Visit California: Dream & Deliver MARKETING STRATEGIC FRAMEWORK 2020-2022

LETTER FROM THE CEO Caroline Beteta

Dreaming Beyond

California is the No. 1 visitor destination in the nation, fueled by an industry-guided marketing program that inspires people around the world to visit the Golden State.

California’s tourism industry has enjoyed record-breaking success. However, a shifting competitive landscape, growing economic threats and changing consumer behavior require our industry to remain nimble. Visit California’s global marketing program must continue to evolve to continue paying dividends to our state and its tourism industry.

Led by extensive new research and guided by industry input, this Dream Big 2.0 Marketing Plan is a two-year blueprint for the next chapter of Golden State tourism. The framework outlined in the pages that follow focuses on refined strategies and audience insights to address today’s consumer in more meaningful ways.

This framework supports Visit California’s focus on ensuring a quality visitor experience as part of the developing Destination Stewardship and Sustainable Travel Plan. The Visit California Board of Directors will review and consider a complete two-year Dream Big 2.0 Marketing Work Plan in May 2020, building on this strategic framework to include tactical annual work plans.

Thank you to Visit California Commissioners, committee members and industry partners throughout the state for their indispensable leadership and guidance in developing a strategic approach that will ensure California’s tourism industry remains an economic engine that benefits all Californians.

Dream Big!

Caroline Beteta, President & CEO, Visit California ABOUT VISIT CALIFORNIA KEY OBJECTIVE The California Travel and Tourism Commission, doing Maintain and increase nonresident leisure travel to and business as Visit California, is a 501(c)6 nonprofit spending in California. corporation that markets California as a desirable tourism destination. Visit California works in close coordination GUIDING PRINCIPLES with California’s Office of Tourism — while Visit California conducts marketing programs that drive visitation, the 1. Do what the industry cannot do for itself. Office of Tourism oversees the assessment program that Deliver value to and collaborate with tourism- helps to fund these initiatives. For more information about related businesses. Visit California, visit industry.VisitCalifornia.com. 2. Build awareness and preference for the California Brand to stimulate travel. 3. Use key metrics and ROI to inform the strategic MISSION direction of the program of work overseen by Visit California is a nonprofit organization with a mission to the board. develop and maintain marketing programs — in partnership with the state’s travel industry — that keep California top of mind as a premier travel destination. INDUSTRY-LED California’s statewide marketing programs are made possible through tens of thousands of industry partners VISION and is stewarded by Visit California. The board of directors, Visit California will be the recognized source for statewide led by an industry-elected board chair, guide the global marketing planning and implementation, and information marketing program of work, supported by industry and support to California’s vast travel and tourism industry, committees that provide direction for efforts against thereby maintaining California’s position as one of the various brand pillars. world’s preeminent travel and tourism destinations.

6 EXECUTIVE SUMMARY: Dream & Deliver

Visit California’s two-year marketing strategic framework Dream & Deliver is about Dreaming Big and delivering results. reflects a collective vision from the commission and industry As such, the majority of our programs focus on tried and leadership. It is guided by proven programs and innovative true initiatives that yield Return on Advertising Spend and tactics to respond to new challenges, including responsible maximized program investment. The balance includes new travel, that face the state’s tourism industry. components and platforms that allow us to innovate and maintain a competitive edge. This measured approach to risk- Over the past two fiscal years, Visit California marketing taking will empower Visit California to Dream and Deliver into programs generated over $27 billion — a full 10% of the the future to be stewards of our resources for current and state’s tourism economy.* What’s more, nearly 90 million future travelers to enjoy for generations to come. global households recalled our advertising and are more likely to be inspired to visit as a result. These and prior successes The next steps for the marketing plan include working with in addition to the work of our industry partners have our agencies, partners and industry to develop the tactical contributed significantly to the past nine years of consecutive work plan and associated budgets that will be presented to growth in the state’s tourism industry. the board in May. This plan will continue to deliver on proven KPIs and economic impact, thereby helping to support the However, California must now contend with a host of lifestyle of all who live, work and play here. new domestic and international competitors, shifting traveler preferences and consumer behavior, fragmented *As reported by SMARInsights media landscapes, economic fluctuations and environmental crises. In preparation for development of this plan, Visit California conducted three bodies of research: Dream Big 2.0 Platform Evolution, California Trip Segmentation and Brand Health. This research has provided insights that are the very underpinnings of this framework and are evidenced by the following core strategies:

1. Cultivate the California Brand: 2. Trigger Active Consideration: 3. Drive Market Development: Build on the equity of Visit Develop and distribute mobile- Develop international markets California’s Dream Big global first statewide content using Visit through a deliberate mix of brand, marketing program. California’s expansive owned and digital, social, public relations, trade social platforms. and partnership activity to increase reach and California presence.

Stewardship: Infuse Dream Big 2.0 Stewardship: Leverage California as a Stewardship: Calibrate sustainability with stewardship and sustainability sustainable destination to attract the messaging to each market audience attributes. Conscious Traveler. and leverage partnerships to support visitor management strategies. Industry-ledLooking from the beginning,Back Visit California has proven that California tourism is stronger when united. For more than 25 years, Visit California has developed and maintained a strong global brand for California around the world, inspiring travelers to “Dream Big” in the Golden State.

DREAM BIG MARKETING MILESTONES

FY14/15 FY15/16 FY16/17 • Unveiled Dream Big • “Top Chef” California • “All Dreams Welcome” launch marketing plan to industry • “Bay Area or Bust” with Joe and Canada and Mexico CEO • Dream365TV launched as Montana to maximize on Super missions part of Dream 365 Project Bowl 50 held in California • “Golden State of Luxury” platform launch • “California Dream Eater” • “Average Joes” and “Kids premieres Unplugged” refreshed spots • “Living the Dream” • “Dreamers” and “Kids at • Emma Stone episode on • “Kidifornia” Play” continue to air Dream365TV • “Jonny Moseley’s Wildest • China CEO Mission Dreams” launch • Expanded China office network • Visit California “Silver to five Anniversary” • National Parks Service • Britifornians Campaign with Centennial – Obama visit to British Airways (U.K.) Yosemite • MasterChef Broadcast • U.S. Sino Summit (China) (Australia) • Hosted Miss France Broadcast (France) • California STAR sales companion and training platform launch • New content series: “California 101” and “Luxury Minute”

8 FY17/18 FY18/19 • “California Now” blog launch • IPW Anaheim and California • First DMO Influencer Advisory Plaza Board • “Power of Love” PSA • India CEO Mission • “Tasteblazers” culinary platform • New content series: evolution “Adventures in Kidifornia” • “Spoiled” and “Parents Love It” • “The Grateful Table” Fundraiser • “California Road Trip Republic” to support wine country wildfire • New Michelin Guide California recovery • Highway 1 “Dream Drive” • Industry website launch • Middle East CEO Mission • Media Center launch • Connections California Luxury • Launch of California Global Forum Ready: India • Inaugural California Surfing Day • Consumer campaign for PyeongChang Winter Olympics • New investment in Middle East market MARKETING MILESTONES • Hosted India Film Producers Forum (India)

9 Looking Forward: The Macro Landscape

10 The past two years were momentous for the California tourism industry. California tourism enjoyed a 10th straight year of success, setting records in travel spending, jobs and tax revenue. The state remains the nation’s No. 1 travel destination.

Despite this success, decades of complicated crises and FY18/20 MARKETING CORE OBJECTIVES economic scenarios have tested California’s resilience and During the past two years, Visit California’s marketing program challenged the industry. has driven success for the California tourism industry by meeting In the wake of the state’s most devastating fire season in 2018, the following core objectives: Visit California launched a multi-layered “#CALove” campaign. • Fuel a statewide brand and marketing platform globally. This included a celebrity-driven public service announcement to • Facilitate meaningful engagement throughout the tell the world that California remains resilient and strong. consumer journey. Continued wildfires in 2019, coupled with new Public Safety Power • Optimize an international market approach through Shutoffs challenges, only fueled an increase in media coverage local relationships. and national and international attention.

Looking ahead, California’s tourism industry must focus on the PROGRAM PERFORMANCE long-term vibrancy of the state as a travel destination. If California Over the past two years, Visit California created a California is to remain an economic engine for all Californians, the tourism brand experience that inspired tourism through a robust mix industry must embrace destination stewardship and encourage of broad reach and narrowcasting strategies across paid, responsible travel. owned, earned, trade and shared channels. Visit California’s paid advertising generated an incremental visitor spend of Visit California will continue to respond to these and any

$13.95 billion for FY17/18 and an incremental visitor spend of THE MACRO LANDSCAPE unforeseen challenges with its marketing strategies. $14.05 billion for FY18/19.

11 $16,000 $13,953 $14,108 $14,000 $12,662 $13,070 China $12,000 $10,296 Australia $10,000 Mexico $8,529 UK $8,000 Canada RETURN$6,000 ON INVESTMENT Over the past two years, Visit California has expandedUS - Website this measurement program beyond just the paid mediaUS program For$4,000 more than 10 years, Visit California has calculated the impact (return on advertising spend) to a more inclusive ROI that includes of its marketing efforts using a consistent and conservative Ad-influenced $2,00 key partnership programs and the Visit California website. methodology. This return on investment research, conducted for Visitor Spend Media Spend Visit California$0 by market research firm SMARInsights, provides an • In FY17/18, Visit California measured $1.1 million in key partner estimate of ad-influenced2014 visitor spending.2015 SMARInsightsFY15/16 surveys FY16/17 programsFY17/18 in Australia, Canada,FY18/19 China and the U.K., and in likely travelers across each brand market to determine the degree FY18/19, $2.3 million in partner programs were measured in to which consumers who recall Visit California ads visit California Canada, China, U.K. and Australia. at a greater rate than those who do not recall ads. This greater • In FY19/20 Visit California added the impact from the rate of travel and spend is “ad-influenced visitor spending” and is consumer-facing website for the U.S. market. This new the ultimate measure of the Paid Advertising program. Website Effectiveness research found that the website influenced $726 million in unique incremental spending. This brings the domestic impact to $11.71 billion.

Six Years of Visit California-Influenced Visitor Spending

China $16,000

Australia $13,953 $14,046 $14,000 $13,070 Mexico $12,662

UK $12,000 $10,296 Canada $10,000 US - Website $8,529 $8,000 US

$6,000 Ad-influenced Visitor Spend Media Spend $4,000

$2,00

$0 2014 2015 FY15/16 FY16/17 FY17/18 FY18/19

Source: SMARInsights, Inc.

12 FY18/19 Return on Ad Spend (ROAS) and U.S. Website Impact Results

U.S. $11.71 Billion ($10.98 Billion (paid) + $751 Million (website)) CANADA $637 Million MEXICO $661 Million Travel and tourism economic U.K. $397 Million impact on the total economy is CHINA $1.16 Billion $140.6 billion; Visit California AUSTRALIA $211 Million contributes 10% of this. FY18/19 TOTAL $14.05 Billion

FY18/19 Performance Summary*:

PAID OWNED EARNED TRADE

• 8.6 Billion Impressions • 78 New Original • $241.6 Million Earned • 179.5 Million Impressions Dream365TV Content Media Value • $47.4 Million Investment • 5,500 Meetings Pieces • Impressions • 203.8 Million Households 9.2 Billion • 53 Co-Ops • Social Media Reached (Broadcast) 3.9 Million • 7,000 Placements Engagements • 243 Travel Trade Hosted • 771 Media and Unique • 31,000 Agent Trainings • 26.6 Million Influencers Hosted Visitors to Visit California • 1,600 Partner Handoffs

Global Websites THE MACRO LANDSCAPE • 13 Million Global E-Newsletter Sends (30% YOY Increase) • 1.6 Million California Welcome Center Visitors

*FY19/20 performance will be available at the end of the 19/20 fiscal year.

13 ENVIRONMENTAL LANDSCAPE

Broader forces influence the travel and tourism industry: CONTINUED RISE IN GLOBAL TRAVEL political and economic trends, global travel trends, shifts in 2019 will have marked the 10th consecutive year of growth media consumption, and other industry and consumer trends. in global international travel, which has doubled since 2005, Increasingly, Visit California, industry partners and stakeholders reaching 1.4 billion international arrivals in 2018, two full years recognize the need to proactively manage these forces to ahead of the UNWTO forecast. The future rate of growth is mitigate their threat to the long-term sustainability of the travel expected to average 3%-4% per year, which will put worldwide and tourism industry. This section gives a summary of the critical international arrivals at 1.8 billion in 2030. global trends that form the backdrop for the development of Visit California’s next two-year marketing work plan.

INTERNATIONAL TOURIST ARRIVALS 1950–2030 2030: 1.8 Billion

2012: 1 Billion

1950: 25 Million

1950 1960 1970 1980 1990 2000 2012 2016 2020 2030

25 M 166 M 435 M 1 B 1.4 B 69 M 277 M 669 M 1.235 B 1.8 B

FORECAST

2016 2030 Source: ©Highlights 2017 — World Tourism Organization (UNWTO), July 2017

14 The growth in global travel has been fueled by a combination This exponential growth has meant that some destinations have of forces: seen visitation levels that overwhelm their capacity. There are many terms used to refer to this phenomenon, from “overtourism” • A growing middle class with disposable income for travel. to “destination overcrowding” to “poorly managed tourism.” Approximately 900 million new members will be added Whatever label is used, there is broad consensus that too many between 2015 and 2025 with the growth primarily driven by visitors to any destination can lead to a range of negative impacts: India and China. • Alienated local residents: Residents no longer perceive value • Demographic shifts and the rise of the millennial traveler. from travel and tourism. Even obvious economic benefits A generation of millennials coming into their peak years of cannot, in the minds of local populations, outweigh the earning and travel desire combined with an increasingly burden of too many tourists in one place at once. Residents global urban population will likely put strains on many often feel that overtourism contributes to higher rents, urban destinations. displacement of locals and changing neighborhood character. • The convenience of researching and booking travel online, • Degraded visitor experience: Long queues and overcrowding through online travel agencies and mapping tools like Google contribute to an overall less enjoyable experience. Eventually, Maps. Value services in the travel space, which include low- this can hurt the destination’s reputation, causing devaluation. cost airlines (Ryan Air, Norwegian) and the sharing economy (Airbnb, Uber), also contribute to the ability of more people • Overloaded infrastructure: Transit and waste management to travel internationally. infrastructure are overwhelmed. Sanitation suffers in particular from irresponsible tourists and major events. • Increased awareness of popular destinations and attractions from social media (Instagram) and rating and review sites • Damage to nature and natural resources: The terrain, (TripAdvisor). plants and animals in fragile ecosystems may not be able to withstand the damage from overuse. In extreme cases, destinations have resorted to bans and closures to avoid permanent damage.

• Threats to culture and heritage: Crowds pose a threat to

historic and cultural assets within a destination, especially in ENVIRONMENTAL LANDSCAPE the absence of sufficient security.

Sources: “Coping with success: Managing overcrowding in tourism destinations,” World Travel & Tourism Council; “Destination Overcrowding and Its Footprint on the Travel Industry,” USTA; “Destinations at Risk: The Invisible Burden of Tourism,” EplerWood International, Cornell Center for Sustainable Global Enterprise and the Travel Foundation)

15 Growing Threats from Climate Change

Climate change has exacerbated the potential Statement: What U.S. NEW YORK 36.5% harms of overtourism. Destinations should prepare destinations/places LOS ANGELES 23.7% CALIFORNIA 23.6% for the possibility of more severe weather events, first come to mind FLORIDA 14.0% increased demand on water resources and rising when you think of CHICAGO 11.8% sea levels. In California, longer, hotter and dryer places with the MOST SAN FRANCISCO 5.8% TEXAS 5.6% summers combined with more populations SERIOUS environmental LAS VEGAS 5.0% living in fire-prone areas have already increased sustainability challenges? MIAMI 4.1% the severity of wildfire seasons. In 2019, many ALASKA 3.5% destinations experienced added disruptions from NEW ORLEANS 2.4% HAWAII 2.3% Public Safety Power Shutoffs. These shutoffs took NEW JERSEY 2.1% an added economic toll on the tourism industry, ILLINOIS 2.0% particularly impacting group travel in California’s ATLANTA 2.0% WASHINGTON DC 1.8% wine regions during harvest season. Destinations COLORADO 1.6% will increasingly need to play a role in managing crisis communications during and after weather- related events, as well as find new strategies to Statement: What U.S. NEW YORK 42.9% offset impacts to the industry. LOS ANGELES 21.7% destinations/places first LAS VEGAS 15.0% come to mind when CALIFORNIA 14.0% you think of places FLORIDA 13.9% ORLANDO/DISNEY WORLD 13.4% with OVERTOURISM MIAMI 7.5% problems? CHICAGO 6.5% HAWAII 5.8% WASHINGTON DC 5.7% SAN FRANCISCO 5.5% ANAHEIM/DISNEYLAND 3.9% YELLOWSTONE NATIONAL PARK 2.75% NEW ORLEANS 2.75% NEVADA 1.6% TEXAS 1.6% KEY WEST 1.5% MYRTLE BEACH 1.5% ATLANTA 1.5% BOSTON 1.2%

Source: The State of the American Traveler, Destination Management Edition, Destination Analysts

16 While the effects of overtourism have been more pronounced in Additionally, a survey of California DMOs and tourism industry Europe and Southeast Asia (locations that have seen the largest businesses also found relatively high levels of concern across a increases in global travel), the United States and California are not number of potential sustainability related threats. immune. A recent survey of U.S. leisure travelers by Destination Sources: “How Bad Will It Get When Overtourism Meets Climate Change,” Skift; Analysts found that nearly one-quarter of the respondents named “The State of the American Traveler,” Destination Management Edition, Destination Analysts (Sustainability Survey conducted by Coraggio Group on behalf of Visit California) Los Angeles or California as destinations that first come to mind when they think about serious environmental sustainability challenges. Los Angeles and California were also among the top five mentions as U.S. destinations that have overtourism problems.

How much does each issue represent a risk to California’s travel and tourism industry?

2% 100% 10% 80% 16% 18% 17% 15% 24% 60% 30% 24% 83% 40% 34% 83% 20% 38% 39%

19% ENVIRONMENTAL LANDSCAPE 0% AFFORDABLE CLIMATE OVERTOURISM RESIDENT CARBON HOUSING CHANGE QUALITY OF LIFE EMISSIONS

CURRENT RISK RISK NEXT 1-5 YEARS RISK NEXT 6-20 YEARS

17 Evolution from Destination Marketing Sustainability Survey of 655 industry partners that included the participation of 500+ tourism-related businesses and 150+ DMO to Management or CVBs across all 12 tourism regions. These dual forces — increased pressure on destinations from the While the Destination Stewardship Plan will be a separate guide continued rise in global travel coupled with growing challenges for Visit California and the industry, the Destination Stewardship from climate change impacts — have created the need for Plan will also inform the FY20-22 Marketing Work Plan. destination marketing organizations like Visit California to reevaluate what is needed to sustain the long-term health and viability of the travel and tourism industry and to reassess the organization’s role in securing that sustainability. This trend has been broadly referred to as the move from “destination marketing” to “destination management.”

At the 2019 Marketing Outlook Forum, Visit California announced the undertaking of development of a Destination Stewardship Plan for California. The purpose of this planning of industry said process was to determine: 93% Visit California • Does Visit California have a role to play in managing tourism has a role to play to ensure the long-term health of the industry for the state? • What does “destination management” mean for a state-level organization like Visit California? • What are the biggest threats to Visit California’s tourism industry: now and in the short and long term? • What are the strategies that Visit California should develop to manage these threats? •At-A-Glance The rise in global travel has elevated In the months following the 2019 Marketing Outlook Forum, “overtourism” to a mainstream challenge. the Coraggio Group conducted stakeholder outreach through 1:1 contacts at the major international travel conference IPW, PLAN IMPLICATION: sustainability workshops held at CalTravel in Los Angeles and • Visit California will incorporate Destination with Visit California Committee Leadership teams in Sacramento Stewardship principles into the industry’s in September, and at the fall board meeting in Santa Barbara marketing program. in October. Additional feedback was received from an online • For more information on Sustainability/Stewardship plan, visit: industry.visitcalifornia.com/stewardship

18

ECONOMIC AND POLITICAL LANDSCAPE

The year 2020 is expected to bring a slowing global economy. Key domestic political issues that have national consequences for Tourism Economics forecasts global GDP in 2019 to dip slightly travel, as well as California-specific impacts, include trade disputes lower than the post-recession mark of 2.6% in 2016. However, with China and immigration policies that have created tensions unlike in 2016, when the global GDP had a quick rebound, most along the U.S.-Mexico border. analysts expect that global GDP will remain relatively flat in 2020. Lingering tensions between the U.S. and China may continue to CHINA TRADE WAR depress economic conditions for both countries into 2020. In addition to the toll that the trade war has taken on U.S. GDP, trade tensions have also lowered visitation rates from Although trade tensions with China have lowered U.S. GDP, this China. Tourists are being deterred by visa rejections and loss is offset by the ongoing strength of the largest contribution difficulties securing visas, as well as increased pressure against to domestic GDP, consumer spending. Employment rates remain travel to the U.S. from government travel warnings and other historically high, personal income is rising, saving rates are high communications that cite safety issues. California appears to and inflation is low. Consumer confidence has started to wane be weathering these disruptions better than other states but in the second half of 2019, but levels remain relatively high. still endured reduced visitation and spend from this key market Assuming consumer confidence stabilizes, the domestic market is in 2019. As of early 2020, some resolution of trade tensions expected to maintain year-over-year growth, albeit at a lower rate appears likely, which may help China visitation rebound. of 1.6-1.8% through 2022.

