Slide1: Perspectives on Major Markets
Southern California
Visitor Industry Outlook Conference - 2006
Tiffany Urness
Research Manager, California Tourism
October 12, 2006
California Tourism 2005: California Tourism 2005 In-State: 279.8 M
80% Out-of-state: 55.5 M
16% Int’l: 14.4 M
4% Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM
CIC Research; California Tourism Research
Slide3: 2005
= Banner year for California tourism.
2005 in Review: 2005 in Review
US CA
Total domestic travel + 4.1% + 6.7%
Domestic leisure + 3.2% + 7.1%
Domestic business + 6.8% + 5.6%
Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM
2005 in Review: 2005 in Review US CA
Overseas visitors +6.9% + 14.3%
Hotel occupancy rates + 2.9% + 3.8%
RevPAR + 8.4% + 10.1%
Domestic air travelers + 4.1% + 2.6%
Source: CIC Research Inc., Smith Travel Research; Bureau of Transportation Statistics
California Domestic Market Share (% US Person-Stays): California Domestic Market Share (% US Person-Stays) Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM
CA Domestic Volume by Segment (Millions of Person-Stays): CA Domestic Volume by Segment (Millions of Person-Stays) Non-Resident Business
Non-Resident Leisure
Resident Business
Resident Leisure Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM
CA Resident Leisure Volume (Millions of Person-Stays): CA Resident Leisure Volume (Millions of Person-Stays) Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM
CA Non-Resident Leisure Volume (Millions of Person-Stays): CA Non-Resident Leisure Volume (Millions of Person-Stays) Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM
Dynamics Affecting California Travel Trends : Dynamics Affecting California Travel Trends Headline Events
Market Conditions
California Competitiveness
2006 Travel Industry YTD: 2006 Travel Industry YTD Headline Events
Relative normality
Restrictions, regulations, and rudeness
2006 Travel Industry YTD: 2006 Travel Industry YTD Market Conditions
Higher prices
Tapering demand
2006 Travel Industry YTD: 2006 Travel Industry YTD TIA Aug.Travel Price Index + 6.2%
Gasoline + 19.6%
Lodging + 4.8%
Airfares + 5.8%
Source: TIA.org, August 2006
Vehicle Miles Driven Vs. Regular Gas Prices : Vehicle Miles Driven Vs. Regular Gas Prices U.S., % change year ago Sources: Department of Transportation,Oil Price Information Service Vehicle Miles Driven (L) Gas Prices (R)
California Hotel Room Rates Vs. Occupancy: California Hotel Room Rates Vs. Occupancy % change year ago Source: Smith Travel Research; Moody's Economy.com Average Room Rate Occupancy, percentage point difference
California Hotel Room Rates Vs. Occupancy: California Hotel Room Rates Vs. Occupancy Source: Smith Travel Research Average Room Rate (R)
% change year ago Occupancy Rate (L) Trendline
2006 Travel Industry YTD: 2006 Travel Industry YTD August YTD
US room revenues + 6.8%
US average occupancies + 1.1%
CA room revenues + 8.2%
CA average occupancies + 1.1%
Month of August - 1.0%
Source: Smith Travel Research
Revenue Passenger Air Miles: Revenue Passenger Air Miles U.S., % change year ago Source: Air Transport Association Domestic International
Feeder Markets: Top States ( 2005 Person-Stays) : Feeder Markets: Top States ( 2005 Person-Stays) Arizona
Nevada
Texas
Oregon
Washington 9.1 million
7.4
4.0
3.4
2.7 Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM
Feeder Markets: Top Metro Markets ( 2005 Person-Stays) : Feeder Markets: Top Metro Markets ( 2005 Person-Stays) 4.4 million
