Beteta told the California Travel Industry Association (CalTIA) 2010 Conference in San Francisco on June 8 that overall travel to California is expected to grow at a modest rate of 3 percent this year, with more “inspired growth” of 4 percent next year.  In the near term, international arrivals will outpace the rebound in domestic visitors.  From an 8 percent decline in 2009, international travel is expected to grow to 4 percent in 2010 and 6 percent in 2011 while domestic visitors are expected to grow 3 and 4 percent respectively.  Visitor expenditures are expected to rise faster than visits to California, aided by both relative strength in overnight visitor numbers and increasing travel-related prices.

California  Tourism  Outlook At a Glance:

2010

3 % growth in visitors

Domestic + 3 %

International + 4 %

5 % growth in visitor spending

Domestic + 5 %

International + 7 %

2011

4 % additional growth in visitors

9 % additional growth in spending

Throughout the previous year, 2009, CTTC focused on achieving the best possible return on investment.  ROI is measured for each program — for example, brand advertising success is measured by incremental visitation and spending numbers.  The 2010-11 operational plan is about moving forward to recover visitors and visitor spending from the decline of the previous year.  CTTC has analyzed the current situation and is well positioned to take advantage of several opportunities that have emerged, such as advances in digital media and technology and the booming economies of certain emerging international markets.

On the international front, the playing field has shifted quite a bit.  In 2009 only Australia and South America showed growth in arrivals in California, while others such as Japan and South Korea were hit very hard.  And, while only moderate growth in GDP is expected for most major markets, both China and India are expected to grow 9.1 % in 2011.  At the same time, foreign currencies across the globe have gained purchasing power against the dollar, making the U.S. an attractive travel destination for long-haul markets.

In 2010/11, the CTTC’s Marketing Mantra will be “preserve and innovate”.  It will maintain core successes, protecting the proven foundation that has been carefully crafted over the years to drive significant economic impact/ROI, and also stimulate progress through innovation to create more meaningful and ongoing ways to connect with and engage consumers in the California brand experience.  The two key brand pillars are the California attitude, combined with the value proposition of “abundance” — that California has the most (and best) of everything, so that visitors will get more for their money from a California vacation.

The next year ushers in a new era in the rapidly changing world of media, from television watching habits (use of DVRs and on-demand) to social and digital media (the new iPad, Twitter, mobile applications).  Connecting with today’s consumers is much different from previous times.  It is critical to make a connection on an emotional level to avoid getting lost in the maze of media options.

– Lakshman Ratnapala
BATW International Consultant

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I recall a former Prime Minister of Sri Lanka, Solomon Bandaranaike, expounding his vision of the world in an address to the United Nations in New York as one “in a period of transition”.  He said we were then between two worlds — one in the throes of death and the other struggling to be born.

Though not quite in the same league as the Bandaranaike world vision, those words seem apt to describe today’s state of tourism, international and national, both emerging from periods of conflict — economic and social — and both energetically trying to create a brighter new world.

At this half way mark of the year, 2010 promises to be a year of transformation against the backdrop of both an upturn in international tourism and overall economic indicators. Industry forecasts are for a return to growth in tourist arrivals, after the drop of 4% last year.  The World Tourism Organization (WTO) now thinks the 2010 growth will be between 3% and 4%.  The Pacific Asia Travel Association (PATA) predicts an increase of 2.7% each year to 2012 for international travel to Asia Pacific destinations.  South Asia is forecast to grow the fastest at an average of 4.9% per annum over the next three years to 2012, followed by Southeast Asia at 4.8%

One significant aspect of the international forecasts by both WTO and PATA is that the overall growth rates for global and regional tourism will remain very much lower from historical levels for the next few years.  This in turn, heralds the need for tourism-based businesses to continue to find profits in cost containment rather than in volume growth.  PATA predicts growth to be very uneven at a number of levels, especially at the individual country of origin-to-destination levels.