Source: U.S. Travel, Tourism Economics Source: Tourism Economics

•At-A-Glance With a softening economy, conservative growth is projected.

PLAN IMPLICATIONS: • Visit California will continue a heavy media investment in the U.S. and heavy public relations and travel trade investments internationally.

20 •At-A-Glance Visitation from China and Mexico has been MEXICO BORDER TENSIONS negatively aff ected by the ongoing China trade war Policy changes regarding asylum-seekers crossing the U.S.-Mexico and Latin American tensions resulting from new border have created political and PR challenges for California. The immigration policies. Department of Homeland Security’s Migrant Protection Protocols PLAN IMPLICATIONS: (their “remain in Mexico” policy), introduced in January 2019, have led to large migrant camps and yearlong media coverage about • Maintain Visit California’s investment in China and Mexico to ensure long-term stability and long wait times and dangerous conditions along the borders. growth for California. Negative images related to this policy, along with rhetoric from some U.S. politicians, have made the U.S. unwelcoming to its Latin American neighbors. This has impacted arrivals from Mexico, in particular border crossings. ECONOMIC AND POLITICAL LANDSCAPE

21 TRAVEL FORECASTS 100 U.S. Travel Forecast 80 The U.S. travel industry sustains its 10th consecutive year of expansion, with softer growth predicted. 60 After increasing 3.4% in 2018, overall international arrivals to the Less international tourists are

U.S. will decline by 1%40 in 2019 and then increase at a moderate coming to the U.S. in 2019, with pace over the next five years (from 79.1 million in 2019 to 90.8 predictions for arrivals to rise at a million in 2024). The 2019 decline is due to lessening visitation 20 from both Canada and Mexico this year, which more than offsets moderate rate in the next few years. the increase in overseas visitors. 0

Sources: Commerce Department’s National00 Travel01 and02 Tourism 03 04 Office, 05 U.S. 06 Travel07 08 09 10 11 12 13 14 15 16 17 18 19(f)20(f)21(f)22(f)23(f)24(f)

INTERNATIONAL VISITORS TO THE U.S. AND PROJECTIONS (2000-2014)

Millions of international visitors 100 90.8 86.0 85.3 79.9 80.7 82.9 77.8 79.1 80 75.4 76.4 77.2 71.6 67.0 63.5 58.0 60.0 60 56.1 55.1 51.2 49.2 51.0 46.9 43.6 46.1 41.2 40

20

0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19(f) 20(f) 21(f) 22(f) 23(f) 24(f)

Sources: U.S. Department of Commerce, ITA, National Travel and Tourism Office; INEGI (Mexico); Statistics Canada — 2019 Travel Forecast (October 2019)

22 While international arrivals to the U.S. will continue to SPENDING FORECASTS THROUGH 2023 grow, greater global competition means that the U.S. share of global long-haul travel is predicted to decrease DOMESTIC SPEND FORECAST from 12.2% in 2017 to 10.4% in 2023.

Source: U.S. Travel 136.8 131.8 126.5 121.5 6.8% 112.3 116.9 106.6 Reasons for slowing U.S. travel growth: 97.5 101.0 94.3 • Ongoing trade conflicts will continue to weigh upon 5.5% 5.3% the domestic travel market and pose additional 4.1% 4.1% 4.2% downside risks through the end of 2019 and beginning 3.7% 3.9% 3.8% 3.4% of 2020. (U.S. Travel) • The value of the dollar remains strong, making travel

more expensive for visitors from other countries. 2014 2015 2016 2017 2018 2019(p) 2020(f) 2021(f) 2022(f) 2023(f) Domestic Spend % change • Trade wars with China could cost the country 1.9 million inbound visitors and $11 billion in spending between 2018 and 2020, according to research from INTERNATIONAL SPEND FORECAST the consultancy Tourism Economics. (Washington Post) • Although consumer confidence dipped in the second 32.6 half of 2019, levels remain relatively high and will be the 31.3 30.2 key contributor to GDP to monitor into 2020. 29.2 8.3% 28.3 28.1 27.1 25.3 23.1 24.4 7.5%

5.6 3.7% 4.3% 4.1% 3.6% 3.7% 3.4% -0.6%

2014 2015 2016 2017 2018 2019(p) 2020(f) 2021(f) 2022(f) 2023(f) TRAVEL FORECASTS International Spend % change

Source: Tourism Economics

23 •At-A-Glance International spend is softening with lower California Travel Forecast international visitation and unfavorable exchange rates, but with an expected return to steady growth for Direct visitor spending in California is expected to grow 3.2% the next four years; domestic spend is showing more in 2019, with strong domestic spending offsetting a decline in resilience in the short term. international spend, 4.1% vs. -0.6% PLAN IMPLICATIONS: • The strong U.S. dollar and the overall decline in international • Continue to focus on domestic and international visitation in 2019 contributed to the slight decline in travel, with a heavy emphasis on domestic, to international spend. continue to grow economic impact. • Domestic visitor spending is expected to grow 3.9% in 2020 and average 4.0% through 2023. • International visitor spending is expected to rebound to Ongoing disruptions along the U.S.-Mexico border since the new 3.7% growth in 2021 and then average 3.8% through 2023, “stay in Mexico” policy was implemented in January of 2019 have as international visitation ticks back up and the dollar is remained in the news cycle throughout the year and appear to expected to weaken. have lowered Mexico land arrivals for all border states. California Visitation to California is projected to slow for 2019, growing at also lost airlift from Mexico in 2019: a 12% decrease in flights and a 1.7%, down from 2.8% in 2018. 10% decrease in seats.

• Domestic visitation is expected to grow at 1.8% for 2019. CBX (Cross Border Xpress) border crossings are a part of the • Overseas visitation is expected to show marginal growth of overall land crossing figures, but even as total land crossings 0.1% for 2019. fell by 5.8%, Banco de Mexico reported a 30% increase in northbound crossings into California through the first nine • Total international visitation (including both Mexico land months of 2019. Tijuana Airport now has 35 nonstop routes from and air) is expected to decline 1.2% due to a 3.0% decline across Mexico and one from China and is expecting 14% growth among Mexico land crossings and a 1.1% decline among in arrivals for 2019. Mexico air travels. • International visitation, excluding Mexico land, The increased airlift into Tijuana translates into more CBX was flat at 0.1% terminal northbound crossings, which are counted as land crossing visitors. This is an important nuance, as air visitors to • The large Mexico land crossing decline disproportionately California from Mexico spend three times more per trip than impacts the state’s total international visitation number due those who arrive by land, meaning land crossing figures may to its large share size: In 2018, Mexico land crossings totaled represent a higher expected spend. Air, total land and Tijuana- 7.4 million, accounting for 41% of California’s 18.1 million total CBX crossing statistics reveal CBX may be cannibalizing air international visitation. arrivals from other California locations.

Source: Tourism Economics, January 2019 Forecast for Visit California

24 CALIFORNIA LANDSCAPE

CRISIS EVENTS THREATEN THE CALIFORNIA BRAND Although issues such as climate change-related severe weather events and homelessness are not unique to California, several California events have captured national and global media attention. Negative headlines have foregrounded fire-related INSPIRATIONS events, from the tragic wildfire season in 2018 to the lingering effects of smoke pollution. Despite a calmer wildfire season in 2019, California remained in the headlines when iconic areas were Local threatened, as was the case with the Getty Fire, and because of PLANNING DMOs the highly disruptive Public Safety Power Shutoffs. Homelessness and affordable housing in California often made national RENTAL CARS ACCOMMODATIONS headlines, as did several gun violence tragedies. These natural TRANSACTION ATTRACTIONS and man-made crises required and continue to require timely and RESTAURANTS & RETAIL sensitive crisis communication. TRANSPORTATION

Another threat from these global headlines is the potential long- term impact on the California brand as a leisure destination. Perceptions related to safety (from weather-related events, VISIT CALIFORNIA AND BRAND USA homelessness and gun violence) or perceptions about possible Brand USA, the destination marketing organization for the inconvenience (power shutoffs) can impact travel decisions as well U.S., promotes the nation as a premier travel destination. as erode the health of the California brand over time. To maintain Visit California coordinates with Brand USA and leverages a strong California brand, Visit California and the California their marketing to promote California more effectively in key tourism industry have to be proactive in balancing the negative international markets. aspects of crisis coverage with proper context and facts, as headlines may lead visitors to believe the crises are more severe Visit California’s collaboration with Brand USA is driven by and widespread than in reality. the dual objectives of elevating the California brand under the national umbrella and increasing exposure for Visit California industry partners. This symbiotic relationship enables us to customize partnership opportunities and leverage each other’s Brand USA amplifies California’s marketing internationally. platforms and brand presence to increase ROI.

25 San Francisco Santa Barbara 1,261 1,261 San Luis Obispo 1,276 14% 12%

San Diego 8% 3,358 TOTAL 5% ROOMS 3% 1%

Los Angeles 12,468 Orange County San Diego 4,436 Los Angeles San FranciscoSanta Barbara Orange County San Luis Obispo

CALIFORNIA DMOS assume 96% of “in construction” projects will be completed, while only 76% of final planning and 65% of planning projects As of 2019, there are over 100 tourism business improvement will come to fruition. districts in California, with budgets totaling $282.9 million.

NEW HOTEL SUPPLY

TBIDs have nearly doubled since 2010, creating an environment San Francisco Santa Barbara 1,261 1,261 where DMOs are doing many programs on their own. San Luis Obispo 1,276 14% 12%

San Diego 8% 3,358 TBIDs IN CA TOTAL 5% ROOMS 3% 1%

120 109 Los Angeles 101 103 12,468 96 Orange County 100 91 San Diego 4,436 Los Angeles 84 San FranciscoSanta Barbara 79 Orange County San Luis Obispo 80 69 59 62 60 Source: STR, Inc. 42 36 40 30 23 27 19 20 11 5 8 Supply is catching up to historic demand but with 1 2 3 0 slowing travel forecasts, demand will start to soften.

2011 1989 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 2018 2019

Source: Civitas, as of Oct 2019

CALIFORNIA ACCOMMODATIONS OUTLOOK Pipeline reports from Smith Travel Research for California show that several California regions are expected to have large •At-A-Glance Negative national and global headlines threaten the long- increases in supply through 2022. term health of the California brand.

However, only 41% of the pipeline supply is in the “final • Increasing California accommodations supply with slowing construction” phase, 39% are in “final planning” and 20% are in growth in demand; ongoing pressures from sharing economy accommodations. the “planning” phase. Projects still in the planning stages could 120 109 be stalled or canceled for a variety of reasons and so cannot101 103 be PLAN IMPLICATIONS: 96 100 91 counted on to come to fruition. 84 79 • Visit California must continue to support an aggressive 80 To arrive at the projected new supply in the69 six regions cited, crisis strategy. 59 62 Smith60 Travel Research applied U.S. national averages that • Work on the California brand is more important than ever in 42 36 a deluge of negative media. 40 30 23 27 19 20 11 5 8 1 2 3 26 0

2011 1989 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 2013 2014 2015 2016 2017 2018 2019 California’s lodging industry saw small declines in occupancy GLOBAL MARKET SIZE ($B) OF TRAVEL ACCOMMODATION SECTORS 2018 in 2019 compared with the previous year. The combination of slowing growth in travel in the forecast window, along with growing supply in several key California markets, is expected to further stress occupancy and revenue in the coming year. Timeshare $5 Nonetheless, even with these challenges, California outperforms the U.S. overall on all key lodging indicators. Hotels & Motels Short-term $600 Rentals CALIFORNIA LODGING OUTPERFORMS U.S. $107 Hostels $6 Occupancy ADR RevPAR 2.0% B&Bs $15 1.7% Serviced Apartments/ Aparthotels $20 1.0% 0.9% Source: Skift Research. All Values are gross bookings (value paid by customer) in $ billion for full-year 2018 0.0% SHARING ECONOMY ACCOMMODATIONS -0.3% U.S. California An accurate report on accommodation supply should Source: STR, Inc. December 2019 also consider the growing number of sharing economy accommodations that further impacts dynamics of supply and demand. The U.S. added nearly twice as many Airbnb units as it CALIFORNIA LODGING OUTPACES U.S. did new hotel rooms since 2012.

Occupancy Rate Average Daily Revenue Per Short-term rentals on platforms such as Airbnb, Homeaway and Spend Available Room Vrbo now capture approximately 14% of travel accommodations $172 globally (based on gross booking value). 75% Sharing economy accommodations have been assumed to be the $129 cause or contributor to a variety of tourism-related issues, such

66% CALIFORNIA LANDSCAPE as exacerbating the lack of affordable housing in some cities and $131 +14% +31% contributing to the decline or change in character of beloved $87 +49% neighborhoods. However, lack of regulation has also contributed to a lack of data to fully analyze these impacts, so it is unclear whether short-term rentals deserve all the blame on these issues. U.S. California U.S. California U.S. California Sources: “The Short-Term Rental Ecosystem and Vendor Deep Dive 2019,” Skift Research Source: STR, Inc. December 2019 “Airbnb Now Completely Overwhelms Some U.S. Cities,” Skift, “Airbnb vs. Local Regulators Is a Lopsided Battle,” Skift

27 COMPETITIVE LANDSCAPE California is the top U.S. travel destination, capturing 13.5% of all While California is capturing an ever-greater share of U.S. visitor spending (from both domestic and international travel). international visitor spending in the U.S., U.S. Travel forecasts that California captures an even greater share of international visitor the U.S. will continue to lose global share. California’s tourism spending in the U.S.: 18.3% vs. 12.6% of domestic visitor spending. industry needs to elevate its destination marketing to continue to grow its share of international travel.

SHARE OF TOTAL VISITOR SPENDING CALIFORNIA SHARE OF TOTAL VISITOR SPEND (DOMESTIC AND INTERNATIONAL) 14.0%

13.6% CALIFORNIA 13.5% 13.5% 13.5% 13.4% FLORIDA 9.5% 13.2% 13.0% 13.1% 13.0% 12.9% 12.9% NEW YORK 7.6%

NEVADA 4.0% 12.5%

HAWAII 2.5% 12.0% 2011 2012 2013 2014 2015 2016 2017 2018

CALIFORNIA SHARE OF VISITOR SPEND U.S. SHARE OF GLOBAL LONG-HAUL VS. CA SHARE OF U.S. INTERNATIONAL 30.0% 13.6% 25.0% 13.0% 12.2% 20.0% 18.1% 11.7% 19.0% 11.2% 11.0% 13.5% 10.8% 10.6% 15.0% 12.7% 10.4% 18.3% 17.2% 10.0% 16.1% 5.0% 2015 2016 2017 2018 2019 2020 2021 2022 2023 0.0% TOTAL International Domestic US CA

California gets a larger slice of a smaller pie as U.S. global share declines.

28 California’s increase in share of visitor spending corresponds to Among international brand markets, California is the only U.S. the growing competitive advantage California has had in U.S. destination that ranks in the top 10 for China and Australia. As media spend: of 2018, Florida had a greater media spend in the U.K. than did California, but that advantage will likely disappear as of 2019 due • Texas drastically cut their domestic media spend (-81%) to funding cuts in Florida. California dominates Mexico media in 2018 after significant budget cuts to the Texas tourism spend, primarily competing with local Texas destinations for share promotion budget. of voice. Competition for share of voice is particularly intense in • Although the full effects haven’t appeared in the China, with many international destinations making significant organization’s media tracking yet, we expect both Michigan investments in the market. and Florida to drop out of the top five domestic spenders in 2019, also due to state tourism budget cuts.

• California’s top U.S. competitor in terms of media spend is Las Vegas, which outspent Visit California by more than 80% domestically.

While California remains strong among domestic DMOs on the global stage, competition is fierce for share of voice.

29 100 FLORIDA HAWAII HAWAII FLORIDA FLORIDA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA NEW YORK FLORIDA NEW YORK NEW YORK NEW YORK LAS VEGAS 80 CALIFORNIA LAS VEGAS FLORIDA LAS VEGAS HAWAII NEW YORK LAS VEGAS

TEXAS 60 HAWAII LAS VEGAS TEXAS BRAND HEALTH TEXAS TEXAS HAWAII INDEX To better assess California’s40 strengths and opportunities relative likelihood to visit and visited past two years (consumer reported), to key U.S. competitors, Visit California commissioned a global while Hawaii claims the top rank for overall rating (as a leisure TEXAS brand health study with SMARInsights, Inc. in the summer of 2019. destination) and for recommendation. Leisure travelers in Australia,20 Canada, China, Mexico, the U.K. and the U.S. participated in an online survey that included measures of brand health (familiarity, rating as a leisure destination, likelihood 0 California places No. 1 or No. 2 across all competitive to recommend, likelihood to visit and visited in past year), as well Familiarity Rating Recommend Likelihoodmeasures, to Visit withVisited Florida 2 Years leading in Familiarity and as perceptions of brand experience and brand imagery. TOP BOX TOP BOX TOP BOX CALCULATEDHawaii leading in% Aspiration. Although California captures the greatest share of visitor spending, and despite a strong media spend relative to top U.S. competitive destinations, the brand health research showed These results underscore the need for Visit California to that California does not own the top spot across a variety of continually press the California message in order to preserve brand health measures. Florida claims the top rank in familiarity, California as the No. 1 U.S. destination.

