Destination Day Germany, Austria & Switzerland International Summit 2009

1. Destination Day Germany, Austria & Switzerland International Summit 2009

2. Market Overview & Economic Trends • Population of Germany: 82,200,000 • Population of Austria: 8,300,000 • Population of Switzerland: 7,600,000 • Current German economy: +1.3 GDP (3rd quarter 2008) • Despite the financial crisis, unemployment has decreased in the third quarter of 2008 (now around 8.0%) • Consumer confidence in Germany remains remarkably stable (Christmas holiday sales were at a record high) • The value of $ was increasing against the Euro until October 2008 but has decreased since then again – 1€ = $1.34 (as of Jan 12, 2009) • Flight capacity: 48 weekly flights/12,881 seats non-stop per week

3. Market Overview & Economic Trends • An economic slowdown is anticipated for 2009; the Institute for Worldwide Economy (IfW) predicted that the German economy will shrink by 2.7% in 2009. • Thanks to the stimulus packages of the government and lowering of interest rates, the ZEW (European Economic Research Center) is still optimistic. • Vacations have a high priority for Germans; savings on travel tend to come last of all. • The Germans will still travel despite the financial crisis – the question is where. Important to note that Spain, for example, will spend additional 150 million Euro on advertising in this competitive market, Greece will be spending 50% more and the Dominican Republic 30% more in the German market this year.

4. Market 0verview & Economic Trends • German travel industry is cautiously optimistic for 2009 despite the worsening economic climate. • 2007/08 was one of the best years ever, with a turnover increase of 5.9% (total outbound travel). • Long-haul holidays grew 4%, self-drive holidays up 2%. • One of the key destinations for Germans in 2008 was North America (up 20% compared to 2007; California is up 24%). • German tour operators report that bookings and revenue for travel to the USA is up and that the start of 2009 is positive as well. • Summer bookings for 2009 have just started to come in. German tour operators report a two-digit growth for California compared to the previous year, despite the financial crisis. The outlook for 2009 is still very positive.

5. New Research Data* • German consumers prefer to book their vacationonline (55%), or by travel agency (42.5%) and phone (2%). • 72% of German online users search for information about holiday offers online. • The influence of the Internet on purchase decisions is twice as high as TV. • ROPO (research online, purchase offline) is a growing trend in Germany’s travel sector. • Germans spend the highest amount of money per person per trip and plan their vacation the furthest in advance (3 months) among European travelers. • The decision to take an international trip still depends on costs;Germans also try to save money during the trip. *various sources – fvw/Ulysses/FUR

6. New Research Data* • Germans like best to travel by plane when they go on vacation (67.4%). • Holiday spending reached 22.1 billion Euro (+ 0.9%). • The number of international trips increased by 11%. • On vacations, Germans are most interested in broadening their horizon and experiencing local culture, but also like shopping, health and relaxing; new is the trend for “green” travel. • Official destination information and recommendations are most credible for German travelers. • The election of Barack Obama has improved the U.S. image a lot and Germans are now interested in the USA again (“Obamania”). * sources – GFK/AHGZ/fvw and tour operators

7. New Research Data – Destination Web Site* • California & German language recommendation: A site that offers a full range of information in German is more effective and will have a stronger impact in generating visitation. • The German site should vary from the domestic site in some ways: • It should have more information on basics – visas, getting there, transportation. • Consumers want to see flight options/costs – and perhaps even some vacation packages. • There were some reactions that the home page was a bit overwhelming, so the German pages should be a bit toned down. • There were some specific features that consumers commented upon and generally liked. These are being included in the German language version: • Must See Features – people like to know what are the most important attractions and features to see. Some choose to avoid these, but they still want to know. • Inside Scoop – this relates to the desire to have expert opinions. The key is how to best position the inside scoop so that it is meaningful. Any German connection would probably be good. • Trip Ideas – the state is large, and itineraries or trip ideas help people visualize a trip to the area. In fact, including nearby attractions such as Las Vegas or the Grand Canyon might make the state seem even more appealing. * source – SMARI’s weblab report June 2008

8. 2008-2009 Market Strategy • Increase California brand awareness through some consumer promotions and integrate travel trade as much as possible. • Position California as a destination providing value compared to other long-haul (and some medium and short-haul destinations). • Position California as #1 food and wine destination among long-haul competitors such as Australia and South Africa. • Develop in-market Web site to take advantage of German consumers' reliance on technology. • Target audience: couples, 30 to 55 years old from middle to upper class who are long-haul travelers and repeat visitors. • Key destination motivators: wine and dine, beaches, city culture, great drives, national and state parks, active lifestyle, shopping.

