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August 6, 2019

Carroll RheemVP, Research & Analytics

Brand USA International Market Update

The Travel Promotion Act signed into law March 2010

-15%

-10%

-5%

0%

5%

10%

15%

North Am

erica*

Western Europe

Asia

South America

Caribbean

Oceania

Central Am

erica

Middle East

Eastern Europe

Africa

2017 2018 2019-YTD Jun

* North America arrivals through MaySource: NTTO

(Change % YoY)Regional Arrivals to the US

Top 20 Markets*: Arrivals to the US(Change % YoY )

* 2018 Rank by volume; ** 2019 YTD MaySource: NTTO, as of July 2019

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

Total International**

Total Overseas

Canada**

Mexico**

United Kingdom

Japan

China, PR

C

South Korea

Brazil

Germ

any

France

India

Australia

Italy

Argentina

Colom

bia

Spain

Netherlands

Ireland

Sweden

Venezuela

Taiwan

2017 2018 2019-YTD June

Global International Trip Growth

5%6%

4%5%

4%4% 4%

6%

5%

10%

3%

6%5%

6%

5%

3%

8%

7%

2010 2011 2012 2013 2014 2015 2016 2017 2018

Short Haul Long Haul

Source: Oxford Economics

Global Long Haul Trips and US Market Share

Source: NTTO; Oxford EconomicsNote: Visitation in millions and US Overseas Market Share

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

50

100

150

200

250

300

350

400

450

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Global Total

US Market Share

2017 Trip Growth by Origin

7%

6%

7%

-8%

9%

4%

8%

6%

-4%

12%

8%

18%

6%7%

11%

8%

Africa Asia Europe Middle East North America Oceania South/CentralAmerica/Caribbean

Total



2018 Trip Growth by Origin

9%

7%

5%

-3%

5%

3%

-3%

5%4%

3%

9%

8%7%

8%

6% 7%

Africa Asia Europe Middle East North America Oceania South/CentralAmerica/Caribbean

Total



2017 Trip Growth by Origin, Key Markets

4%

8%

5%

17%

6%5%

7%

2%

13%

18%

10%

4%

18%

3%

7%

11%9%

11%

China India Japan South Korea United Kingdom France Germany Italy Spain



2018 Trip Growth by Origin, Key Markets

7%

12% 12%

3% 3%2%

5% 6%

8%

5%

9%

2%

-2%

5%

17%

8%

13%

18%

China India Japan South Korea United Kingdom France Germany Italy Spain



Source: Market Intelligence 2013 – 2019 Surveys

Incidence of Long Haul Travelers by Age: France

Question: What countries did you visit during your [N pipe S-6a] international holiday(s) you took in the past 2 years; How likely are you to visit the following regions for an international holiday in the next 12 months?

0%

10%

20%

30%

40%

50%

60%

2013 2014 2015 2016 2017 2018 2019

20-24

25-34

35-44

45-54

55-64


Incidence of Long Haul Travelers by Age: China

Question: What countries did you visit during your [N pipe S-6a] international holiday(s) you took in the past 2 years; How likely are you to visit the following regions for an international holiday in the next 12 months?

0%

10%

20%

30%

40%

50%

60%

70%

2013 2014 2015 2016 2017 2018 2019

20-24

25-34

35-44

45-54

55-64

Which overseas market holds the record for highest visitor volume in a given year?

a. Germanyb. UKc. Japand. China

US Visitors

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

United Kingdom Japan China South Korea Germany France India Italy Spain

Source: NTTO

Political EnvironmentGlobal Economic CoolingInternational Trade/Political TensionBrexitGun Violence

Behavior vs. Sentiment

Commercial Opportunity Messaging/Channel Strategy

Influence of USA’s Political Climate on Likelihood of Visiting USA (June 2019)

16%10%

32%

9%

32%

5% 8%

42%

8% 8%16%

8%

13%

9%

14%

7%

21%

8%11%

21%

14% 16%

14%

11%

41%

50%

38%

39%

17%

45%

50%

26%

50%52%

33% 56%

16% 16%

10%

21%

18%

16%

16%

7%

12%

19%

22%

14%

13% 15%6%

24%

12%

26%

15%5%

16%

4%

15% 11%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Total Australia Brazil Canada China Germany France India Japan Korea Mexico U.K.