COMPETITIVE RANKING ACROSS 6 GLOBAL BRAND MARKETS (AMONG AUSTRALIA, CANADA, CHINA, MEXICO, U.K. AND U.S)

100 FLORIDA HAWAII HAWAII FLORIDA FLORIDA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA NEW YORK FLORIDA NEW YORK NEW YORK NEW YORK LAS VEGAS 80 CALIFORNIA LAS VEGAS FLORIDA LAS VEGAS HAWAII NEW YORK LAS VEGAS TEXAS 60 HAWAII LAS VEGAS TEXAS

TEXAS TEXAS HAWAII INDEX 40

TEXAS

20

0 Familiarity Rating Recommend Likelihood to Visit Visited 2 Years TOP BOX TOP BOX TOP BOX CALCULATED %

Source: SMARInsights, Inc. 2019 Global Brand Health Study

30 Destination Experiences EXPERIENCE CALIFORNIA FLORIDA HAWAII LAS VEGAS NEW YORK TEXAS Visiting a winery or wine regions 118 100 97 90 92 104 Heat Map: Exploring farm tours or farm trails 116 99 104 82 87 111 Going to the beach 114 117 121 73 80 95 California is recognized for its Visiting famous movie/TV locations, studio tours, celebrities 113 102 92 95 102 95 abundance of visitor experiences. Snow sports activities such as skiing or snowboarding, etc. 113 95 94 92 101 105 The state’s diverse range of Visiting a theme or amusement park 112 115 90 92 90 101 products makes it harder to Water sports activities such as surfing, boating 111 112 119 80 83 95 dominate in any single area vs. Participating in cannabis-related activities or events 110 98 96 103 94 100 Viewing and enjoying natural scenery 110 108 113 86 84 99 competitors who have more Driving on scenic byways or roads 108 102 109 91 89 102 narrow or one-dimensional Visiting a zoo or aquarium 108 107 99 85 100 101 offers. However, high scores give Hiking 108 100 112 89 85 105 California opportunities to further Going to a farmers market 108 101 104 83 93 110 leverage these strengths into new Road/trail sports activities such as biking, cycling, running 108 102 107 90 88 106 Visiting state or national parks 108 102 103 90 95 103 advantages. Brand health research Visiting a microbrewery 108 99 96 93 97 106 shows that California has strong Adventure activities 107 107 114 87 84 101 recognition across experiences, Attending a class or workshop on personal development 106 99 99 90 103 102 and particularly in the expanding Exploring small towns 106 101 105 87 91 110 areas of culture and culinary, Visiting art museums or other visual arts venues 106 97 95 88 112 101 which travelers are seeking. Attending a live sporting event 105 100 87 97 107 103 Golfing 105 106 102 97 88 100 California overindexes on Visiting museums, science centers or exploratoriums 105 100 95 87 110 103 39 of 40 statements tested; Dining at a celebrity/notable chef’s restaurant 105 97 93 105 106 94 Heritage/family history tours 105 100 103 86 101 106 California is recognized as a Attending a culinary festival or event 104 98 99 96 103 100 state with diverse options and Shopping at an outlet mall 104 102 93 99 101 101 an abundance of activities. Exploring a city/urban area 104 99 93 96 108 99 Dining at a Michelin-starred or recommended restaurant 104 97 95 102 107 95

Luxury shopping 104 98 92 105 108 94 Visiting a spa or wellness center 103 101 104 99 96 97 Shopping at a mall 103 102 94 101 102 98 Visiting historical sites 103 98 103 86 104 105 Culinary and cultural Attending performing arts events (theater, dance, etc.) 103 95 94 103 110 95 Shopping at a unique local shop or shopping district 103 99 98 98 104 98 activities represent a Visiting a high-end resort 103 102 104 106 92 93 BRAND HEALTH significant opportunity Attending a live music event, concert or festival 103 100 92 105 104 99 Dining at a unique local restaurant(s) 102 99 99 100 103 98 for California. Nightlife 101 117 94 110 105 92 Gambling 97 102 86 130 93 97

Source: SMARInsights, Inc. 2019 Global Brand Health Study

31 •At-A-Glance California share of domestic and international visitor Experience Statements: spending is No. 1 with sustained growth, but there is increasing competition for share of voice. Visit California monitors the state’s rating across brand experiences as a part of the ongoing Advertising Effectiveness • California’s global brand health is strong but faces strong competition from domestic competitors. research program, but those ratings are not given in a competitive context. The Global Brand Health study found that while California • California enjoys abundance — recognition by gets credit for its range of destination experiences, many of these travelers for the full range of experiences. No other destination can match the state’s competitiveness experiences are also rated high for key competitors. across all these areas. California gets recognition for its full range of experiences. PLAN IMPLICATIONS: However, Florida is recognized for family activities, New York for culture and culinary, and Hawaii for outdoor and natural scenery. • Continue to invest domestically and internationally to maintain California’s market share and competitive brand health. • Visit California will home in on the greatest areas California gets recognition for its full range of of experience potential: road trips, family, culinary experiences. However, Florida is recognized for family and culture. activities, New York for culture and culinary, and Hawaii for outdoor and natural scenery.

EXPERIENCE STATEMENTS (RATING INDEX) CALIFORNIA FLORIDA HAWAII LAS VEGAS NEW YORK TEXAS

A place where celebrities are part of the culture 110 97 92 105 105 90

A place where the terrain is perfect for outdoor adventure (water sports, snow 110 106 116 84 83 102 sports, hiking, biking, climbing, etc.)

A place with an abundance of family activities, theme parks and attractions 110 113 99 89 90 99

A place with endless road trip opportunities featuring scenic beauty, 109 102 107 90 88 104 interesting towns and off-the-beaten-path experiences

A place that offers an abundance of scenic experiences including national/ 109 106 112 85 89 100 state parks and beaches

A place that embodies a healthy lifestyle and sense of well-being 108 104 111 84 94 100

A place that is rich in cultural attractions (historic sites, cultural institutions and 104 97 106 85 106 102 diverse neighborhoods)

A place where culinary experiences (food, wine, craft beer) are part of the 104 97 101 99 104 96 culture/lifestyle

A place that offers laid-back luxury 102 101 107 101 95 94

Source: SMARInsights, Inc. 2019 Global Brand Health Study

32 COMPETITIVE LANDSCAPE

33 TRAVEL DISTRIBUTION The travel trade industry continues to play an important Travel Trade Trends role in the consumer booking journey, driving visitation and dispersing visitors throughout the state. The emphasis has 1. AUTHENTIC EXPERIENCES AND shifted to a simplified, disintermediated model delivering greater TRANSFORMATIONAL TRAVEL specialization, responsiveness to traveler motivations and Consumer desire for authentic and transformational experiences commercial viability. is driving them back to travel agencies that can arrange personalized, curated itineraries. An increasing number of global Ten years ago, vertical integration by way of growth, merger or operators are delivering “transformational itineraries” that acquisition provided a competitive advantage for operators by integrate opportunities for self-betterment and giving back to giving them ownership over most or all of the customer journey. visited communities. Today, smaller, nimbler operators have risen in importance with a clear trend toward specialized selling propositions that offer expertise, scale and a tailored travel experience. GLOBAL ATTITUDES TO EXPERIENCES, 2019

I value real-world experiences

I use technology to improve my day-to-day life

It is important to experience cultures other than my own

I seek curated experiences that are tailored to my tastes

It is important to spend money on experiences

I shop in stores that create engaging experiences

I value online virtual experiences

0 20 40 60 80 % OF RESPONDENTS

Source: Euromonitor International Lifestyles Survey

34 2. PERSONALIZATION AND SPECIALIZATION 5. SOCIAL INFLUENCE AND COLLABORATION Travel advisors no longer act as booking facilitators or “order- In Asian and European markets, digital influencers are takers” to package an itinerary. The client relationship today collaborating with tour operators to curate itineraries based is consultative and nuanced, hence the shift away from the on their personal travel experiences and lead group tours. title “travel agent.” Niche operators are becoming the norm in Millennials and Gen Z are more open to interacting with brands categories like culinary journeys and solo travel, and technology- on social media and messaging forums, leading platforms such as driven businesses are creating new ways to provide personal Instagram and TripAdvisor to add booking capabilities. interaction without human resources. Online travel agencies such as Expedia and Booking.com have developed text and voice- 6. OMNI-CHANNEL DISTRIBUTION enabled chatbot AIs that approximate personal interaction in the Successful trade operators are creating omni-channel distribution travel booking journey. models designed to ensure multigenerational appeal, customer convenience and ongoing relevance of their businesses. Travel 3. DATA IS KEY providers must offer transaction options that service each Predicting and responding to shifts in consumer demand requires segment of their customer base with options, including: a data-driven understanding of customers and the ability to • Online search and booking capability segment and target the database. Large organizations with data- captured audience insights can emulate a personalized response • Dynamic packaging and pricing to travel trends and demands. • Brick-and-mortar agency presence • App/mobile technology 4. MOBILE APPS AND TECHNOLOGY • Mobile agent network New mobile apps that combine technology and specialist interaction deliver a hybrid of tailormade and self-guided travel platforms. Operators and social platforms that connect visitors directly with locals are in demand, particularly among the younger demographics, as are businesses and social platforms that incorporate peer-to-peer and celebrity endorsement. TRAVEL DISTRIBUTION

35 At-A-Glance Travel Trade Segmentation • The travel trade industry continues to play an important role in the consumer booking journey, Travel trade businesses are segmented based on audience size driving visitation and dispersing visitors throughout and customization/personalization of their product range. This the state. evaluation approach identifies common business characteristics PLAN IMPLICATIONS and opportunities for Visit California to support the primary travel • Visit California segments travel trade companies trade objectives of: based on audience size and customization/ • Growing visitation through travel trade channels personalization of their product range. • Expanding available product to incorporate primary travel motivators • Dispersing visitors across the state

36 MASS AUDIENCES

Mainstream Operators and OTAs Tour Operators and Travel Consortia With emphasis on transaction rather than relationship and Visit California is in a position to deliver content and new product to the personalization, Visit California’s opportunity with these larger consumer audience base of these organizations while working to operators is to capitalize on their considerable market reach continually improve the knowledge of the agents within the network — by distributing content their channels. thus extending the longevity and ROI of campaign activity. Characteristics Opportunity Characteristics Opportunity • Established & recognized brand • Inspirational content distribution • Established & recognized brand • Keep destination top of mind • Large, nonspecific consumer • Road Trip itineraries — gateway • Dominant in market • Distribute new & enhanced product audience to gateway • Extensive marketing reach • Repeat visitation • Air-driven bookings • Data-driven, high-level customer • Support visitor dispersion and pillar • Technology based transactions Strategic Focus insights segment growth with Road Trip • Multi-demographic appeal • B2B2C • Ability to segment & offer targeted product development TAILORED, PERSONALIZED ITINERARIES • Mass data – little personalization & • Road Trip Republic content gateway product segmentation to gateway • Ability to emulate personalization • Strategic Focus • Price-driven customer • Digital content/media partnerships • Diverse product readily available & • B2B & B2B2C • Some loyalty — air affiliations & offered • Road Trip Republic rewards • Omni-channel distribution capability • Trip Motivator itineraries • Campaign driven — no longevity in • Multi-demographic appeal • New & ancillary product behavioral change • Scale — competitive advantage • Hidden Gems • Price/Value-driven customer • Destination Content • Some customer loyalty

New Targets Niche/Special Operations Due to the varied and unique nature of organizations that may Visit California’s super affluent/ultra-high net worth market segment fall within the quadrant, Visit California takes a case-by-case is a highly relationship-driven market segment. To reach these approach to support. customers, Visit California must build and facilitate relationships GATEWAY CENTRIC BOOKINGS GATEWAY with the owners and executive of the businesses themselves. Characteristics Opportunity • Existing audience • Utilize customer insights to develop Characteristics Opportunity • Established relationship with travel motivation-inspired product & • Niche/Specialist operator • Experience pillars customer itineraries • Loyal, highly qualified customer base • Product development specific to • Personal customer insights • Leverage customer trust & influence • Deep, personal customer insights travel motivators to deliver inspirational content • California is not core outbound • Relationship & service driven market • Expertise & trust Strategic Focus Strategic Focus • Travel may not be core business • Personalized marketing reach • B2B • B2B2C Destination content • Addition of travel/California is • Tailor-made itineraries • Experience pillars response to opportunity or demand • Experience/trip motivation-inspired • Experience/motivation-driven • Niche product & experiences content • Loyalty derived from core business — itineraries • Trip motivation focused content travel/California is viewed as added • Complex bookings • VIP events and forums value or ancillary revenue • Higher customer spend • Customer may be rewards driven • Repeat & referral customers • Lower number, higher value clients

SMALL, HIGHLY QUALIFIED AUDIENCES 37 38 AVIATION LANDSCAPE

Airlift connectivity is a key barometer of the health of California’s 2. ULTRA-LONG-HAUL TRAVEL international tourism business, and airlines are instrumental Aircraft advancements have made “ultra-long-haul” nonstop marketing allies. In 2017, Visit California activated an Aviation routes possible. To support these, airlines are adding the new Development Support strategy powered by a comprehensive aircraft to their fleets. There are very few places that cannot be route evaluation matrix that determines how to best support reached nonstop from California on these planes. DMO partners, airports and airlines. California gateway DMOs and airports take the lead on route development, and Visit California 3. HUB-AND-SPOKE REPLACED BY POINT-TO-POINT plays a supporting role. Point-to-point services are on the rise due to lower operating In FY18/19, Visit California had formal marketing partnerships aircraft costs, as well as the move away from very large aircraft with 17 major air carriers. These included large, multimillion- and consumer demand for nonstop flights. This will slowly affect dollar, multiyear partnerships with leading carriers such as the gateway airports that have significant levels of connecting Air Canada, Air New Zealand, British Airways, China Southern traffic, whereas smaller regional airports should see route Airlines and Qantas. development opportunities.

More than 50 airlines currently offer nonstop flights to California from the state’s top international markets, accounting for 1,713 The Looming Challenge weekly flights and 382,253 weekly seats. In 2019, the number There is a small but growing movement against air travel to of weekly flights and seats available grew in seven out of the reduce the industry’s carbon footprint. Travelers are replacing 14 target markets. long-haul overseas and regional air trips with destinations that can be reached by rail or auto. Airlines are acutely aware of the need Trends and Opportunities to reduce aviation’s environmental impact. 1. SMALLER JETS, LONGER ROUTES New narrow-body, “extra-long range” aircraft designs (Boeing 787, Airbus A350 and Airbus A321XLR debuting in 2023) allow for longer routes that were previously considered uneconomical. This presents an opportunity to develop new markets and diversify At-A-Glance AVIATION LANDSCAPE regional airport routes. • Aviation innovations present new, game-changing nonstop route possibilities.

PLAN IMPLICATIONS • Capitalize on new service potential through airline partnerships. • Protect market share as California will no longer be the sole Western U.S. gateway for Asia Pacific.

39 Media Landscape

40 Media Landscape

Email Social Platforms Cloud CRM Viewability Platforms Telephone Spreadsheet Business Intelligence PLATFORMS/ Postal Digital Brand CDPs Fax Machine SEM Platforms DSPs Blockchain Service Studies/ Attribution (MTA) TOOLS Computer Ad Servers SSPs Measurement Fraud Prevention Web Analytics DMPs

VR, AR Newspaper DOOH IoT Satellite Radio/TV Social Marketing Addressable TV Outdoor Radio SMS Marketing Wearables MEDIUMS/ Internet Mobile Web Native Advertising Magazines Television Advergramming Haptic Email Marketing RTB Connected TV (CTV) METHODS Direct Mail Cable Streaming Audio Chatbots Search Marketing Mobile Apps Over-The-Top (OTT) Yellow Pages Streaming Video Voice Search Holograms

1750-1925 1925-1990 1990-2000 2000-2005 2005-2010 2010-2018 175 YEARS 65 YEARS 10 YEARS 5 YEARS 5 YEARS 8 YEARS FUTURE

Media Complexity Has Intensified In The Past 20 Years Given the vast number of choices, the fragmented Over the last half decade, 90% of media media landscape has expanded the time consumers are spending with media and complicated the ease spend growth has come from digital media. by which marketing messages can be delivered. As of 2019, digital ad spend makes up about 50% of total worldwide ad spend with projected growth forecast at 60% by 2023.

41 Time spent with media averages 8.5 hour per day globally. DAILY TIME SPENT WITH MEDIA U.S. adults spend the most time interacting with media at almost one half of every day across digital and traditional channels. INDIA 4:59 CHINA* 6:39 The digital device landscape is shifting consumer habits. JAPAN 7:17 Changing consumer preferences and priorities are driving consumption shifts, and ad spend for digital is following suit. SOUTH KOREA 7:36 AUSTRALIA 8:02 Mobile dominates. Ownership of PCs and/or tablets is falling, LATIN AMERICA 9:00 while smartphones have cemented their dominance as the primary digital device globally. As a result, spending on mobile UNITED KINGDOM 9:38 advertising will rise 21% in 2019. Mobile accounts for 73% of all CANADA 9:50

digital ad spending and more than one third of total media ad GERMANY 9:56 spending. In the next three years, mobile ad spend is projected to FRANCE 10:06 be 80% of all digital ad spend worldwide. UNITED STATES 12:09 According to eMarketer, U.S. adults spent one out of every three media minutes on a mobile device in 2019, and mobile usage is Total Media: Average Time Spent in Select Countries 2019 (hr:min) *excludes Hong Kong poised to surpass time spent with television in nearly all key Sources: eMarketer April & June 2019; Zenith Media 2019 Media Consumption Forecasts & Zenith 2017 Consumption Forecasts Visit California markets.

AVERAGE TIME SPENT WITH MEDIA STREAMING MUSIC

TV MOBILE HI 2018 H1 2019

AUSTRALIA 2:18 2:12 AUSTRALIA :47 1:05

BRAZIL 2:32 4:59 BRAZIL 1:19 1:36

CANADA 2:23 2:33 CANADA 1:03 1:13

CHINA* 1:27 3:13 CHINA 1:10 1:27

FRANCE 2:35 1:47 FRANCE :37 :46

GERMANY 2:16 1:49 GERMANY :35 :46

INDIA 1:36 2:27 INDIA 1:29 1:44

JAPAN 2:14 1:30 JAPAN :16 :20

MEXICO 2:06 2:34 MEXICO 1:26 1:46

SOUTH KOREA 2:05 2:34 SOUTH KOREA :57 :56

UNITED KINGDOM 2:39 2:18 UNITED KINGDOM 1:05 1:15

UNITED STATES 2:51 2:30 UNITED STATES 1:25 1:31

*excludes Hong Kong

Source: GlobalWebIndex, Q1-2 2019, August 2019

42 Three Key Mobile Trends U.S. ADULT WEARABLE USERS AND PENETRATION, 2017-22 MILLIONS AND % OF POPULATION 67.0 DIGITAL AUDIO 63.9 60.6 In nearly all markets, streaming music has seen an 56.7 51.9 increase in time spent over the past year. Nearly 45.8 25.3% two-thirds of the U.S. population (and more than 24.3% three-quarters of the U.S. internet population) listens 23.3% to digital audio at least monthly, including streaming 22.0% music, podcasts, etc. 20.3%

WEARABLES 18.1% According to CCS Insight, the global wearable device market is set to grow from 84 million units in 2015 to 2017 2018 2019 2020 2021 2022

245 million units in 2019. By 2022, more than a quarter Adult wearable users % of population of U.S. adults (67.0 million) will use wearables (e.g., Note: at least once per month, individuals ages 18+ who wear accessories or clothing embedded smartwatches) thanks in part to 5G streaming that will with electronics, software or sensors that have the ability to connect to the internet (via built-in connectivity or tethering), which in turn collects and exchanges data with a manufactured, operator enable fully autonomous functionality not dependent or other connected devices. on a smartphone network. Source: eMarketer, November 2018

SMART SPEAKERS Smart speaker users accounted for more than 85 million Chinese internet users and more than a quarter of U.S. internet users in 2019. At-A-Glance • Consumers are spending more time with media and using smartphones as the No. 1 way to consume it — spending as much or more time with smartphones than television (the previous leader). • Audio engagement is growing across many platforms and delivering higher engagement times than both

Amazon dominates the U.S. smart speaker market, social and video. MEDIA LANDSCAPE but Google Home is growing — 709% compared with PLAN IMPLICATIONS: just 102% for Amazon. Baidu has also experienced • Continue to prioritize digital and mobile strategies signifi cant growth, now making up more than 12% of across all platforms. global market share, and new off erings (e.g., Alibaba, • Continue to invest in digital audio with an eye to Apple) keep emerging. future voice strategies.

43

TECH IS CHANGING THE WAY PEOPLE CONSUME TV The definition of “what is TV?” is changing and more unclear. Watching TV is no longer defined as one device; it is an activity that refers to video content Traditional pay cable still reaches 86.5% of total TV households. However, viewed across any device. This is especially true of cord-cutting and cord-shaving is accelerating due to platforms like YouTube younger generations. TV and Sling providing network and live programming, the abundance and high quality of streaming content, and the perception of streaming being Only 21% of light to no TV viewers, of which more convenient and less expense than Pay TV. millennials and Gen Z make up a significant percentage, define watching TV as streaming, According to a 2019 Roku Cord Cutting study, 3.5 million U.S. households broadcast/cable or satellite viewing on a TV set. dropped cable or satellite in favor of streaming between March 2018 and February 2019. That study also found that 60 million TV households will be accessing video on TV exclusively through streaming by the end of 2024.

Source: Nielsen/eMarketer

Watching TV means watching content: 71% SHORT-FORM CONTENT

63% 49% 77% 96% MEDIA LANDSCAPE ON A COMPUTER ON A TABLET OR STREAMING STILL CITE AN ACTUAL SMARTPHONE CONTENT TV AS THE DEVICE THAT THEY USE TO WATCH TV2.

