Points of view on Significant Markets Southern California Guest Industry Standpoint Meeting - 2006 Tiffany Urness Resear

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Airfares 5.8% Source: TIA.org, August 2006. Vehicle Miles Driven Vs. Standard Gas Prices ... O&D Survey. Air Travel Vs. Air Fares To California from Seattle ...

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Viewpoints on Major Markets Southern California Visitor Industry Outlook Conference - 2006 Tiffany Urness Research Manager, California Tourism October 12, 2006

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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. Headings ® DESTINATION PERFORMANCE/Monitor SM CIC Research; California Tourism Research

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2005 = Banner year for California tourism.

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2005 in Review US CA Total residential travel + 4.1% + 6.7% Domestic leisure + 3.2% + 7.1% Domestic business + 6.8% + 5.6% Source: D. K. Shifflet & Associates Ltd. Headings ® DESTINATION PERFORMANCE/Monitor SM

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2005 in Review US CA Overseas visitors +6.9% + 14.3% Hotel inhabitance 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

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Domestic Markets

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California Domestic Market Share (% US Person-Stays) Source: D. K. Shifflet & Associates Ltd. Bearings ® DESTINATION PERFORMANCE/Monitor SM

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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. Headings ® DESTINATION PERFORMANCE/Monitor SM

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CA Resident Leisure Volume (Millions of Person-Stays) Source: D. K. Shifflet & Associates Ltd. Bearings ® DESTINATION PERFORMANCE/Monitor SM

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CA Non-Resident Leisure Volume (Millions of Person-Stays) Source: D. K. Shifflet & Associates Ltd. Bearings ® DESTINATION PERFORMANCE/Monitor SM

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Dynamics Affecting California Travel Trends Headline Events Market Conditions California Competitiveness

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2006 Travel Industry YTD Headline Events Relative ordinariness Restrictions, directions, and impoliteness

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2006 Travel Industry YTD Market Conditions Higher costs Tapering interest

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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

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Vehicle Miles Driven Vs. Standard Gas Prices U.S., % change year prior Gas Prices (R) Vehicle Miles Driven (L) Sources: Department of Transportation,Oil Price Information Service 

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California Hotel Room Rates Vs. Inhabitance % change year prior Average Room Rate Occupancy, rate point distinction Source: Smith Travel Research; Moody's Economy.com

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California Hotel Room Rates Vs. Inhabitance Average Room Rate (R) % change year back Trendline Occupancy Rate (L) Source: Smith Travel Research

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2006 Travel Industry YTD August YTD US room revenues + 6.8% US normal occupancies + 1.1% CA room revenues + 8.2% CA normal occupancies + 1.1% Month of August -1.0% Source: Smith Travel Research

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Revenue Passenger Air Miles U.S., % change year prior International Domestic Source: Air Transport Association

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Arizona Nevada Texas Oregon Washington 9.1 million 7.4 4.0 3.4 2.7 Feeder Markets: Top States ( 2005 Person-Stays) Source: D. K. Shifflet & Associates Ltd. Headings ® DESTINATION PERFORMANCE/Monitor SM

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4.4 million 4.0 1.8 1.3 1.2 1.1 Phoenix Las Vegas Yuma Tucson Reno New York Portland Feeder Markets: Top Metro Markets ( 2005 Person-Stays) Source: D. K. Shifflet & Associates Ltd. Bearings ® DESTINATION PERFORMANCE/Monitor SM

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% change year back Fares From Phoenix Trips From Phoenix Air Travel Vs. Air Fares To California From Phoenix Source: U.S. Bureau of Transportation, O&D Survey

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Air Travel Vs. Air Fares To California From Las Vegas % change year back Fares From Las Vegas Trips From Las Vegas Source: U.S. Branch of Transportation, O&D Survey

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Air Travel Vs. Air Fares To California From Portland % change year back Fares From Portland Trips From Portland Source: U.S. Division of Transportation, O&D Survey

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Air Travel Vs. Air Fares To California From New York % change year back Source: U.S. Bureau of Transportation, O&D Survey Fares From New York Trips From New York Source: U.S. Branch of Transportation, O&D Survey

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Air Travel Vs. Air Fares To California from Seattle % change year back Source: U.S. Branch of Transportation, O&D Survey Fares From Seattle Trips From Seattle Source: U.S. Branch of Transportation, O&D Survey

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Air Travel Vs. Air Fares To California From Chicago % change year back Source: U.S. Bureau of Transportation, O&D Survey Fares From Chicago Trips From Chicago Source: U.S. Bureau of Transportation, O&D Survey

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UK Germany Japan Australia International Markets 81% Canada Mexico

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Mexico (Air/Land) 3,796,000 Day guests 4,800,000 Canada 1,060,000 UK 778,000 Japan 722,000 Australia 313,000 Germany 309,000 Top CA International Markets (2005) Source: CIC Research Inc.

