OUTLOOK FOR U.S. TRAVEL AND TOURISM

1. OUTLOOK FOR U.S. TRAVEL AND TOURISM

2. “Get your facts first, then you can distort them as you please.” Mark Twain

3. Where Are We Now?2005

5. Travel Performance* – 2005 • Domestic travel up 6% • Leisure travel up 9%; business/ convention travel down slightly • Continued growth in air and hotel volume • Group meeting room-nights up but transient business room-nights down • International travel to U.S. exceeding expectations * in Terms of person-stays Source: DK Shifflet & Associates/Travel Industry Association of America

6. Gas Prices Peak in Early September 2005 Jan ‘04 July ‘04 Jan ‘05 July ‘05 Oct ‘05

7. Air Traffic is Back Millions of Passengers Enplanements - Source: Air Transport Association

8. U.S. Hotel Performance, 2001-2005p % Change over Prior Year Source: Smith Travel Research

9. RV Trends • 7 million U.S. households own RVs • RV retail sales down slightly in 2005 but forecasted to be second best year for RV sales in 27 years • RV rentals by Americans up 22% in 2005 according to Cruise America Source: RVIA Source: Recreation Vehicle Industry Association

10. Cruise Trends • 5.5% increase in passengers on CLIA member cruise lines in 2005 • North American passengers up 9.4% • 11 million passengers expected this year • Average length of cruise was 7.33 days versus 7.09 days last year • Growing number of cruise-ship theme voyages for a broad range of special interests Source: RVIA Source: Recreation Vehicle Industry Association

11. Estimated Attendance at theAll U.S. Theme Parks1999-2005p Source: PricewaterhouseCoopers

12. Commercial Casino Gaming Revenues up 7 Percent in 2004 Billions Source: Christiansen Capital Advisors and State Gaming Regulatory Agencies

13. Tour Operator Trends, 2005/2003 • FIT Offerings up 26%; 17% of overall sales volume – up 42% since 2003 • 56% of tours sold in 2005 were customized, up from 49% in 2003 • 46% of customer base are Seniors (60+) • 33% Boomers (39 – 59) • 6% young adults (21 – 28) • 15% students (under 21) • 23% book 45 days or less in advance, up from 8% in 2003 Source: National Tour Association

14. Tour Types with Greatest Growth Among NTA Operators Percent of NTA Operators Offering Source: National Tour Association

15. Tour Types with Greatest Declines Among NTA Operators Percent of NTA Operators Offering Source: National Tour Association

16. International Visitation To The U.S. Approaches 2000 Levels in 2005 Arrivals in Millions Source: Office of Travel and Tourism Industries (OTTI) One or more nights

17. International Visitor Arrivals to the U.S. 2005p %Change % Change (In Millions)2005/20042005/2000 Canada 15.0 8% 2% Mexico 12.7 6% 23% Overseas 21.7 7% -17% Europe 10.3 8% -10% Asia 6.7 7% -17% Latin America 2.4 6% -33% Source: Global Insight Forecast; Office of Travel and Tourism Industries

18. Why Not Even Greater Growth? • The U.S. is on sale! Euro, Yen and Canadian dollar have all appreciated considerably. • One obvious problem – our deteriorating image around the world.

19. Several Studies • Validate magnitude of problem and how it is affecting the credibility and usage of U.S. brands • 20% of Europeans and Canadians say they are consciously avoiding U.S. brands • Those products seen as quintessentially American are avoided even more • 55% of Japanese, 36% of Germans and 32% of French say less likely to visit U.S. • 57% of Japanese, 42% of French and 38% of UK avoid flying U.S. air carriers Source: GMI World Poll, The Pew Center for People & The Press

20. Visitation and Image PositiveNegative The United States Visited the U.S. Before 54%46% Have Not Visited the U.S. 38% 62% The American People Visited the U.S. Before 72%28% Have Not Visited the U.S. 61% 39% Quality of Life in America Visited the U.S. Before 68%32% Have Not Visited the U.S. 48% 52% * Among online residents of six countries (Source: GMI)

21. Travel Expenditures Up Nearly 8 Percent in 2005 Billions p = preliminary; f = forecast International traveler spending on U.S. carriers made outside the U.S. not included Source: TIA; OTTI

22. Where are We Going?

23. The Shifting Travel Landscape • Business Indicators Vacillating GDP, Dow, Unemployment, Consumer Confidence, National mood shift • International Issues – Currencies, USA Image Abroad, Biometric Passports – Visa Hassles, War, Disease, Terror, Hurricanes • Product/Marketing Issues: Online Distribution, Internet Connections, Teleconferencing, Flat Screens, Bed Systems…

24. Consumer Confidence At A Two-Year Low Source: The Conference Board

25. TIA’s Traveler Sentiment Index Remains Weak Seasonally Adjusted, 1st Quarter 2000 = 100 Source: TIA’s Traveler Sentiment Index

26. AFFORDABILITY INDEX (U.S. Average, 2000 = 100 for Perceived Affordability of Travel ) U.S. Average, 2000=100 Source: TIA’s Traveler Sentiment Index

