New Research on the International Travelers to the U.S. One Travel Conference New Research on the International Travelers to the U.S. NOTES TO SPEAKER: Thank you, It is my pleasure to be here with you today representing the National Travel and Tourism Office (NTTO). Insert overview ………………… Before I do, just a little about our office. Presented by: Mr. Ron Erdmann National Travel & Tourism Office (NTTO) International Trade Administration U.S. Department of Commerce January 29, 2015

We Serve as the National Tourism Office… …by advancing policies and programs that strengthen economic development and export opportunities. Publications Research Industry Relations Travel Promotion Act Policy National Travel & Tourism Office The former Office of Travel and Tourism Industries is now called the National Travel & Tourism Office yesterday you heard our new Executive Director (Kelly Craighead) speak. As you heard, she oversees the NTTO’s operation. This is a movement up for our office as we report directly to head of Industry & Analysis rather than the DAS for Services. We will continue to do all of the things we have done in the past like……. Research……All of the data you see today and much more are available from our office. We manage a set of 7 complementary research programs that provide the industry with the most comprehensive data on international travel to and from the country. Industry Relations: NTTO staff work industry associations and businesses delivering presentations at conferences, offering webinars, and working directly with the travel industry associations or businesses to help them expand travel exports. TPA…..NTTO serves as the liaison to Brand USA along with several other Commerce staff. The Secretary of Commerce approves BUSA’s Board, marketing objectives and all request for funding from the cash and in-kind donations Brand USA uses to obtain the matching funds goes through Commerce. [Policy]……NTTO works with U.S. government agencies as well as other governments and world organizations serving as the tourism industry’s advocate from inside the government. So, if you have issues with a policy, rule, and procedure required by a government that hinders you from doing your international business we would like to here about it and hopefully work with you to resolve. [pubs]……We also use the NTTO website to provide information to the government and industry. We have numerous free publications and others that are sold that can help you track travel to and from the U.S., and understand the international traveler at the national, sector, regional and destination level. http://travel.trade.gov/

Restructured & Revised Travel Export & Import Estimates In June to October 2014 the Bureau of Economic Analysis released newly restructured and revised goods and services exports and imports data It was the result of work started in 2009 based upon International Monetary Fund recommendations, and is the most extensive restructuring since 1976 Brings U.S. accounts into closer conformity with international guidelines making the data more comparable to other country’s estimates Affects all travel and tourism export and import estimates for 1999-2013 and into the future New spending estimates include: (1) education, (2) medical and (3) temporary workers to the existing travel export and import estimates More detail is now available than previously possible with breakouts of business & personal travel as well as estimates for the new 3 items added * Revised travel export figures issued by the Bureau of Economic Analysis in October 2014. To learn more about the revisions, visit the NTTO website at: http://travel.trade.gov/outreachpages/restructuring_travel.html

Travel & Tourism as a Leading Export (2013) Travel & Tourism exports $215 billion Percentage of service exports 31% Percentage of all exports 9% Travel trade surplus $78 billion Employment from Travel & Tourism exports 1.1 million NYO-NY3689-20030925-ST1

Travel & Tourism as a Leading Export (2013) International Travelers = 4 percent of all travelers BUT 25 percent of total spending United States is #2 for share of international visitors with 6.4% United States holds #1 for share of world travel spending with 14.5% NYO-NY3689-20030925-ST1

New Top Travel & Tourism Export Markets 2013 in $ Billions Origin Country Travel Receipts Passenger Fare Receipts New Export Data * Total Travel Receipts Canada $21.9 $5.1 $1.5 $27.9 China $10.6 $2.4 $8.1 $21.1 Mexico $7.4 $7.5 $18.1 Japan $11.5 $5.5 $0.7 $17.6 United Kingdom $9.3 $3.4 $0.6 $13.2 Brazil $8.8 $3.2 $0.4 $12.4 India $3.7 $1.6 $3.6 $8.9 Germany $1.7 $7.2 South Korea $4.5 $0.2 $7.0 Total Travel Exports $135.6 $41.6 $37.6 $214.8 * = new export data now includes spending by students, medical, and temporary worker travelers. It was released in October 2014 by BEA.

Top Travel Export Markets for the U.S. 2013 Market of Origin Exports ($ Billions) % Change 12/13 % Change 09/13 Total Travel & Tourism Exports $214.8 7% 47% Canada $27.9 5% 59% China $21.1 16% 207% Mexico $18.1 24% Japan $17.6 3% 39% United Kingdom $13.2 -1% 14% Brazil $12.4 9% 137% India $8.9 10% 33% Germany $7.2 -3% 25% South Korea $7.0 17% 52% Record year for travel exports 7

U.S. Visitors & Spending (1999-2013) Visitor spending (receipts) closely mirrors visitor volume. Visitor volume was a record 69.8 million, and spending also set a record at $214.8 billion in 2013. Sources: Department of Commerce, National Travel and Tourism Office; Department of Commerce, Bureau of Economic Analysis; Statistics Canada; Banco de Mexico.

