visa usa-tourism-2011-2

T O U R I S M O U T L O O K

United States APRIL 2011

T O U R I S M O U T L O O K | U N I T E D S TAT E S

Introduction

At this time last year, I wrote of the vitality of tourism to local, national and global economic growth, despite a depressed and challenging economy. Following severe but expected drops in tourism spending in both 2008 and 2009, we were hopeful that 2010 would bring about significant global economic recovery and with it, more positive news for the travel and tourism industry.

Today, I am pleased to write that U.S. and international Visa cardholders were optimistic in 2010, took more trips and increased their spending on international tourism. Last year, U.S. and international Visa cardholders increased spending across a majority of key merchant categories.1 Total inbound tourism spending on Visa cards by international travelers visiting the U.S. increased by 18 percent from 2009.2 Outbound international travel and tourism also rebounded, with major sporting events such as the 2010 FIFA World Cup South Africa and Vancouver 2010 Olympic Winter Games beckoning U.S. travelers to venture outside the country.

Support from the U.S. government via the Travel Promotion Act, which aims to attract foreign tourists to the U.S. by improving international perception of the country, and the Visa Waiver Program, which in 2010 allowed citizens from certain countries to travel to the U.S for tourism or business for up to 90 days without having to obtain a visa, also likely contributed to these impressive rises in U.S. travel and tourism spending.

Visa is committed to providing the U.S. tourism industry with accurate, comprehensive and current spending information, known as VisaVue Travel Data, to help the country and its tourism entities accomplish their objectives of long-term and sustainable growth. As such, we are very pleased to present Visa’s fourth annual Tourism Outlook: USA report. This annual publication details spending on Visa cards by international visitors to the U.S., as well as spending by U.S. travelers overseas, for the previous two years.

Visa digital currency is transforming the world, bringing us closer together and providing secure economic empowerment to more people than ever before. It is currency that enables a shopper to buy gifts in mid-air, while returning from vacation, and a merchant in Florida to process a transaction with a tourist from Istanbul. As the world’s largest retail electronic payments network, Visa has the unique ability to provide valuable insights to foster a better understanding of where and how travelers are spending their money. Turning Visa transaction data into actionable information enables Visa to provide U.S. retailers, businesses and tourism partners critical spending data to help create targeted tourism programs that promote the country’s growth.

As the use of digital currency continues to play a significant role in the everyday lives of local and international consumers alike, Visa will continue to work with its partners in the tourism industry to ensure that both residents

and visitors to the U.S. enjoy the benefits of electronic payments.

William M. Sheedy

Group President, Americas Visa Inc.

1 VisaVue Travel Data, 2009 - 20102 VisaVue Travel Data, 2009 - 2010

In 2010, international tourist arrivals were up by almost 7%


Overview

The U.S. contributes an enormous amount to the global tourism economy. When the recession first hit the U.S. in the fall of 2008, the effects swept across the country like a wildfire and quickly engulfed the rest of the world. According to last year’s Tourism Outlook: USA report, international travel by U.S. tourists decreased drastically, and the amount spent by international visitors to the U.S. declined just as quickly.3

In 2010, the global tourism industry showed signs of strength. According to the United Nations World Tourism Organization (UNWTO), international tourist arrivals were up by almost 7 percent to 935 million.4 According to VisaVue travel data, spending by international Visa cardholders traveling to the U.S. yielded a significant $34 billion in total spend.5 Similarly, spending by Visa cardholders traveling outside of the U.S. also grew, with U.S. travelers spending nearly $31 billion on Visa payment cards outside the country, a 6 percent increase over 2009.5

Perhaps even more promising was the fact that growth in spending by both U.S. and international Visa cardholders was registered across 92 percent of merchant segments.5 Lodging and restaurants both recognized significant double-digit increases from inbound and outbound tourism spending – a stark contrast to the declines of 2008 and 2009.5

Looking ahead, tourism operators in the U.S. have continued reasons for optimism. As the gradual rebound of the global economy continues, so does the recovery of consumer confidence, which will continue to drive travel and tourism spending. Visa has been a longtime supporter of tourism industries around the world, and this report is intended to be a tool that provides insight on how to support tourism’s contribution to national and global economies so that the industry is well-positioned for years to come.