Source: MAGNA, IPG Media Lab “Reaching the Un-reachable”

45 The Resiliency of Linear TV Linear TV still makes up the majority of TV viewing, even among 18- to 34-year-olds where live and time-shifted still account for Broadcast TV is still the most widely used media channel. In more than half of their TV viewing. While millennials and Gen Z nearly all markets, adults spend more than two hours of their daily are very digital-centric and more inclined to “binging” content media diet with broadcast television. The U.S. leads with daily and streaming it than watching live, it is important to note the time spent nearing three hours. Demonstrating its resiliency in an relevance and sustained traction of linear TV. ever-fragmented landscape, the medium has not seen significant TIME SPENT ON LINEAR TV declines in usage over the past year, even in markets where time AVERAGE TIME SPENT ON LINEAR TV PER DAY IN HH:MM spent with broadcast television is the lowest (e.g., China, India). Time spent in nearly all markets has remained consistent from the first half of 2018 to first half 2019. 01:28 01:47 02:05 02:44 BROADCAST TELEVISION

HI 2018 H1 2019 GEN Z MILLENNIALS GEN X BABY BOOMER AUSTRALIA 2:16 2:18 Question: Roughly how many hours do you spend on the following on a typical day? BRAZIL 2:23 2:32

CANADA 2:16 2:23 Regardless of age, television ads also consistently appear in the top three sources of brand discovery among consumers. This is CHINA 1:19 1:27 one of the most powerful examples why linear TV will continue to FRANCE 2:31 2:35 be a central pillar in the media landscape. GERMANY 2:16 2:16

INDIA 1:37 1:36 TOP 3 BRAND DISCOVERY CHANNELS BY AGE JAPAN 2:12 2:14 % WHO DISCOVERED BRANDS OR PRODUCTS VIA THE FOLLOWING

MEXICO 1:54 2:06 Ads seen online Ads seen on TV Search engines Word-of-mouth SOUTH KOREA 2:07 2:05

UNITED KINGDOM 2:36 2:39

UNITED STATES 2:57 2:51

16-24 35% 33% 33%

According to Nielsen, TV ratings are declining and viewing 25-34 33% 34% 37% fragmentation is at an all-time high with TV viewers spending 20% 35-44 38% 38% 31% less time with live and time-shifted TV compared to six years ago. 45-54 39% 40% 34% That said, live and time-shifted still dominate U.S. TV viewing. 55-64 43% 40% 37%

Source: GlobalWebindex Q3 2018 Base: 93,803 Internet Users aged 16-64

46 At-A-Glance Digital Video Audiences Are • Convergence across both linear and digital TV platforms continue to shake up the Increasing Worldwide media landscape. Linear TV consumption far surpasses online TV and video viewing. • Digital advertising approaches are remaking But, with the proliferation of digital video content and streaming the traditional TV media model, creating new services, the number of digital video viewers and subscribers of business models, distribution vehicles and tech/ content platforms to meet the needs of the new SVOD/OTT services continues to climb, threatening the broadcast media consumer. TV model forever. • Linear TV still makes up the majority of TV viewing, but digital TV is creating more By 2023, an estimated fragmentation in the medium. PLAN IMPLICATIONS: 3 Billion • Continue to deploy multiple video approaches to reach audiences in a variety of media GLOBAL DIGITAL VIDEO VIEWERS environments, both linear and digital. • Test and evolve with the shifting landscape, shifting dollars into new video tactics to generate Asia-Pacific is nearly reach among relevant audiences. 5x the size OF THE NEXT LARGEST AREA BY VIEWERS (LATAM)

Y2022 1.7 Billion OTT VIDEO VIEWERS MEDIA LANDSCAPE

Sources: PwC Global insights, eMarketer

47 48 THE EVER-EVOLVING DIGITAL PLATFORMS LANDSCAPE In an increasingly fragmented media world, users look to a The Duopoly Versus Amazon growing number of digital platforms for inspiration, information, entertainment and e-commerce. The platform landscape is home As faith in the Facebook-Google duopoly wanes, many marketers to established giants and up-and-coming challengers, each vying are looking for the next platform alternative. Amazon is the for consumer attention and usage. In the travel space, social increasing go-to for many consumer activities online; the platform media and OTA platforms are crucial to inspire and engage users has surpassed Google for shopping-driven search and is second throughout the travel planning journey. only to Netflix in video subscriptions.

The Facebook-Google Duopoly vs. Facebook and Google deliver audience and scale that cannot be ignored or duplicated. With global reach and performance efficiencies that are rarely beat, this duopoly represents over 51.3% of all digital ad spending worldwide in 2019. Social Platforms

In response to ongoing brand safety issues, privacy concerns Social platforms are developing their own unique identities, in and legislation, both platforms are actively developing stronger part informed by user behaviors that include consumption of content and advertising review systems, brand safety controls, content, entertainment or news as much as staying in touch with and responses to manipulation and misuse. Premium advertising family and friends. While emerging social platforms offer unique options are also becoming more prevalent elements of platform ways to reach and engage niche target segments, they have buys, complementing TV and OTV buying capabilities. Advertisers yet to gain mass popularity on the scale of social networks like on these platforms are met with the highs of new ad types and Facebook, YouTube and Instagram, and mobile messaging apps advanced ways to meet marketing objectives, and the lows of like WhatsApp, Facebook Messenger and WeChat. shifting targeting capabilities and privacy requirements. MEDIA LANDSCAPE

49 Snapchat

Snapchat has evolved from a 1:1 messaging platform to This Chinese super-app is a messaging platform turned digital become a robust content engagement channel for Gen Z one-stop-shop that many other social media companies and millennial consumers. (Facebook) are now attempting to emulate. With built in e-commerce, brand content, gaming, entertainment and more, TOP MARKETS BY NUMBER OF USERS: WeChat is the go-to app for Chinese consumers. While WeChat still has the largest user base with over 87% of internet users U.S. France India accessing the app, recent studies show that time spent may be decreasing year-over-year as other popular apps make a play for 98 20 19 valuable user time. MILLION MILLION MILLION HOW MUCH TIME PER DAY DO DOUYIN*, KUAISHOU** AND WECHAT USERS IN CHINA SPEND ON EACH APP? MINUTES, SEPTEMBER 2018 & SEPTEMBER 2019

WeChat (Douyin) 40 31 Owned by the same Chinese company, Douyin/TikTok have grown a significant, highly engaged user base in just two years and are Kuaishou** especially popular amongst younger audiences. Gen Z consumers 36 spend over 45 minutes in at least nine sessions per day. 48

TOP MARKETS (BY NUMBER OF USERS): Douyin* 17 China (Douyin) India U.S. 27

SEPT 2019 SEPT 2019

500 120 27 Note: represents activity in the Trustdata network, broader industry metrics may vary, MILLION MILLION MILLION *international version is known as TikTok, **also known as Kwai Sources: Trustdata, “China Mobile Internet Industry Analysis Report: January-September 2019 Edition,” October 29, 2019

Source: eMarketer

50 OTAs CONVERT THE MOST TRAVELERS

80%

60%

40%

20%

0%

Online Travel Agency Airline Sites Hotel Sites Alternative Accom Sites Car Rental Sites

US Canada France Brazil China UK Australia Argentina Japan Germany Mexico

Online Travel Agency (OTA) Platforms OTAs are the top source for travel planning and At-A-Glance conversion in a majority of international markets and • Digital platforms dominate the media landscape, with the Facebook-Google will continue to be an important marketing channel. duopoly seeing more than half of all digital ad spending worldwide in 2019. • Emerging social platforms like Snapchat, Douyin and TikTok are Yet, as OTA platforms continue to mature, many challenging the old guard. are expanding functionality to serve consumers across all aspects of the travel journey. • OTAs are finding new ways to inspire and engage users.

PLAN IMPLICATIONS: MEDIA LANDSCAPE • Continue to invest in leading global digital platforms to leverage their audience reach and targeting capabilities. • Leverage TripAdvisor to California’s advantage as the platform continues to evolve. • Test emerging platforms like Douyin to reach and engage new audiences.

51 Capitalizing on the popularity of user- generated content (UGC) and personal recommendations to fuel travel inspiration, TripAdvisor seeks to engage users and brands via a social travel feed. TripAdvisor is also developing bigger content partnerships to appeal to users seeking both entertainment and inspiration.

52 PERSONALIZATION Consumers are using an expanding array of connected devices to organize, curate and discover their own unique worlds of media. In response, companies are designing their offerings to revolve around personal preferences, using data and usage patterns to pitch their products and services not at audiences of billions, but separately at billions of individuals. When personalization is effective, it is because product recommendations and offerings are made based on consumer interests, purchase history and relevancy. Marketers overwhelmingly agree (98%) that personalization helps advance customer relationships, with 70% claiming it has a “strong” or “extremely strong” impact. And 85% agree their customers and prospects expect a personalized experience.

The Personalization-Privacy Paradox

While today’s consumers want to see information relevant to their interests and needs (targeted advertising, custom content, and tailor-made product recommendations), they are becoming When asked what drives personalization within more skeptical about sharing the data that allows this accurate their own organizations, marketers cite delivering personalization. This has led to the personalization-privacy better customer experiences (88%), increasing paradox: how to deliver personalized messages without access to loyalty (59%) and generating measurable lift/ROI the data needed to do so. (50%) as top motivating factors. Between data breaches and misuse of data, consumers have

Source: Researchscape International — 2019 Trends in Personalization started questioning whether it is worth handing over their personal information in exchange for relevance. Despite a preference for relevant ads, 76% of U.S. adults are concerned

about how tech/social media companies are using online data and MEDIA LANDSCAPE location information for commercial purposes. Younger consumers especially are becoming more diligent about monitoring and adjusting their privacy settings.

53 At-A-Glance U.S. INTERNET USERS’ ATTITUDES TOWARD • Getting the right message to the right person at the right PERSONAL DATA USE, APRIL 2019 time provides a better user experience and leads to more % OF RESPONDENTS engagement, but consumers are tightening their privacy settings, making it harder to collect data and build Concerned about how tech/social media companies are using my online data and location information for commercial purposes accurate profiles. • Avoiding the personalization-privacy paradox requires that marketers build direct and trusted relationships with 54% 22% 11% 5% 7% consumers through new tactics (e.g., questionnaires, polls, There should be a single national policy addressing consumer data quizzes, and/or social stories). privacy rules in the U.S. PLAN IMPLICATIONS:

48% 24% 20% 4% 4% • Take a measured approach to personalization, including OK with online tech/social media companies that collect and use personal data migration of VisitCalifornia.com to a “smart site” and because it makes online searches, advertisements and content more relevant to me e-newsletter 1:1 evolution to deliver content based on subscribers’ interests. • Use data collected on subscriber interactions and interests 3% 8% 13% 19% 56% to guide future content and programming. STRONGLY AGREE NEITHER AGREE NOR DISAGREE STRONGLY DISAGREE

SOMEWHAT AGREE SOMEWHAT DISAGREE

Note: ages 18+; numbers may not add up to 100% due to rounding Source: Internet Innovation Alliance (IIA), “Consumer Data Privacy Concerns” conducted by CivicScience, July 30, 2019

Personalization Done Right

Netflix and Amazon are synonymous with personalization with their “if you like this, try this” messaging based on the user’s habits, tastes and searches. Each have perfected the science of predictive personalization while also maintaining user trust and loyalty.

54 EDITORIAL MEDIA CONSUMPTION

The saying goes, while advertising is paid for, public relations is population does not trust the media. Furthermore, social media prayed for as it was thought to offer greater value with implied has proved unreliable given complex updates to data privacy laws endorsement. In this modern day of promotion, the adage shows and sudden changes in newsfeed algorithms. its age. Today, as consumers seek more personalized and relevant These trends are evidenced by findings in Cision’s 2019 State content, marketers seek integrated solutions and media have of the Media Report, in which nearly 2,000 journalists from 10 grown to accommodate, blurring the lines between paid and countries participated. earned media. Key takeaways include: A changing environment has contributed to an increasing pace of media and communications innovation, personalization and 1. JOURNALISTS LET DATA DRIVE CONTENT DECISIONS. variety. New channels have emerged, but news organizations have withstood the test of time, with technology facilitating how Globally, 43% of journalists reported their organization’s primary people consume news as most newspapers operate in print and measure of success for their content is readership or views. Facing online, maximizing reach and readership. pressure to drive readership, engagement and revenue, journalists are making data-driven decisions about the content they publish. Niche publications and outlets create opportunities to secure Journalists have more access to data than ever before, and they targeted coverage and turn devoted readers, viewers and listeners are using analytics to better understand their audiences and what into brand advocates. Additional media opportunities include they want and need to create more impactful and relevant stories. streaming video and audio, digital voice assistants, smart speakers and podcasts. AUDIENCE METRICS

Declining Trust and Evolving Newsrooms The availability of audience metrics 65% such as views and engagement The influence of media on consumer behavior is profound. has changed the way journalists evaluate stories. However, no one placement will sway a consumer. Low trust in news and consumer media means a brand’s earned media efforts need to be targeted and built over time.

In recent years, journalists have increasingly contended with 24% MEDIA LANDSCAPE attacks on their credibility, accusations of distributing “fake news” and the rapid spread of misinformation. In fact, according 11% to Edelman’s 2019 Trust Barometer, roughly half the American Agree Neither Agree Or Disagree Disagree Source: Cision’s 2019 Global State of the Media Report

55 2. SOCIAL MEDIA BECOMES MORE COMPLEX FOR PUBLISHERS. While the veracity of content is at the forefront of news Journalists rely on social media to stay connected to sources and organizations, “fake news” attacks on media have not waned and gather real-time news. They also have stated a belief that social have had an interesting impact: Many people are paying more networks bypassing traditional media is the biggest challenge attention to what journalists do and the value they provide and facing journalism, when compared to the results of the 2018 helping to restore the public’s trust in journalism. Content Landscape survey. For publishers, social media has proved challenging as concerns and issues related to data privacy grow and algorithms DISTRUST IN MEDIA change the reliability of various platforms and cause concern with regard to the accuracy of engagement metrics. When Cision asked journalists if the public lost or gained trust in 3. JOURNALISTS ARE OVERWHELMED AND OVERWORKED. the over the last year, 91% 2017 63% feel the public lost Newsrooms continue to decline through employment cuts and trust. While this is still 71% 63% ever-shrinking resources. According to Pew Research, one-third of high, it’s the lowest 2017 2019 newspapers with a circulation of 50,000 or more suffered layoffs it’s been in years. in 2017, and one-fourth again slashed staffs in 2018. Digital-only outlets saw one in five staff laid off in 2017 and an additional 17% downsize in 2018. However, workload has increased, leading those who remain to juggle more content than ever before. At-A-Glance On average, more than 30% of journalists publish more than seven • The evolving media landscape affects consumer consumption articles per week, forcing them to plan their stories in nearly of all content, including editorial media. real time, and more than 40% of survey respondents said they • Declining trust in news media and organizations underscores work on stories no more than a day in advance. Furthermore, the challenge of where to concentrate media efforts. journalists are increasingly overall content producers as they also • Earned media is critical to the overall promotion of California are required to submit more than just a well-written article, but because highly valuable placements result in higher also visual content such as videos and images, often filmed and conversions and, ultimately, a higher return on investment. produced themselves. They are also required to promote stories PLAN IMPLICATIONS: via blogs and social media. • Low trust in news and consumer media means earned media efforts need to be targeted and built over time. 4. JOURNALISTS BELIEVE PUBLIC’S LACK OF TRUST IS ON THE DECLINE. • Niche publications and experiential opportunities will Of the Cision survey media respondents, 51% said ensuring become increasingly important as consumers seek relevant and personalized content. accuracy was most important for their organization, pushing out revenues, exclusivity and being first to publish. In contrast, • As media make increasingly data-driven decisions to develop content, Visit California’s earned media approach must Edelman’s 2019 Trust Barometer shows only 47% of people said leverage analytics to identify trends, new audiences and they trust the media, which is actually up three points over 2018. ensure messaging is engaging.

56 Content Landscape CONTENT LANDSCAPE When it comes to today’s content landscape, Visit California Across this growing content landscape, California is frequently is marketing within a growing volume of California-related featured as the focus of, or backdrop for, storytelling. This digital content. According to SKIFT/Brand USA, 71% of travel- provides inherent value in amplifying California as a travel industry storytellers plan to incorporate digital content into their destination, but without any influence on the narrative. Some 2020 efforts. Travel organizations worldwide, from hospitality of these expressions of California — on television, in films, in companies like Marriott to online travel agencies like Expedia, magazines, etc. — present the state in a positive light that fully are increasingly authoring branded content. Digital travel aligns with Visit California’s marketing efforts. But other third- influencers and media platforms are also producing greater party representations do just the opposite, underscoring unsavory volumes of travel content. aspects of the California experience — everything from traffic- related issues to wildfires to homelessness. These representations could have a negative impact on travelers’ propensity to visit and require that Visit California fully engages in brand storytelling.

Travel Industry Content Television/Movies

Marriott branded YouTube Netflix series Travel with My HBO’s Big Little Lies set in Father set in California video set in San Francisco Monterey Social/Digital Influencers Expedia YouTube video featuring Lake Tahoe

ABC’s Bartell’s Backroads in Sonoma Flight Centre California guide YouTube Social Influencer ‘California Through My video Lens’ featuring San Francisco

Despegar Mexico Twitter video La La Land opening showing LA traffic featuring Los Angeles congestion Vagabond Brothers’ featuring San Diego, Lonely Planet YouTube video sponsored by Google Pixel

58 Given the massive volume of third-party California content that foundational content that answers consumers’ most pressing might not present the state in a positive light, Visit California questions around the California travel experience, while has adopted a “brand newsroom” approach to content creation inspiring through a visually arresting website. that mirrors the efforts of highly trusted editorial brands. Using The California Now blog launched in FY17/18 as a vehicle for timely journalists who have contributed to Travel + Leisure, Los Angeles and topical content. It played a central role in crisis response to Times, New York Times, Sunset and many others, Visit California the Napa and Sonoma wildfires by informing consumers that focuses on creating authoritative and rigorously reported content much of the region was open for business. In addition to crisis crafted with an emphasis on consumer utility. response, the blog showcases events and activities that are By adopting this editorial mindset and minimizing over-the-top only available within a specific time frame, triggering a sense of brand superlatives often associated with traditional advertising, urgency among consumers to book travel. Visit California brings a degree of credibility to its branded Visit California grows its digital audiences by strategically content efforts more commonly associated with traditional deploying paid content distribution across select media platforms editorial brands. This accomplishes two key goals: and social channels. This process not only delivers new and 1. Because consumers find actionable information that truly repeat visitors to the sites, but also drives “partner handoffs” from helps them in the trip-planning process, they return often to content on Visit California’s owned channels to partner websites Visit California channels to find more relevant content. throughout the state. A consistent flow of consumer-centric content emanating from the brand newsroom, combined with paid 2. Because the content is crafted in an editorial fashion by content distribution and organic search, deliver nearly 30 million veteran journalists, the travel recommendations carry unique visitors a year into the Visit California ecosystem — and greater weight than they would in a traditional “heavy sell” just over 7 million handoffs to partners throughout the state. advertising context.

While consumers utilize a range of platforms and websites during their path to booking, SMARInsights, Inc. research The destination website was the only source of confirms they still heavily rely on DMO websites to inform information cited by consumers as one they refer their travel decisions. In fact, according to 2018 research from to throughout all stages of the travel life cycle. SMARInsights, the destination website was the only source of information cited by consumers as one they refer to throughout all stages of the travel lifecycle. Marketing on behalf of the state’s travel and tourism industry, CONTENT LANDSCAPE Visit California establishes a unified brand voice across branded Visit California has made a concerted effort over the last content programs that can be tracked to industry investment. several years to strategically grow its owned channel audiences to engage a wider spectrum of potential travelers. VisitCalifornia.com continues to be the mainstay of foundational content — a rich repository of “how to”

59 “Jonny Moseley’s Wildest Dreams” and “California Road Trip Republic” platform launched in 2019 to inspire greater visitation Republic” are two such content initiatives tied to measurement through road trips. It provides distinct positioning and assets that across Visit California’s paid, owned ecosystem. “Jonny Moseley’s will be deployed globally — from a “Born to Be Wild” OTV spot Wildest Dreams” fuels discovery of California outdoor content, and custom bookazine featuring 50 life-changing adventures to with original video series episodes that have been supported in a new digital planning hub, influencer familiarizations and travel paid, owned and earned media content. The “California Road Trip trade partnerships.

60 Celebrity in Today’s Content Landscape The Digital Marketing Institute defines a social media influencer as, “A user who has established credibility in a specific industry, The idea of celebrity has long been a part of culture. As the home has access to a huge audience and can persuade others to act of Hollywood, celebrity has always been associated with California based on their recommendations. An influencer has the tools and reflected in Visit California’s marketing program. and authenticity to attract many viewers consistently and can motivate others to expand their social reach.” Over the last decade, the definition of “celebrity” has broadened to include new forms of fame and notoriety that are emerging While there are a broad range of influencers, the threshold for CONTENT LANDSCAPE from the rapidly evolving digital and social media landscape. “celebrity-level” influence is defined as having at least 5 million Social media celebrities, or digital influencers, have become followers. Today, entertainment celebrities are also leveraging famous in fresh ways and for different reasons than previous social media, interacting with fans and gaining large followings. forms of celebrity. Unlike past celebrities, they are creating their Consequently, the social media celebrity landscape is a blend of own content, audiences and brands. entertainment celebrities and celebrity-level social influencers.

