1 FOR INTERNAL USE ONLY

2013 Research Roundup:

Arizona Tourism in 2012 and Beyond

2

$19.3 billion in direct spending

38.1 million overnight visitors

2012 Arizona Travel Industry Performance

Source: Dean Runyan Associates, Tourism Economics, Office of Travel & Tourism Industries - U.S. Department of Commerce, 2007-08 Mexican Visitors to Arizona – University of Arizona, Statistics Canada

3

• Economic Impact

• Total Overnight Visitation - U.S. Visitors to Arizona - International Visitor to Arizona

• Regional Profiles

• Indicators

2012 Arizona Travel Industry Performance - Introduction

4

Economic Impact

5 2012 Arizona Travel Impact Summary

Source: Dean Runyan Associates

$19.3 billion in direct spending generated:

• 161,300 direct jobs

• $5.4 billion direct earnings

• $2.6 billion in local, state and federal tax revenues

6

17.8 18.1 18.0

16.417.5

18.519.3

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

2006 2007 2008 2009 2010 2011 2012p

Billi

ons

2012 Direct Travel Spending in Arizona (dollars) historical comparison from 2006

Source: Dean Runyan Associates

4.6%

70% of 2012 Travel Spending is by Out-of-State Visitors

7 2012 Direct Travel Spending in Arizona - by Commodity Purchased

Source: Dean Runyan Associates

2.5

3.5

0.9

3.5

2.12.4

1.5

2.6

3.6

0.9

3.7

2.1

2.5

1.6

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Accomm-odations

Food Service Food Stores Local Tran. & Gas

Arts, Ent. & Rec.

Retail Sales Visitor Air Tran.

2011 2012p

Billi

ons

8

168.5 168.0 165.2156.3 154.3 157.1 161.3

0

20

40

60

80

100

120

140

160

2006 2007 2008 2009 2010 2011 2012p

Thou

sand

s2012 Direct Travel Employment in Arizona historical comparison through 2006

Source: Dean Runyan Associates

2.7%

9

All other33%

Maricopa & Pima67%

2012p, Distribution of Travel-Generated Employment

Percent of State Direct Travel-Generated Employment

2012 Arizona Travel Employment Distribution

Source: Dean Runyan Associates

10 2012 Arizona Travel Employment as Percent of Total Area Employment

Source: Dean Runyan Associates

9%

91%

2012p, Travel-Generated Employment as Percent of Total Area Employment in All Other Counties

Percent of Total Area Employment that is Travel-Generated

4%

96%

2012p, Travel-Generated Employment as Percent of Total Area Employment in Maricopa & Pima Counties

Percent of Total Area Employment that is Travel-Generated

11

4.95.2 5.1

4.9 4.95.1

5.4

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

2006 2007 2008 2009 2010 2011 2012p

Billi

ons

2012 Direct Travel Earnings in Arizona (dollars) historical comparison from 2006

Source: Dean Runyan Associates

4.2%

12

2,4742,554 2,518

2,3972,477 2,536

2,628

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

2,600

2,800

2006 2007 2008 2009 2010 2011 2012p

Mill

ions

2012 Local, State and Federal Tax revenue generated by Direct Travel Spending in Arizona historical comparison from 2006

Source: Dean Runyan Associates

3.6%

Travel Industry Tax Revenues represent 7% of all State and Local Tax Revenues in Arizona

13 Annual Earnings, Selected AZ Export-Oriented Industries historical comparison from 1991

Source: Dean Runyan Associates

$0

$1

$2

$3

$4

$5

$6

$7

$8

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12p

Rea

l (20

12)

Ear

ning

s in

Bill

ions

Annual Earnings, Selected Arizona Export-Oriented IndustriesMicroelectronics Travel Aerospace Mining Agriculture

14

2012 Total Overnight Visitation

15

Source: Tourism Economics, 2007-08 Mexican Visitors to Arizona, US Department of Commerce-Office of Travel & Tourism Industries and Statistics Canada

Total Overnight Visitation to Arizona

2011

2012

% Change

37.6 million 38.1 million 1.4%

16 2012 Total Visitation to Arizona - Share

Source: Tourism Economics, Office of Travel & Tourism Industries - U.S. Department of Commerce, 2007-08 Mexican Visitors to Arizona – University of Arizona, Statistics Canada

38.1 million Overnight Visitors to Arizona

International 13.1%

Domestic 86.9%

17 2012 Arizona Domestic Overnight Visitation Volume Resident vs. Non-Resident

Mill

ions

Source: Tourism Economics

1.0%

1.1%

0.6% 10.0 10.1 9.7 9.0 9.2 9.3 9.4

23.5 23.7 22.721.1 22.6 23.5 23.8

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2006 2007 2008 2009 2010 2011 2012