Makes itSIGNIFICANTLY LESSlikely that I will visit

Makes it SLIGHTLYLESS likely that I will visit

No effect

Makes it SLIGHTLYMORE likely that I will visit

Makes itSIGNIFICANTLY MORElikely that I will visit

Source: Engine/ORC custom studyBase: General population (age 18-64); n=11,023 (each country n=~1,000)

Influence of USA’s Political Climate on Likelihood of Visiting USA (Top 2 Box – More likely to visit)

0%

10%

20%

30%

40%

50%

60%

70%

80%

Australia Brazil Canada China Germany France India Japan Korea Mexico U.K.

17-Feb Wk3

17-Feb Wk4

17-Mar Wk1

17-Mar Wk3

17-Apr Wk1

17-Apr Wk3

17-May Wk4

17-Jul Wk3

17-Dec

18-Mar

18-Jun

18-Aug

18-Sep

18-Dec

19-Mar

19-JunSource: Engine/ORC custom studyBase: General population (age 18-64); n=11,023 (each country n=~1,000)

Influence of USA’s Political Climate on Likelihood of Visiting USA (Bottom 2 Box – Less likely to visit)

Source: Engine/ORC custom studyBase: General population (age 18-64); n=11,023 (each country n=~1,000)

0%

10%

20%

30%

40%

50%

60%

Australia Brazil Canada China Germany France India Japan Korea Mexico U.K.

17-Feb Wk3

17-Feb Wk4

17-Mar Wk3

17-Apr Wk1

17-Apr Wk3

17-May Wk4

17-Jul Wk3

17-Oct

17-Dec

18-Mar

18-Jun

18-Aug

18-Sep

18-Dec

19-Mar

19-Jun

China Update

The content of this presentation is the confidential and proprietary information of Brand USA. It is not intended to be shared with or distributed to any third party without the prior written consent of Brand USA.©The Corporation for Travel Promotion d/b/a Brand USA

Trade Conflict


Safety Concerns


Chinese Arrivals to the USA

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

January February March April May June July August September October November December

2016 2017 2018 2019

2016: +16%2017: +4.1%2018: -5.7%

Jan-Jun 2019: -3.1%

Source: NTTO

Turning point


Situational Assessment

Means(Economic

Health)

Motive(Demand for US)

Opportunity (Visa, Retail Promotion)



Weighted Perception of Destination Characteristics - 2017

Question: When considering the following countries as holiday destinations, how would you rate each on the following characteristics? Please rate each characteristic on a scale from 1 to 5 (1 being poor, 3 being adequate and 5 being excellent); How would you rate each characteristic that might discourage you from considering it. Please rate each characteristic on a scale from 1 to 5 (1 being not at all discouraging/not applicable, 3 being moderately discouraging and 5 being extremely discouraging).

Base: China intercontinental travelers (N=349-990)

<~25 = Not a factor ~25 - ~50 = A contributing factor ~50+ = A strong factor

Demotivators U.S.A.Inconvenience of travel to the destination (no direct flights) 21Distance from home 15Crowdedness 27Visa requirements/entry procedures 25Personal safety concerns 32Political climate 26Lack of visitor resources/support in the destination 21Unfamiliarity with local customs/language 19High prices 28AVERAGE 24

Behavior vs. Sentiment

Commercial Opportunity

Messaging/Channel Strategy

Phocuswright Inc. on Behalf of Brand USA • 45Asia Focus Groups 2019 Results

Top 10 Future Destinations

Question: What countries you would most like to visit in the future? Please list up to 10 countries .

0%

10%

20%

30%

40%

50%

60%

70%

2013 2014 2015 2016 2017 2018 2019

U.S.A.

France

Japan

U.K.

Australia

Germany

Italy

Korea

New Zealand

Thailand



Likelihood of Travel to United States

Question: When, if ever, are you likely to visit the following countries?

Base: China international travelers ( 2018 N=1063, 2019 N=1050)

25%

25%

22%

19%

7%

1%

21%

23%

26%

20%

8%

1%

24%

26%

23%

18%

9%

1%

In the next 6months

6-12 months

1-2 years

2-5 years from now

Maybe some time inthe distant future

Not likely to evervisit

2017

2018

2019



Net Promoter: United States

Question: If a friend or relative were discussing a future holiday destination with you, which statement would best describe your attitude toward the following countries?