61 Entertainment and social media celebrities are, in their own way, valuable to brands. INFLUENCER TIERS With some exceptions even the largest celebrity social influencers are likely to have far lower reach than a traditional entertainment celebrity. For example, American entertainer Selena Gomez — the celebrity with the largest Instagram CELEBRITY 5M+ following — reaches 165 million.

While celebrity influencers may have massive social followings, social influencers have typically built a following based on their personality or expertise and are therefore highly trusted by their MEGA 1M - 5M audiences. eMarketer’s “Global Influencer Marketing 2019” report found that factors like expertise, knowing the influencer personally, and perceiving that their content is authentic or genuine were the MACRO 500K - 1M most important determinants of trust of a digital influencer.

California celebrity has and continues to MID-TIER 50K - 500K be a core differentiator for the brand. Visit California has kept pace, evolving its use of celebrity to not only include MICRO 10K - 50K Hollywood stars, entertainment icons and athletes, but new social influencers such as Damon And Jo, travel vloggers NANO 1K - 10K dedicated to millennial wanderlust who boast 1.25 million YouTube subscribers.

62 In the editorial space, celebrities continue to wield substantial influence. The most successful magazines still place recognizable celebrities on their covers because doing so consistently increases readership and sparks engagement. Brad Pitt, Jennifer Lawrence, Nicole Kidman, Will Smith, Leonardo DiCaprio and other A-listers consistently appear on magazine covers, as any impromptu survey of a nearby newsstand will confirm.

This trend shows no sign of abating: In January 2020, Meredith launched its newest celebrity-focused publication, Reveal, a lifestyle quarterly featuring HGTV’s “Property Brothers” Jonathan and Drew Scott. Meredith, the world’s largest publisher, has enjoyed tremendous success with other celebrity-focused publications, including Rachael Ray Everyday, Martha Stewart Living and Magnolia Journal, featuring Chip and Joanna Gaines from the HGTV series “Fixer Upper.”

In keeping with this, Visit California leverages the power of celebrity on its 2020 California Visitor’s Guide by featuring iconic entertainer Steve Martin on the cover.

Thanks to his groundbreaking comedy routines; blockbuster films like Roxanne, L.A. Story and The Jerk; and many appearances on TV shows like “Saturday Night Live,” Martin is one of the most recognizable celebrities in Hollywood and will no doubt draw many consumers to the guidebook. It is worth noting that Visit California and its content agency, Meredith, did not pay Martin to appear

on the cover of the California Visitor’s Guide. Instead, and CONTENT LANDSCAPE in true editorial fashion, both parties saw the value in the partnership. Martin had recently released a new song, titled “California,” and saw the guidebook, which is sold on newsstands throughout the United States, as a vehicle that could help generate awareness and interest in his music.

63 Additionally, Visit California has been able to leverage celebrity The “California Questionnaire” is a deceptively simple tool. It throughout its owned channels, most notably by launching effectively draws celebrities into the Visit California ecosystem, Consumer Trends the California Questionnaire — a new content franchise that setting the stage for them to become more involved with the quickly has become a huge success. Modeled in the spirit of brand. It is also a massive driver of traffic and partner handoffs Vanity Fair’s world-renowned end-of-book feature, “The Proust on VisitCalifornia.com, having generated 2 million page views Questionnaire,” which poses rapid-fire questions to celebrities, with an average time spent on page of 7:05. Over the past three icons and influencers, the “California Questionnaire” asks 11 years, dozens of celebrities have participated — actors, authors, simple questions of notable Californians on what they love about filmmakers, musicians, comedians, chefs and other celebrities. the Golden State. They include Francis Ford Coppola, Ayesha Curry, Kristen Bell, Jimmy Kimmel, Dax Shepard, Natalie Morales and Alice Waters. The “California Questionnaire” is so successful because it is a fairly low-effort request with a high return for the celebrity and Visit California audience alike.

•At-A-Glance As the media landscape has grown and content distribution increased, the amount of content showcasing California has grown exponentially. • Today’s definition of “celebrity” has broadened to include new forms of celebrity that are emerging from the rapidly evolving digital and social media landscape. • As the volume of California content increases across all platforms and channels, the competition for consumer attention has grown drastically.

PLAN IMPLICATIONS: • Continue to maximize the benefit from brand-aligned California content while producing content that tells the California story through a brand-controlled narrative. • Continue to leverage personalities that fall within the broad range of “celebrity.” • Continue to focus on consumer needs and maintain an authoritative and trustworthy approach to content creation.

64 Consumer Trends 1. CULTURE 2020 A new mindset is the driving force behind how people travel Culture has taken on a new meaning today. It has evolved Art is no longer a museum or gallery — it’s street art and from a functional product place to an experiential place. graffiti. Food is enjoyed as much in a spice market as in Culture has a much broader context — now culture is an award-winning restaurant. Accommodations are a framed by the way a traveler experiences a destination. yurt under the stars. It’s the combination of these type of Travelers don’t want to be insulated from the places they experiences that make up the cultural essence of a place. visit inside a cultural bubble; instead they want to engage with and participate in the local culture. This new cultural Today, immersive exploration is a fundamental component context has been the catalyst for travelers’ desire for of how we live and how a traveler experiences a destination. immersive travel and to experience a place like a local. This mindset is pervasive and has transformed both travel motivators and how people travel. Today, this evolved definition of culture is what people are seeking out.

A BROADENED CONTEXT OF CULTURE IN TRAVEL

Culture has shifted from a functional place to the sum of experiences.

Culinary plays a critical role: “Food tourism is traveling for a taste of place in order to get a Then functional products: Now, experiential: museums, galleries, fine arts food and music festivals, local sense of place.” restaurants, street art, heritage tours, Source: World Food Travel Association, 2019 meeting locals, exploring small towns, sports events and urban centers.

66 1. CULTURE 2020 70% 6 in 10 48% think trips where you have new U.S. adults find it vital to learn want to spend time with local experiences are more important than about the culture of the destination people from the destination those where you see all the sights they are visiting

“Young travelers are not “escaping” PARTICIPATE IN ONCE IN A LIFETIME through travel. They are pursuing EXPERIENCES VOLUNTEER opportunities for growth.” 36% 31%

THE HOTTEST SOUVENIR TO BRING Traveler bookings for classes and workshops increased 90% globally in 2019. BACK FROM A TRIP IS A NEW SKILL Source: TripAdvisor 2019

TREND IN ACTION: The Rise of Local People Powered Platforms Need for local immersion and highly curated experiences are fueling new travel product.

Airbnb launches Airbnb Adventures • Lodging and meals included Cleartrip, one of India’s largest featuring small 2-10 day group trips In addition to planning activities, OTA’s curates over 15,000 adventure hosts also provide lodging hyper-local experiences. • Expertly curated itineraries and meals. So all you have to do is CONSUMER TRENDS Choose from hundreds of small book and go. SideStory curates one-of-a-kind group trips designed by expert private, insider experiences and hosts with deep local knowledge • All logistics handled far-flung adventures led by locals — and outdoor credentials. Save time researching outfitters and intended to feel like you are exploring stop worrying about what to bring. with a knowledgeable friend. Hosts coordinate your gear list and provide local transportation.

67 2. WELLNESS Today’s consumers are constantly connected to their stress levels globally. Against this backdrop, a new breed devices. They have access to more information with of consumer is emerging — one who is empowered and greater speed and convenience than ever before, yet these motivated to take control of their overall well-being. 50 6.0 same advancements in technology and connectivity have 45 They are thoughtful and proactive: every choice, brand, 5.0 been proven to lower levels of mental health and overall 40 destination or experience is evaluated through the lens 4.0of 35 3.0 well being. In fact, devices are often replacing in-person 30 whether it supports and propels their personal pursuit of2.0 experiences and relationships and contributing to higher 25 greater well-being. 1.0 20 0 15 -1.0 10 -2.0 ppt change Y-o-y % of total respondents % of total 5 PHYSICAL MENTAL -3.0 0 -4.0

US UK Italy India Brazil China Defining Wellness Russia France Mexico TurkeyPoland Japan Canada Thailand Australia Wellness is no longer limited to regimen Indonesia Colombia Germany a passive singular experience, product activeSouth AfricaSouth Korea or treatment or practice pursuit - ENVIRON- WELLNESS SPIRITUAL 2016 2017 pptMENTAL change but has evolved to become (e.g., spa) (e.g., yoga or lifestyle and active pursuit of choices, a diet) activities and lifestyles that lead

to a state of holistic health. SOCIAL EMOTIONAL

Source: Global Wellness Institute 2019

CONSUMERS HAVE REACHED THEIR BREAKING POINT CONSUMERS AGREEING THAT INTERNET USE ADDS TO STRESS LEVELS

“In an age of so-called connectivity, we have 50 6.0 never been more disconnected from humanity, 45 5.0 40 4.0 and often, from ourselves.” 35 3.0 30 2.0 In 2019 BURNOUT was recognized as an occupational 25 1.0 health phenomenon by the World Health Organization 20 0 15 -1.0 • Women see wellness and social media detox 10 -2.0 ppt change Y-o-y % of total respondents % of total as a solution: 5 -3.0 0 -4.0

73% have done or considered a wellness regimen US UK India Italy Russia Brazil China Japan France Mexico Canada TurkeyPoland Thailand and 65% have taken a break from social media Indonesia Colombia Australia Germany South AfricaSouth Korea Source: Trend Watching 2020, Meredith Corporation 2019 “Burnout Flashpoint” Study 2016 2017 ppt change Source: Euromonitor, 2019

68 2. WELLNESS FROM TO Reducing their time online in favor of life experiences…which FOMO JOMO they no longer feel compelled to Joy Of Missing Out! share on social networks.

Prescription Mother Nature As consumers seek ways to disconnect, they are spending more time immersed in the great outdoors, so much so that time spent in nature has become synonymous with wellness.

GROWING WELLNESS INDUSTRY

as fast global economic Wellness is over half the size 5x growth annually of global health expenditures WELLNESS TRIPS 830 Million 20% 1 Billion trips in 2017 trips growth since 2015 trips expected in 2019

TREND INTO ACTION CONSUMER TRENDS

Park Rx & Nature Rx — doctors around Forest Bathing — being enveloped Destination X — getting away from “it” the world are prescribing time spent in by the natural atmosphere has proven goes next level to untouched and off-grid parks or nature for a variety of ailments. health benefits. destinations for new perspectives.

Sources: Global Wellness Institute 2019, The Future 100: 2019 JWT Intelligence

69 3. THE CONSCIOUS TRAVELER The Conscious Traveler has been a top trend for years the places they are visiting now so they are around for and continues to be gaining momentum. With global generations to come. Visitors’ ongoing education on the issues like climate change and overtourism it has become importance of sustainable travel and how they can do their mainstream and is fueling one of the world’s largest part has also led to a shift from the consumptive mindset cultural tensions. Thus, travelers are rethinking where to a contribution mindset. and how they travel with a new focus on taking care of

THE POSITIVE IMPACT TRAVELERS CAN MAKE ON THE DESTINATIONS AND PEOPLE THEY VISIT IS MOVING SUSTAINABLE TRAVEL FROM A ME TO A WE PLACE.

Travelers want to know their travels are, in some way, just as fulfilling for others…it’s about human rights and sustaining communities. Source: Skift 2019 55% 52% 72% 50% report being more determined to say they now alter their behaviors to of all travelers report that it is would choose to not go to a make sustainable travel choices than be more sustainable while traveling important that their travel spending destination that negatively impacted they were a year ago — walking, riding, bike helps the communities they visit people who live there

TRAVEL ITSELF MOTIVATES A BEHAVIOR CHANGE

THE FACTORS THAT INSPIRE SUSTAINABLE TRAVEL % GLOBAL TRAVELERS WHO FOUND THIS INSPIRING Being impressed by natural sights, during their own travels (e.g., coral reefs, rain forest) 60% Noticing a visible impact of tourism at the destinations they have visited 54% Seeing the positive effect that sustainable tourism can have on the local people 47%

Sources: Global Wellness Institute 2019, JW Thomas, Tourism Cares 2019, Booking.com 2019, Smart Travel 2019

70 3. THE CONSCIOUS TRAVELER With easy accessibility to sustainable alternatives, eco-consumption has moved from the status of OPTING IN to the shame of OPTING OUT.

CLIMATE ACTIVIST are flying less as In 2018, Greta Thunberg started a “flight shaming” school strike for the climate outside the propels travelers to Swedish Parliament — the movement, 1/5 shun air travel for Fridays For Future, is now worldwide TRAVELERS sake of the planet. with over 100,000 schoolchildren. Source: Reuters, 2019 1o Million KindTraveler, the first socially conscious “Give & Get” travelers used Skyscanner to select the hotel booking platforms launched in 2018, empowering lowest CO2 emission flight option. travelers to be a force for good.

KEY MOTIVATOR IN OTHER TRENDS

Conscious Traveler mindset has become more mainstream and is colliding and Wellness Culture 2020 merging with other key trends. As these Being well and doing good Travel that allows you to trends evolve one can see a definite shift are closely related. connect on a deeper level from the “me” to “we” mindset and the focus Example: wellness travel and make a contribution to CONSUMER TRENDS on the greater good. drives people to off-the- other’s lives. beaten path places. Example: Voluntourism — allows you to learn, immerse, serve.

71 •At-A-Glance “Culture” in a tourism context has taken on new meaning. The term now often refers to the traveler’s experiencing a location immersively, like a local. • In an age of constant connectivity, consumers are choosing to actively pursue holistic health. This includes disconnecting and spending time outdoors in nature. • Travelers have become more conscientious, rethinking where and how they travel with a focus on responsibility. • These macro-trends together represent a mindset shift from “me” to “we.” Travelers today are focused on the greater good and experiencing a destination holistically, rather than as a consumer.

PLAN IMPLICATIONS: • Package California’s distinct culture and unparalleled abundance into new messaging that appeals to a “live local” motivation. • Capitalize on California’s inherent outdoor experience, dialing up nature and the state’s many opportunities to find wellness. • There is an opportunity to build destination stewardship into marketing programs that lean into responsible travel.

72 Dream Big 2.0: Research

73 DREAM BIG 2.0 In 2013, after extensive research across Research Methodology: 11 countries, Visit California established A New Approach to Qualitative a global messaging platform to serve as an anchor for all marketing activity. The From To Dream Big platform allowed for greater Traditional Modern consistency and connectivity from one FOCUS ONLINE execution to another, from one initiative to GROUPS FORUM another, and across channels and markets, allowing industry investment to deliver even greater California brand impact. Similar to a message board, an online forum is a question- and-answer format that allows for back-and-forth dialogue over multiple days. Unlike traditional focus groups that require Six years into Dream Big, amidst a changing political and travel to multiple cities or countries, online forums are efficient, economic climate, shifting sentiment, and an evolving audience effective and nimble. They provide a more cost-effective way to mindset and motivations, Visit California brand agency Mering, reach quality respondents around the world and engage them in collaboration with research partner SMARInsights, conducted in one-on-one, ongoing dialogue without the “group think” new qualitative research to revisit the core tenets of the California influence. Participants spend time with questions and give more brand. These include what the “California Attitude” means today thoughtful answers. and how it should influence and inform refinement of the Dream Big platform for future marketing. A quantitative brand health This research was conducted in seven global markets: Australia, survey was also deployed by SMARInsights as an overlay. Canada, China, India, Mexico, the U.K. and U.S., with participants recruited to represent the global brand target audience of adults (Gen Z, millennials, Gen X) in top income households with a travel propensity.

74 “THE CALIFORNIA ATTITUDE”: THEN AND NOW Dream Big is born out of California’s unique brand position, or Unaided Findings point of difference: Core tenets of “the California Attitude” were confirmed, with “The California Attitude.” While the state’s abundance is an the lighthearted side of California’s personality predominant: important aspect of the brand, it is who we are as a people, how laid-back, fun, friendly and exciting/lively. Mentions of we think and the organization’s distinct approach toward life that “pretentious,” “health-conscious” and “image-focused” were has always set California apart. also present to a lesser degree. This research sought to understand the following in an unaided The state’s brand character has evolved over time, and and aided manner: today there exists added dimension with strong sentiment • Does “the California Attitude” still ring true? surrounding California as liberal, open, accepting, freedom, progressive and diverse. “Tolerance” and “environmental • Is it relevant? activists” were also mentioned.

• Has the sentiment surrounding it changed? Overall, there is a global mindset with minor variations. While all markets share a similar image of California, those in Mexico and India mentioned California’s wealth more frequently, with environmental factors at the very top of mind for U.S. respondents.

Californians and their philosophy still set California apart. The Golden State’s accepting, anything goes outlook are core. Additionally, the climate and Hollywood continue to ring true as unique aspects of the California lifestyle. DREAM BIG 2.0: RESEARCH

75 UNAIDED FINDINGS What California stands for is well-defined

“California = healthy living, outdoor lifestyles, modern attitudes.” — AUSTRALIA

“I would associate the ‘American “California stands for Dream’ with California.” — U.K. acceptance.” — CANADA “California = adventure, different ideas, “Living ‘the dream,’ good sociable people.” — MEXICO although for some this can be superficial.”— U.K. “California stands for vibrancy, liberation and iconic attractions… “California stands for tolerance, the sunshine capital.” — U.K. environmental friendliness and an obsession with outside “A mythical island…considered appearances.” — CANADA to be a paradise.” — INDIA

“Glamorous, worldly, out of the ordinary.” — U.S.

“California = adult freedom, great views, modernization, fun.” — CHINA “Tolerance, living the high life, making your dreams come true, this is the life.” — CANADA

Source: SMARInsights, Inc. 2019 Global Brand Research “It has a long history, but it does not lack vitality. It can innovate constantly and bring forth new brilliance.” — CHINA “The relaxed way “State has the most progressive values, such as accepting Californians manage alternative lifestyles, taking their time.” — MEXICO climate change seriously…” — U.S.

“Californians are more open to new ideas than a lot of other parts of the US…Californians are more laid-back and accepting of different lifestyles.” — U.K.

“There is no predictable ‘California “Its inclusiveness and lifestyle’ — everyone has their own openness lead to creativity, unique vibe and style and no one which spawns all kinds of feels left out.” — U.S. wonders.” — CANADA

“Hollywood, “The California lifestyle is unique celebrities and the because people are able to be climate.” — AUSTRALIA whoever they want to be.” — CANADA

“The liberal outlook of people toward life and the presence of Hollywood.” — INDIA “The presence of Hollywood “Hollywood dreams makes California unique.” — MEXICO and the beach DREAM BIG 2.0: RESEARCH culture.” — CHINA

“The mix of people, the open-minded attitudes and the climate.” — U.K.

“The California lifestyle is unique because of its weather, and it’s a hub of entertainment and Hollywood.” — U.S.

77 Aided Findings

“The California Attitude” statement, as originally written, was evolved to align with Dream Big. Respondents indicated clear agreement and connection, with statements including: “California is a place where you realize your dreams.” (China). “The state offers unique opportunities to all human beings. It is a place of dreams and fulfilling one’s dream. The state offers fun, spirit and open-mindedness to all.” (India).

Brand character attributes were also evolved to lean into California’s inclusive, open-minded nature. Across markets, “fun” was the top attribute (except China), with universal agreement that California is “open-minded.”

THE CALIFORNIA ATTITUDE

Original Refined Californians Californians live life to live life to the fullest the fullest and put in pursuit of pleasure first. their dreams.

78 Environmental factors are influencing sentiment, particularly in the U.S. Natural THE CALIFORNIA ATTITUDE disasters, the political climate, cost of living, traffic and the cumulative stress of these were mentioned as reasons that Californians Then Now might not be optimistic or laid-back. FUN FUN FREE-SPIRITED FREE-SPIRITED LAID-BACK LAID-BACK WELCOMING WELCOMING ACCEPTING ACCEPTING HIGHLY INDIVIDUALISTIC HIGHLY INCLUSIVE OPEN-MINDED OPTIMISTIC

U.S. CANADA MEXICO U.K. AUSTRALIA CHINA INDIA Fun Fun Fun Fun Fun Accepting Fun Free-spirited Free-spirited Optimistic Laid-back Free-spirited Welcoming Welcoming Open-minded Accepting Open-minded Welcoming Open-minded Open-minded Open-minded Open-minded Welcoming Open-minded Laid-back Highly inclusive Optimistic Laid-back Accepting Free-spirited

“While I feel optimistic when I visit California, there “I think the impression that it’s ‘laid-back’

seems to be a lot of doom and gloom associated with because of the perceived sun, funny, and DREAM BIG 2.0: RESEARCH their government and recent policies, and also with the carefree attitude, but I think in reality it’s increased earthquake threats.” — U.S. crowded, busy and stressful.” — AUSTRALIA

“The people of California have a lot to be worried about: drought, earthquakes, wildfires, mass shootings…so there are a number of things which work against optimism.” — U.S.