9. 2009-2010 Planning Strategies • Keep California top-of-mind with key German travel trade and media, and through those channels, promote California as the long-haul destination of choice for the German consumers. • Continue to use the key destination motivators of wine and dine, beaches, city culture, great drives, national and state parks, active lifestyle, and shopping in all marketing efforts. • Position California as a destination providing value compared to other long-haul (and some medium and short-haul destinations). • Keep California‘s position as the premier food and wine destination among long-haul competitors such as Australia and South Africa. • Focus on technology to take advantage of German consumers' reliance on it.

10. 2009-2010 Key Initiatives • Cooking Cup consumer promotion • Exclusive online promotion with wetter.com (weather info portal) • 2010 Trade and Media Sales Mission to Hamburg and Frankfurt • Co-op promotions with the top 5 tour operators • Fam for top 10 product managers to showcase new product • SuperFam with Meier's Weltreisen for 120 travel agents • Host of 2010 DER academy in California (for 700 travel agents) • Content expansion of the online training program for the selling travel agent staff • Development of the travel trade portal and press room on in-market Web site • Development of e-marketing strategy for the consumer, travel trade and media • Wine and food group media trip in the fall 2009 • Group media trip showcasing active California lifestyle scheduled for spring 2010

11. How to partner with CTTC Germany? View our programs on the Marketing Program Planner (MPP) at tourism.visitcalifornia.com/mpp • New travel trade co-ops, such as DERTour Wine Tasting program • 2009 Cooking Cup • 2010 ITB Berlin (2009 program is sold out) • 2009 Meier's SuperFam • 2010 Germany Sales and Media Mission • PR/Media projects • Technology co-ops and e-marketing • 2010 German Visitor's guide

12. 2009 DERTour Wine Promotion • DERTour is offering 500 travel agencies a special wine tasting package, where travel agencies can invite their clients to taste California wine and learn more about traveling to California. • 100 folders (six pages) with information about California and the packages DERTour is offering for summer will be distributed. • Raffle for DERTour‘s California trip as an incentive; wine provided by Gallo. • Also, 2,500 travel agencies with the best booking numbers will receive a California info package independent of their participation in the wine tasting.

13. 2009 Cooking Cup • The Cooking Cup is the biggest cooking contest for non-professional cooks in Germany. • California is the official partner and a host of the final cook-off (November 2009) together with Gallo and Meiers Weltreisen. • Promotion and the partners are featured in Elle Bistro (food and lifestyle magazine), freundin (#1 women’s lifestyle magazine), Abenteuer and Reisen (top travel magazine), and will receive TV coverage. • This innovative and highly efficient marketing strategy guarantees more than 50 million impressions for partner brands.

14. 2009 Meiers Weltreisen SuperFam • Fam trip for 120 travel agents from Germany in November 2009 • Five guided tours through California by bus, rental car and motorhome • Great way to inspire and eduacte the front line staff on California product • Will need assistance from destinations

15. 2010 Sales and Media Mission • CTTC Sales and Media Mission planned for April 2010 (pre-Pow Wow) • Program will include individual sales calls to key travel trade and media, marketplaces and evening receptions

16. MSI’s Services CTTC‘s German office offers following the marketing services: • Travel trade focus – sales calls and seminars • Fam trips and travel agents education • Representation at ITB and Pow Wow • Quarterly reports and market intelligence • Annual tour operator brochure and sales analysis • Possible further activities can be contracted and realized • Close cooperation with CTTC staff and constant info on additional marketing as well as PR/media project buy-ins