INTERNATIONAL  TOURISM  FORECAST

2009                FORECAST 2010

WORLD                                                         – 4 %                + 3 %  to +  4 %

Asia – Pacific                                               – 2 %                + 5 % to  + 7 %

Middle East                                                 – 6 %                + 5 %  to  + 9 %

Americas                                                      – 5 %                + 2 %  to  + 4 %

Europe                                                          – 6 %                + 1 %  to  +  3 %

Africa                                                           + 5 %               + 4 %  to  +  7 %

________________________________________________________________

As 2010 develops into a year of transformation, analysts see several upside opportunities :

*    Business and consumer confidence has picked up.

*    Interest rates and inflation remain low.

*    A slump is generally followed by a rebound due to pent-up demand.

*     Scope for revival in source markets

– Lakshman Ratnapala
BATW International Consultant

Culinary traditions are important elements of culture and history.  Cuisine and the technology of its production show how people cope with food sources, vegetation, climate and the numerous other aspects of their environment.  As tourism and heritage conservation become important to community pride and to their livelihood, culinary history becomes a point of reference to social planning and well being.

The Philippines with its 7,000 islands of tropical beauty is one of the best kept culinary secrets in the world of tourism.  Now, the Department of Tourism is taking the story of its multifaceted culinary heritage to the world.  Philippine culinary vignettes and period recipes from as far back as the 1500s are presented  in a coffee table publication titled The Governor-General’s Kitchen.  Complementing the publication comes a package of 13  ”Kulinarya Food Trips” offered by the Philippine travel industry.

“The Governor-General lives like a king, and his grand receptions are the glory of Manila,” wrote an American journalist, in a preview of Philippine life during the Spanish and American colonial occupations when 112 Spaniards and 11 American governors-general ruled over the islands from 1569 onward.  For close to 400 years, the governor-general’s table represented the epitome of Western cuisine and culture on the archipelago.  It was the inspiration for countless recipes and a social etiquette that evolved singular to the hospitable, festival-loving Philippine people.

The Governor-General’s Kitchen shares stories of how insular cooks with nothing but simple clay stoves and pots produced everything from galantines forced with locally grown capers to pináis — boiled banana-leaf pillows filled with delicately flavored banak fish.  Having learned to distill spirits, the island-rum became world famous.  As the beehive oven found its following, native bakers turned out feathery hojaldres cookies and towering croquembouche sometimes filled with pineapple and cream.  How the people of the Philippines transformed tropical ingredients into delicious meals and splendid edible fancies is a tribute to culinary creativity.  The Governor General’s Kitchen attempts to show how it all happened over the centuries.

Showcased in the banquet of 13 “Kulinarya Food Trips” marketed by the Philippines travel industry are an array of distinctive regional dishes created with local ingredients with their very special flavors.  They also reflect the influence of the various foreign cultures that impacted the Philippines for half a millennium.

For instance, the Ilocondia Culinary Tour introduces the visitor to cooking that is as exclusive as the region’s heritage churches and historic villages.  The Pampanga Kulinarya Tour takes one to the “Food Capital of the Philippines”, the center for desserts and pastries.  Bicol Kulinarya is a chili hot tour of the Bicol region where hot chili peppers rule the dinner table.  The Iloilo Kulinarya traces the roots of southern culinary specialties with visits to ancestral houses.  Other culinary tours transport the visitor to exotic places such as  Cebu, “Queen City of the South” famous for mangoes, and Davao City, home to the “heavenly” durian fruit.  Finally there is a tour of Bohol’s  ”Chocolate Hills”, which regrettably cannot be eaten.  Instead one has to go for peanut kisses!

– Lakshman Ratnapala
BATW International Consultant

The good news is that President Obama has at last signed the Travel Promotion Act into law. With that the United Stated is equipping itself to compete in the international travel market by promoting diverse attractions under a collective national brand, as so many other countries are doing. It is a historic victory for which the U.S. travel industry has fought for so long.

