Industry & Analysis’ Spotlight Series

1. Industry & Analysis’Spotlight Series July 16, 2013

2. Speakers Isabel Hill Travel and TourismOffice of Travel and Tourism Industries Scott Kennedy Aerospace Office of Transportation and Machinery

3. Industry & Analysis’Spotlight on Travel and Tourism July 16, 2013 Prepared by Office of Travel and Tourism Industries

4. Travel and Tourism

5. Impact of Travel on the U.S. Economy(2012)

6. U.S. Competitiveness in Travel and Tourism Source: United Nations World Tourism Organization (Jan. 2013)

7. Brand USA • Private sector organization funded in part by up to $100 million in fees on travelers from visa waiver countries • OTTI is the liaison to Brand USA. • Actively marketing in international markets to increase demand. • Working with partners and destinations from across the country and with federal agencies.

8. National Travel and Tourism Strategy • Goal: Attract and welcome 100 million international visitors, estimated to spend $250 billion, annually by the end of 2021, and encourage Americans to travel within the U.S. and its territories to see all that our country has to offer. • 5 Primary Sections: • Promoting the United States • Enabling and Enhancing Travel and Tourism • to and within the U.S. • Providing World-Class Customer Service and • Visitor Experience • Coordinating Across Government • Conducting Research and Measuring Results

9. NEI Priority Markets Origin Country 2012 Receipts/ Forecast Per Traveler(18/12)

10. Opportunities • Global Growth – global travel and tourism is expected to grow by 4% through 2020 (UNWTO) • Promotion – Brand USA active engagement in multiple markets will help us stay competitive with other countries that have ongoing national marketing campaigns. • Changes in Travel Facilitation Policy – risk-based screening identifies and removes low-risk travelers through trusted traveler programs. • Private Sector Engagement– provides insights, sets priorities. • Collaboration – strong working relationships • within ITA and across agencies will increase efficiency.

11. Risks and Issues • Economic downturns in source markets (resulting in lower household incomes). • Natural and man-made disasters in the United States. • As visitation continues to increase to our country, travel facilitation systems may get overwhelmed, resulting in long wait times for visas, long lines upon entry, etc. • Ability of Brand USA to successfully raise $100 in order to receive the full matching funds.

12. Examples of ITA and Interagency Activities • Webinars with the Travel and Tourism Team • FY12: Australia, China, Germany/France, Japan, Korea, Russia, UK, Travel Forecast • FY13: Canada, Mexico, Taiwan, Brazil, Traditional vs. BRIC markets, Travel Forecast • Promotional and Educational Events • IPW and other trade shows • Working with local CVBs • Industry roundtables • Trade Associations • MDCP Grants • NTA– promote the U.S. in China • Capital Region USA – create marketing partnerships with overseas tour operators to increase hotel bookings • U.S. Travel Association – support meetings and events • Mississippi River Country – attract Japanese visitors to the 10 MS River states

13. Research and Analysis http://tinet.ita.doc.gov TINews email updates on travel and tourism

14. Isabel Hill Director Phone: 202-482-5120 Email: Isabel.Hill@trade.gov Curt Cottle International Trade Specialist Phone: 202-482-4601 Email: Curt.Cottle@trade.gov Jennifer Kirsch International Trade Specialist Phone: 202-482-2404 Email: Jennifer.Kirsch@trade.gov Ron Erdmann Team Lead, Research Phone: 202-482-4554 Email: Ron.Erdmann@trade.gov Travel and Tourism Staff Julie Heizer Team Lead, Industry Relations Phone: 202-482-4904 Email: Julie.Heizer@trade.gov Margie Parker Program Assistant Phone: 202-482-2408 Email: Margie.Parker@trade.gov Schermin Smiley Administrative Specialist Phone: 202-482-4866 Email: Schermin.Smiley@trade.gov Melissa Bennett Program Analyst Phone: 202-482-4004 Email: Melissa.Bennett@trade.gov John Terpening Economist Phone: 202-482-6390 Email: John.Terpening@trade.gov Mark Brown Market Research Analyst Phone: 202-482-4754 Email: Mark.Brown@trade.gov Richard Champley Senior Research Analyst, Phone: 202-482-4753 Email: Richard.Champley@trade.gov Claudia Wolfe Economist Phone: 202-482-4555 Email: Claudia.Wolfe@trade.gov

