1. Montana Tourism Tax Committee Presentation Information provided by Smith Travel Research, D.K. Shifflet, Montana Department of Revenue Presentation by Mike Scholz Montana Innkeepers Association

2. Purpose n Identify origin of Montana’s hotel guest n Determine purpose of trip (business or leisure) n Look at travel trends in Montana n Examine hotel performance in Montana n Conclusions

3. Montana Feeder Trends Origin of Travel and Relative Percentages

4. State of Origin Source: D.K. Shifflet & Associates

5. Inter-State Origins Source: D.K. Shifflet & Associates

6. State of Origin by Season Source: D.K. Shifflet & Associates

7. State of Origin by Season Source: D.K. Shifflet & Associates

8. State of Origin by Season Source: D.K. Shifflet & Associates

9. State of Origin by Season Source: D.K. Shifflet & Associates

14. Summary of latest reporting periods on Montana room nights n Origin: 36% Residents - 64% Out of State n Purpose: 52% Business - 48% Leisure n Resident: 67% Business - 33% Leisure n Out of State: 44% Business - 56% Leisure n Total Business Rm/Nites - 44.8% Resident n Total Leisure Rm/Nites - 24.1% Resident n Note: Ave. persons/room – Leisure Business –

15. Montana Performance Condition of the industry

16. Supply and Demand Source: Smith Travel Research

17. Supply and Demand Source: Smith Travel Research % Change Over Previous Year

18. Occupancy Source: Smith Travel Research

19. Occupancy Source: Smith Travel Research % Change Over Previous Year

20. Average Daily Rate Source: Smith Travel Research

21. Average Daily Rate Source: Smith Travel Research % Change Over Previous Year

22. Revenue per Available Room Source: Smith Travel Research

23. Revenue per Available Room Source: Smith Travel Research % Change Over Previous Year

24. Revenue Source: Smith Travel Research

25. Revenue Source: Smith Travel Research % Change Over Previous Year

26. Key Indicators for Montana Source: Smith Travel Research

27. Occupancy by Day of Week 2001 Source: Smith Travel Research

28. Montana Supply Analysis 1987 2001 Source: Smith Travel Research

29. Summary of Supply increase exceeding demand increase n Decrease in occupancy rates n Decrease in room rate increases n As long as total demand increases bed tax revenues continue to rise n Occupancy declines and ADR stagnation reduces hotel industry profitability and income tax collections n Increased room supply increases property tax collections

30. Closing thoughts n 36% of room nights are Out of State Leisure Guests n Out of State Leisure guests provide the incremental revenue that is needed to sustain profitability in many of Montana’s industries. n Effective Tourism Promotion is needed to drive needed incremental revenue to Montana businesses

31. Tourism might not drive the Montana economy, but it does make it possible to be profitable.