U.S. TRAVEL AND TOURISM OUTLOOK AND TRENDS Research, Idea National Park Visitation up 4% through November 2004; Sale of Park Passes up 8%Sale of Park Passes up 8% See AmericaSee America s National Parks partnership with TIA, National Park s National Parks partnership with TIA, National Park Service and National Park FoundationService and National Park Foundation Travel Policies Travel Policies Air Business TravelersAir Business Travelers 2004 and 20022004 and 2002 20% 21% 26% 25% 20% 26% 34% 28% 45% 40% 46% 42% 56% 50% 79% 73% 0%10%20%30%40%50%60%70%80% Require Use Specific Airlines Restrictions on # of People Require Use Specific Hotels Restrictions on Class of Hotel Upper Management Approval Limits on Per Diem Restrictions on Airfare class Any of Listed Policies 20022004 Source: Travel Industry Association of America and National Business Travel Association Percent of Air Business Travelers Alternative Technologies Used By Alternative Technologies Used By Business Travelers in Past Year, 2004Business Travelers in Past Year, 2004 31% 41% 26% 35% 11% 18% 10% 12% 0% 10% 20% 30% 40% 50% Any of the 3TeleconferencingWebconferencingVideoconferencing Total Frequent (10+ Trips) Source: Travel Industry Association of America and National Business Travel Association Percent of Business Travelers Effectiveness and Efficiency of Technology Effectiveness and Efficiency of Technology to Replace Travel, 2004 and 2002to Replace Travel, 2004 and 2002 19% 65% 37% 71% 0% 10% 20% 30% 40% 50% 60% 70% 80% 20022004 Effective Efficent Source: Travel Industry Association of America and National Business Travel Association Percent of Air Business Travelers Top Two Boxes AUTO TRAVEL AUTO TRAVEL PERFORMANCEPERFORMANCE U.S. auto travel up 2% through September 2004U.S. auto travel up 2% through September 2004 Still holding up due to:Still holding up due to: Shifts from air, especially for shortShifts from air, especially for short- -distance tripsdistance trips CloserCloser- -toto- -home travelhome travel Increasing interest in family travelIncreasing interest in family travel Increased interest in RVsIncreased interest in RVs Airline TurbulenceAirline Turbulence Domestic air travel up 5% over 2003, but still 10% below 2000.Domestic air travel up 5% over 2003, but still 10% below 2000. International is up 14% over 2003, but better yet, up 5% over 20International is up 14% over 2003, but better yet, up 5% over 2000.00. Exchange rates make U.S. even more of a bargainExchange rates make U.S. even more of a bargain US Air, United and ATA in bankruptcyUS Air, United and ATA in bankruptcy Airline losses $8 billion in 2004; $23 billion between 2001 Airline losses $8 billion in 2004; $23 billion between 2001 - - 20032003 U.S. Hotel Performance U.S. Hotel Performance Strengthens In 2004Strengthens In 2004 1.0% 4.6% 3.7% 4.0% 7.8% 8.8% 0.0% 2.0% 4.0% 6.0% 8.0% SupplyDemandOccupancyADRRevPARRoom Revenue Source: Smith Travel Research % Change over Prior Year Changes to Domestic Advertising and Changes to Domestic Advertising and Marketing ProgramsMarketing Programs 48% 35% 47% 59% 63% 70% 63% 75% 34% 39% 40% 44% 47% 51% 53% 56% 0%10%20%30%40%50%60%70%80% More Advertising Changed targeted consumer markets Focus more on domestic More marketing/promotion/PR Offered specials/discounts More partnerships Focus on closer markets More e-Marketing 2004 2005 Source: Travel Industry Association of America Among 90% of Members with Domestic Marketing Programs Where are We Going?Where are We Going? AmericansAmericans Economic Economic Assessments Are MixedAssessments Are Mixed 41% now rate economic conditions as positive, up slightly41% now rate economic conditions as positive, up slightly 48% say economy getting better vs. 42% who say it is getting wor48% say economy getting better vs. 42% who say it is getting worse se Noticeable decline in citing economy as most important problem fNoticeable decline in citing economy as most important problem facing acing America America now 30% vs. 38% now 30% vs. 38% - - 40% in autumn of 200440% in autumn of 2004 Only 33% says itOnly 33% says it s a good time to s a good time to “ “find a quality jobfind a quality job” ”, vs. 62% who say , vs. 62% who say it it s a bad time s a bad time Source: Gallup Surveys U.S. Leisure U.S. Leisure OutlookOutlook Leisure travel intentions remain strongLeisure travel intentions remain strong Trends of the last few years will continue but some return to moTrends of the last few years will continue but some return to more re normal patternsnormal patterns Growth in air travel exceeding that of auto travel Growth in air travel exceeding that of auto travel Continued focus on family and connections but greater participatContinued focus on family and connections but greater participation in ion in other activities tooother activities too Spending up 4% in 2004 over 2003 Spending up 4% in 2004 over 2003 Domestic Leisure Travel Will Domestic Leisure Travel Will