15. Industry and Analysis’Spotlight on Aerospace July 16, 2013 Prepared by Office of Transportation and Machinery

16. Aerospace The aerospace industry includes: • Large Civil Aircraft (e.g. Boeing 737) • Business Jets • General Aviation Aircraft (including helicopters) • Aircraft Engines • Commercial Satellites and Launches • Unmanned Aerial Systems • Aerospace Parts • Aerospace Products and Equipment (e.g. NextGen Air Traffic Management)

17. NEI Priority Markets: (Figures based on Year-End 2012) U.S. Aerospace Exports to Target Markets (“Green Box” Countries) • European Union $33.2 B • GCC * $12.2 B • China $9.1 B • Japan $9.0 B • Brazil $6.8 B • Canada $6.6 B • Korea $3.9 B • Turkey $2.0 B • Russia $1.7 B • India $1.5 B • South Africa $534 M • *Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and UAE • Source: U.S. Census Bureau

18. Opportunities • In general, U.S. aerospace manufacturers see continued global growth for their products. Looking ahead over the next 20 years, Boeing sees demand for 35,280 new airplanes, valued at $4.8 trillion (at list prices). • Growing markets like China, India and Latin America show promise for increased exports: • Aircraft • Spare parts • Maintenance services • Flight simulators • Airport equipment, including air traffic management • U.S. manufacturers are world leading producers of new technologies: • Unmanned systems • Green technologies • Composites • NextGen Air Traffic Management • Communication and imaging satellites • Reform of U.S. export control laws simplifies the process for U.S. companies to export many products that were previously on the more strictly controlled ITAR list.

19. Risks and Issues • Foreign governments seeking to create/bolster their domestic industries create programs to subsidize their manufacturers. • Foreign governments also create OECD-inconsistent programs to finance their aerospace exports. • The aerospace industry is highly regulated both in the United States and abroad. Fees in foreign markets can be an issue. • Many of the fastest growing markets rate poorly on ease-of-doing business rankings. • Many sales campaigns and infrastructure projects may take years to come to fruition. • Investment in the domestic market may be necessary to win a sale (may be mandated offsets or just local business practice). • U.S. products are expensive (but high quality) (e.g. easier to buy 1 non-U.S. produced helicopter a year than 1 U.S. helicopter that will last 10 years).

20. Examples of ITA and Interagency Activities • Supporting Ohio Aerospace Industry’s MDCP • U.S. / Canada Aerospace Summit • Educational Seminars – Export control reform, financing, etc. • Proposed trade mission to Brazil 2014 (open to all U.S. companies) • Coordinate with USTR on highest value WTO dispute settlement case regarding European subsidies to Airbus • Support USTDA activities like Latin America Summit • Promote U.S. exports at aerospace trade shows, including Farnborough and Paris, other shows like Singapore and Dubai, and the annual Air Traffic Control Association conference and the annual Space Symposium • Support FAA participation at the UN ICAO meetings • Represent Commerce during drafting of National Space Policies to promote pro-export language • Participate in OECD meetings on aircraft financing • NextGen Vendor’s Guide U/S Sanchez at the opening of the U.S. Pavilion at the Farnborough Air Show (June 2012) DAS Chandra Brown opening the Alternative Aviation Fuels Pavilion at the Paris Air Show (July 2013)

21. Scott Kennedy; Aerospace Team Leader Scott.Kennedy@trade.gov; 202-482-1474 Aerospace Team Staff Kim Wells; Commercial Space, Middle East, North Africa, Aircraft Engines, Export Controls Kim.Wells@trade.gov; 202-482-2232 Alexis Haakensen; Aircraft Finance, General Aviation, Sub-Saharan Africa, Asia, Latin America Alexis.Haakensen@trade.gov; 202-482-6235 Fred Elliott (currently away on detail); Large Civil Aircraft, Aircraft Parts, Offsets, Export Control, Aircraft Subsidies, EU, Canada, Japan Fred.Elliott@trade.gov; 202-482-1233 Jonathan Alvear; NextGenAir Traffic Management, Aviation Security, Airport Infrastructure Jonathan.Alvear@trade.gov; 202-482-4125 CS Aerospace Team: Melissa Grosso; Global Aerospace Team Leader Melissa.Grosso@trade.gov; (860) 638-6955 http://trade.gov/mas/manufacturing/OAAI/index.asp