California Tourism Outlook 2010-2011 Dan Mishell Director, Research California Travel & Tourism Commission

1. California Tourism Outlook 2010-2011 Dan MishellDirector, ResearchCalifornia Travel & Tourism Commission October 29, 2010

3. Mission: To develop and maintain marketing programs in partnership with the state’s travel industry that keep California top-of-mind as a premier travel destination. California Tourism Mission California has over 100 destination marketing organizations, and over 50 tourism business districts. (CTTC, Civitas) CTTC provides a statewide platform for promoting the California brand to leisure travelers.

4. California’s Leisure Visitors 36 million non-resident leisure person-trips in 2009 $24 billion in spending by non-resident leisure travelers Sources: DK Shifflet & Assoc.; US Dept. of Commerce; CIC Research, Inc., Stats Canada

5. Domestic Leisure Overview Six primary states account for nearly half of non-resident visits and 1/3 of non-resident spending in California. Sources: DK Shifflet & Assoc.; TNS TravelsAmerica

6. International Market Overview, 2009 • Mexico Total • 6.3million visitors • $760 million spending Sources: US Dept. of Commerce; CIC Research; Stats Canada; CTTC

7. California Lodging Inventory Sources: Smith Travel Research

8. The New Normal Confidence Has Stabilized, but at a Low Level Consumer confidence index Sources: ABC News, Washington Post

9. The New Normal Recovery Will Proceed at a Tepid Pace % change yr ago except unemployment rate Sources: Moody’s Analytics, BLS, BEA

10. New Normal – GDP • China and India will remain growth leaders • Economies in Japan and Western Europe will be slower to recover • Australia shows no signs of slowing

11. The New Normal 1 in 4 Americans spending less, staying with friends &relatives, and driving instead of flying Projected Changes in US Traveler Behavior in Next 12 Months Source: SMARI

12. TheNew Normal Consumer Trends • Recovery consumers are redefining value in a new era of consequences • Consumers want transparency, trustworthiness and authenticity. • The definition of “luxury” is morphing and now consumers want meaning along with material goods Compiled from: The New Experience of Luxury Synovate 06/10, : PwC The New Consumer Paradigm: Permanent or Fleeting 10/09, Brand Keys 02/10, A Darwinian Tale The Futures Co 11/09

13. Forecast Overview • Stronger than expected recovery in 2010 to date • Visits will moderate in the second half of the year against headwinds from the economy and comparisons to late 2009 • The economic outlook is marred by uncertainty

14. CA Hotel Regional Occupancy • Business and international travel are up • Leisure travelers trading up from day to overnight • Gateway • Rural • Other Source: Smith Travel Research

15. Strong start to 2010… • International arrivals up 14% through June

16. Domestic Forecasts

17. Domestic Forecasts

18. International Forecast

19. International Forecast

20. Spending Forecast

21. Spending Forecast

22. Expenditures recover ahead of visits

23. California Travel Forecast Summary 20102011 Total Visits 4.0% 3.1% Domestic Visits 3.8% 2.9% International Visits 6.2% 5.9% Total Spending 7.4% 5.6% Domestic Spending 6.8% 4.8% International Spending 10.5% 9.0% Source: Tourism Economics

24. Full Forecast Available Online tourism.visitcalifornia.com/research