Source: SMARInsights, Inc. 2019 Global Brand Research

79 DREAM BIG: THEN AND NOW The Dream Big platform was refined to incorporate the The majority of respondents agreed with the refined statement idea that Californians share the mindset that all dreams are and nearly half completely agreed. When asked to identify which welcome, and that California is a place of possibility with an aspects of the Dream Big platform they most agreed with, “a open invitation to all. magnet for dreamers and their dreams” followed by “unique lifestyle and way of thinking” and “California’s creative, free- spirited, fun-loving, anything-is-possible vibe” were selected, reinforcing continued relevance.

DREAM BIG PLATFORM DREAM BIG PLATFORM Original Refined Set one’s sights with great enthusiasm; Californians share a state of mind, one rooted in go for it all. a belief system that influences a wholly unique lifestyle and way of thinking. Our unique attitude and California has always been a magnet approach to life has created a culture that is more for dreamers and their dreams — from welcoming than any other. the wonderfully wack-a-doodle to the literally world-changing. Its awe-inspiring That’s why California has always been a magnet landscapes, unreal icons and copious for dreamers and their dreams. No place welcomes amounts of sunshine create an epic the promise of possibility — of being, living, loving, backdrop for the creative, free-spirited, exploring and experiencing — more than California. fun-loving, anything-is-possible vibe for Here, California’s creative, free-spirited, fun-loving, which California is so famous. anything-is-possible vibe is an open invitation to all. California is the land of boundless opportunity where California is the land of boundless individual dreams come to fuel and foster the larger opportunity, a place where you don’t just community — a place where we can all Dream Big. dream, you dream big.

80 When asked to identify which aspects of the Dream Big platform they did not agree with, respondents noted that Californians “I don’t know if there are other destinations do not share a “belief system.” To the contrary, they indicated more welcoming, I just think it comes across as belief that Californians celebrate the ability for everyone to arrogant...It would be better with something like think differently. Additionally, superlatives were off-putting, with ‘welcoming to all.’ ” — CANADA California not seen as more welcoming than any other place:

DREAM BIG PLATFORM DREAM BIG PLATFORM Agree with Do not agree with Californians share a state of mind, one rooted in Californians share a state of mind, one rooted in a belief system that influences a whollyunique a belief system that influences a wholly unique lifestyle and way of thinking. Our unique attitude lifestyle and way of thinking. Our unique attitude and approach to life has created a culture that is and approach to life has created a culture that is more welcoming than any other. more welcoming than any other.

That’s why California has always been That’s why California has always been a magnet for dreamers and their dreams. a magnet for dreamers and their dreams. No place welcomes the promise of possibility — No place welcomes the promise of possibility —

of being, living, loving, exploring and experiencing of being, living, loving, exploring and experiencing DREAM BIG 2.0: RESEARCH — more than California. Here, California’s creative, — more than California. Here, California’s creative, free-spirited, fun-loving, anything-is-possible free-spirited, fun-loving, anything-is-possible vibe vibe is an open invitation to all. California is the is an open invitation to all. California is the land of land of boundless opportunity where individual boundless opportunity where individual dreams dreams come to fuel and foster the larger come to fuel and foster the larger community — community — a place where we can all Dream Big. a place where we can all Dream Big.

Source: SMARInsights, Inc. 2019 Global Brand Research

81

Dream Big is seen to inspire visitation to California. “It absolutely does. It makes it seem irresistible. The key words that really stand out to me are ‘magnet for dreamers and their dreams.’ I have always been a bit of a dreamer myself, and nowhere really fits everything into the way California does. The phrasing is very catchy and almost guarantees you will be having fun in a positive environment.” — U.S.

“It absolutely makes it appealing to visit. All of “Yes. I believe it’s because most people have those things are what tourists want to experience a dream and California is so welcoming for when they visit a new place.” — CANADA everyone, it makes you happy to visit.” — U.K.

“It certainly does make it appealing to visit. It’s almost like stepping “Yes, because it makes me onto the scene of your favorite movie. It creates an illusion that feel the enthusiasm and some of the magic and ‘big dreams’ that happen in California can be captured by anyone who visits there. We’re all fascinated about confidence of California, I what’s possible and it creates a sense of urgency that you’re missing believe it must be a very out on such an amazing opportunity if you don’t visit.” — AUSTRALIA worthwhile trip.” — CHINA

“Yes, the statement lures a person to visit such “Of course, because it makes it clear to you that

a place where people are friendly, fun-loving, California is a state that always welcomes you DREAM BIG 2.0: RESEARCH with open arms.” — MEXICO free-spirited and welcome everyone without discrimination or prejudices.” — INDIA

Source: SMARInsights, Inc. 2019 Global Brand Research

83 GLOBAL BRAND HEALTH: QUANTITATIVE OVERLAY In addition to the qualitative research, a quantitative brand health As shown in previously cited research, Hawaii continues to rate survey was deployed in all 14 Visit California markets to ascertain highly based on its aspirational appeal. It is seen as “a place that how California rated on key brand positioning statements and cares for the environment and natural resources,” with California a personality attributes within the competitive context of core strong second. Hawaii has the strongest rating on being “a place domestic volume competitors: Florida, Hawaii, Las Vegas, New with a welcoming culture that is fun, free-spirited and doesn’t take York and Texas. itself too seriously,” where “you can be yourself and live life to the fullest.” Unlike others in the competitive set, California overindexes Brand Positioning on all of these statements but one. This quantitative data aligns with qualitative findings showing California gets credit in these As part of Visit California’s annual advertising tracking survey, areas but is not viewed as superlative. SMARInsights measures California brand positioning and personality attributes to ascertain how campaign messaging is resonating with California and New York tied for being a place that “celebrates consumers. In 2019, Visit California worked with SMARInsights diversity,” “is progressive and forward-thinking,” and “inspires you to test California’s brand positioning statements and personality to try new things,” while New York took the top position as “a attributes against domestic competition in a global brand health place where you are inspired to dream big.” survey, with respondents rating them on how strongly they agreed or disagreed that each was reflective of the destination.

BRAND POSITIONING STATEMENTS

BRAND POSITION (RATING INDEX) CALIFORNIA FLORIDA HAWAII LAS VEGAS NEW YORK TEXAS

A place that cares about the environment and our natural resources 106 101 114 87 91 100

A place that is progressive and forward-thinking 105 97 100 100 105 93

A place that celebrates diversity 104 98 103 100 104 91

A place where the climate fuels a unique attitude/approach toward life 103 102 108 97 95 96

A place where you are inspired to dream big 102 98 100 102 104 95

A place that inspires you to try new things 102 98 103 101 102 94

A place with a welcoming culture 102 100 109 97 96 97

A place that is fun and free-spirited 102 100 104 104 97 93

A place where people live life to the fullest 101 99 104 103 100 94

A place where you can be yourself 101 100 104 101 100 94

A place where anything is possible 101 97 100 104 103 95

A place that doesn’t take itself too seriously 100 100 107 106 93 94

Q: How strongly do you agree or disagree that DESTINATION is…? (5pt scale) Source: SMARInsights, Inc. 2019 Global Brand Health Study

84 Brand Personality BRAND PERSONALITY ATTRIBUTES

ATTRIBUTE When it comes to key brand CALIFORNIA FLORIDA HAWAII LAS VEGAS NEW YORK TEXAS personality attributes, California (RATING INDEX) trails Hawaii on free-spirited, Liberal 106 96 100 103 104 90 accepting, laid-back, welcoming Progressive 105 98 98 101 105 93 and optimistic, while trailing Pretentious 104 97 89 106 106 97

Las Vegas on fun, exciting and Trendy 104 99 97 102 106 91 open-minded. California was Tranquil 104 105 119 81 86 105 rated as the most liberal, while Innovative 104 98 97 102 104 96 tying with New York for the most progressive and innovative. Open-minded 103 98 103 104 101 91 Sophisticated 103 97 99 97 109 94 What the data reinforces is the Free-spirited 102 99 105 104 97 93 critical need for Visit California to continue to invest in brand- Accepting 102 99 105 101 100 93 building communication that Laid-back 102 103 111 97 88 99 creates powerful mental structures Charming 102 99 109 93 99 98

(associations, memories, beliefs, Optimistic 101 100 103 100 99 96 etc.) that predispose consumers to Practical 101 101 102 92 100 104 associate California with its core Serious 101 98 94 88 108 110 BRAND POSITIONING STATEMENTS brand positioning and personality attributes over the competition. Lighthearted 101 101 107 101 93 97 Adventurous 101 99 104 103 97 96

Boring 101 102 93 94 96 115

Welcoming 101 100 108 100 95 96

Fun 100 101 103 104 99 93

Romantic 100 99 112 94 101 93 DREAM BIG 2.0: RESEARCH Exciting 100 99 102 104 102 93

Authentic 99 98 106 95 101 101

Exotic 98 100 115 105 91 90

Traditional 97 100 109 86 97 112

Q: Thinking about DESTINATION as a place to visit, how strongly do you agree or disagree that the following statements represent its feeling, vibe, and culture? (5pt scale) Source: SMARInsights, Inc. 2019 Global Brand Health Study

85 Derived Importance California has high performance on a significant portion of the characteristics that consumers rank as high importance, To understand what matters to consumers and which strengths to including those that are core to “the California Attitude” and emphasize and leverage, a high-to-low importance was derived the organization’s definition of Dream Big. Emphasizing those based on correlating brand positioning statements and personality brand-level strengths, while adding new depth and dimension attributes performance to the overall destination ranking. that work to improve performance in areas of opportunity, will be fundamental to future Visit California programming.

HIGH IMPORTANCE

3 1 Opportunities  for Brand Level Strengths to Improvement: Emphasize: Important to consumers Important to consumers and and California does not California performs well HIGH PERFORMANCE perform as well

4 2

LOW PERFORMANCE LOW Not Important: Niche Strengths to Emphasize Not important to consumers Not important overall to and California does not consumers (can be to niche perform as well audiences) and California performs well

LOW IMPORTANCE

86 BRAND MARKETS OVERVIEW HIGH IMPORTANCE

Fun A place that offers an abundance of scenic experiences A place that is fun and free-spirited Trendy Exciting A place where you are inspired to dream big A place that celebrates diversity A place where people live life to the fullest A place that inspires you to try new things A place that is progressive and forward-thinking A place where the climate fuels a unique attitude and approach towards life A place where anything is possible A place where you can be yourself A place that embodies a healthy lifestyle and sense of well being Optimistic HIGH PERFORMANCE Innovative Charming Welcoming Romantic A place with a welcoming culture

A place that is rich in cultural attractions A place where celebrities are part of the culture A place that offers laid-back luxury A place with an abundance of family activities, theme parks Liberal and attractions

LOW PERFORMANCE LOW A place where the terrain is perfect for outdoor adventure A place with endless road trip opportunities Accepting A place where culinary experiences are part of the Light-hearted culture/lifestyle Adventurous Free-spirited A place that cares about the environment and our natural Progressive resources Open-minded Authentic Laid-back DREAM BIG 2.0: RESEARCH Sophisticated A place that doesn’t take itself too seriously Practical Exotic Tranquil Traditional Serious

LOW IMPORTANCE

87 Dream Big 2.0: Moving Forward DREAM BIG 2.0: MOVING FORWARD

While no single destination can own a welcoming culture (being California has a distinct brand purpose: welcoming is a cost of entry when it comes to travel), California to champion dreamers and their dreams, can confidently lean into its value of celebrating diversity and dreams of all shapes, sizes and colors. California continues to be a no matter where they come from or magnet for the dreamers and seekers of the world, a progressive, forward-thinking place where people live life to the fullest, and what they are chasing, big or small. anyone and everyone is welcome to dream big.

The qualitative online forum and As we move into the next chapter of California brand storytelling quantitative brand health study has — Dream Big 2.0 — Visit California will amplify this message, continuing to shine a spotlight on Californians who are pioneering, validated the Dream Big platform and innovating and fueling the Golden State’s unique culture, while expanding the narrative to include travelers from near and far. provided valuable insight for refinement moving forward.

Purpose is why a brand exists.

Brands that take a stand outperform their competitor brands, growing at a much faster rate. Today, consumers will no longer invest their time, money and loyalty to brands that are just selling a product or experience.

89 PURPOSE-DRIVEN Definition: Purpose (n.): Reason for which something exists. of consumers say 64% of consumers across 14 major markets, they have stronger including the U.S., China, India, Mexico, U.K., The emotional bonds Netherlands, Germany, Brazil, Japan and more are to purpose-driven belief-driven buyers, and the belief-driven 77% companies mindset now spans generations. Source: Accenture 2019

of consumers worldwide say they more often make purchasing 30% decisions based on company values than they did three years ago. 62% 52% 63% of consumers want companies believe that brands should stand prefer to purchase from brands to stand up for the issues they for something bigger than just the that stand for a purpose that are passionate about product they sell reflects their own values

Source: Accenture 2019

90 DREAM BIG 2.0: MOVING FORWARD Dream Big 2.0 Platform Californians share a wholly unique lifestyle and attitude that celebrates diversity and champions being open-minded.

That’s why California has always been a magnet for dreamers and their dreams. Here, we welcome the promise of possibility — of living life to the fullest and exploring what’s next. Here, California’s creative free- spirited, fun-loving, anything-is-possible vibe is an open invitation to all.

We’re up for whatever goofy or grand, serious or silly, life-changing or afternoon-changing dream you dream up. Because in California, all dreams are welcome. So, dream big.

92 WE HAVE AN OPEN-DOOR POLICY FOR ANY AND ALL DREAMS

TO DREAM IS HUMAN. TO LIVE THE DREAM IS LIKE SO TOTALLY CALIFORNIAN.

YOU DON’T HAVE TO YOU DON’T DREAM BIG 2.0: MOVING FORWARD GO BIG TO HAVE TO BE DREAM A KID BIG TO DREAM LIKE ONE.

93 Global Target Audience GLOBAL TARGET AUDIENCE GlobalWebIndex is a market research company that offers GlobalWebIndex has a base population of internet users aged 18 comprehensive consumer profiling in 46 countries, allowing for to 64. Since the 65+ population is eliminated, the percentage of target audience development and definition of country-specific children in the household may appear larger and percentages by insights with global consistency. As the world’s largest study generation will differ from other sources. on the digital consumer, their panel represents a universe of In addition to sizing and profiling Visit California’s Global 2.3 billion people based on a sample of 544,000 responses. Brand Target, GlobalWebIndex was also used to develop the GlobalWebIndex panel questions are universal across all countries. psychographic makeup. Ratings on a variety of self-perception They rate each country by the same metrics to allow for a unified questions were evaluated and four attitudinal segments were vantage of opportunistic targets worldwide. Their research reveals significantly above average across all 14 Brand, Digital and Trade national attitudes, lifestyles, interests and media usage, and drills markets. These attitudes represent the Dream Big state of mind. down into local nuances.

Global Brand Target Audience

Adults Top 25% Have taken a domestic vacation (US) or 18-64 household a medium- or long-haul vacation abroad income (international) in the past year

A Dream Big State of Mind The Global Brand Target embodies a Dream Big state of mind. They are COSMOPOLITAN, with an interest in other cultures/

countries, and like to explore the world around them and be surrounded by different people, cultures, ideas and lifestyles. GLOBAL TARGET AUDIENCE As STATUS SEEKERS, they are brand-conscious and tend to buy premium, while striving to achieve more in life and be respected by peers. They are ASPIRATIONAL, with a career orientation and drive to develop new skills throughout life, push themselves to be the best they can and seize opportunities when they arise. As ALTRUISTS, they believe it is important to contribute to the community and strive for equality, and are willing to pay more for sustainable/eco-friendly products.

TARGET = US Domestic vacation past year, top 25% HHI Source: GlobalWebIndex, TARGET = INT’L Medium-/long-haul vacation abroad, top 25% HHI Q3 2018 - Q3 2019 Audience data

95 BRAND MARKETS DIGITAL MARKETS

USA CAN MEX U.K. AUS CHN BRA JPN S.KOR

202.6M A18-64 23.4M A18-64 60.5M A18-64 40.9M A18-64 15.0M A18-64 657.7M A18-64 103.9M A18-64 73.5M A18-64 35.1M A18-64 39.7M 4.4M 9.6M 8.3M 2.9M 138.8M 12.4M 7.2M 6.0M TARGET TARGET TARGET TARGET TARGET TARGET TARGET TARGET TARGET 20% 19% 16% 20% 19% 21% 12% 10% 17% 6% GEN Z 6% GEN Z 12% GEN Z 8% GEN Z 6% GEN Z 7% GEN Z 6% GEN Z 4% GEN Z 6% GEN Z 27% MILLENNIAL 28% MILLENNIAL 48% MILLENNIAL 34% MILLENNIAL 32% MILLENNIAL 47% MILLENNIAL 44% MILLENNIAL 26% MILLENNIAL 26% MILLENNIAL 46% GEN X 47% GEN X 32% GEN X 45% GEN X 47% GEN X 41% GEN X 39% GEN X 49% GEN X 46% GEN X 21% BOOMERS 19% BOOMERS 7% BOOMERS 14% BOOMERS 15% BOOMERS 5% BOOMERS 11% BOOMERS 21% BOOMERS 22% BOOMERS 42% 46% 67% 48% 45% 58% 57% 42% 58% CHILDREN IN HH CHILDREN IN HH CHILDREN IN HH CHILDREN IN HH CHILDREN IN HH CHILDREN IN HH CHILDREN IN HH CHILDREN IN HH CHILDREN IN HH

HHI TOP 25%+ HHI TOP 25%+ HHI TOP 25%+ HHI TOP 25%+ HHI TOP 25%+ HHI TOP 25%+ HHI TOP 25%+ HHI TOP 25%+ HHI TOP 25%+ $85K+ USD $80K+ CAD $300K+ MXN £ 48K+ GPB $100K+ AUD ¥ 240K+ RMB R$50K+ BRL ¥ 7M+ JPY ₩ 65M+ KRW $60.8K+ USD $15.4K+ USD $59.1K+ USD $68.6K+ USD $33.7K+ USD $12.2K+ USD $64.7K+ USD $55.6K+ USD

Gen Z: 18-22 TRADE MARKETS** Millennial: 23-36 ITA SWE DEN GER FRA IND Gen X: 37-55 30.7M A18-64 5.9M A18-64 3.6M A18-64 50.9M A18-64 37.5M A18-64 287.5M A18-64 Boomers: 56-64 5.1M 1.1M 640K 9.3M 5.6M 50.5M TARGET TARGET TARGET TARGET TARGET TARGET Detailed market blueprints 16% 19% 18% 18% 15% 18% are available at GEN Z GEN Z GEN Z GEN Z GEN Z GEN Z 6% 7% 7% 6% 8% 22% industry.visitcalifornia.com/ 24% MILLENNIAL 26% MILLENNIAL 18% MILLENNIAL 26% MILLENNIAL 26% MILLENNIAL 55% MILLENNIAL 52% GEN X 49% GEN X 51% GEN X 53% GEN X 46% GEN X 20% GEN X marketprofiles 17% BOOMERS 18% BOOMERS 25% BOOMERS 14% BOOMERS 18% BOOMERS 4% BOOMERS 58% 57% 53% 41% 57% 53% CHILDREN IN HH CHILDREN IN HH CHILDREN IN HH CHILDREN IN HH CHILDREN IN HH CHILDREN IN HH

HHI TOP 25%+ HHI TOP 25%+ HHI TOP 25%+ HHI TOP 25%+ HHI TOP 25%+ HHI TOP 25%+ € 32K+ EUR kr600K+ SEK kr450K+ DKK € 50K+ EUR € 37K+ EUR 720K+ INR $35.4K+ USD $62.3K+ USD $66.7K+ USD $55.0K+ USD $40.7K+ USD $10.1K+ USD Source: GlobalWebIndex, 2019 **Finland, Norway and Middle East data not available

96 Media Consumption: Average Time Spent/Day

KEY FINDINGS - All countries spend more time with broadcast television except - Mexico, Brazil and India are heavy social media users, spending China and India, which spend significantly more time with 3+ hours per day. online TV than all of the other countries. - The majority of the countries spend more time on a computer - Australia, Germany, France, Japan, S. Korea, Italy and Denmark or tablet than mobile. are medium online TV viewers and with print both physically - Mexico and Brazil spend the most time online; 8+ hours per day and online. split between mobile and computer/tablet. - India and China spend significantly more time with print, both physical and online, with Brazil above average with online print.