3 VisaVue Travel Data, 2008 - 20094 UNWTO World Tourism Barometer, Advance Release, January 20115 VisaVue Travel Data, 2009 - 2010


United States Inbound Tourism Spending The U.S. travel and tourism industry scored a major victory in 2010 when President Barack Obama approved the first-ever national travel promotion and communications program to attract more international visitors to the U.S. Funded through fees and private sector contribution, the Travel Promotion Act aims to attract foreign tourists to the U.S. by improving international perception of the country. In addition to the Act, the U.S. also instituted the Visa Waiver Program in 2010 allowing citizens from specific countries to travel to the U.S. for tourism or business for up to 90 days without having to obtain a visa. These initiatives, along with improved global economic conditions in 2010, led to a rise in spending on Visa cards by international travelers visiting the U.S.

Similar to last year, visitors from Canada and the United Kingdom made the largest contribution to U.S. inbound tourism spending during 2010.6 Canadian travelers spent $9.2 billion on their Visa cards when traveling to the U.S. last year, up 18 percent over 2009 spending, while travelers from the United Kingdom spent just over $2.5 billion, up 11 percent from the previous year.6 This was followed by Mexico ($2 billion), Brazil ($1.9 billion), Japan ($1.8 billion) and China ($1.1 billion).6

Of the top 25 contributors to U.S. tourism revenue, Visa cardholders from China (64%), Brazil (63%), Saudi Arabia (61%), Colombia (42%), and Russia (42%) had the largest growth in 2010 compared to 2009.6 Furthermore, 15 of the top 25 source countries saw double-digit growth from 2009 to 2010.6

6 VisaVue Travel Data, 2009 - 2010

2010 Monthly ComparisonPerhaps one of the most significant signs of tourism recovery is the consistent increase in international travelers visiting the U.S. each month in 2010.

While August and July were the most popular months for international travelers to the U.S., October through December also saw significant

spending increases on Visa cards, with each month netting around $3.1 billion dollars in tourism revenue.7

The month with the greatest increase was May (25%), followed by March and April, which each saw 23 percent growth.7

Month-to-Month Inbound International Spending Comparison

$2.7B

$2.2B

$2.5B

$2.1B

$3.1B

$2.6B

$2.8B

$2.2B

$2.8B

$2.3B

$2.6B

$2.3B

$2.3B

$1.9B

$3.3B

$2.9B

$3.1B

$2.6B

$3.1B

$2.7B

$3.1B

$2.7B

$2.9B

$2.5B

March | +23%

June | +18%

July | +19%

May | +25%

April | +23%

January | +13%

February | +18%

August | +15%

November | +20%

December | +13%

October | +15%

September | +14%


2010 2009

Page 8


August and July were the most popular months for international travelers to the U.S.

State-by-State Tourism GrowthAccording to VisaVue data, travel destinations such as Florida, New York, California, Texas and Nevada were the most popular states amongst international travelers to the U.S. during 2010.8 Disney World, Times Square and Las Vegas were some of the top destinations within those states, respectively.9

International visitors to Florida contributed more than $6.6 billion on their Visa cards in 2010, followed by New York ($5.6 billion) and California ($5.4 billion).10 States which saw

the biggest year-over-year growth were North Dakota (39%), Tennessee (33%), Utah (27%), and Wisconsin (26%).10 In total, 48 of the 50 states reported year-over-year increases in spending on Visa cards, and of those states, 46 saw double-digit year-over-year growth.10

Page 10

Florida+17%

California+19%

Nevada+21%

Texas+16%

New York+22%

Top 5 U.S. States Based on Inbound International Spending

8 VisaVue Travel Data, 2009 - 20109 “Top 25 Most Visited Tourism Destinations in America,” TheTravelZone.com, May 10, 201110 VisaVue Travel Data, 2009 - 2010

United States Outbound Spending U.S. travelers ventured outside the country at an increased rate in 2010, spending nearly $31 billion on Visa payment cards, a 6 percent increase over 2009.11

However, American travelers continued to stay closer to home while traveling internationally in 2010, as Canada and Mexico were the most popular destinations according to Visa cardholder spend data.11

Canada was the most popular destination for U.S. international travelers, as they spent $3.5 billion on their Visa payment cards in the country during 2010.11 Mexico was a close second, with American travelers spending