The Travel Promotion Act establishes a public-private partnership to promote the U.S. and to communicate U.S. security and entry policies. According to analysis by Oxford Economics, the bill is estimated to drive $4 billion in new consumer spending annually, provide $321 million in new federal tax revenue each year and create 400,000 jobs nationwide. Overseas visitors spend an average of over $4,000 when they visit the U.S.

The TPA is funded through a matching program featuring up to $100 million in private-sector contributions and a $10 fee on foreign travelers who do not pay $131 for a visa to enter the United States. The fee is to be collected once every two years in conjunction with the Department of Homeland Security’s electronic system for travel authorization.

Now for the bad news. The San Francisco Convention & Visitors Bureau (SFVCB) released its annual estimate of the economic impact of the tourism industry in the city, reporting that last year (2009) San Francisco saw a drop in both visitor numbers and expenditures. The negative results had a spill-over effect throughout the Bay Area as tourist destinations all around the bay and beyond depend much on excursions originating in San Francisco.

Total number of visitors to San Francisco in 2009 was 15.4 million, a decrease of 5.8 percent, and visitor expenditures amounted to $7.8 billion, a drop of 7.8 percent from the previous year. The data was not unexpected, given the state of the global economy, but it is especially disturbing in the light of the importance of tourism to the economic health of San Francisco and the Bay Area.

The tourism industry generated over $426 million in taxes for the city of San Francisco, down 19.2 percent from 2008. The industry supported 66,837 jobs in 2009 with an annual payroll of $1.8 billion. There was an average of 125,407 visitors in San Francisco each day, last year. They spent $21.5 million daily, on average.

Now, to help boost hotel business, the SFCVB is casting a wider net for meetings and conventions. Also, this summer, for the third year in a row, the Bureau is orchestrating a cooperative campaign with several major cultural venues to promote San Francisco’s “embarrassment of riches” in art exhibitions, targeting “cultural travelers” in prime feeder markets to the city. This month (April, 2010) SFCVB will be launching a new campaign aimed at gay and lesbian (LGBT) travelers, a key market segment for San Francisco, considered to be the #2 overall destination in America for LGBT travelers.

– Lakshman Ratnapala
BATW International Consultant

Accommodating this massive increase in such a short time will be an enormous challenge. But it is only the beginning of the potential for the region. In the U.S. there are three aircraft seats per year for each of the 300 million people who live here. China’s population of 1.3 billion is served by only 0.3 seats per person and India’s 1.1 billion population has only 0.1 seats available per person. When Asians reach the stage of traveling as frequently as people in the U.S., that alone will triple the size of today’s global aviation industry.

Asia is home to two of the five most profitable airlines in the world. At the same time, there are many carriers in great difficulty. In the first quarter of this year, governments have already provided over $10 billion in bailouts to Asian airlines. One of the largest carriers in the region, Japan Air Lines has just filed for bankruptcy.

The two biggest growth markets are experiencing different challenges. India is in a crisis as it tries to adjust its infrastructure and, even more critically, its cost structure to the realities of today. China has put the infrastructure in place but its carriers are struggling to adjust to new trade patterns as the global economy recovers.

The region has seen enormous shifts. A look back at Japan and China a decade ago, is interesting.

Japan was Asia’s biggest player with a domestic market of 2.5 million seats per week, 1.2 million weekly international seats and a fleet of 480 aircraft. China had a domestic market of 1.6 million sets per week, half a million international seats and a fleet of 480 aircraft. Today, the comparison is completely different. Japan has stagnated with a domestic market of 2.6 million seats per week, 1.3 million weekly international seats and a fleet of 540 aircraft. China has seen weekly domestic seats expand to 5.7 million, weekly international seats grow to 1.4 million and the fleet more than double to 1,400 aircraft.