SOCIAL TELEVISION RADIO/MUSIC PRINT/PRESS DEVICE ONLINE MEDIA

PC/TABLET/ BROADCAST ONLINE BROADCAST ONLINE PHYSICAL ONLINE ONLINE MOBILE LAPTOP U.S. 2:34 1:18 1:28 1:33 :51 1:13 1:44 2:08 3:46 CAN 2:05 1:03 1:25 1:08 :41 :51 1:29 1:54 3:28 CHN 1:48 2:01 1:27 1:50 1:34 1:46 2:22 3:06 2:52 U.K. 2:27 1:27 1:38 1:28 :58 1:13 1:59 2:20 3:33 MEX 2:14 1:40 1:18 2:08 :55 1:22 3:23 4:05 4:41 AUS 2:10 :58 1:25 1:02 :36 :43 1:27 1:46 3:20 BRA 2:41 1:42 1:30 1:58 :58 2:28 3:27 4:29 4:56 GER 2:00 :47 1:48 :46 :38 :45 1:04 1:35 2:58 FRA 2:17 :44 1:13 :55 :38 :48 1:19 1:29 3:03

JPN 2:06 :42 :43 :44 :42 :42 :53 1:22 2:32 GLOBAL TARGET AUDIENCE KOR 2:09 :54 :44 :54 :39 :44 1:10 2:07 2:47 IND 2:19 2:22 1:20 2:30 1:32 2:05 3:12 3:30 3:47 ITA 2:14 :55 1:20 :57 :44 :53 1:32 2:11 3:38 SWE 1:55 1:03 1:28 1:27 :41 :55 1:34 2:00 3:06 DNK 2:02 :52 1:31 :54 :44 1:01 1:22 1:26 2:49

Source: GlobalWebIndex, 2019

97 Brand Discovery

MEDIA USED TO DISCOVER NEW BRANDS/PRODUCTS/SERVICES 78% 55% 78% 78% 61% 82% 85% 63% 77% 79% 58% 81% 87% 75% 87% 78% 61% 84% 84% 66% 83% 73% 55% 81% 73% 58% 76% 78% 54% 80% 81% 49% 80% 85% 62% 81% 80% 62% 83% 73% 59% 81% 72% 51% 78%

USA CAN CHN UK MEX AUS BRA GER FRA JPN KOR IND ITA SWE DEN EARNED MEDIA OWNED MEDIA PAID MEDIA

TOP 5 MEDIA USE FOR BRAND/PRODUCT DISCOVERY KEY DIFFERENCES

1. Search engines • China, India, Mexico and Brazil are above average with influencers and expert bloggers/vlogs 2. Ads seen on TV • China and India are below average in the top 3 media 3. Recommendations from used for brand discovery friends & family • Germany, France and Japan are significantly below 4. Brand/product website average for ads or recommendations/comments on social media than other countries 5. Product comparison website

Source: GlobalWebIndex, 2019

98 Digital Segments

USA CAN CHN U.K. MEX AUS BRA JPN KOR GER FRA IND ITA SWE DEN

SHOPPERS Have searched, compared prices or purchased a product/service online 98% 97% 99% 99% 99% 97% 99% 98% 98% 98% 97% 96% 99% 98% 97%

VIEWERS Watch videos, TV shows, movies or have used a TV streaming service, an on-demand or online 73% 76% 86% 81% 93% 79% 96% 72% 83% 71% 72% 86% 82% 84% 77% TV/film subscription service or have watched a vlog (a video or blogger)

LISTENERS Have listened to an online radio station/service, or have listened to or watched a podcast, or have 74% 69% 95% 77% 91% 70% 86% 56% 77% 64% 66% 95% 71% 85% 75% used a music-streaming service

CREATORS Have uploaded/shared a photo or video online, or have uploaded a photo or video to a brand’s 71% 70% 91% 75% 91% 70% 92% 54% 64% 66% 61% 90% 83% 75% 61% social network page, or have provided ideas for a new product/service or for a new brand design

FOLLOWERS Follow brands they like or buying from on social media or have liked or followed a brand on a 45% 47% 64% 48% 75% 50% 70% 43% 54% 40% 41% 62% 54% 49% 42% social network, or have visited a brand’s social network page

COMMENTERS Say that sharing their opinion is important, or have asked a question to a brand on a social 48% 48% 78% 54% 72% 48% 68% 33% 44% 42% 46% 80% 61% 53% 46% network, or have posted a comment in a forum

REVIEWERS Have left feedback or a review on a brand’s website, or have posted a review of a product, 42% 35% 74% 47% 65% 35% 54% 32% 48% 38% 37% 77% 51% 33% 31% company or service online GLOBAL TARGET AUDIENCE

SHARERS Sharing photos/videos is a main reason for using social media or have shared a brand’s post on a 41% 41% 47% 41% 58% 42% 61% 25% 37% 30% 38% 55% 46% 39% 31% social network

Source: GlobalWebIndex, 2019

99 GENERATIONAL SNAPSHOT While each generation embodies unique characteristics, Gen Z and Millennials share the most in common in terms of the attitudes and behaviors, when it comes to travel they share a mindset and behaviors. They celebrate ethnic diversity, value lot in common. With technology advances and 24/7 availability, acceptance and equality, and believe in social responsibility. all generations expect the travel experience to be seamless They want brands to play a meaningful role in society, are and easily integrated, while demanding some degree of entrepreneurial and prefer new travel destinations. As often is the personalization with tailored experiences unique to their case, these trends and behaviors tend to start with the young and preferences. Having information at their fingertips provides a migrate to the older generations over time. One example of this sense of empowerment to fulfill in individual needs and interests. today can be seen in every generation’s desire to get in touch with and immerse themselves in local culture.

GEN Z MILLENNIALS GEN X BOOMERS

• Never disconnected • Seek out personal attention • Independent • Rebellious • Mobile-first • Prioritize fun • Self-reliant • Optimistic • Believe in group problem- • Budget-conscious • Challenge authority • Focus on personal solving gratification and growth • Value-driven • Family-oriented • In-depth online researchers • Make up 80% of luxury • Seek authentic and • Make up more than 50% of spending • Truly global outlook transparent brands leadership roles globally • Expect “high touch” service Mindset • Rely on social media to select • Most educated generation destinations • More likely to plan around • Convenience-driven culinary Travel • Focus on adventure & novelty • Collaborative/team-oriented Attitudes travel • Least likely to use shared economy accommodations • Most likely to use shared • Passionate about outdoor economy offerings experiences • Most concerned about • Prefer new travel experiences sustainability • Seek out new and surprising destinations

100 Gen Z

With a truly global outlook, Gen Z values individual expression Gen Z is more demanding of brands, with a wider set of key purchase and avoids labels, mobilizing themselves for a variety of social criteria, including style, sustainability, uniqueness and a brand’s and environmental causes. They believe in dialogue to improve ethics. They expect brands to empower their values and embolden the world and emphasize individual expression and identity, with their personas, viewing consumption as an expression of individual a radically inclusive and open mindset. When asked to develop a identity and a matter of ethical concern2. slogan for their generation, they overwhelmingly suggest some variation of “be yourself.” Sources: OC&C Strategy Consultants, A Generation Without Borders, McKinsey, SKIFT, JWT Intelligence

GEN Z “SLOGANS”

THINK FOR YOURSELF BE YOU BE HAPPY 67% SAVE THE PLANET LIVE LIFE Agree that “being true WING IT to their values and DO YOU JUST BE YOU SMILE beliefs makes a person cool,” and they feel the same about brands. BE YOURSELF LIVING OUR BEST LIFE JUST BE YOURSELF STAY TRUE GLOBAL TARGET AUDIENCE DO WHAT MAKES YOU HAPPY GO BIG OR GO HOME WORK HARD PLAY HARD THE INNOVATORS

101 Global Segmentation Research GLOBAL TRIP MOTIVATION SEGMENTATION Understanding Travel Motivation Based on this understanding, the focus of Visit California’s segmentation approach was to identify motivations for different The most successful brands are able to form powerful emotional types of trips. Surveyed travelers could describe up to three connections with consumers. Brands make these emotional bonds different trips, and all these trips were segmented by the underlying by meeting the consumers underlying needs or motivations. motivation. The research found four distinct trip motivations: To guide the 2020–2022 marketing program, Visit California commissioned global segmentation research with SMARInsights, • YOLO: Liberation & Excitement Inc. to better understand the important motivations that drive • IMMERSE: Immersion & Perspective consumer choice in leisure travel. • RECHARGE: Harmony & Balance Travel and tourism marketers have long understood that the • BOND experiences sought by consumers within the travel industry category cannot be defined by a single person-based Further analysis found that both Liberation & Excitement and approach. While people can have some general attitudes and Immersion & Perspective had important subsegments defined a predisposition regarding their travel preferences, travel is a by presence of kids on the trip. Visit California already knew category that is strongly driven by the type of occasion (or from previous global millennial research that the presence of trip). This means that factors such as who is in the travel party kids on a trip is an important factor: This research provides (particularly the presence of kids on the trip), as well as other another layer of insight to understand trips with kids across two factors such as length of the trip and distance traveled, can key trip motivations. all change the underlying emotional needs or motivation for a Deeper evaluation of the Harmony & Balance segment led us particular trip. This is intuitive: A family trip with youngsters will to determine another important split, one based on differences differ from a romantic getaway for a couple, which will differ in attitude and activity. While all Harmony & Balance trips are from a weeklong trip with friends. A quick escape from a heavy motivated by finding a sense of restoration and escape, we found work schedule after meeting a looming deadline may dictate GLOBAL SEGMENTATION RESEARCH distinct subsegments that fulfilled this motivation either through different needs than would a longer, planned getaway to a new, nature-oriented activities or through pure relaxation (resting and far-away destination. relaxing by the pool).

103 YOLO: Immerse: Recharge: Liberation & Immersion & Harmony & Bond Excitement Perspective Balance

NATURE- RELAXATION- TRIPS TRIPS TRIPS TRIPS FOCUSED FOCUSED NO KIDS WITH KIDS NO KIDS WITH KIDS TRIPS TRIPS

Identifying Key Opportunities Using Trip Motivation to Better

Segmentation is an approach that lets Visit California group Understand Experiences different people or experiences (in the organization’s case, Another insight came into sharper focus through this trip different trips) in order to adequately determine the greatest motivation segmentation, and that is how different activities or areas of opportunity. Opportunity is determined by size and value, experiences appear across trips. Visit California knew from past as well as if there is resonance between what Visit California has research that experience categories seldom completely define to offer and what the consumer is seeking. Based on these factors, a trip. While people occasionally may take a trip based solely Visit California determined that the greatest opportunity for on culinary activities (or outdoor or entertainment), it is much California falls within the first three motivational segments. more common that these experiences are part of an overall trip experience — rather than the key motivator. While Bond trips represent a relatively large segment (34% of trips analyzed), Visit California found that when trips are The Trip Motivation Framework helps Visit California understand motivated by a sense of bonding, the actual destination is not these different experiences across different trip types. In an important driver. Bond trips are twice as likely to stay with essence, the organization’s experience pillars have evolved to family and relatives as a part of their accommodations. California be understood within the Trip Motivation Framework as layers: can still attract some of these trips by appealing to secondary experiences that show up to varying degrees across all trips, motivations, but many of these trips involve families going to the but which have a different look and feel and level of significance same cabin or time-share year after year, and these trips cannot depending on the underlying trip motivation. be easily swayed. Furthermore, Bond-motivated trips are much more common in the U.S. and Mexico, and less prevalent in other international markets.

104 GLOBAL SEGMENTATION RESEARCH You only live once! YOLOLIBERATION & EXCITEMENT YOLO trips are characterized by a desire to live in the moment, let go, be carefree, indulge and embrace life.

When on a YOLO trip, travelers are seeking adventure, exhilaration and spontaneous opportunities that challenge them to try something new. The excitement and energy of large cities that offer a thriving culinary scene with exceptional restaurants, including Michelin-starred, and a plenitude of entertainment experiences, from theme parks to outdoor activities to live events, that make for “Instagram-worthy” vacations where they can “see and be seen” and impress others is highly appealing. Paying more for high-quality hotel or eco-friendly accommodations is often part of a YOLO trip.

Source: SMARInsights, Inc. 2019 Global Segmentation Study

106 YOLO TRAVEL MOTIVATORS:

Gives me a sense of Challenges me to try Allows me to let go and Helps me enjoy life exhilaration something new be completely free to the fullest

TRAVEL ATTITUDES:

SPONTANEOUS LIKE TO SOCIALLY SOCIALLY CHARGED Like to go with INDULGE ON CONSCIOUS MOTIVATED • Seek out

TRIPS excitement and YOLO: LIBERATION & EXCITEMENT the flow • Try to find ways • Want • Worth it to pay more to give back to “insta-worthy” activity for high-grade hotel the community vacations • Choose active accommodations they visit • Want experiences vacations with lots • Pick places with • Look for that impress others to do exceptional eco-friendly • Prefer energy of restaurants or a accommodations larger cities thriving culinary scene

Source: SMARInsights, Inc. 2019 Global Segmentation Study

107 YOLOTravel without kids WHAT THEY 26% 23% REPRESENT: OF TRIPS OF SPEND WHO THEY ARE: More likely to travel with friends: 25%

AGE TRIP TRIP TRIP ROAD GLOBAL 55+: 18-34: LENGTH SPEND PLANNING TRIPS 20% 47% 6.3 $106 40% 27% CANADA PER PERSON/ USED DESTINATION LIKE TAKING 35-54: DAYS PER DAY WEBSITES ROADTRIPS 33% AUSTRALIA CHINA WHAT THEY DO: ENTERTAINMENT CULINARY ACTIVITIES • Nightlife • Wine region or wineries • Hiking • Explore urban city • Michelin-starred restaurant • Biking • Gambling • Microbrewery • View natural scenery • Unique local restaurants • Snow sport activities More likely to be single: 33% Source: SMARInsights, Inc. 2019 Global Segmentation Study 108 YOLOTravel with kids WHAT THEY 7% 8% REPRESENT: OF TRIPS OF SPEND WHO THEY ARE:

AGE TRIP TRIP TRIP ROAD GLOBAL 55+: 18-34: LENGTH SPEND PLANNING TRIPS 7% 36% 5.6 $100 51% 21% PER PERSON/ USED DESTINATION LIKE TAKING CHINA 35-54: DAYS PER DAY WEBSITES ROADTRIPS 57% YOLO: LIBERATION & EXCITEMENT WHAT THEY DO: More likely to have visited CA in the past year: 41% ENTERTAINMENT CULTURE CULINARY ACTIVITIES • Theme/amusement park • Explore city/urban area • Culinary festival • Go to the beach • Zoo/aquarium • Shop at unique local • Unique local • View natural scenery • Famous TV/movie boutiques restaurants • Watersports locations/studios • Adventure activities

Source: SMARInsights, Inc. 2019 Global Segmentation Study

109 IMMERSE IMMERSION & PERSPECTIVE IMMERSE trips are characterized by a desire to live like a local and find enrichment through local culture.

When on an IMMERSE trip, travelers want enriching experiences that allow them to learn about other cultures, and broaden their knowledge and understanding of the world. Memories are shaped by the new people they meet, and the unique and interesting experiences they find along the journey, whether a taste of place through culinary or added dimension through historical sites. The charm and authenticity of small towns is more appealing than touristy, over-developed places, and traveling somewhere different every time they plan a leisure trip is desired. The meaning of culture today has evolved from a functional product place to an experiential place because of this trip motivation segment.

Source: SMARInsights, Inc. 2019 Global Segmentation Study

110 IMMERSE TRAVEL MOTIVATORS:

Broadens my Allows me to immerse Helps me to meet new Provides me with knowledge and enriches myself in local life/ people and create unique and interesting my understanding of culture memories experiences the world

TRAVEL ATTITUDES: IMMERSE: IMMERSION & PERSPECTIVE ENRICHMENT LOCAL UNIQUE • Travel with children to broaden • I hate very touristy and over • I try to go somewhere different their horizon developed places every time I plan a leisure trip • Travel is a great way for me to learn • I don’t want to feel like a tourist during holiday about other cultures when I travel • I seek out one-of-a-kind, new and • I prefer the charm and authenticity authentic travel experiences of small towns

Source: SMARInsights, Inc. 2019 Global Segmentation Study

111 IMMERSETravel without kids WHAT THEY 34% 38% REPRESENT: OF TRIPS OF SPEND WHO THEY ARE: More likely to be couples 54%

AGE TRIP TRIP TRIP ROAD GLOBAL 55+: 18-34: LENGTH SPEND PLANNING TRIPS 35% 36% 7.3 $113 49% 29% CANADA PER PERSON/ USED DESTINATION LIKE TAKING U.K. 35-54: DAYS PER DAY WEBSITES ROADTRIPS 29% Spend the most on travel WHAT THEY DO: CULINARY CULTURE ACTIVITIES • Unique local restaurant • Historical sites • Exploring urban areas • Winery or wine region • Museum, visual arts • Exploring small towns • Farmers market • Heritage family tours • Unique local shopping • Science centers, exploratoriums

Travel with friends 25% Source: SMARInsights, Inc. 2019 Global Segmentation Study 112 IMMERSETravel with kids WHAT THEY 9% 11% REPRESENT: OF TRIPS OF SPEND WHO THEY ARE:

AGE TRIP TRIP TRIP ROAD GLOBAL 55+: 18-34: LENGTH SPEND PLANNING TRIPS 16% 32% 6.2 $107 60% 30% PER PERSON/ USED DESTINATION LIKE TAKING CHINA 35-54: DAYS PER DAY WEBSITES ROADTRIPS

52% IMMERSE: IMMERSION & PERSPECTIVE WHAT THEY DO: Participate in all of CULINARY CULTURE ENTERTAINMENT the activities that • Unique local • Zoo, aquarium • Theme/amusement parks those without kids restaurant • Museum, science • Exploring urban areas do plus... • Winery or center • Performing arts wine region • Historical sites • Live sports • Farmers market

More GenX & Boomers Source: SMARInsights, Inc. 2019 Global Segmentation Study 113 RECHARGE HARMONY & BALANCE RECHARGE trips are driven by JOMO — the joy of missing out — and characterized by the need to escape from everyday stress and take time out to regain control of life.

When on a RECHARGE trip, nature is seen as the new antidote to the pressures of hectic lifestyles, and being outside in nature is the perfect way to practice mindfulness and restore a sense of harmony and balance. Often taking a road trip where off-the-beaten-path destinations, scenery and experiences can be spontaneously enjoyed along the way, people on these trips are also socially conscious and interested in green or eco-friendly accommodations and travel activities that limit the environmental impact during their stay.