$3.1 billion during 2010, followed by popular European destinations including the United Kingdom ($1.6 billion), Italy ($1.3 billion), France ($1.3 billion) and Germany ($1.1 billion).11

Of the top 10 most popular international destinations amongst U.S. travelers, all but one saw moderate year-over-year growth according to Visa cardholder spending data.11 Of these countries, China (18%) saw the biggest year-over-year growth, followed by Puerto Rico (9%), Canada (8%), Mexico (7%), and Japan (7%).11

Page 13

Top 5 Outbound Destination Countries

Canada +8%

Mexico+7%

United Kingdom

+7%

France+4% Italy

+4%



Digital Currency and Team Spirit International sporting events were popular among American international travelers in 2010. At both the Olympic Winter Games and FIFA World Cup, U.S. international travelers spent more on their Visa cards than travelers from any other country.12

As evidenced by Visa’s proprietary spend data, events of this scope and magnitude have significant and lasting effects on their host country. As a proud Worldwide Sponsor of the Olympic Games and a partner of the FIFA World Cup™, Visa is uniquely qualified to help the U.S. understand where its consumers are traveling, to help establish effective cross-border tourism partnerships that fuel economic growth.

World Cup Stats

• More than 30,000 U.S. travelers made their way to South Africa for the 2010 FIFA World Cup.13 • U.S. travelers visiting South Africa during the FIFA World Cup spent more than $59 million on

their Visa cards.14 • Interest in the 2010 FIFA World Cup spurred dramatic year-over-year growth for U.S. travelers

visiting South Africa, as spending on Visa cards by American travelers increased by 21 percent from 2009 to 2010.14

Olympic Winter Games Recap

• The number of U.S. travelers visiting Canada rose by almost 6 percent from the previous year during the Vancouver 2010 Winter Olympic Games.15

• American travelers visiting British Columbia during the Vancouver Winter Olympic Games spent approximately $61 million on their Visa cards.16

12 VisaVue Travel Data, 2009 - 201013 South Africa Ministry of Tourism, South Africa, December 201114 VisaVue Travel Data, 2009 - 201015 Statistics Canada, April 201016 VisaVue Travel Data, 2009 - 2010

Proud Worldwide Sponsor of the Olympic Games and a Partner of the FIFA World Cup™

International travelers using their Visa card, showed signs of caution over the past two years. The amount spent within popular categories, including lodging, retail, restaurants, and airlines saw extreme decreases from 2008 to 2009.17 However, according to 2010 VisaVue Travel Data, international Visa cardholders are feeling more optimistic about economic recovery and are spending within key U.S. tourism market segments accordingly.18


Tourism Spending by Market Segment Inbound

17 VisaVue Travel Data, 2008 - 200918 VisaVue Travel Data, 2009 - 2010

2010 Inbound Cardholder Spending by Market Segment

Gen

eral

Ret

ail

Airl

ines

Dep

artm

ent S

tore

s

$1.2B$1B

$1.2B$1.6B

$1.3B$1.4B

$14B

$12B

$13B

In 2010, general retail purchases made by international Visa cardholders increased by 16 percent, totaling more than $14 billion compared to $12 billion in 2009. This impressive spend amount represents 42 percent of total international Visa cardholder spending in 2010.

After double-digit drops from 2008 to 2009, international Visa cardholders reinvigorated spending on both lodging and restaurants. Lodging increased from $4.3 billion in 2009 to $5.0 billion in 2010 and represented almost 15 percent of total international Visa cardholder spend in 2010. Restaurants increased from $1.6 billion in 2009 to $1.8 billion in 2010 and represented more than 5 percent of total international cardholder spending last year.

The airline industry saw a significant 24 percent increase in spending by international Visa cardholders in 2010, surpassing pre-recession spending by more than $2.0 million.

After a sharp 15 percent drop from 2008 to 2009, spending at department stores saw positive growth in 2010. Spending by international Visa cardholders increased from $1.0 billion to $1.2 billion.

Lodg

ing

$5B

$4.3B

$5.2B

Rest

aura

nts

$1.8B$1.6B$1.7B

VisaVue Travel Data, 2009 - 2010

Tourism Spending by Market Segment Outbound

Similar to the patterns of international Visa cardholders traveling to the U.S., American travelers using their Visa cards increased spending throughout key market segments in 2010, making a tremendous comeback from the 2008 to 2009 period.

