21th Annual Southern CaliforniaTourism Outlook Conference

CIC Research, Inc.8361 Vickers St.

San Diego, CA 92111858-637-4000

www.cicresearch.com

Pasadena Convention Center

October 30, 2009

2

2008 - 2009The Perfect Storm

3

September 15, 2008

4

The Stock Market Meltdown

5

2008Dow down34% by the end of 2008

6

Business Bankruptcies and Bailouts

7

Businesses Closed

8

Layoffs - Unemployment

Fearful Overseas Travelers

9

Lodging Industry Challenged

10

11

And Tourism Goes On Sale?

12

When Will Tourism Recover?

13

It Will Be A Long Slow Climb

14

Southern California Perspective

15

Southern California Perspective

23.4 Mil. people in Southern California

About 7.5 Mil. households

More than 9.8 Mil. employees

Estimated 301,000 hotel and motel rooms

Southern California:23.4 million of 38.3 million CA population (61%)9.8 million of 16.2 million CA employees (61%)

Who Is A Visitor?

Economic Base Definition

A Visitor Is:- Not a resident of SoCal (stay less than 6 months)- Not here for daily

employment- Not a student

16

17

2009 SoCal Hotel Room Inventory

LA SD OCRiv/ San

Bern KernSanta

Barbara SLO VenturaImperial

Co

2009 108,800 57,595 55,330 41,741 9,525 9,153 8,216 8,055 2,600

0

20,000

40,000

60,000

80,000

100,000

120,000 301,000 Rooms 109.9 Mil. Room Nights

Avail. 60.6% Occ. Rate 66.6 Mil. Room Nights

Sold

Sources: CIC Research, LACVB, AOCVCB, SDCVB, & STR.

Rooms

SoCal Hotel Rooms Sold

2003 2004 2005 2006 2007 2008 2009p

Rms Sold 68.5 73.2 75.5 75.3 75.5 72.8 66.6

0

20

40

60

80

100

Sources: CIC Research, LACVB, AOCVCB, SDCVB, & STR.

18

Millions of Room Nights

No change 2005 - 2007?

SoCal Hotel Room Revenue

2003 2004 2005 2006 2007 2008 2009p

Revenue $6.44 $6.99 $7.82 $9.04 $9.10 $9.01 $7.42

$0

$2

$4

$6

$8

$10

Sources: CIC Research, LACVB, AOCVCB, SDCVB, & STR.

19

$ Billions

Peak in 2007

20

51.246.9

43.6 41.246.1

49.2 51.056.0 58.0

52.955.9

0 M

20 M

40 M

60 M

80 M

'00 '01 '02 '03 '04 '05 '06 '07 08 09p 10p

International Visitors to the U.S.

Millions

Source: U.S. Dept. of Commerce, OTTI, October 2009.

21

2.7 2.73.0

2.5

2.0 1.92.1 2.2 2.2 2.3 2.3

2.0

0 M

1 M

2 M

3 M

4 M

98 99 '00 '01 '02 '03 '04 '05 '06 '07 08 09p

SoCal Ports of Entry-All Overseas Visitor Arrivals

Millions

Source: CIC Research & Dept. of Homeland Security

22

0.70

0.58 0.60

0.50

0.37 0.32

0.37 0.38 0.33 0.30 0.28

0.21

0.0

0.2

0.4

0.6

0.8

1.0

'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09p

SoCal Ports of Entry - Japan

Millions

Source: CIC Research & U.S. Dept. of Homeland Security

23

0.31 0.32

0.370.33

0.28 0.28 0.27 0.280.26 0.26

0.280.24

0.0

0.1

0.2

0.3

0.4

0.5

'98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09p

SoCal Ports of Entry - U.K.

Millions

Source: CIC Research & U.S. Dept. of Homeland Security

24

Overnight Visitors to SoCal

25

40.438.2 37.4

39.8 40.943.4 43.2 42.0 40.7 38.3 38.3

0 M

10 M

20 M

30 M

40 M

50 M

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09p '10f

Domestic Overnight Visitors to SoCal

Millions

Source: CIC Research, Inc.

26

6.9

5.9

5.0 4.85.3 5.6 5.6 5.9 6.1

5.6 5.8

0.0

2.0

4.0

6.0

8.0

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09p '10f

SoCal Overnight International Visitors

Millions

Source: CIC Research, Inc.

27

47.344.1 42.4 44.6 46.2

49.0 48.8 48.3 46.843.9 44.2

0 M

10 M

20 M

30 M

40 M

50 M

60 M

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09p '10f

Millions

Total Overnight Visitors to SoCal

Source: CIC Research, Inc.

28

$25.0$22.9 $22.0 $22.6

$24.1$26.4 $26.9

$28.0 $27.7

$24.5 $25.0

$0 B

$5 B

$10 B

$15 B

$20 B

$25 B

$30 B

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09p '10f

$ Billions

Total SoCal Overnight Visitor Spending

Source: CIC Research, Inc.

29

SoCal Overnight Visitor Forecast

(2009-2010)¨ Visitors

43.9 M (2009 Preliminary) Down (-6%)43.6 - 44.4 M (2010 Forecast) Modest(-0.5% to 1%)

¨ International Visitors5.6 M (2009 Preliminary) Down (-8%)5.7 - 5.9 M (2010 Forecast) Up (3% to 5%)

¨ Domestic Visitors38.3 M (2009 Preliminary) Down (-6%)38.0 - 38.5 M (2010 Forecast) Flat (-0.5% to 0.5%)

¨ Spending$24.5 B (2009 Preliminary) Down (-12%) $24.7 - $25.4 B (Forecast 2009) Modest (1% to 3%)

30

Can SoCal Tourism Weather the Storm?