Over the last decade, airlines worldwide lost a total of $50 billion. The worst of the crisis is over now, but the aviation industry still expects a global loss of $5 billion this year. The loss reduction is being led by Asian airlines who are expected to see their losses shrink from $3.4 billion last year to $ 700 million this year. Asia’s prospects are improving faster than other regions’. To understand the reason for this, one needs only to look at industrial production. Globally, developed countries’ economies are down 10% from last year, but Asia, with the exception of Japan, is up 13%.

– Lakshman Ratnapala
BATW International Consultant

A new study that for the first time measures the return on investment of business travel finds the average business in the U.S. would forfeit 17 percent of its profits in the first year of eliminating business travel, and it would take more than three years for profits to recover. In the first clear link between business travel and business growth, the research finds that for every dollar invested in business travel, businesses experience an average of $12.50 in increased revenue. The research shows that face-to-face meetings and incentive awards to top performers are among the smartest investments companies can make.

In tough economic times, many business executives have an understandable short-run focus on managing costs. The study points out the less visible — but significant — long term benefits resulting from business travel, such as partnership building and new business opportunities. Increased business travel in a down-economy can actually increase profits and reduce the financial decline companies might otherwise suffer.

It is estimated that 28 percent of current businesses would be lost without in-person meetings. Roughly 40 percent of prospective customers are converted to new customers with an in-person meeting, compared to 16 percent without such a meeting. Corporate executives cited customer meetings as having the greatest returns, approximately $15 – $20 per dollar invested, with conference and trade show participation returns ranging from $4 – $6 per dollar invested.

Business travel in the U.S. is responsible for $246 billion in spending and 2.3 million American jobs. $100 billion of this spending and 1 million jobs are linked directly to meetings and events. In the first six months of 2009 business travel was down by 12.5 percent and business travel volume was down more than 6 percent. This new research study was commissioned by the U.S. Travel Association and conducted by the global research firm Oxford Economics.

Meanwhile, in a separate development, controls are to be placed on cruise ships visiting Antarctica, in order to reduce the growing threat of human and environmental disasters posed by exploding numbers of tourists. Until recently shipping in Antarctica was limited to scientific vessels, but traffic has burgeoned in recent years as tourists flock to see the world’s last great wilderness.

Annual tourist numbers have grown from about 10,000 a decade ago to 45,000 last year. Tourists pay between $3,000 and $24,000 for a two-week trip, ranging in style from basic hotel to all-out luxury. Existing rules bar tour operators from leaving behind anything — like garbage or human waste — and protect animal breeding grounds. But there are no codes on the type of vessels than can use the waters or the types of fuel and other chemicals that they can carry. Heavy fuel oils pose the greatest threat of long-term environmental damage. A proposed code of control now being considered by experts would cover vessel design and construction for polar operations, equipment and new training. It will be presented in May.

– Lakshman Ratnapala
BATW International Advisor

(photo of Antarctica © Morton Beebe)

According to the CBI report, the United States ranks number one in brand image but remains in the bottom half of countries for “ease of travel” to and within the country. Situations like this pose a challenge to tourism policymakers.

Roger Dow, President & CEO of the U.S. Travel Association (USTA) says, “it is past time for our country to make welcoming visitors a priority. These visitors are key to our diplomacy and economy. It’s time for a fair and effective visa system that limit wait times and arbitrary refusals. It’s time for an entry process that is the envy of the world in its use of technology and efficient screening. Our industry can create jobs and strengthen the national image in the world. The onus is on policymakers to work with this industry and tap into the global demand and welcome millions of new visitors to the country”.

The USTA has projected inbound travel to the U.S.A. to increase by 3 percent in 2010, enabling the industry to add nearly 90,000 American jobs, on the heels of 400,000 combined travel industry job losses in the last two years. The U.S. travel industry employs 7.7 million Americans, supporting one out of every eight non-farm jobs in the U.S.  Overseas visitors to the U.S. contribute more to the U.S. economy, spending an average of $4,500 per person per trip compared to about $900 per person for Canadian and Mexican visitors.

