The State of Ohio’s Tourism Industry:

“Visitors are Traveling and Spending Again”

2012 Ohio Conference on Tourism

Wow!

Thank You!

Quick OverviewTourismOhio:• Since Last Year’s Conference

– Tourism Funding Model– Key Accomplishments– Our Current Budget– New Partnership Opportunities

Travel Trends:• Industry Vs. Economy

– Ohio Currents– National Currents & Outlook

Our Industry• $40 Billion in Total Revenues

• $2.7 Billion in Total State and Local Taxes Generated

• 443,000 FTE’s Supported by Tourism (7% of OH jobs)

Bottom Line: Tourism is a Revenue Generator for OH!

*2011

Say “hi” to:

Who Are We?• State’s Destination Marketing Organization

• Premier source of information for travelers and media about Ohio’s vibrant tourism experiences, attractions and economy.

If We Do Our Job

We enhance the economic health of Ohio by driving business to you, thus generating revenue for the state.

How We Do It (10.5 Staff+Agencies)

• Advertising • Main• Multicultural• International

• Public Relations• Tourism Information Services

• Buckeye Database• 1-800-BUCKEYE• DiscoverOhio.com• Social Media• Buckeye Fulfillment

Center• Research

Since We Last Met…

• Record R.O.I. = 14:1• Record Industry Partner Participation!• Innovation & Partnership• Online & Social Media Enhancements!• Mobile Tour – 3nd Year!• Bronze Anvil, Sabre, & Telly Awards!

How Do We Compete?• Surrounding states currently have an

average budget of $10 million each.

• Michigan’s Tourism MARKETING budget is $27 million. Office budget total is $32 million.

• We work hard and smart

• We partner with you, and non-traditional businesses

Before I Continue…Write This Down:

1. Go to DiscoverOhio.com/industry

2.Register for Buckeyeline

3.“Ohio Tourism Industry” FB Group

The Continued Basis of Our Approach:

• UPSELL! - “Too Much Fun for Just One Day”

• Identifiable Ohio – Differentiate• Through the eyes of our visitors/target

audiences• Retail Strategy using New and Trad. Media• …And the:

Focus Areas for Success

• Industry Partnerships:– Advertising Co-ops– PR– Web/Database– Telemarketing/Fulfillment– Multicultural– Social Media – Research– Non-Traditional Partnerships– Etc…etc…etc…

Tourism Division

New Opportunities for FY’13

• Our menu is bigger than ever!

• Did you grab a 2013 Partnership Book?!

• Most Opportunites are FREE!

• We will have more based upon trends and your needs!

The State of the Industry• Rebounding

Strength

• Resilience

• Recovery

• Release

Business Day

• After increasing 7.4% in 2010, Ohio visitor spending expanded another 6.5% in 2011, reaching $26.3 billion.

• More overnight stays along with higher prices pushed accommodations spending up 9.4% in 2011.

2011 Re-Cap: Continued growth in visitor spending

$24.5

$25.6

$23.0

$24.7

$26.3

$21

$22

$23

$24

$25

$26

$27

2007 2008 2009 2010 2011

-12%-10%-8%-6%-4%-2%0%2%4%6%8%10%

TOTAL % Change

Visitor spending US$ Billions

Source : Tourism Economics

Overnight and Day Markets Compared

2009 2010 2011 % ChangeTotal Visitors (millions) 172.45 180.06 181.48 0.8%

Overnight 34.27 35.71 37.39 4.7% Day 138.18 144.35 144.09 -0.2%

Total Spending (million $) 23,031 24,736 26,336 6.5%

Overnight 9,468 10,298 11,407 10.8%

Day 13,563 14,438 14,928 3.4%

Per Visitor Spending 134$ 137$ 145$ 5.6% Overnight 276$ 288$ 305$ 5.8%

Day 98$ 100$ 104$ 3.6%

Visits and Spend

SB 314 = Tourism

–Name Change: Office of TourismOhio

–Tourism Funding Model

–Tourism Advisory Board

Pilot Funding Model• Performance-based funding model

• Compare sales-tax receipts year over year

2013 benchmarked against 2012

• Tax receipts are based on NAICS Codes

Restaurants, Hotels, Rental Cars, etc.