4.0
1.8
1.3
1.2
1.1
1.1 Phoenix
Las Vegas
Yuma
Tucson
Reno
New York
Portland Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM
Air Travel Vs. Air Fares To California From Phoenix: Air Travel Vs. Air Fares To California From Phoenix Source: U.S. Department of Transportation, O&D Survey
Air Travel Vs. Air Fares To California From Las Vegas: % change year ago Source: U.S. Department of Transportation, O&D Survey Fares From
Las Vegas Trips From
Las Vegas Air Travel Vs. Air Fares To California From Las Vegas
Air Travel Vs. Air Fares To California From Portland: Air Travel Vs. Air Fares To California From Portland % change year ago Source: U.S. Department of Transportation, O&D Survey Fares From
Portland Trips From
Portland
Air Travel Vs. Air Fares To California From New York: % change year ago Source: U.S. Department of Transportation,
O&D Survey Fares From
New York Trips From
New York Air Travel Vs. Air Fares To California From New York Source: U.S. Department of Transportation, O&D Survey
Air Travel Vs. Air Fares To California from Seattle: Air Travel Vs. Air Fares To California from Seattle % change year ago Source: U.S. Department of Transportation,
O&D Survey Fares From
Seattle Trips From
Seattle Source: U.S. Department of Transportation, O&D Survey
Air Travel Vs. Air Fares To California From Chicago: % change year ago Source: U.S. Department of Transportation,
O&D Survey Fares From
Chicago Trips From
Chicago Air Travel Vs. Air Fares To California From Chicago Source: U.S. Department of Transportation, O&D Survey
Slide28: Canada Mexico 81%
Top CA International Markets (2005): Top CA International Markets (2005) Mexico (Air/Land) 3,796,000
Day visitors 4,800,000
Canada 1,060,000
UK 778,000
Japan 722,000
Australia 313,000
Germany 309,000
Source: CIC Research Inc.
International Visitors Vs Arrivals: California Visitors:
Estimates based on in-flight surveys of non US residents reporting a California visit, supplemented with DHS data. International Visitors Vs Arrivals California Arrivals:
Non US residents arriving in California as their first US port of entry.
Int’l Visitors Vs Arrivals at California Ports of Entry (Percent Chg 04-05): Int’l Visitors Vs Arrivals at California Ports of Entry (Percent Chg 04-05) Visitors Arrivals Total Overseas 14.3% 5.8% China 44.6% 21.7% Mexico (Air) 21.3% 14.0% Australia 20.8% 10.6% So. Korea -7.7% 2.0% Japan 14.6% -5.0% UK 12.3% 2.1% France 21.4% 19.8% Germany 12.4% 8.4% Source: DHS Port of entry arrivals, Form I-94; CIC Research Inc.
Value of U.S. Dollar Vs. Foreign Currencies: Value of U.S. Dollar Vs. Foreign Currencies Index: January 2003 = 100 Source: The Federal Reserve Board Euro Peso Yen Pound Canadian $
Canadian Travel Vs Exchange Rates: Canadian Travel Vs Exchange Rates Source: Fedgazette, Federal Reserve Bank of Minneapolis, July 2006
Value of Euro VS German Arrivals in CA: Value of Euro VS German Arrivals in CA Index: January 2003 = 100 Source: Federal Reserve Board; DHS Port of entry arrivals, Form I-94 Euro German Arrivals
CA Overseas Visitor Market Share 1994 - 2005: CA Overseas Visitor Market Share 1994 - 2005 Source: CIC Research Inc.
European Visitors to California (1999-2005): European Visitors to California (1999-2005) Source: CIC Research Inc.
Asian Visitors to California (1999-2005): Asian Visitors to California (1999-2005) 1999 2005 Source: CIC Research Inc.