Overnight Resident Overnight Non-Resident

33.5 33.8 32.4 30.0 31.8 32.8 33.1

18 2012 Arizona Overnight Visitor Profile: Domestic Overnight Residents vs. Non-Residents

Source: Longwoods International, Tourism Economics

Domestic Overnight Non-Residents

Domestic Overnight Residents

Share of AZ Overnight Visitors 72 % 28 %

Average Length of Stay 4.7 nights 2.5 nights

Average Travel Party Size 2.7 persons 2.8 persons

Purpose of Stay 45% VFR, 15% Business, 14% Touring

40% VFR, 14% Business, 12% Outdoors

Average Age 45.4 years 46.6 years

Average Household Income $76,880 $63,480

Mode of Transportation

55% Auto, 38% Air, 29% Rented Auto

88% Auto, 5% Rented Auto, 4% Camper/RV

Accommodations 72% Paid, 28% Non-Paid 63% Paid, 37% Non-Paid

Trip Quarter 29% Q1, 25% Q2 29% Q1, 25% Q3

Trip Expenditures (excluding transportation to destination)

$792 $342

19

6.8 6.8 6.8 5.3 5.7 5.8 5.7

26.7 27.0 25.624.8

26.1 27.0 27.4

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

2006 2007 2008 2009 2010 2011 2012

Overnight Business Overnight Leisure

2012 Arizona Domestic Overnight Visitation Volume Leisure vs. Business

Mill

ions

Source: Tourism Economics

1.0%

1.5%

33.5 33.8 32.4 30.0 31.8 32.8 33.1

-1.7%

20 2012 Arizona Overnight Visitor Profile: Domestic Overnight Leisure vs. Business

Source: Longwoods International, Tourism Economics

Domestic Overnight Leisure

Domestic Overnight Business

Share of AZ Overnight Visitors 83 % 17 %

Average Length of Stay 3.9 nights 3.4 nights

Average Travel Party Size 2.9 persons 2.0 persons

Purpose of Stay 51% VFR, 15% Touring, 9% Outdoors

69% General Business & 31% Conf./Convention

Average Age 46.9 years 48.8 years

Average Household Income $70,520 $86,020

Mode of Transportation

69% Auto, 24% Air, 19% Rented Auto

50% Auto, 42% Air, 30% Rented Auto

Accommodations 67% Paid, 33% Non-Paid 87% Paid, 13% Non-Paid

Trip Quarter 28% Q1, 24% Q2 32% Q1, 25% Q4

Trip Expenditures (excluding transportation to destination)

$609 $668

21

1. Arizona 28.28%

2. California 17.16%

3. Texas 2.98%

4. Nevada 2.11%

5. New Mexico 2.04%

6. Illinois 2.01%

7. Florida 1.91%

8. Washington 1.90%

9. New York 1.89%

10. Colorado 1.68%

2012 Domestic Overnight Visitation – Top Origin States

Top Origin States:

Source: Longwoods International, Tourism Economics

AZ 28.3%

CA 17.2%

TX 3.0%

NV 2.1%

NM 2.0%

WA 1.9%

NY 1.9%

IL 2.0% CO

1.7%

FL 1.9%

22 2012 Total Visitation to Arizona - Share

Source: Tourism Economics, Office of Travel & Tourism Industries - U.S. Department of Commerce, 2007-08 Mexican Visitors to Arizona – University of Arizona, Statistics Canada

38.1 million Overnight Visitors to Arizona

International 13.1%

Domestic 86.9%

23 2012 International Visitation Market Share – Arizona

Source: Office of Travel & Tourism Industries - U.S. Department of Commerce, 2007-08 Mexican Visitors to Arizona – University of Arizona, Statistics Canada, Tourism Economics

International to Arizona 5 million overnight visitors

Overseas, 17%

Canada, 15%

Mexico, 68%

24 2012 Canadian Visitation to Arizona

Source: Statistics Canada

496,300 455,600

514,500

557,400

650,000

703,800 728,000

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2006 2007 2008 2009 2010 2011 2012

YOY % Change over:2012 2011 3.4%2010 12.0% 2009 30.6%2008 41.5%

25 2012 Canadian Visitation to Arizona by Province

Source: Statistics Canada

Province 2012 % Change

12/11

Alberta 243,600 3.3%

Ontario 168,100 -3.9%

British Columbia 164,500 7.0%

Quebec 52,300 13.2%

Saskatchewan 50,600 45.4%

Manitoba 34,500 -8.5%

Atlantic Canada 14,500 29.3%

TOTAL 728,000 3.4%

26

Source: The Arizona Office of Tourism estimates based on and extrapolated from aggregate card usage data provided by VisaVue Travel for the period of 2012 and incorporates data from other independent research sources.

