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

2


American Express Cardmembers

3


US SPEND TRENDSRecession & Recovery

4


OVERALL SPEND GROWTH

5

Pre Recession Recession Recovery

Spend Growth by Card Type


Dining

THE GREAT RECESSION

Retail

Entertainment

6

YOY Spend Growth by Quarter

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


Dining

THE UNEVEN RECOVERY

Entertainment


7

Retail

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


THE UNEVEN RECOVERY?

Entertainment


8

Travel Q1 - 2011 Q2-2011

Retail

Dining


US CONSUMER BEHAVIORThe New Normal

9


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

10

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


LODGING INDUSTRY TRENDS

11


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

12

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


Gen Y Travelers are Leading the Road to Recovery

13

Sp

end

ind

exB

ase

Per

iod

: 2

008=

100

Consumer Spend on Lodging

Recession Recovery


14

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


15

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


Business TravellersBusiness Travellers

Key Leisure SegmentsKey Leisure Segments

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

International VisitorsInternational Visitors


Sp

end

In

dex

H1

200

7=10

0Business and Visitor Spending observes strong rebound in 2011

Business Leisure

Visitor Domestic


% Business vs. Leisure (H1 2011)

+4%

Domestic Business Travellers Remain Valuable

Business Leisure

Spend

-5%


% Business vs. Leisure (H1 2011)

+2%

International Travelers For Business Are Also Rebounding

Business Leisure

Spend

-2%


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%


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


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


Newcomers in the Recovery Period Have Gained Share

23

Spend Share for All Lodging


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

24

Spend Share for All Lodging


The “Recession Proof” Traveler is Showing Resilience

25

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%


28

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%


29

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%


RETAIL BEHAVIOR

30


THE PRE-RECESSION LUXURY FASHION CONSUMER

31

Spend Growth


NEWCOMERS ARE DRIVING GROWTH IN THE RECOVERY

32

Spend Growth by Consumer Segment


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%

33

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