Dan MishellVisit California

Travel Trends and Outlook for California

Over 90% of visits are domestic, but international accounts for 20% of spending

93%

7%DomesticInternational

80%

20%

251 million person-trips

$117.5 billion in spending

Source: DK Shifflet & Associates, U.S. Department of Commerce, CIC Research Inc., Dean Runyan Associates

Six primary states account for nearly half of non-resident leisure visits and 1/3 of non-resident spending in California.

Sources: DK Shifflet & Assoc.; TNS TravelsAmerica

78% of US. Leisure visits and 60% of spending is from California residents.

California’s diverse base of international visitors is a strength

2014 VolumeMexico 7,572,000Air 542,000

Canada 1,625,000China 996,000U.K. 686,000Australia 589,000Japan 575,000France 445,000 Germany 439,000S. Korea 397,000Scandinavia 268,000India 262,000Brazil 220,000

Source: Department of Commerce; Stats Canada; CIC Research Inc.; BEA; Tourism Economics

California hotel room demand is at record level

Source: Smith Travel Research

70.7%72.8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

And travel spending is at an all-time high

Source: Dean Runyan Associates

Source: Dean Runyan Associates

Travelers spent nearly

$117 BILLIONin California in 2014

$117.5 billion1,027,000$9.3 billion

In travel-related consumer spending

Tourism-related jobs in California

In state and local tax revenue

Growth has continued in 2015

California U.S.Lodging (Aug YTD)Occupancy +2.7% +1.8%Average Daily Rate +7.2% +4.8%Revenue Per Available Room +10.1% +6.7%California Airport Traffic (July YTD)Domestic +4.6%International +6.9%Overseas Arrivals (Mar YTD) +4.0% +2.5%Welcome Center Traffic (July YTD) +6.5%Leisure & Hospitality Employment (Aug/Sep) +4.4% +2.9%

Source: Smith Travel Research

Lodging indicators are up for nearly all regions

Source: Smith Travel Research

Occupancy Aug YTD % Chg ADR Aug YTD % Chg

Q115 overseas growth led by Middle East, S. America, and Asia

Source: Forward Keys

MiddleEast

CentralAmerica(excld.Mex.)

Africa SouthAmerica Asia Total

Overseas Europe Oceania Caribbean

YTD % Chg. 33.3% 22.8% 15.3% 11.5% 6.8% 4.0% -1.8% -4.8% -14.4%

-20.0%

0.0%

20.0%

40.0%

60.0%

California International Port-of-Entry Arrivals from World Regions(March YTD 2015 Year-Over-Year Percent Change)

Source: U.S. Department of Commerce, National Travel & Tourism Office (NTTO), Form I-94

Domestic travel forecasted to grow 2-3% annually through 2018

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

10 11 12 13 14 15F 16F 17F 18F

Jan 2015Jun 2015

Total Arrivals to CaliforniaBy forecast vintage, %

Source: Tourism Economics

Domestic growth led by western states

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0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

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Projected trip growth by source marketAverage annual growth in visitors, 2015 to 2018

Source: Tourism Economics

Opportunity marketsin light blue

Travel intentions are strongly correlated to household income

Source: MMGY

Among generations Millennials plan to travel most

Source: MMGY

International travel forecasted to be up 1% in 2015 then grow 4-5% through 2018

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

08 09 10 11 12 13 14 15F 16F 17F 18F

US

California

CA International Inbound TravelAnnual % change

Source: Tourism Economics

Strong US Dollar impacting travel in 2015, especially from Mexico and Canada

Source: Pacific Exchange Rate Service – Prof. Werner Antweiler

Forecasted growth led by China, India and N. America

0 3 6 9 12 15

JapanFrance

AustraliaUnited Kingdom

BrazilGermany

ScandanaviaSouth Korea

MexicoCanada

IndiaChina

Projected international visits by marketAverage annual % growth, 2015-2018

Source: Tourism Economics

Growth in expenditures to outpace growth in visits despite strong dollar

8090

100110120130140150160170180190

07 08 09 10 11 12 13 14 15F 16F 17F 18F

DomesticInternational

Expenditures and Visits DivergingIndex, 2007 = 100

Source: Tourism Economics

Solid lines = visitorsDashed lines = expenditures

CA Travel Forecast, Visits

2015 2016Visits +2.1% +2.3%

Domestic +2.1% +2.1%International +1.0% +4.2%

Overseas +2.2% +5.0%Source: U.S. Dept. of Commerce; StatsCan; CIC Research, Inc.; Tourism Economics;

CA Travel Forecast, Spending

Source: U.S. Dept. of Commerce; StatsCan; CIC Research, Inc.; Tourism Economics;

2015 2016Spending +2.7% +5.5%

Domestic +2.5% +4.9%International +3.4% +7.7%

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