2012 International VisaVUE Spending Trends in Arizona Top 10 Countries

% CHANGE MARKET SHARE2008 YOY % Change

2009 YOY % Change

2010 YOY % Change

2011 YOY % Change

2012 YOY % Change 2007 2008 2009 2010 2011 2012

1 CANADA 0.0% -7.9% 25.3% 11.8% 0.8% 44.1% 45.8% 50.1% 53.5% 53.0% 52.3%2 MEXICO -8.1% -23.6% 10.8% 16.4% 9.7% 21.3% 20.2% 18.4% 17.4% 17.9% 19.2%3 UNITED KINGDOM -10.2% -37.4% -0.2% -3.4% -0.4% 7.4% 6.9% 5.1% 4.4% 3.7% 3.6%4 GERMANY -15.9% -18.3% 0.4% 8.1% -2.8% 3.8% 3.3% 3.2% 2.7% 2.6% 2.5%5 FRANCE 32.9% -16.8% -1.9% 6.3% -0.3% 2.3% 3.2% 3.2% 2.7% 2.5% 2.4%6 JAPAN -22.2% -26.0% 15.8% 29.0% 1.7% 2.6% 2.1% 1.8% 1.8% 2.1% 2.1%7 CHINA 17.9% 18.1% 26.2% 61.5% 41.9% 0.5% 0.6% 0.8% 0.9% 1.2% 1.7%8 AUSTRALIA -12.7% -8.6% 14.9% 15.6% -3.1% 1.6% 1.4% 1.5% 1.5% 1.5% 1.5%9 SWITZERLAND 2.9% -10.6% 16.2% 24.5% -8.4% 0.9% 1.0% 1.0% 1.0% 1.1% 1.0%

10 BRAZIL -4.8% 1.2% 50.3% 15.8% 3.4% 0.7% 0.7% 0.8% 1.0% 1.0% 1.0%TOTAL -3.5% -15.8% 17.2% 12.9% 2.3%

Top Countries to Arizona

27

Source: The Arizona Office of Tourism estimates based on and extrapolated from aggregate card usage data provided by VisaVue Travel for the period of 2012 and incorporates data from other independent research sources.

2012 International VisaVUE Spending Trends in Arizona

UPDATE

Canada, 52%

Mexico, 19%

Overseas, 28%

Overseas, 17%

Canada, 15%

Mexico, 68%

VISITATION

28

28

Total International Spending % Change (Year-over-Year)

Source: The Arizona Office of Tourism estimates based on and extrapolated from aggregate card usage data provided by VisaVue Travel for the period of 2012 and incorporates data from other independent research sources.

2012 International VisaVUE Spending Trends in Arizona

-3.5%

-15.8%

17.2%12.9%

2.3%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

2008 YOY % Change

2009 YOY % Change

2010 YOY % Change

2011 YOY % Change

2012 YOY % Change

29

29

Source: The Arizona Office of Tourism estimates based on and extrapolated from aggregate card usage data provided by VisaVue Travel for the period of 2007-2012 and incorporates data from other independent research sources.

2012 International VisaVUE Spending Trends in Arizona

Total International Spending % Change (Year-over-Year) by Segment

0.0%

-7.9%

25.3%

11.8%

0.8%

-8.1%

-23.6%

10.8%

16.4%

9.7%

-5.2%

-21.9%

8.2%

12.8%

0.2%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

2008 YOY % Change 2009 YOY % Change 2010 YOY % Change 2011 YOY % Change 2012 YOY % Change

Canada Mexico Overseas

30

Arizona Regional Profiles

31 Arizona’s Five Marketing Regions

Northern

North Central

West Coast

Central & Phoenix

Tucson & Southern

32

$1.5 billion (7.8% of Arizona Direct Travel Spending)

in direct spending generated:

• 15,900 direct jobs

• $394 million direct earnings

• $103 million in local and state tax revenues

5.8 million Domestic Overnight Visitors (17.7% of Arizona’s Domestic Overnight Visitors) 9% Share of VisaVUE International Spending (Top Country Spending from Canada, France and Germany)

Arizona’s Northern Region Profile

Source: Dean Runyan Associates, Tourism Economics, Longwoods International, VisaVUE, Smith Travel Research

Counties: Apache, Coconino, Navajo

33 Arizona’s North Central Region Profile

$1.06 billion (5.6% of Arizona Direct Travel Spending)

in direct spending generated:

• 12,100 direct jobs

• $257 million direct earnings

• $66 million in local and state tax revenues

4.5 million Domestic Overnight Visitors (13.7% of Arizona’s Domestic Overnight Visitors) 4% Share of VisaVUE International Spending (Top Country Spending from Canada, Japan and UK) Source: Dean Runyan Associates, Tourism Economics, Longwoods International, VisaVUE, Smith Travel Research

Counties: Gila, Graham, Greenlee, Yavapai

34 Arizona’s Tucson & Southern Region Profile

$3.3 billion (17.1% of Arizona Direct Travel Spending)

in direct spending generated:

• 28,000 direct jobs

• $700 million direct earnings

• $190 million in local and state tax revenues

7.0 million Domestic Overnight Visitors (21.0% of Arizona’s Domestic Overnight Visitors) 21% Share of VisaVUE International Spending (Top Country Spending from Mexico, Canada and UK)

Source: Dean Runyan Associates, Tourism Economics, Longwoods International, VisaVUE, Smith Travel Research

Counties: Cochise, Pima, Santa Cruz

35

$1.3 billion (6.7% of Arizona Direct Travel Spending)

in direct spending generated:

• 13,800 direct jobs

• $313 million direct earnings

• $81 million in local and state tax revenues

4.2 million Domestic Overnight Visitors (12.7% of Arizona’s Domestic Overnight Visitors) 8% Share of VisaVUE International Spending (Top Country Spending from Canada, Mexico and Germany)

Arizona’s West Coast Region Profile

Source: Dean Runyan Associates, Tourism Economics, Longwoods International, VisaVUE, Smith Travel Research

Counties: La Paz, Mohave, Yuma

36 Arizona’s Phoenix & Central Region Profile

$12.2 billion (63.2% of Arizona Direct Travel Spending) in direct spending generated:

• 91,600 direct jobs

• $3.7 billion direct earnings

• $772 million in local and state tax revenues

16.7 million Domestic Overnight Visitors (50% of Arizona’s Domestic Overnight Visitors) 60% Share of VisaVUE International Spending (Top Country Spending from Canada, Mexico and UK)

Source: Dean Runyan Associates, Tourism Economics, Longwoods International, VisaVUE, Smith Travel Research

Counties: Maricopa, Pinal

37

Arizona Indicators

38 Arizona Indicators - Summary 2012 Annual % Change compared to 2011, 2010 & 2007

Source: Arizona State Parks, National Park Service, Individual Arizona Airports, Arizona Dept. of Revenue, Northern Arizona University and Smith Travel Research

* The above tax estimates DO NOT include the 1% temporary tax increase which took effect June 1, 2010 and expired June 1, 2013.

Indicator 2012 Volume

Tourism Related Tax ▼ -5.5% ▲ 13.3% ▲ 4.9% $559,148,796Airports (Enplaned & Deplaned) ▼ -1.0% ▲ 2.8% ▲ 0.6% 46,694,380State Park Visitation ▼ -6.1% ▼ -0.4% ▲ 5.2% 2,170,077National Park Visitation ▼ -2.9% ▼ -2.2% ▼ -1.0% 11,507,469Statewide Lodging Occupancy ▼ -13.1% ▲ 3.0% ▲ 0.3% 57.5% ADR ▼ -7.9% ▲ 4.8% ▲ 1.8% $97.10 RevPAR ▼ -20.1% ▲ 7.9% ▲ 2.1% $55.82 Demand ▼ -2.4% ▲ 4.3% ▲ 0.6% 23,568,277 Supply ▲ 12.5% ▲ 1.3% ▲ 0.3% 40,998,183

% Change from 2007

% Change from 2010

% Change from 2011

2012 Arizona Tourism Indicators

39

39

Arizona Indicators 2013 YTD

Source: Arizona State Parks, National Park Service, Individual Arizona Airports, Arizona Dept. of Revenue, Northern Arizona University and Smith Travel Research

Indicator

Tourism Related Tax ▲ 5.0% AprilAirports (Enplaned & Deplaned) ▼ -0.2% AprilState Park Visitation ▼ -2.0% MarchNational Park Visitation ▲ 4.7% JanStatewide Lodging Occupancy ▲ 1.5% May ADR ▲ 3.1% May RevPAR ▲ 4.6% May Demand ▲ 1.3% May Supply ▼ -0.1% May

2013 YTD

2013 YTD Arizona Tourism Indicators

* The above tax estimates DO NOT include the 1% temporary tax increase which took effect June 1, 2010 and expired June 1, 2013.