Meanwhile in a sign of these recessionary times forcing budget cuts most everywhere, Connecticut has slashed the promotional budget of the state’s Commission on Culture and Tourism to just one dollar for this fiscal year from $4.3 million last year.  The tourism promotional agency will get another lonely dollar next year.

Last year’s budget of $4.3 million paid for producing vacation guides and tourist maps and for a domestic advertising campaign titled “Closer Than You Think” aimed at professional women with household incomes of $80,000 or more in New York.  Those ads — one labeled “Private Walk” showing a couple meandering through a meadow and another called “Morning Rush” featuring children tubing down a river — will be taken off television

This year (2010) domestic leisure travel in the U.S. is expected to increase 2 percent, with a corresponding increase in spending of nearly 5 percent. The projected growth in leisure travel is an indicator of rising consumer confidence and disposable income . Businesses now have a heightened focus on the value and bottom line benefits of travel. Thus an increase in business travel is expected based on pent-up demand for face-to-face meetings that drive growth and productivity.

– Lakshman Ratnapala
BATW International Corresponent

President Obama’s personal appeal on behalf of Chicago and his sending a welcoming message to international travelers around the world is laudable. It is, nevertheless, clear that the United States still has a lot of work to do to restore its place as a premier travel destination.

The need to polish the image of destinations if they expect to invite foreign travelers should resonate with many other cities and countries, especially if they are seeking quality, up-class, so-called high-end, “high-spend” tourists. In this day and age of the Internet, glossy brochures and sassy power-point presentations won’t do. Prospective visitors can, and often do, compare notes on the Internet with other visitors who have “been there and done that”. Projections of safe and secure, clean and comfortable destination images are important. Beautiful pictures of tourist sites are simply not good enough. Promoters have to put their money where their mouths are. That is what President Obama failed to achieve.

Chicago has everything to offer and would have been an ideal venue for the Olympics. Officials from the city and the state of Illinois did a decent job of showcasing everything Chicago has to offer, and it’s disappointing to have this $7 billion loss to its economy at a time it is sorely needed

When IOC members are commenting to President Obama that foreign visitors find traveling to the United States a pretty harrowing experience, there is a need to take seriously the challenge of reforming the entry process to ensure that there is a welcome mat to friends around the world even as we ensure a secure system, says Roger Dow, President and CEO of the U.S. Travel Association. “At the same time the Travel Promotion Act is an important step in making sure international travelers know we want them to visit our country”.

The Travel Promotion Act, which recently was passed in the U.S. Senate and the House of Representatives and is awaiting passage as formal legislation, would create the first-ever U.S. promotion and communications program aimed at international travelers. Virtually all other industrialized nations spend at least tens of millions of dollars annually on advertising and promotions to attract foreign visitors.  Studies show that such a campaign could attract millions of additional overseas visitors per year, resulting in billions of dollars in new visitor spending.

– Lakshman Ratnapala
BATW International Advisor

“The U.S. travel community is eager to forge new relationships with our Indian partners,” says Bryan Lewis, Chief of Staff for the U.S. Travel Association. The Indian travel market has grown exponentially in recent years and is a growing source of inbound travel to the United States. It is expected that this mission will build on our previous missions and enhance the ties between the two countries’ travel industries and encourage more Indian visitors to come to discover America.

India’s strong economy has created enormous growth in international travel in recent years. Nearly 600,000 Indian visitors traveled to the United States in 2008, an increase of 44% from 2006, and contributed more than $4.3 billion to the U.S. economy, according to the U.S. Department of Commerce Office of Travel and Tourism Industries. The majority (59%) were visiting for business related or professional reasons, while 43% were visiting family or friends. Top activities among Indian travelers to the U.S. include shopping (87%), dining in restaurants (74%), sightseeing in cities (43%) and visiting historical places (39%).