27. FINANCIAL INDEX (U.S. Average, 2000 = 100 for Ability to Take Pleasure/Vacation Trip Based on Personal Finances U.S. Average, 2000=100 Source: TIA’s Traveler Sentiment Index

28. Energy Woes • Worst is over for gasoline – prices should fall back to around $2.50/gallon by year-end • But, home heating will cost Americans about one-third more this winter on average than last winter, assuming typical weather. A colder-than normal winter could lift energy costs nearly 50 percent. Source: Global Insight, Energy Information Administration

29. Consumer Spending Growth to Slow Significantly in 4th Quarter, 2005 Percent Change Source: Global Insight

30. Wanning CEO Confidence • CEO confidence fell to its lowest level in four years in the third quarter and will likely remain subdued for rest of 2005 • Noticeable less optimistic about short-term outlook – one-third expect economic conditions to worsen in next 6 months Source: The Conference Board

31. Economic Trends • GDP growth in fourth quarter will slow to 2.8% but economy will pick up steam in first quarter 2006 on post-hurricane bounce • Underlying trend, however, for slower economic growth in 2006 and 2007 Source: Global Insight

32. U.S. Economic Growth to Slow 20042005p2006f Real GDP 4.2% 3.5% 3.3% Payroll Employment 1.1 1.6 1.5 Unemployment Rate 5.5 5.1 4.9 Real Disposable Income 3.4 1.6 3.8 Consumer Prices 2.7 3.5 2.7 Total Consumption 3.9 3.4 2.8 Source: Global Insight

33. 2005 Hurricane Season Impact Study Provided By: Donna Larsen Lisa Araj, Ph.D. DataPath Systems Cunningham Research

34. Expected Leisure Travel Changes in 2006 16. Now thinking about all your travel plans, compared to last year, please indicate the statement that best describes your future travel plans. Base: All Travelers

35. Impact of 2005 Hurricane Season & Gas Prices On Auto Travel Among those planning to decrease travel ..."is this primarily due to the price of gasoline?" 16. Now thinking about all your travel plans, compared to last year, please indicate the statement that best describes your future travel plans. Base: All Travelers

36. Impact of 2005 Hurricane Season & Gas Prices On Long Haul Auto Travel Among those who had planned a trip… Do you still plan on taking the long-haul driving vacation? 17. Prior to the 2005 hurricane season, were you planning on taking a “long-haul” driving vacation in the next 12 months? Base: All Travelers

37. Trip Planning and Contingency Plans for Travel to the South/Southeastern Region % Travelers who had planned or were in the process of planning a leisure trip to the South/Southeastern Region Among those who had planned a trip… % who have decided to… 9. For travel in the next 12 months, had you planned or were you in the process of planning a leisure trip to any of the following states prior to the onset of the 2005 hurricane season? Base: All Travelers

38. Ways to Significantly Increase Interest in Region 8. Which of the following might significantly increase your interest in visiting the region? Base: Those previously interested in travel to any state in the Region

39. For More Information Please Contact… Donna Larsen Partner DataPath Systems 867-660-4600 Donna@DataPathSystems.net Lisa Araj, Ph.D. Vice President Cunningham Research 866-876-5472 Lisa@CunninghamResearch.com

40. U.S. Leisure Travel Outlook • Leisure travel intentions have weakened • Expect slower growth in remaining months of 2005 and first quarter of 2006 • Up 4% in 2005; 2% in 2006 • Growth in travel spending will also slow Source: Travel Industry Association of America

41. Estimated Attendance at theAll U.S. Theme Parks1999-2009 1999-2004 CAGR = +0.9% 2005-2009 CAGR = +1.8% Source: PricewaterhouseCoopers

42. Nationwide Interest in Theme Park Travel -5 points from 2004 Source: YPB&R/ Yankelovich National Leisure Monitor

43. Nationwide Interest in Theme Park Travel SOURCE: YPB&R/ Yankelovich National Leisure Monitor

44. U.S. Business Travel Outlook • Domestic business travel also likely to be constrained in short-term • Weak CEO confidence, much slower growth in corporate profits and rising travel costs • Up 1% in 2005; 1 – 2% in 2006 Source: Travel Industry Association of America

45. Outlook for Air Travel • Not out of the woods yet • Mainland carriers: -2% in domestic passengers +6.5% in international passengers -1.5% in domestic available seat miles +8% in international available seat miles • Load factors will remain at record levels • Fares will rise Source: Air Transport Association

46. U.S. Hotel Performance, 2003-2006 % Change over Prior Year Source: Smith Travel Research

47. International Visits Expected to Surpass 2000 Level Next Year Arrivals in Millions Source: Office of Travel and Tourism Industries (OTTI)

48. Travel Expenditures Will Continue to Rise Billions p = preliminary; f = forecast Source: TIA; OTTI

49. How We Sell and Distribute Travel Changed Forever

50. Travel is Top Online Category • Online sales now exceed $100 billion; expected to reach $316 billion by 2010 (Forrester Research) • Travel = $45 – 65 billion (JupiterResearch, eMarketer, PhocusWright) • 27% of U.S. leisure/unmanaged business travel booked online in 2004; 35% by 2006 (PhocusWright) • Internet is information source used by majority of Americans planning vacations (51%) and majority of business travelers (54%) (YPBR)