TourismOhio Budget

• In growth years, TourismOhio will receive up to $10 million.

• Any increase in Tourism funding will not be realized until October 2013 for FY14 budget.

How Do We Plan?

• Track tax receipts throughout the fiscal year

• The OhioTourism Fund is Revolving

• Set aside a few million dollars each fiscal for zero-growth years

What Happens in Five Years?

• The pilot funding model terminates end of FY 2018.

• Pilot program to be evaluated and recommendations made as to whether to make the funding mechanism permanent.

• If it is recommend to make the funding model permanent, it could be recommended to establish TourismOhio as a private nonprofit corporation or a subsidiary corporation of JobsOhio.

Director Search

• Development and Tourism leadership involved

• Better to find the right candidate than to hurry

• Have interviewed strong candidates

Our Market

• 2011 Visitor Study Highlights

• Industry.DiscoverOhio.com

Current Word on the Street

• Occupancy is UP 6.1% in 2011 vs. 2009 YTD (+4.6% U.S.)

• ADR is UP 2.7% (+3.6% U.S.)

• RevPar UP 8.9% (+8.3% U.S.)

• Business Travel is Steadily Improving

• Leisure Holding Its Own in Volume After Soggy Start

• Incremental Visitor Spending is FINALLY going UP • BUT: Consumer Confidence and Gas Prices are Shaky!

Tourism and the National Economy*

*A special thanks to the US Travel Association and Tourism Economics for providing much of this data!

2001 – 2011… One for the books

But also a Decade of R’s…

Resilience Renewal Re-Birth

Recovery

Resourcefulness

Turning the corner…But when?

• Another “soft patch”• Weak housing market• Americans’ spending plans still on hold • Weak labor market has weakened again • Inflationary pressures still high in travel• Ongoing debt crisis• Threat of higher taxes

Consumer Confidence is on the rise

The Consumer Confidence Index is

currently at 70.3, up form 45.5 last year at this time.

90.0 is considered healthy

1985 = 100

Source: The Conference Board, September 2012

Overall Traveler Sentiment IndexTM saw an uptick in July

April’s overall Traveler Sentiment IndexTM of 93.5 represents not only a nearly ten point increase from April 2011’s index of 83.9, but also marks its highest level since April 2007 (96.2)

Source: MMGY/U.S. Travel Association, travelhorizonsTM, April 2012

US Travel Forecast

Younger Americans the Most Positive about Travel Traveler Sentiment Scores

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, July 2011

Affordability of Travel Index… Regains some ground

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, July 2011

March 2007 = 100

Gas price rise

But travel prices still outpacing inflation!

Source: U.S. Travel Association Travel Price Index

Percentage change through July 2011YTD TPI = +6.7%YTD CPI = +2.9%

Does not include various fees

Interest in Travel Remains Strong

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, July 2011

Traveler Sentiment Scores

But affordability of travel remains elusive

Positive

Negative

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, July 2011

Traveler Sentiment Scores

Deep discounts & deals

And “money available for travel” not back to pre-recession levels

Traveler Sentiment Scores

Positive

Negative

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, July 2011

First Half 2011 Travel Performance…Pretty good!

DomesticVolume

DomesticLeisure Volume

Domestic BusinessVolume

2.6%2.8%

1.9%

DomesticSpending

7.8%Source: U.S. Travel Association and Tourism Economics

Leisure Travel Trends

Domestic Leisure Visitors…Exceeded the 2007 high last year

Source: U.S. Travel Association

Bah!

Millions of Person-Trips

56% of U.S. adults planning at least one leisure trip between

August and January7 million more travelers

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, July 2011

Financial factors influencing leisure travel…

Most not really travel relatedFinancial Factor Influencing Future Leisure Travel

% AgreeJuly 2011

Price of gallon of gasoline 62%

Price of air travel 59

Meltdown of the U.S. economy 58

High level of credit card debt 57

Expectation of making less money 56

Expectation spouse/partner will lose job 55

High level of personal debt 55

Rising cost of healthcare 51

Size of the national debt 46Q: To what degree is each of the following financial issues currently affecting your leisure vacation plans over the next 12 months? (Somewhat to much less likely to travel)Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, July 2011

Reasons for taking more leisure trips…3 Rs -- Rest, Relax, Reconnect

• Reconnect with family/fiends (43%) • Relieve stress/need to relax (34%)

• Break from home/work routine (26%)

• Have put off traveling due to economy – feeling housebound (25%)

Q: Why are you planning on taking more leisure trips during the next 6 months?Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, July 2011

Other Leisure Travel Trends• The “Staycation” has been revived – Regional Travel!

