks, Recreational Activities, Cosmopolitan Cities. • In Mexico everything is about relationships – visibility and leadership is key!

7. New Research Data PURPOSE OF TRAVEL

8. New Research Data MEXICANS WHEN TRAVELING ARE ATTRACTED TO: COSMOPOLITAN CITIES SHOPPING RECREATION THEME PARKS

9. New Research Data • Nielsen research found the main concerns for the next six months are: Economy, job security, Political stability and balance between work and life. This will directly affect on the consumer spending on travel/vacation, use of credit cards, entertainment, among others. • Approximately 4,200 travel agencies throughoutthe country. Travel agencies and tour operators are veryinfluential in theconsumer’sdecision-makingprocess. • Define travel drivers per season based on key dates for the Mexican market such as Easter/March-April, Bridal Seasonality/April, Summer Vacations/July-August, Independence day/September, and others.

10. New Research Data TRAVEL AGENCIES, KEY IN THE RESERVATION PROCESS Last Minute Market WE DECIDE WE WANT TO TRAVEL , NO PLANNING INTERNET USE MAINLY AS AN INFORMATIONAL TOOL THERE IS NO MUCH PLANNING AHEAD OF TIME CHECK FINANCIAL SITUATION

11. New Research Data MEXICO SEASONALITY TRAVEL DRIVERS EASTER/ MARCH-APRIL SUMMER/ JUNE-JULY WEDDING MONTH/ MAY INDEPENDENCE DAY/ SEPTEMBER ALL SAINTS/NOVEMBER CHRISTMAS/DECEMBER

12. CTTC Mexico appointed in late 2008. Key objectives are: Strength and reinforced relationships within market Focus on the seasonality aspect of the traveler- Easter (March/April), Summer (July/August), Independence Day (Sept) other travel periods and optimize the markets short booking patterns. Establish a dedicated Spanish language Web site which offers planning and resource tools for travelers – visitacalifornia.com.mx Emphasis on travel trade – outreach and ongoing education. Showcase the depth of the statewide product to the industry. Demonstrate leadership for California within the market and in the CTTC and industry framework Market Strategy

13. 2009 - 2010 Marketing Plan 12 month/ongoing TRAVEL TRADE INITATIVE PROGRAM Groundbreaking incentive promotion in Mexico market LET’S START TO BE THE INFLUENCER with creation of a Direct Communication campaign (electronic and physical) Begin April 09 – Industry involvement - Need prizes, fun facts, etc. THOUSAND THINGS TO DISCOVER MILLIONAIRE CALIFORNIA, WINE NOT?

14. 2009 - 2010 Marketing Plan UPCOMING EVENTS – CTTC Booth Space available for industry • EXPOVACACIONES March, 2009 Most important Tradeshow in Mexico City- CTTC sponsoring lunch which offers high visibility • ARLAG, May, 2009. Guadalajara Tradeshow

15. 2009 – 2010 Marketing Plan SHOP CALIFORNIA We will intensify our “Shop California” in Mexico and the on-line presence through very key initiatives A California Fashion and lifestyle month in Mexico – Spring 2010 at Palacio de Hierro department store (the most influential department store in Mexico) www.SpanishShopAmericaTours.com/California

16. 2009 – 2010 Marketing Plan CONSUMER PROMOTIONS • This is a direct consumer promotion in which we will place California electronic banners linked to our website in Spanish • This is a great opportunity to create California product awareness for both VISA and Master Card to over 102 million card holders, combined. • Mailing campaign to American Express card holders and banners campaign through retail outlet stores.

17. 2009 – 2010 Marketing Plan GDS CAMPAIGN WITH SABRE

18. 2009 – 2010 Marketing Plan TRAVEL TRADE • Available to offer customized, tailored discount and packages available for each region. MPP will solicit industry to obtain special offers and info • Banners will be displayed on Mexicana, Volaris and Aeromexico web pages • This will enticeconsumers to travel to California when booking a reservation with either carrier

19. 2009 – 2010 Marketing Plan TRAINING SEMINARS CTTC Mexico office will develop an educational product campaign through a training seminars to key travel agencies before key travel months throughout the country. These seminars will update industry partners on our product and will keep them informed on new developments. 2 trainings in Mexico City in February,2009 2 trainings in Guadalajara in May,2009 2 trainings in Monterrey in May,2009 2 trainings in Mexico City in October,2009 PR INITIATIVES Media fam trips, wine tasting events, distribution and follow up of press releases, special event coverage

20. 2009 – 2010 Marketing Plan NEW TRADE AND P.R. E MAGAZINE Opportunity for industry to provide fun facts and educational information Ongoing email campaign for both media and travel trade 10,000 emails will sent monthly DO YOU KNOW CALIFORNIA?

21. WHERE AND WHY TO PARTNER WITH CTTC Mexico is the second largest source of visitors to the USA, after Canada. California remains the top. Mexico operates on a short planning cycle (30-90 days) which offers good opportunities for CA partners to see quick results and ROI Proximity and Relationships - Mexicans are attracted to the wide range of activities California offers New air service - Aeromexico will add a nonstop service from Mexico City to San Francisco, Interjet and Volaris (a low –cost carrier) expected to add service to California. Increased use of Tijuana airport. Very low airfares (some half price from last year)