Top U.S. Origin Markets for International Travelers 2013 Rank Market of Origin Visitors (000) % 2012/13 Change % Change 2009/13 -- Total Arrivals * 69,768 5% 21% 1 Canada 23,387 3% 23% 2 Mexico 14,343 1% 7% 3 United Kingdom 3,835 2% -2% 4 Japan 3,730 22% 5 Brazil 2,060 15% 57% 6 Germany 1,916 12% 7 China (PRC) 1,807 71% 8 France 1,505 20% 9 South Korea 1,360 9% 45% 10 Australia 1,205 40% * International travelers include all countries generating visitors to the U.S. Record year for travel to U.S. 9

New Processing Method for Monthly Arrivals Data Customs & Border Protection (CBP) completed the I-94 Automation Project on April 30th, 2014 – which means no paper I-94 forms for most air & sea ports Arrivals records are now created when CBP officer creates an electronic arrivals record using the passport that also pulls information from other databases Same data found on paper I-94 forms are still collected and processed But, unlike the paper forms, now an electronic record is created for departures This means an accurate record of nights in the U.S. that was not possible before is now available Starting with January 2014, the NTTO revised the method used to calculated arrivals to the U.S. for one night or longer using the automated I-94 data Arrivals data are not directly comparable to previous years, but there is no way to go back and correct the previous data There was a 5% increase in all overseas arrivals noted between January to April 2014 compared to 2013, but variances exist by country The 2014 and future data will have improved data quality and comparability

** Overseas includes all countries except Canada and Mexico. Top Origin Markets for International Travelers to the U.S. January to October 2014 2014Rank Market of Origin Visitors (000) % Change 13/14 -- Total Arrivals * 62,706 7% Overseas Arrivals ** 28,946 8% 1 Canada 19,835 -2% 2 Mexico 13,925 21% 3 United Kingdom 3,351 2% 4 Japan 3,016 -4% 5 China (PRC) 1,919 22% 6 Brazil 1,816 10% 7 Germany 1,686 1% * International travelers include all countries generating visitors to the U.S. ** Overseas includes all countries except Canada and Mexico. 11

Survey of International Air Travelers English and 11 Foreign language versions New Questionnaire In 2012 New NTTO reports Data on 37 Traveler Characteristics Self administered by passenger Same survey for non-resident and resident travelers … Skip patterns http://travel.trade.gov/ See the 2013 Cultural Heritage Profile at: http://travel.trade.gov/outreachpages/download_data_table/2013-cultural-heritage-profile.pdf

* Overseas includes all countries except Canada and Mexico. Top Cultural Heritage Traveler Markets for Overseas Travelers to the U.S. 2013 2013 Rank Market of Origin Visitors (000) % Change 12/13 % Change 09/13 -- Overseas CHT Arrivals * 18,294 9% 36% 1 United Kingdom 2,543 -1% 6% 2 Brazil 1,427 15% 146% 3 Germany 1,409 4 Japan 1,281 17% 5 France 1,207 21% 6 China (PRC) 1,043 24% 222% 7 Australia 1,006 0% 59% 8 South Korea 732 109% . * Overseas includes all countries except Canada and Mexico. 13

Top Ports-of Entry Overseas & Cultural Heritage Travelers 2013 Overseas Travelers to the U.S. Top Ports of Entry % of Overseas Travelers who Visit the City they Used to Enter the Country Cultural Heritage Travelers to the U.S. Top Ports of Entry New York (JFK) - 17% 85.3% New York (JFK) - 24% Miami (MIA) – 14% 65.0% Miami (MIA) – 13% Los Angles (LAX) – 10% 67.4% Los Angles (LAX) – 12% Honolulu (HNL) – 7% 85.6% Newark (EWR) – 7% Newark (EWR) – 5% 5.8% (64% - NYC) San Francisco (SFO) – 5% Top 5 – 52% Top 5 – 61%

Transportation Used by Overseas & Cultural Heritage Visitors to the U Transportation Used by Overseas & Cultural Heritage Visitors to the U.S. 2013  Mode of Transport Overseas Travelers to the U.S. 2013 Cultural Travelers to the U.S. 2013 Taxi/Cab/Limousine 35% 39% Air Travel Between US Cities 33% 37% Rented Auto 34% City Subway/Tram/Bus 32% 44% Auto, Private or Company 31% Bus between Cities 18% 20%

Selected Overseas & Cultural Heritage Travelers’ Key Characteristics 2013 Overseas Travelers to the U.S. 2013 Cultural Travelers to the U.S. 2013 Nights in the U.S. (mean/Median) 18/9 20/10 Average # of States Visited 1.4 1.7 % visiting one state or territory 72% 61% Average # of Destinations Visited 1.9 2.3 % visiting one state/city 56% 46% Percent staying in Hotel/Motel 78% 79% . .