45%

30%

18%

6%

0%

43%

30%

20%

6%

2%

35%

34%

24%

5%

1%

I would bring it up torecommend as a destination

I would tell people positivethings about it if it were

brought up

I would tell people neitherpositive nor negative things if it

were brought up

I would tell people negativethings about it if it were

brought up

I would bring it up to discouragepeople from travelling the there

2017

2018

2019



Net Promoter: France

Question: If a friend or relative were discussing a future holiday destination with you, which statement would best describe your attitude toward the following countries?


52%

31%

13%

4%

0%

51%

33%

14%

2%

%

47%

33%

16%

3%

1%

I would bring it up torecommend as a destination

I would tell people positivethings about it if it were brought

up

I would tell people neitherpositive nor negative things if it

were brought up

I would tell people negativethings about it if it were brought

up

I would bring it up to discouragepeople from travelling the there

2017

2018

2019



Methodology: Focus Groups

SeoulTokyoBeijingShanghaiChengdu



Methodology: Focus Groups

10 Focus Groups

8 per group90 minutes

Screeners: Ages: 20-35;36-55Must have traveled internationally at least once within last two yearsMust be planning to travel internationally within next 12 monthsMust have played an active role in travel planningNote: Groups included a mix of participants with kids and without kids, and an even split of male/female participants



China Consumer Focus Groups: Destination Deterrents

• Ongoing issues that travelers said would deter them• Really bad public security (India, Philippines)• Poor food safety (referred to India)

– Anti-China events– Bombings, terror attacks,

shootings

– Tension with China (as recently with Malaysia, Korea)

– Protests (France)

– Hearing Chinese people were robbed or put in jail

• Travelers had mixed feelings about hearing of friends’ negative experiences. One summed it up thus: “If that friend has similar views as me I will consider his perspective.”

• Events that travelers said would deter them:



China Consumer Focus Groups: Perception of Politics

• Regarding China-U.S. trade war and rhetoric, the consensus was: no effect on travel • “As long as they don’t reject my visa, what’s it got to do with me?”• “I’m just going there to spend money.”• “It’s a government dispute, not related to normal people.”• “If it affects the exchange rate, that might affect my decision.”

• Anti-China sentiment came up mostly as an issue within Asia – Malaysia, Indonesia.

• One mentioned avoiding Taiwan upon hearing its independence movement was growing.

• Several said they would heed any government travel warnings, as recently happened with Korea.

• Politics can affect the decision to visit a country, but among these participants, who are relatively well traveled, there is no discernible issue with travel to the U.S.


Situational Assessment

Means(Economic

Health)

Motive(Demand for US)

Opportunity (Visa, Retail Promotion)


China’s Distinct Perspectives

Experienced Travelers

Novice Travelers

Retailers and Operators

Maintain Long-Term Focus

Pioneering new, uncharted territory with two ambitious IMAX® films

WE’VE GONE OFF THE BEATEN PATH AND HAVE HAD AN EXTRAORDINARY JOURNEY

Impact of Video on Travel

Passive Consumption

Destination Inspiration from Watching Films/Videos

0%

10%

20%

30%

40%

50%

60%

Canada Australia France Germany UK Japan Korea Mexico Brazil India China

Documentary TV show MovieTraveler-made video from someone you don’t know Traveler-made video from friends/family Professionally made travel videoVideo advertisement Other None of the above

Question: In the past 2 years, have you been inspired to want to visit a specific travel destination by watching any of the following? ? (Select all that apply)Base: Intercontinental travelers –Australia (N = 1,029); Canada (N = 1,031); France (N = 1,014); Germany (N = 1,032); U.K. (N = 1,023); Brazil (N = 1,026); Mexico (N = 1,010); Korea (N = 1,031); Japan (N = 1,007); China (N = 1,007); India (N = 1,014)


TV/Video Channels

0%

10%

20%

30%

40%

50%

60%

70%


Broadcast/cable/satellite TV Video sharing platform (e.g., YouTube, Youku) Social media (e.g., Facebook, Weibo)Streaming TV subscription (e.g., Netflix, iQiY) Travel/tourism company website News/magazine websiteBlogger website Other Not inspired by TV/Online videos

