AH&LA Resort Conference

Michael R. Grillo, Vice President

American Express Business InsightsSeptember 19th, 2011

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

American Express Business Insights The US Consumer Post Recession The New Normal Lodging Industry Trends, Domestic and International Visitors Key Traveler Segments to Focus on for 2011 and Beyond Final Thoughts and Q&A

Agenda

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© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

American Express Cardmembers

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© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

US SPEND TRENDSRecession & Recovery

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© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

OVERALL SPEND GROWTH

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Pre Recession Recession Recovery

Spend Growth by Card Type

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

Dining

THE GREAT RECESSION

Retail

Entertainment

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YOY Spend Growth by Quarter

Q1 -09 Q2-09 Q3-09 Q4-09Travel

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

Dining

THE UNEVEN RECOVERY

Entertainment

YOY Spend Growth by Quarter

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Retail

Travel Q1 -10 Q2-10 Q3-10 Q4-10

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

THE UNEVEN RECOVERY?

Entertainment

YOY Spend Growth by Quarter

8

Travel Q1 - 2011 Q2-2011

Retail

Dining

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

US CONSUMER BEHAVIORThe New Normal

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THOUGHTS ABOUT THE NEW NORMAL

Smart and wireless phone and service have increased through the recession

Necessities Are Being Redefined

Spending shifted from dining to supermarkets while affluent consumers shopped more with discount retail

Value Is Sticking

Generations MatterBoomers and Seniors cut back first and haven’t come back as strong while Gen X and Y have returned to spending

Luxury fashion spending returned first but consumers are deal seeking; newcomers are younger and less affluent

Luxury Is Back

Dining Out is ChangingQSR increased its share of restaurant spending by more than 15% and bars have seen greater than 40% increase since the start of the recession

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Affluent consumers and Gen Y have prioritized a healthy lifestyle of fitness, high-quality foods, and caring for oneself since the pre-recession period

Health Matters

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

LODGING INDUSTRY TRENDS

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Lodging Spend has Picked Up and Maintains its Trajectory for the Luxury and Upscale Segments

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Sp

end

ind

exB

ase

Per

iod

: 2

008=

100

Domestic Visitor Spend Index in Lodging

Recession Recovery

Recession Recovery

International Visitor Spend Index in Lodging

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

Gen Y Travelers are Leading the Road to Recovery

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Sp

end

ind

exB

ase

Per

iod

: 2

008=

100

Consumer Spend on Lodging

Recession Recovery

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

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TravelRetail Dining

Gen Y, are Growing ALL tiers of the Lodging industry, especially on the high and low ends

H1 2011 YOY Visitor Growth by Lodging Tiers

6%

0%

-4%

-10%

6%

-1%

-4%

-9%

7%

10%

2%

-8%

9%

2%

0%

-4%

LUXURY UPSCALE MIDSCALE ECONOMY

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

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TravelRetail Dining

…..and Spending!

H1 2011 YOY Visitor Growth by Lodging Tiers

3%

14%

2%

-5%

8%

2%

-3%

-7%

40%

43%

30%

9%

22%

6%

3%

-2%

LUXURY UPSCALE MIDSCALE ECONOMY

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

Business TravellersBusiness Travellers

Key Leisure SegmentsKey Leisure Segments

Who are the key Traveler Segments to Focus on for 2011?

International VisitorsInternational Visitors

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Sp

end

In

dex

H1

200

7=10

0Business and Visitor Spending observes strong rebound in 2011

Business Leisure

Visitor Domestic

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% Business vs. Leisure (H1 2011)

+4%

Domestic Business Travellers Remain Valuable

Business Leisure

Spend

-5%

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% Business vs. Leisure (H1 2011)

+2%

International Travelers For Business Are Also Rebounding

Business Leisure

Spend

-2%

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Top International Feeder Markets

Canada United Kingdom Mexico Australia France

Business17% 19% 11%

Leisure

MAPS to be UPDATED

11%17% 17% 30% 18%

3% 3%

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

Top International Feeder Markets

Canada United Kingdom Mexico Australia France

BusinessAmex Overall

LeisureAmex Overall

1% 3% 1.3%

0.9%0.9%0.1%

0.9%0.7%

0.0% 0.0%

MAPS to be UPDATED

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

Top International Growth Markets

Australia Brazil Canada Japan France

BusinessAmex Overall

LeisureAmex Overall

22%30% 17% 17% 18%

13%19% 17% 14% 11%

MAPS to be UPDATED

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

Newcomers in the Recovery Period Have Gained Share

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Spend Share for All Lodging

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Younger Consumers (Gen X and Gen Y) Are Becoming More Important

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Spend Share for All Lodging

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The “Recession Proof” Traveler is Showing Resilience

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CORE RETURNING NEWCOMER RECESSION PROOF

% Leisure/# and Spend 56%/46% 72%/63% 75%/63% 76%/63%

Luxury & Upscale Share of Visitors/Spend

59%/73% 54%/69% 51%/65% 52%/66%

YOY Change in Luxury Spend (H1 2011)

-2% -4% -2% +61%

YOY Change in Upscale Spend (H1 2011) -1% -2% +1% +58%

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

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TravelRetail Dining Entertainment

SPEND BEHAVIORS BY GENERATION

2010 YOY Spend Growth by Industry

15%

8%

4%

2%

0%

-2%

-5%

-6%

0%

-3%

-3%

-6%

4%

4%

1%

-2%

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

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TravelRetail Dining Entertainment

SPEND BEHAVIORS BY GENERATION

H1 2011 Spend Growth by Industry

6%

2%

-1%

-7%

-6%

-5%

-7%

-10%

6%

-7%

-1%

-9%

1%

1%

-2%

-5%

© 2010 American Express Travel Related Services Company, Inc.  All rights reserved.CONFIDENTIAL, PROPRIETARY & TRADE SECRET INFORMATION. This document contains confidential, proprietary, and trade secret information of American Express Company and its subsidiaries and affiliates ("American Express"), and may not be disclosed in whole or in part to any third parties without prior written consent of American Express.

RETAIL BEHAVIOR

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THE PRE-RECESSION LUXURY FASHION CONSUMER

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Spend Growth

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NEWCOMERS ARE DRIVING GROWTH IN THE RECOVERY

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Spend Growth by Consumer Segment

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GENERATIONAL TRENDS - LODGING

2010 YOY Spend GrowthEconomy Midscale Upscale Luxury

Gen Y 4% 14% 23% 24%

Gen X (7%) 8% 10% 10%

Baby Boomers (12%) 3% 6% 6%

Seniors (15%) (1%) 0% 1%

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