International Visitors Entering CA* (Percent Chg 05-06 July YTD Prelim.): International Visitors Entering CA* (Percent Chg 05-06 July YTD Prelim.) *Port of Entry Arrivals -14.9% -13.3% Source: DHS Port of entry arrivals, Form I-94
All Overseas Arrivals in CA*: All Overseas Arrivals in CA* *Port of Entry Arrivals % change year ago Source: DHS Port of entry arrivals, Form I-94
Asian Arrivals in CA*: Asian Arrivals in CA* *Port of Entry Arrivals % change year ago Source: DHS Port of entry arrivals, Form I-94
European Arrivals in CA*: European Arrivals in CA* *Point of Entry Arrivals % change year ago Source: DHS Port of entry arrivals, Form I-94
Australia and Mexican Air Arrivals in CA*: Australia and Mexican Air Arrivals in CA* *Point of Entry Arrivals Source: DHS Port of entry arrivals, Form I-94 % change year ago
Trends to Watch : Trends to Watch Generation divide
Solo travel
Nature travel (tamed)
Voluntourism
California’s Age Wave 2000 - 2010: California’s Age Wave 2000 - 2010 Millions Source: Pulse Marketing/Newbridge Partners The 45 to 64 Segment grows from 20 to 25 Percent of the Population
The Way We Look -- 2000: The Way We Look -- 2000 War Babies Depression Kids Boomers 1936-1945 1965-1976 1946-1964 Pre 1935 1977-1994 1995 + Millions Source: Pulse Marketing/Newbridge Partners Generation Y Generation X Generation Z
The Way We Look -- 2010: The Way We Look -- 2010 War Babies Depression Kids Boomers 1936-1945 1965-1976 1946-1964 Pre 1935 1977-1994 1995 + Millions Source: Pulse Marketing/Newbridge Partners Generation Z Generation Y Generation X
Visits to CA State/National Parks (Domestic Person-Stays): Visits to CA State/National Parks (Domestic Person-Stays) Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM
Visits to CA Theme/Amusement Parks (Domestic Person-Stays): Visits to CA Theme/Amusement Parks (Domestic Person-Stays) Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM
Seasonal Outlook 2006-2007: Seasonal Outlook 2006-2007 Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM
CA Business vs Leisure Travel Seasonal Trends and Outlook (Millions of Domestic Person-Stays): CA Business vs Leisure Travel Seasonal Trends and Outlook (Millions of Domestic Person-Stays) Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM Fall Spring Summer Winter
Travel by California Residents Seasonal Trends and Outlook (Millions of Domestic Person-Stays): Travel by California Residents Seasonal Trends and Outlook (Millions of Domestic Person-Stays) Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM Fall Spring Summer Winter
Travel by Non-Residents Seasonal Trends and Outlook (Millions of Domestic Person-Stays): Travel by Non-Residents Seasonal Trends and Outlook (Millions of Domestic Person-Stays) Source: D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM Fall Spring Summer Winter
Slide54: Forecast Key CA domestic origin markets will slow but growth is still above US average Source: BEA, Global Insight
Slide55: Income, housing wealth, and debt begin to apply pressure… Savings rate is currently below zero and (w/o/ rising housing wealth) unsustainable…
Time for the consumer to regroup, retire debt, and get spending back in line with income growth (Percent change) Prepared by: Global Insight
Income, housing wealth, and debt begin to apply pressure… : 34% overvaluation is trigger point for major price correction. Income, housing wealth, and debt begin to apply pressure… U.S. Metro Areas with 34%+ Housing Overvaluation Housing wealth has provided consumers with the confidence to add debt and spend more…
California’s key domestic feeder markets are poised for a correction. Source: Global Insight
Slide57: US and California business travel should remain strong… US corporations are flush with cash and profits are relatively strong Leading to a rise in bricks & mortar, equipment, and…
travel spending Prepared by: Global Insight
Slide58: Growth in Personal Income Only one of California’s top 10 feeder markets is a slower growth state (NY)… Bodes well for U.S. non-resident leisure travel… Source: Global Insight;;
D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM
Slide59: Most of CA’s largest metropolitan feeder markets are growing faster than the US average… Source: Global Insight;;
D. K. Shifflet & Associates Ltd. DIRECTIONS®DESTINATION PERFORMANCE/MonitorSM
Slide60: California Competitiveness
Previously ranked 28th, heading up to 6th place
$50 million may place in top 3
Slide61: 2004-2005 Projected State Tourism Office Budgets compiled by TIA
Slide62: www.visitcalifornia.com
Travel Industry: Research & Statistics
Research@cttc1.com