Question: Where did you watch the film/video(s) that inspired you? (Select all that apply)Base: Intercontinental travelers –Australia (N = 1,029); Canada (N = 1,031); France (N = 1,014); Germany (N = 1,032); U.K. (N = 1,023); Brazil (N = 1,026); Mexico (N = 1,010); Korea (N = 1,031); Japan (N = 1,007); China (N = 1,007); India (N = 1,014)


Types of Social Media Videos

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Canada Australia France Germany UK Japan Korea Mexico Brazil IndiaFacebook Feed Facebook Watch videos/WeChat video posts Instagram video postsInstagram Story videos Instagram TV videos Twitter video postsOther Not inspired by social media videos

Question: What types of social media videos inspired you? (Select all that apply)Base: Intercontinental travelers –Australia (N = 1,029); Canada (N = 1,031); France (N = 1,014); Germany (N = 1,032); U.K. (N = 1,023); Brazil (N = 1,026); Mexico (N = 1,010); Korea (N = 1,031); Japan (N = 1,007); China (N = 1,007); India (N = 1,014)

China*

WeChat video posts

Sina Weibo videopostsQzone

Momo

Other

Not inspired by socialmedia videos

*China’s legend


Content of Travel Videos

0%

10%

20%

30%

40%

50%

60%

70%

80%


Natural scenery The local culture/lifestyle A particular attraction or activity Architecture/urban scenery

The individual characters/people The story/plot Other Not inspired by watching travel films/videos

Question: What about the video(s) inspired you to want to visit a particular place? (Select all that apply)Base: Intercontinental travelers –Australia (N = 1,029); Canada (N = 1,031); France (N = 1,014); Germany (N = 1,032); U.K. (N = 1,023); Brazil (N = 1,026); Mexico (N = 1,010); Korea (N = 1,031); Japan (N = 1,007); China (N = 1,007); India (N = 1,014)


Active Consumption

Stages of Searching for Travel-related Videos

0%

10%

20%

30%

40%

50%

60%

70%

80%


I did not search for travel-related video When seeking ideas about what destinations to consider

When choosing between destinations I have been considering When looking for local attraction/activity ideas after I had chosen where to go

Question: At what stage did you search for travel-related videos, if ever, while planning the [ ] international holiday trip(s) you took in the past 2 years? (Select all that apply)Base: Intercontinental travelers –Australia (N = 1,029); Canada (N = 1,031); France (N = 1,014); Germany (N = 1,032); U.K. (N = 1,023); Brazil (N = 1,026); Mexico (N = 1,010); Korea (N = 1,031); Japan (N = 1,007); China (N = 1,007); India (N = 1,014)


Channels for Travel-related Video Searching

0%

10%

20%

30%

40%

50%

60%

70%

80%

Canada Australia France Germany UK Japan Korea Mexico Brazil India

General search engine (e.g., Google) Video platforms (e.g., YouTube) FacebookInstagram Streaming TV TwitterOther Did not search for travel-related videos

Question: Where did you search for travel videos? (Select all that apply)Base: Intercontinental travelers –Australia (N = 1,029); Canada (N = 1,031); France (N = 1,014); Germany (N = 1,032); U.K. (N = 1,023); Brazil (N = 1,026); Mexico (N = 1,010); Korea (N = 1,031); Japan (N = 1,007); China (N = 1,007); India (N = 1,014)

China*

General searchengine (e.g.,baidu)Video platforms(e.g., Youku)

Weibo

WeChat

Streaming TV

Other

Did not search fortravel-relatedvideos

*China’s legend


Influence of Travel-related Videos on Destination Selection

0%

10%

20%

30%

40%

50%

60%

70%


Strongly influential Moderately influential Slightly influential Not at all influential Do not search for travel-related videos when selecting a destination

Question: How influential were the travel videos you watched on your destination decisions? Base: Intercontinental travelers –Australia (N = 1,029); Canada (N = 1,031); France (N = 1,014); Germany (N = 1,032); U.K. (N = 1,023); Brazil (N = 1,026); Mexico (N = 1,010); Korea (N = 1,031); Japan (N = 1,007); China (N = 1,007); India (N = 1,014)


“Failure and innovation are inseparable twins”

-Jeff Bezos

Lessons Learned

Lesson 1: Video platforms are not the same

Lesson 2: More isn’t always better

Lesson 3: Travel is a mood,

but it’s not moody

Lesson 4: Play off your strengths

Like/Follow/Share

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