• Balancing Effect with Long-Haul Travel

• Bargain-Hunting “New Consumer” sees your discount

rate as the beginning point of the haggle!

• Explosive adaptation of Smart Mobile and Tablet

technology redefines the marketplace…More are

booking via mobile!

• The Social Media ROI debate rages on, but you must be

there!

Outlook through January 2012• Still willing to travel, but making

adjustments in spending

• Still traveling close to home

• Overnight leisure trips shorter in

duration

• More day trips

• More long weekend getaways

• Plans can change, but…..Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, July 2011

Vacations/Getaways are Needed Now More than Ever!

Business Travelers…Not what it used to be

Incidence of Business Travel Down 14 Points Over Past 5 Years, but Stabilizing

Percent taking business trip in past year

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, July 2011

508.7494.3

461.1

431.1

447.8

380

400

420

440

460

480

500

520

2006 2007 2008 2009 2010

Source: U.S. Travel Association

Millions of Person-Trips

Domestic business travel inches up…Well below 1998 record high

Ouch!

Business travel… The province of the young

Plan to take a business trip between August 2011 and January 2012

Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, July 2011

Lodging Trends

Hotel demand… Stronger than expected

Source: Smith Travel Research, September 2011

2010 2011

Percent change in room-nights sold over prior year

% change in RevPAR through August 2011 -

Getting better

Source: Smith Travel Research, August 2011

10.0% or more

Decrease

7.5% to 9.9%

5.0% to 7.4%

0.0% to 4.9%

9.2

10.4

8.85.8

6.1

STR Forecasts for 2011 and 2012ADR drives up RevPAR

Source: Smith Travel Research, July 2011

International Visitors…Welcome back!

• Spend more per trip ($4,000 per overseas visitor)• Stay longer (18 nights in U.S.)• $31.7 billion trade surplus• Stay in hotels (78%)• They enjoy seeing the America we take for granted

International arrivals to U.S. sets new record!

9 million more visitors than 2000

Source: Office of Travel and Tourism Industries

(in millions)

Promoting the U.S

Forecasts Through 2013…Break out the Ouija boards!

Total domestic visitors…Modest growth

*ForecastSource: U.S. Travel Association; Tourism Economics

Domestic leisure visitors…More solid growth

*ForecastSource: U.S. Travel Association; Tourism Economics

In millions

Domestic business travel improves…But still well below 1998 record high

* Forecast as of May 11, 2011Source: U.S. Travel Association and Tourism Economics

International and Overseas arrivals continue strong as well

*ForecastSource: U.S. Travel Association; Tourism Economics

Summary…sustained, but slow growth expected in 2011…and 2012 and 2013

DomesticLeisureVolume

DomesticBusinessVolume

InternationalVisitors

InternationalSpending*

2.4%1.2%

5.8%

10.0%

DomesticSpending

7.3%

*Excluding international airfaresSources: U.S. Travel Association; Oxford Economics/Tourism Economics; U.S. Department of Commerce-Office of Travel and Tourism Industries

42 million “not sures”…Must be in the marketplace

Not Sure18%

42 Million

No Plans to Travel26%

60 Million

Q: Over the next 6 months, do you plan to take any leisure trips of at least 50 miles one way from home or that will include an overnight stay?Source: U.S. Travel Association/Ypartnership, travelhorizonsTM, July 2011

Just a couple more thoughts before you can get ready for

tonight…

A Few Messaging Opportunities• VALUE!!!

• Authenticity

• Focus on “Re” - Connections

• Ease of Travel – Time

• Social Media – Be Strategic

• Show Your Mobility

• PACKAGE!!!

• INTEGRATE!!!

Tourism Division

Questions?

Tourism Division

Thank You!

Amir Eylon

Amir.Eylon@Development.ohio.gov

(614) 466-3704

DiscoverOhio.com/industry

(Buckeyeline!)

Tourism Division

Tourism Division