The Mission interacted with the Indian travel industry in Bombay and New Delhi.   U.S. destination and travel-supplier participants for the 2009 India Trade Mission included, among others, the California Travel and Tourism Commission.

– Lakshman Ratnapala
BATW International Consultant

Korea (photo by Laurie McAndish King)

For instance, the Korea Tourism Organization (KTO) is recruiting international bloggers to strengthen its online promotion. The project titled “Blog Korea! Visit Korea!” is encouraging blogs in a variety of foreign languages (English, Chinese, Japanese, German, French, Spanish and Russian).  The 100 top bloggers of Korean culture and travel will be awarded prizes.   The KTO hopes the event will enhance interest in Korean culture and travel among bloggers worldwide. It plans to recruit 500 top bloggers to promote Korean tourism aggressively by continually expanding its exchanges with bloggers.

Trekking in New Zealand (photo by Morton Beebe)

New Zealand is also doing promotions increasingly online using their website and social networking channels such as Facebook and YouTube.  This is both cost effective and speaks to a younger generation of travelers.   Tourism New Zealand has introduced a “Have Your Say” studio to get the marketing message out to potential travelers.  This project involved a mobile recording studio traveling the length and breadth of New Zealand recording short video diaries from international visitors.  The video diaries – the ultimate in word-of-mouth advertising – are then edited for viewing on YouTube.  A world-first for a tourism organization, it is a start-to-finish project to film, edit and publish visitors’ thoughts about a destination, direct to the Internet and other potential travelers.  Some 1,500 video diaries have so far been recorded by visitors from 42 countries and viewed by over 110,000 people. With visitor numbers falling, Tourism New Zealand has had to be more creative in the way it reaches potential travelers, and this studio has been a good example of how to use new media and social marketing to do that. Word-of-mouth recommendation is one of the greatest motivators when people are choosing a holiday destination.  The “Have Your Say” studio has been a great way to get the New Zealand message out there in a cost-effective way.

Golden Gate Bridge in fog (photo by Morton Beebe)

San Francisco provides a third good example of innovative tourism marketing. The City’s visitor web site is a powerful tool in the promotion effort.  An year-long study shows that for every 1,000 visitors to the site $15,850 in direct spending is generated on incremental visits to the city.   This year the site will attract 3 million unique visitors.  Meanwhile, the San Francisco Convention & Visitors Bureau (SFCVB) went on location to video “insider tips” from local residents, in a program titled “Escape to the City” intended to encourage prospective visitors to take advantage of the world-class City by taking a vacation in San Francisco.  Each Tuesday, for six consecutive weeks, the SFCVB invited local residents to be videotaped sharing their favorite things to do and see in San Francisco.  The videos were posted on the SFCVB’s new microsite.  The first participants received prizes and were entered into a drawing to win a grand prize package.

San Francisco, the birthplace of the United Nations, is also the lead city to partner with the Global Sustainable Tourism Criteria Partnership, a coalition of more than 40 international conservation, development and travel industry organizations to implement sustainable tourism principles, working to promote local businesses that protect cultural heritage and the environment.  This initiative helps to ensure that tourism will benefit, not harm, the environment and local communities.

The Partnership, initiated by the Rainforest Alliance, the United Nations Environment Program (UNEP), the United Nations Foundation and the World Tourism Organization spent 15 months developing 37 Criteria with the aim of harmonizing elements from more than 60 existing sustainable tourism certification systems from around the world.  Sustainable tourism, in contrast to “green” or “eco” tourism, addresses cultural and socio-economic impacts of tourism in addition to environmental ones.

More than 30 restaurants and hotels in San Francisco have been recognized as “Green Businesses” for meeting the City’s rigorous environmental standards for waste reduction, pollution prevention and energy and water conservation.  Last year San Francisco received 16.4 million visitors, who spent $8.52 billion, generating over $527 million in taxes for the City.

– Lakshman Ratnapala
BATW Board of Directors