As the global economy steadily recovers, consumer confidence will continue to rise and spending by international travelers will likely

continue to grow. Visa will work with retailers, businesses and its U.S. tourism partners to provide critical spending data that will help the country create targeted tourism programs that promote the country’s growth.

2010 Outbound Cardholder Spending by Market Segment

Gen

eral

Ret

ail

Oth

er T

rave

l & E

nter

tain

men

t

Airl

ines

General retail purchases made by U.S. Visa cardholders traveling internationally totaled nearly $16 billion compared to $15 billion in 2009, representing an extraordinary 52 percent of total spending by U.S. Visa cardholders traveling internationally in 2010.

Visa cardholders from the U.S. reinvigorated spending on both lodging and restaurants. Lodging increased from $5.0 billion in 2009to $5.6 billion in 2010 and represented 18 percent of total international Visa cardholder spending in 2010. Restaurants increased from $1.6 billion in 2009 to $1.8 billion in 2010 and represented 6 percent of total international Visa cardholder spending last year.

After a dramatic 19 percent dip from 2008 to 2009, other travel and entertainment related expenses saw a 12 percent increase in 2010. The amount spent in this popular category by U.S. Visa cardholders traveling internationally represented 3 percent of total tourism spending on Visa cards ($1.1 billion).

From 2008 to 2009, the airline industry su�ered dramatically and absorbed a 66 percent loss. In 2010 that number has plateaued to $889 million.

$15.9B

$19.1B

$1.1B$999M

$1.8B

$899M$900M

$2.7B

$15.4BLo

dgin

g

$5.6B$5B

$6.2BRe

stau

rant

s

$1.8B$1.6B$1.8B

VisaVue Travel Data, 2009 - 2010


Looking Ahead

2010 proved to be a successful year for the U.S. tourism economy and many of the industry’s key stakeholders are doing everything within their power to ensure a similar story unfolds in the year ahead. As we move into 2011, tourism and business entities all over the world will need to carefully monitor not only the longer-term effects of the devastating economic crisis, but also from current events that take us by surprise throughout the year, like the disastrous earthquake and tsunami in Japan this past March. While the global effects of this catastrophic event are still unknown, it is inevitable that the international travel and tourism industry will be affected. For the U.S. alone, Japanese Visa cardholders were the fourth-largest source of tourism spend in 2010, contributing $1.8 billion.19

Visa is committed to working with its tourism partners and will share important Visa cardholder travel spending data to help these groups better understand how to navigate the long-term impacts of the recent economic crisis and any natural disasters.

By providing not only the currency for cross-border transactions, but also a reliable and secure global payments network that includes millions of cardholders around the world, Visa is committed to working with the global tourism industry and regional businesses to support continued growth.

For more information regarding Tourism Outlook: USA and Visa’s tourism initiatives, please contact [email protected].


Methodology Visa cardholder spending data cited is based upon a review of cross-border spending on Visa-branded payment cards by cardholders from key source countries while in the U.S. during the calendar years 2009 (January 1 – December 31, 2009) and 2010 (January 1 – December 31, 2010). These findings are based upon VisaVue® Travel data. Visa introduced the VisaVue® Travel tourism reports to U.S. tourism organizations in 2008 and continue to provide them to paid subscribers within the destination marketing community. The reports are shared with a broad audience of state and convention and visitors bureau destination marketing entities provided to paid subscribers within the destination marketing community.


Appendix

TOP 2010 INBOUND SOURCE COUNTRIESIssuer Country 2010 2009 Percent Growth (+/-)