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California Visitors : Estimates in view of in-flight overviews of non US occupants reporting a California visit, supplemented with DHS information. Global Visitors Vs Arrivals California Arrivals : Non US occupants landing in California as their first US port of passage.

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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 passage entries, Form I-94; CIC Research Inc.

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Value of U.S. Dollar Vs. Outside Currencies Index: January 2003 = 100 Euro Peso Yen Pound Canadian $ Source: The Federal Reserve Board

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Canadian Travel Vs Exchange Rates Source: Fedgazette, Federal Reserve Bank of Minneapolis, July 2006

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Value of Euro VS German Arrivals in CA Index: January 2003 = 100 Euro German Arrivals Source: Federal Reserve Board; DHS Port of passage landings, Form I-94

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CA Overseas Visitor Market Share 1994 - 2005 Source: CIC Research Inc.

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European Visitors to California (1999-2005) Source: CIC Research Inc.

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Asian Visitors to California (1999-2005) 1999 2005 Source: CIC Research Inc .

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International Visitors Entering CA* (Percent Chg 05-06 July YTD Prelim.) *Port of Entry Arrivals - 13.3% - 14.9% Source: DHS Port of section landings, Form I-94

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All Overseas Arrivals in CA* % change year back *Port of Entry Arrivals Source: DHS Port of passage entries, Form I-94

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Asian Arrivals in CA* % change year prior *Port of Entry Arrivals Source: DHS Port of passage entries, Form I-94

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European Arrivals in CA* % change year prior *Point of Entry Arrivals Source: DHS Port of section landings, Form I-94

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Australia and Mexican Air Arrivals in CA* % change year back *Point of Entry Arrivals Source: DHS Port of section landings, Form I-94

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Trends to Watch Generation isolate Solo travel Nature travel (restrained) Voluntourism

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California's Age Wave 2000 - 2010 Millions The 45 to 64 Segment develops from 20 to 25 Percent of the Population Source: Pulse Marketing/Newbridge Partners

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The Way We Look - 2000 Boomers Millions Generation X War Babies Generation Y Depression Kids Generation Z 1946-1964 Pre 1935 1977-1994 1995 + 1965-1976 1936-1945 Source: Pulse Marketing/Newbridge Partners

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The Way We Look - 2010 Millions Boomers Generation X War Babies Generation Y Generation Z Depression Kids 1946-1964 Pre 1935 1977-1994 1995 + 1936-1945 1965-1976 Source: Pulse Marketing/Newbridge Partners

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Visits to CA State/National Parks (Domestic Person-Stays) Source: D. K. Shifflet & Associates Ltd. Bearings ® DESTINATION PERFORMANCE/Monitor SM

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Visits to CA Theme/Amusement Parks (Domestic Person-Stays) Source: D. K. Shifflet & Associates Ltd. Headings ® DESTINATION PERFORMANCE/Monitor SM

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2007 Outlook

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Winter 06/07 Spring 07 Summer 07 Fall 07 US Leisure +3.2% +4.4% +3.1% +4.8% CA Leisure +2.6% +7.1% +6.3% +7.2% US Business +4.2% +7.6% +2.1% - 0.5% CA Business +5.4% +5.2% - 2.8% - 2.0% CA Resident +2.9% +6.5% +3.3% +6.2% CA Non-Resident +6.0% +7.0% +7.4% - 2.8% Seasonal Outlook 2006-2007 Source: D. K. Shifflet & Associates Ltd. Headings ® DESTINATION PERFORMANCE/Monitor SM

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CA Business versus Leisure Travel Seasonal Trends and Outlook (Millions of Domestic Person-Stays) Fall Winter Spring Summer Source: D. K. Shifflet & Associates Ltd. Bearings ® DESTINATION PERFORMANCE/Monitor SM

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Travel by California Residents Seasonal Trends and Outlook (Millions of Domestic Person-Stays) Fall Winter Spring Summer Source: D. K. Shifflet & Associates Ltd. Headings ® DESTINATION PERFORMANCE/Monitor SM

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Travel by Non-Residents Seasonal Trends and Outlook (Millions of Domestic Person-Stays) Winter Spring Summer Fall Source: D. K. Shifflet & Associates Ltd. Headings ® DESTINATION PERFORMANCE/Monitor SM

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Key CA local inception markets will moderate yet development is still above US normal Forecast Source: BEA, Global Insight

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Income, lodging riches, and obligation start to apply weight… Savings rate is as of now underneath zero and (w/o/rising lodging riches) unsustainable… Time for the customer to regroup, resign obligation, and get going through back in accordance with pay development (Percent change) Prepared by: Global Insight

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Income, lodging riches, and obligation start to apply weight… U.S. Metro Areas with 34%+ Housing Overvaluation Housing riches has furnished customers with the certainty to include obligation and spend mo

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