Top U.S. States/Territories Visited by Overseas & Cultural Heritage Travelers (CHT) 2013 State/Territory Visited by Overseas Travelers Market Share % State/Territory Visited by CHT Travelers New York 30.6% 41.9% Florida 22.5% California 24.3% 20.2% 18.3% Hawaii 9.9% Nevada 14.1% 9.1% 9.0% Texas 4.9% Massachusetts 5.7% Guam 4.6% Illinois 4.8% 4.5% 4.3% Arizona Pennsylvania 3.1% 3.7%

Top U.S. Destinations Visited by Overseas & Cultural Heritage Travelers (CHT) 2013 City Visited by Overseas Travelers Market Share % City Visited by CHT Travelers New York City 29.9% 41.2% Miami 12.5% Los Angeles 15.2% 11.8% Las Vegas 13.8% Orlando 11.6% San Francisco 13.6% 9.5% 11.0% 8.9% 9.4% Honolulu 8.0% Washington, DC 5.3% 7.0% Chicago 4.3% Boston 4.0% 4.6%

Activities Participation of Overseas & Cultural Heritage Travelers to the U.S. 2013 Overseas Travelers to the U.S. 2013 Cultural Travelers to the U.S. 2013 Shopping 88% 91% Sightseeing 77% 86% Experience Fine Dining 39% 46% National Parks/Monuments * 34% 59% Art Gallery/Museums * 28% 50% Amusement/Theme Parks 32% Small Towns/Countryside 27% 38% Visit Historical Locations * 47% Guided Tours 24% * Categories that define the CHT visitor. The others were: Concert/Play/ Musical; Cultural Ethnic Heritage Sites; and American Indian Communities.

Forecast for International Travel to the United States Well enough about the past, let’s take a quick look into the future. Twice a year our office issues a forecast for international travel to the U.S. It is based upon historical trends for arrivals and looks at world arrivals and the USA’s share and how it has changed over time. We also obtain data from the International Monetary Fund. They forecast key economic variables for over 200 countries twice a year and we look at the change in these forecasted economic indicators to develop our forecast. On the NTTO website the top 20 countries have yearly forecast volume and rates of change for 2014-2019. Now, let’s look at our short term forecast for Asia.

USA arrivals in millions International Visitors to the U.S. and Projections (2000-2019) USA arrivals in millions Sources: U.S. Department of Commerce, ITA, National Travel and Tourism Office; Secretaria de Turismo (Mexico); Statistics Canada. -- Fall 2014 Travel Forecast

Short-Term Forecast Inbound Travel to the U.S. Visitor Origin 2014 (000) % Change 2015 (000) 2016 (000) Total Visitors 73,887 6% 76,589 4% 79,127 3% Overseas 33,629 5% 35,026 36,558 Canada 23,621 1% 24,094 2% 24,575 Mexico 16,638 16% 17,469 17,994 United Kingdom 3,950 4,029 4,110 Japan 3,618 -3% 3,582 -1% 0% China 2,240 24% 2,666 19% 3,119 17% Brazil 2,205 7% 2,359 2,500 Germany 1,955 1,994 2,034 France 1,625 8% 1,690 1,724

The Quickest Way to U.S. International Tourism Information: http://travel.trade.gov Order, read, download & print the latest statistics on international travel to and from the U.S. All of the latest summary tables highlighting specific tourism trends More than 30 plus market and regional profiles available Forecast of international travelers to the U.S. through 2019 Information on NTTO’s nine ongoing market analysis (research) programs Updated monthly statistics on arrivals and departures Late-breaking TI News announcements and information releases Links and information on the Commerce, Commercial Service Travel & Tourism Team in the USA & abroad Links to other organizations in the travel industry Sign up for TINews, NTTO’s FREE news service, for the latest in tourism industry news and program updates So, I hope you will book mark the OTTI/NTTO website and use us as a starting point for market research. We have several complementary and interrelated data bases that can help answer the questions you need answers to. We would also like to encourage you to look for additional indices and market intelligence, and contact your local city and state tourism bureaus to tap the research they obtain from our office. Plus, there is another resource for within Commerce, and that is our sister agency the Commercial Service. They too have a series of products and services that can also help you be more successful in the international market. If you have not signed up for our free Tinews service to be kept informed of the latest information on the international market, I would also like to encourage you to do so as well.

Thank You! Questions? Ron Erdmann National Travel and Tourism Office (NTTO) International Trade Administration U.S. Department of Commerce Phone: 202-482-4554 ron.erdmann@trade.gov http://travel.trade.gov NTTO General Office Number: (202) 482-0140 I want to thank the conference organizers for allowing me to be there today, and I want to thank all of you for participating in this session. If you would like to contact me, or visit or website, or call our office, the contact information is provided here. With that, do you have any questions? 24