1 Canada $9.2B $7.8B 18%

2 United Kingdom $2.5B $2.3B 11%

3 Mexico $2.0B $1.7B 18%

4 Brazil $1.9B $1.2B 63%

5 Japan $1.8B $1.7B 6%

6 China $1.1B $700M 64%

7 Australia $1.1B $861M 32%

8 France $1.0B $975M 6%

9 South Korea $824M $651M 27%

10 Germany $800M $769M 4%

2010 MONTH-BY-MONTH INBOUND INTERNATIONAL SPENDING COMPARISONMonth 2010 2009 Percent Growth (+/-)

• January $2.6B $2.3B 13%

• February $2.3B $1.9B 18%

• March $2.7B $2.2B 23%

• April $2.8B $2.3B 23%

• May $2.8B $2.2B 25%

• June $2.5B $2.1B 18%

• July $3.1B $2.6B 19%

• August $3.3B $2.9B 15%

• September $2.9B $2.5B 14%

• October $3.1B $2.7B 15%

• November $3.1B $2.6B 20%

• December $3.1B $2.7B 13%

Appendices

Source: VisaVue Travel Data, 2009-2010


TOP 2010 U.S. STATES BASED ON INBOUND INTERNATIONAL SPENDINGIssuer Country 2010 2009 Percent Growth (+/-)

1 Florida $6.6B $5.7B 17%

2 New York $5.6B $4.6B 22%

3 California $5.4B $4.5B 19%

4 Texas $2.1B $1.8B 16%

5 Nevada $1.8B $1.5B 21%

6 Hawaii $1.3B $1.2B 16%

7 Washington $980M $805M 22%

8 Arizona $802M $688M 17%

9 Illinois $799M $686M 16%

10 Massachusetts $784M $665M 18%

TOP 2010 OUTBOUND DESTINATION COUNTRIESIssuer Country 2010 2009 Percent Growth (+/-)

1 Canada $3.5B $3.3B 8%

2 Mexico $3.1B $2.9B 7%

3 United Kingdom $1.6B $1.5B 7%

4 Italy $1.3B $1.3B 4%

5 France $1.3B $1.2B 4%

6 Germany $1.1B $1.2B -2%

7 Puerto Rico $1.1B $967M 9%

8 China $741M $626M 18%

9 Spain $731M $695M 5%

10 Japan $659M $614M 7%

Appendices



AppendicesOUTBOUND TRANSACTION VOLUME IN TOP MERCHANT CATEGORIES - THREE YEAR COMPARISON

Country 2008 2009 Percent Change 2010 Percent Change

1 General Retail $19.1B $15.4B -19% $15.9B 3%

2 Lodging $6.2B $5.0B -19% $5.6B 13%

3 Restaurants $1.8B $1.6B -12% $1.8B 12%

4 Other Travel & Entertainment $1.8B $999M -43% $1.1B 7%

5 Airlines 2.7B $900M -66% $899M —


INBOUND TRANSACTION VOLUME IN TOP MERCHANT CATEGORIES - THREE YEAR COMPARISONIssuer Country 2008 2009 Percent Change 2010 Percent Change

1 General Retail $13.0B $12.0B -8% $14.0B 16%

2 Lodging $5.2B $4.3B -18% $5.0B 18%

3 Restaurants $1.7B $1.6B -10% $1.8B 15%

4 Airlines $1.4B $1.3B -6% $1.6B 24%

5 Department Stores $1.2B $1.0B -15% $1.2B 3%


METHODOLOGYVisa payment card spending by international visitors in the U.S. cited in the previous pages was evaluated across the following broad merchant spending categories:

• Airlines

• Auto Rental

• Lodging

• Healthcare

• Business to Business Includes printing, freight, commercial goods, industrial supplies, stationery, office supplies, uniforms, etc.

• Other Retail Includes general merchandise, contractors, confection, bakeries, home supply, lumber, paint, garden supply, clothing, software, music, wine/liquor, antiques, bookstores, jewelry, toys, camera/photo supply, luggage/leather, glassware, cosmetics, newsstands, etc.

• Remaining Merchant Includes railroads, marinas, ATMs, financial institutions, insurance, money transfers, etc.

• Other Emerging Includes local commuter transport, taxis, etc.

• Other Travel & Entertainment

Includes buses, boat rentals, airport purchases, duty free purchases, home furnishings, catering, bars, casinos, golf courses, etc.

• Steamship/Cruise Lines

• Bill Pay Includes courier services, warehousing/storage, telecommunication services, internet services, and utilities

• Travel Agencies

• Toll and Bridge Fees

• Wholesale Clubs

• Discount Stores

• Department Stores

• Supermarkets

• Oil

• Furniture/Equipment Stores

• Radio, TV and Stereo Stores

• Restaurants

• Quick Service Restaurants

• Drug Store and Pharmacies

• Sporting Goods Stores

• Direct Marketing

• Government

Appendices