1. 23 rd Annual Southern California Visitor Industry Outlook Conference Economic Outlook Kimberly Ritter-Martinez Associate Economist The Kyser Center for Economic Research LAEDC

2. Sources: Bureau of Economic Analysis U.S. Economic Growth Q/Q %Change (Annual Rate)

3. Jobless Rates -- Still Too High Percent Unemployed (SA)Annual %Change Sources: BLS, CA EDD California 11.9% Los Angeles 12.4% Orange 8.6% San Diego 9.7%

4. U.S. Retail Sales Source: U.S. Census Bureau

5. U.S. Housing Starts Thousands of Homes 1848 1949 2078 1812 1355 906 554 574 740 Source: U.S. Census Bureau

6. Source: U.S. Department of Commerce, Bureau of Economic Analysis (BEA) Personal Income & the Saving Rate

7. Nondefense Capital Goods Shipments Source: U.S. Census Bureau

8. Pre-Tax Corporate Profits Pre-Tax Corporate Profits With Inventory & Capital Consumption Adjustments Source: Bureau of Economic Analysis (BEA), U.S. Department of Commerce

9. California Gas & Diesel Prices Source: Energy Information Agency

10. Domestic Feeder Markets City/Region Unemployment Rate (NSA) 9/2011 Change in Employment Sept Y-Y Local Area GDP 2009/2011 San Francisco Bay Area9.2%+0.8% San Diego9.7%+1.6%+1.2% New York City Area8.3%+0.4%+4.7% Sacramento11.5%-0.1%-1.1% Phoenix8.1%+0.4%+0.7% Las Vegas13.6%+0.5%-1.9% Chicago9.6%-0.1%+1.9% Seattle8.5%+1.3%+1.9% Fresno14.9%-1.4%-0.9% Portland8.4%+2.0%+4.7% Source: LA Inc, BLS, BEA, CA EDD

11. Mexico GDP Growth % Change in Real GDP, Year-Over-Year Source: IMF, World Economic Outlook, LA Inc., Visit California Mexican Visitors to CA 2010 376,000 (air arrivals) Up 9.0% over 2009 22.4% share of total to US

12. Canada GDP Growth % Change in Real GDP, Year-Over-Year Source: IMF, World Economic Outlook, LA Inc., Visit California Canadian Visitors to CA 2010 1,355,900 – Up 13.0% over 2009 6.8% share of total to US

13. U.K. GDP Growth Source: IMF, World Economic Outlook, LA Inc., Visit California % Change in Real GDP, Year-Over-Year U.K. Visitors to CA 2010 683,000 - up 3.0% over 2009 17.7% share of total to US

14. Japan GDP Growth Source: IMF, World Economic Outlook, LA Inc., Visit California % Change in Real GDP, Year-Over-Year Japanese Visitors to CA 2010 545,000 – Up 19.0% over 2009 16.1% share of total to US

15. China GDP Growth Source: IMF, World Economic Outlook, LA Inc., Visit California % Change in Real GDP, Year-Over-Year Chinese Visitors to CA 2010 399,000 (excl. Hong Kong) Up 49.0% over 2009 48.8% share of total to US

16. Australia GDP Growth Source: IMF, World Economic Outlook, LA Inc., Visit California % Change in Real GDP, Year-Over-Year Australian Visitors to CA 2010 502,000 - Up 33.0% over 2009 55.5% share of total to US

17. VALUE OF U.S. DOLLAR SINCE 2000 Index (2000 = 100) Source: Federal Reserve Board G5

18. In Summary:  Slow rate of job creation  Financial market fragility  Housing & real estate are troubled.  State/local government budgets are problematic. BUT...  The economic recovery is real - it is not as strong as we initially thought, but it is still largely intact.  Tourism, technology, trade, & entertainment are leading the way in California.  Labor markets will improve.

19. Wrap Up Travel & Tourism has Outperformed U.S. Economy during recovery Weaker Growth at Home & Abroad will Slow Tourism Expansion in 2012 U.S Consumers Face Constraints International Market Remains a Bright Spot

20. THANK YOU For Further Insight into the Local Economy find our Mid-Year Economic Forecast & Industry Outlook online at www.LAEDC.org/reports Keep up with economic news and major developments by subscribing to e-EDGE, our free weekly economic newsletter. Check out the current issue at www.LAEDC.org/eEdge