Source: SMARInsights, Inc. 2019 Global Segmentation Study

114 RECHARGE Reinforces JOMO Trend TRAVEL MOTIVATOR:

Gives me time out to think and Helps some to escape from regain control of my life everyday stress/pressure and find a sense of relaxation

Restores my sense of Allows me to feel special and harmony and balance spoil myself

Allows me to feel organized and avoid surprises RECHARGE: HARMONY & BALANCE

Source: SMARInsights, Inc. 2019 Global Segmentation Study

115 RECHARGE through nature TRAVEL MOTIVATORS:

WELLNESS SOCIALLY CONSCIOUS THROUGH NATURE • Interested in travel activities that • Immerse myself in nature when limit the environmental impact travel is a form of wellness during the stay • Like to be outside and reconnect/ • Look for green or eco-friendly recharge by being out in nature accommodations when I travel • Mindfulness and well-being • Try to find aysw to give back to the activities are a priority when I travel community I visit

UNIQUE EXPERIENCES SOCIAL • Like taking road trips where I visit • Want to be able to share lots of several destinations “Instagram-worthy” selfies and • Like to be spontaneous when I photos from my vacation travel and go with the flow • Often asked for vacation • Seek out one-of-a-kind experiences travel advice • Often recommends great vacation ideas to others

Source: SMARInsights, Inc. 2019 Global Segmentation Study

116 RECHARGE through nature WHAT THEY 10% 8% REPRESENT: OF TRIPS OF SPEND WHO THEY ARE: 60% travel as couples

AGE TRIP TRIP TRIP ROAD GLOBAL 55+: 18-34: LENGTH SPEND PLANNING TRIPS 13% 51% 6 $105 47% 39% MEXICO PER PERSON/ USED DESTINATION LIKE TAKING CHINA 35-54: DAYS PER DAY WEBSITES ROADTRIPS 36% RECHARGE: HARMONY & BALANCE WHAT THEY DO: Big opportunity ACTIVITIES UNPLUG NATURE CULINARY • Beach, watersports • Wellness • Scenic byways/roads • Farmers markets • Hiking center/spa • View/enjoy • Unique local • Golfing • Personal natural scenery restaurants development • State/national parks • Farm tours/farm trails • Road/trail sports workshop • Farm tours/trails • Michelin-starred restaurants Source: SMARInsights, Inc. 2019 Global Segmentation Study

117 RECHARGE through relaxation They want traditional relaxation, TRAVEL ATTITUDES: with few activities

FLY AND FLOP FAMILIAR NOT PLANNERS • When I go on holiday I only want • Go back to familiar places for • Go on holidays where activities are to eat, drink and lie in the sun holidays planned and organized • I want to completely disconnect • Take holidays in my own country • Want the whole trip planned in and unplug on vacation rather than abroad advance so that they don’t have • The best vacations are restful to make arrangements/decisions and relaxing during travel

Source: SMARInsights, Inc. 2019 Global Segmentation Study

118 RECHARGE through relaxation WHAT THEY 13% 12% REPRESENT: OF TRIPS OF SPEND WHO THEY ARE: 62% travel as couples

AGE TRIP TRIP TRIP ROAD GLOBAL 55+: 18-34: LENGTH SPEND PLANNING TRIPS 24% 38% 6.6 $91 38% 25% USA PER PERSON/ USED DESTINATION LIKE TAKING U.K. 35-54: DAYS PER DAY WEBSITES ROADTRIPS 38% RECHARGE: HARMONY & BALANCE WHAT THEY DO: CHILL ENTERTAINMENT • Visit spa/wellness center • Nightlife • Go to beach • Gambling • View natural scenery • Urban city/area • High-end resort • Shop at unique local shop/district

Source: SMARInsights, Inc. 2019 Global Segmentation Study

119 Objectives & Core Strategies

The Dream Big 2.0 Marketing Work Plan will be guided by objectives and core strategies against brand, NOW NEW NEXT content and trade activity. To ensure Proven cross- New ways to activate Calculated Visit California’s ability to dream channel tactics that the California brand never-been-done and deliver for the industry in the deliver optimal to foster consumer experiments next two-year horizon, programming reach, penetration participation, with emerging investment will be deployed using a and efficiency to engagement and tech, media, Now/New/Next philosophy designed drive program ROI. advocacy, and fuel content and trade to preserve proven ROI approaches platform innovation. platforms and/or while introducing fresh avenues for partners. reach and engagement across paid, owned, earned and trade channels. OBJECTIVES AND CORE STRATEGIES

Cultivate the CORE STRATEGIES STEWARDSHIP 1. Lean into brand attribute strengths IMPLICATION California Brand: that are of high importance to Infuse stewardship and consumers to enhance competitive sustainability attributes Build on the equity performance over time: • A place where you are inspired to into Dream Big 2.0 of the Dream Big dream big. brand storytelling. marketing platform • A place that is fun and free-spirited. to create desire for • A place with a welcoming culture. 2. Add depth and dimension to California travel and brand storytelling, evolving from a concentration in original Dream365TV support DMO and video series to custom, connected industry investments. digital experiences across global platforms. 3. Fuel brand innovation through investment in proven and new OBJECTIVES AND CORE STRATEGIES programming that delivers salient messaging and intersection points with all travelers.

121 OBJECTIVES AND CORE STRATEGIES

Trigger Active CORE STRATEGIES STEWARDSHIP 1. Expand upon the established IMPLICATION Consideration: “California Now” platform by creating Develop messaging to new programs to distribute content inform visitors about Leverage Visit focused on timely and topical news and events through a combination of web, sustainable travel email, social media and audio channels. California’s content practices and choices. 2. Incorpor ate a greater degree of User platforms to engage & industry generated content into global audiences owned content efforts that showcase the state real-time, authentic and and spark a sense of compelling ways. urgency to travel to 3. Identify brand-aligned content partners that can help augment Visit California. California content and provide a new set of distribution channels for existing California content. 4. Utiliz e technology to provide personalized and targeted content to each audience segment. • Enhance Visit California’s website with elements that allow for greater personalization.

122 OBJECTIVES AND CORE STRATEGIES

CORE STRATEGIES STEWARDSHIP Drive Market 1. Infuse California messaging into IMPLICATION local marketing opportunities, Calibrate sustainability Development: events, social buzz and environmental factors to deliver broader reach and messaging to each Develop international deeper connection. market audience and 2. Develop strategic partnerships with leverage partnerships markets through a consumer brands, airlines, travel trade to support visitor companies and California industry to deliberate mix of brand, provide calls-to-action for California management strategies. digital, social, public campaigns and create urgency for consumers to visit California now. relations, trade and 3. Segment the travel trade industry partnership activity in each market to deliver precise marketing that maximizes California to increase reach and product inclusion, content distribution California presence. and California promotion:

• Increase travel agent inspiration OBJECTIVES AND CORE STRATEGIES and education through the STAR online platform. • Create new immersive B2B engagement platforms as part of Visit California’s sales missions. • Use the reach of key partnerships to increase content distribution.

123 Marketing Within a Destination Stewardship Model

Additional threats to the long-term sustainability of the travel and tourism industry have created a need for Visit California’s marketing efforts to incorporate new strategies. A range of new tools and initiatives will be developed as a part of the final Marketing Work Plan, which will be designed to help Visit California meet objectives identified within the Destination Stewardship Plan.

• Incorporate responsible travel ethics throughout marketing materials.

• Develop responsible travel guidelines and policies for social media posts and for influencers.

• Incorporate visitor management strategies into marketing efforts to help smooth visitation into low/shoulder-season time periods.

• Create and promote “new” or alternative icons or destinations to help alleviate visitation pressure from places that are at or past capacity, particularly among domestic and repeat California visitors.

• Leverage and develop the California sustainability ethos as a part of the California brand strategy to position California as a sustainable tourism destination.

These and other strategies will be developed in greater detail as a part of Visit California’s Destination Stewardship Plan, to be unveiled alongside the full FY20/22 Marketing Work Plan at the organization’s May 2020 board meeting. See industry/visitcalifornia.com/stewardship for more details.

124 POET 2.0 At the heart of Visit California’s approach to deploying industry investment is an integrated mix of paid, owned, earned EARNED and travel trade channels that Earned media differs from paid and carry the California travel owned channel content, where Visit brand to consumers around the PAID California directs the messaging. It delivers third-party content across world, providing inspiration a growing landscape that includes and information around the traditional outlets such as newspapers, destination experience. OWNED magazines, TV and radio, along with digital content via online publications, blogs and podcasts and influencer social PAID media channels. Paid media investment supports California EARNED brand-building at the highest level with TRAVEL TRADE broad reach channels complemented by With travel trade, Visit California digital platforms. TRAVEL seeks to influence international travel TRADE intermediaries who continue to play a role OWNED in the consumer booking journey.

Visit California develops and distributes Together with its global constellation of OBJECTIVES AND CORE STRATEGIES a wealth of original content through a agencies, Visit California will continue to robust owned channel ecosystem that deploy paid, owned, earned and travel includes VisitCalifornia.com and a global trade tactics with an increased emphasis suite of websites, print publications, social on synergistic programming that delivers media channels, email and the “California even greater brand impact in the Dream Now” news blog and podcast. Big 2.0 horizon. These plans will be detailed in the forthcoming Marketing Work Plan.

125 Measurement MEASUREMENT Calculating Return on Investment for For FY18/19, Visit California further expanded the return on investment program with the addition of website effectiveness Paid and Owned research, which quantifies the impact of Visit California’s Visit California is a data-driven organization that uses research consumer-facing website: VisitCalifornia.com. Using data collected to inform, adjust and measure the success of its marketing from website visitors, combined with survey results from the efforts. At the heart of Visit California’s measurement efforts is Ad Effectiveness Research program, SMARInsights was able to the ongoing Ad Effectiveness Research program conducted by determine website-influenced incremental spend that differs SMARInsights, Inc. meaningfully from the ad-influenced spend. The methodology is careful to not double count the impact from both the advertising This Ad Effectiveness program uses online surveys of likely and the website, so that the results quantify a total non- travelers across each of the organization’s six brand markets duplicative ROI for both paid and owned efforts. to determine the influence of paid advertising on consumer behavior. The return on advertising spend calculation is a This new website effectiveness research found that $302 million conservative measure of impact that determines the degree to of the $10.98 billion incremental spend Visit California already which consumers who recall Visit California ads visit California measured as a part of the ROAS program was additional trip at a greater rate and spend more than those who do not recall spending influenced by visitation to the website. Because these the ads. This greater rate of travel and spend is “ad-influenced website visitors recalled Visit California advertising, Visit California visitor spending” and is the ultimate measure of the paid doesn’t count this as additional impact, as that spending was advertising program. already captured in the ROAS research. Among those who came to the website and who did NOT recall Visit California advertising, Over the past two years, Visit California has expanded return Visit California research estimates that the website influenced on advertising spend measurement to include key partnership another $726 million in unique incremental spending. This brings programs in addition to the paid media spend. In FY17/18, Visit the domestic impact to $11.71 billion. California measured $1.1 million in partner programs in China, U.K. and Australia, and in FY18/19, $2.3 million in partner programs were measured in Australia, Canada, China and the U.K. MEASUREMENT

127 Total U.S. ROI (paid advertising + website): $11.71 Billion

$14.05 BILLION Unique website- influenced visitor GLOBAL ROAS spending measure via Website Effectiveness $10.98 BILLION research U.S. ROAS $726 MILLION Ad-influenced visitor spending measured via ROAS research

$302 MILLION Ad + Website-influenced spending (already counted in ROAS figure)

Source: SMARInsights, Inc., Ad Effectiveness and Website Effectiveness Research

Integrated Measurement and Analysis

Visit California is continually working to develop new ways to expand measurement and analysis that help to uncover and leverage synergies across the organization’s paid, owned, earned, trade and social marketing efforts. To deliver these insights, Visit California launched its Strategic Data Initiative to bring the organization’s many data inputs from its many partner vendors in-house to allow for cross-programming analytics. These efforts will help Visit California to further increase efficiencies not just within each program, but across the full breadth of the organization’s efforts.

128 Reassessing Earned Media Measurement

In the face of new technologies, changing consumer habits, an evolving media landscape and historically low levels of trust in institutions, public relations has become a more essential tool that can (and should) be more precisely targeted than ever before.

Visit California’s global earned media program has maintained two traditional approaches to measuring earned media successes. The first is reach, derived from impressions, circulation and viewership audiences for broadcast, such as television and radio. The second, advertising value equivalent, is a method used to compare the value of an earned placement to what a similar paid placement would cost. A clear flaw in this approach is that there are no standard rates for advertising value.

Public relations practitioners have shifted focus to qualitative characteristics that move beyond arbitrary measurements, giving way to models such as the “Barcelona Principles” that stipulate marketers should instead consider messaging and visuals to score the value of earned media.

Measuring quantitative success against a chaotic media landscape means relying on inaccurate metrics, while qualitative measurement risks impartiality given increasing manual tasks to dissect earned media placements to ascertain the qualities of a given placement against predefined criteria.

Visit California’s new approach is a more accurate and meaningful way to measure earned media progress — which will also be key for a more holistic, integrated measurement process for the entire marketing program of work. In the next generation of earned media measurement, Visit California will begin measuring media coverage through three lenses: quantitative, MEASUREMENT qualitative and competitive.

129 Data and Consumer Insights Inform Quantitative Impact

Accurately measuring reach for earned media necessitates moving away from self-reported media valuations. Leveraging data fed by Alexa Web Rankings, Visit California will arrive at an “opportunity to see” score for placements by understanding the actual reach for a media outlet at any given time based on verifiable data. Web rankings quantify each outlet’s current period to determine reach, a better depiction of the audience that had the opportunity to see the article versus a standard subscription or circulation figure that remains static.

Leveraging owned channels such as VisitCalifornia.com and measuring consumer traffic and engagement derived from digital earned media placements will also allow the organization to better understand how consumers are introduced to the Visit California consumer journey, and what placements are most effective at moving the needle on consumer engagement.

Visit California will continue to report the total number of placements placed by market — counting only the proactive and reactive work the global team undertook to secure a placement, from hosting media in the state to providing research, interviews and other assets. Counting each placement also provides context for how the program is performing month to month, or year-over-year.

130 Media Quality Informs Qualitative Ensuring a balanced approach requires an assessment of earned media, where information that detracts from Visit California’s Increasingly, Visit California is narrowing the focus of earned media goals is also considered. measurement to assess success against qualitative benchmarks While the approach inherently introduces a qualitative overlay to that focus on the quality, depth and desirability of messaging an assessment-based approach, the use of a third-party auditor delivered in a media placement against audiences that are most ensures minimal subjectivity or bias in scoring. In short, this likely to convert. approach valuates secured coverage on whether or not a specific A media quality index allows Visit California to focus on piece of earned media coverage is helping to move the needle driving consumers into consideration by ensuring messages — or push a reader toward actually booking a trip or otherwise bolster experience pillars, promote a sense of urgency and follow a call to action. are delivered in outlets that have been vetted and targeted as strategic priorities. This approach is counter to a sheer volume- based approach, applying a qualitative overlay that reflects organizational priorities.

VOLUME OF COVERAGE VS. QUALITY TOP 7 PUBLICATIONS FEBRUARY 2017

700 6.00 AVERAGE OF QUALITY PUBLICATION COUNT OF ITEMS 600 5.00 SCORE

500 4.00 Washington Post 21 3.80 400 3.00 New York Times 20 5.00 300 2.00 200 USA Today 15 3.93 1.00 100 Huffington Post 14 3.93 0 0.00 Variety 13 4.40 JUL JUL SEP SEP FEB FEB JUN JAN JAN APR DEC DEC OCT OCT MAY AUG AUG NOV NOV MAR Broadway World 13 7.17 2015 2016 2017 Laughing Squid 13 5.37 Number of Items Average of Quality Index MEASUREMENT

Source: Visit California Media Quality Index

131 Introducing Competitive Benchmarking VISIT CALIFORNIA MEDIA IMPACT SCORE

An additional layer of quantitative measurement will come in the PERFECT 10 CRITERIA SCORE WORST NIGHTMARE SCORE form of share of voice measurement, which seeks to assess Visit California’s media reach compared with competing state and Story includes at least 1.0 Negative sentiment/ -2.5 one pillar/priority opposite of international tourism destinations. message key message (homelessness, While Visit California has always engaged in a robust media crowding/overtourism) monitoring program, implementing a universal dashboard approach will allow the organization to track how the California Item in a most wanted 1.0 media outlet brand is faring in the media at any given point in time, and especially over time. The goal is to measure how competitive Story is a feature that 2.5 California and its destination partners are seasonally, general only includes California consumer sentiment and how well Visit California is performing destinations against key messages that resonate most. Call to action (to the 0.5 Recommends other -1.0 VCA website, social places to visit and channels, guides or explore over California other owned channel)

Gives the reader 3.0 Discourages travel to -3.5 a reason to visit California (urgency) or explore (beyond the gateways) (crisis)

Contains a desirable 1.0 Contains an -1.5 visual undesirable visual

(Wildfire, dirty city, the homeless, crowds, etc.)

Desirable headline 1.0 Negative headline -1.5 mention mention

TOTAL 10.0 TOTAL -10.0

132 MEASUREMENT

133 Evaluating the Success of Visit California’s Travel Trade Strategy

Historically, Visit California has measured product exposure in international markets by evaluating the California product and content pages within the travel brochures of in-market tour operators and agents. In recent years, the number of printed travel brochures produced by operators has either diminished or reduced in frequency with many tour operators shifting their promotional content to digital channels. As a result, continuing to measure only the destinations and products featured in printed brochures no longer provides a fair and comprehensive representation of California product being presented to the consumer via the travel trade.

Visit California has identified a new platform that promises to provide extensive analysis of not only the product and content distributed on digital platforms of more than 250 global tour operators and the products’ own digital channels, but also track the manner in which the customer engages with it throughout their research and booking journey. The product covered by this platform includes all accommodation, tours, activities and events, and can be extended to cover restaurants and ground transportation. Further evaluation and testing of capabilities is a core priority of the Visit California trade strategy, with a view to providing a comprehensive overview of travel trade product distribution in core trade markets in 2020.

134 Marketing Allocation

135 MARKETING ALLOCATION Thanks to Visit California’s 10-plus-year history of consistent These quantitative data tools are further enhanced by local market evaluation of its paid advertising program through ad intelligence and insights from Visit California’s 19 international effectiveness and return on advertising spend research, Visit offices in 14 countries. California is able to use this historical database of ROAS Visit California uses this library of market intelligence to measurement to model different spending scenarios for current classify global markets into three distinct categories. In order brand markets. of investment level, the three segments and the respective Visit California further supplements this internal market allocation markets are: model with a comprehensive analysis of market potential for all 15 • Brand: United States, Canada, China, Mexico, United Kingdom, global markets where Visit California currently invests. The relative Australia description of market potential is assessed across 12 components in four separate categories: • Digital: Japan, South Korea, Brazil • Trade: France, Germany, India, Italy, Scandinavia, Middle East

CATEGORY COMPONENT In each market, the foundational disciplines of travel trade, earned media and owned content strategies are employed. Digital and Opportunity Travel market size Brand layers are added on as markets mature or grow in visitation Country size value or potential. Trade markets primarily focus on product development. In Digital markets, hand-picked digital channels are Market growth utilized to foster awareness and demand. Brand markets require Headroom a consistent presence across multiple paid advertising channels Sentiment (e.g., linear/digital TV, out-of-home, digital/social platforms) Propensity for California to remain competitive and are allocated with the Alignment highest levels of investment. Purchasing power Value Visit California continually evaluates potential and risk across Visitor value markets, as well as monitors the larger prevailing economic Affordability and travel landscape forces in order to determine the best marketing allocation. Working closely with its committee and Market presence board leadership, Visit California has the flexibility to recommend Constraints Risk proactive adjustments during changing conditions, such as the reallocation of a portion of global investment to the domestic Accessibility market in light of slowing international travel patterns in mid-2019.

Source: Tourism Economics Market Potential Platform

136 FY19/20 GLOBAL MARKETING ALLOCATION FY 19/20 Global Market Allocation

Brand

Digital

Trade MARKETING ALLOCATION

137 Market Snapshots MARKET SNAPSHOT: UNITED STATES 39.7 Million Travelers DOMESTIC VACATION PAST YEAR, TOP 25% HHI 50%/50% 6% 27% 46% 21% MALE/FEMALE50%/50% 6% 27% 46% 21% 50%/50%MALE/FEMALE GEN Z MILLENNIAL GEN X BOOM ERS MALE/FEMALE 18-22 GEN Z 23-36MILLENNIAL 37-55 GEN X 56-64BOOMBOOMERS ERS 1818-22-22 2323-36-36 3737-55-55 5656-64-64

73%/15% MARRIED/SINGLE73%/15% 73%/15%MARRIED/SINGLE 55% PURCHASED DOMESTIC DOMESTIC VACATION VACATION LAST 3- 6LAST MOS. 3-6 MOS. MARRIED/SINGLE 55% 49% PLAN55% TO PURCHASED PURCHASE DOMESTIC VACATIONNEXTVACATION LAST 33--66 MOS.MOS. 49% PLAN TO PURCHASE DOMESTIC VACATION NEXT 3-6 MOS. 13% 77% 69% RENTED49% PLAN A CAR TO PURCHASE DOMESTIC VACATIONNEXT 3-6 MOS. 13% 10% 77% 10% 69%92% RENTEDSTAYED69% RENTED IN A A CARHOTEL A CAR 42% 92% STAYED IN A HOTEL 92%53% STAYEDSTAYED IN IN RENTED A HOTEL ACCOMODATIONS (AIRBNB) CHILDREN IN 42%HH 53% STAYED IN RENTED ACCOMODATIONS (AIRBNB) CHILDREN IN HH 42% 53% STAYED IN RENTED ACCOMMODATIONS (AIRBNB) CHILDREN IN HH

35%/28% TOP 10 INTERESTS COLLEGE DEGREE/35%/28% TOPTOP 10 10 INTERESTS INTERESTS POST GRADUATE 13% 35%/28%COLLEGE DEGREE/ COLLEGEPOST DEGREE/ GRADUATE 13%33%

POST-GRADUATE 55%

33% 60% 55% 60% 60%

$ 49% 54% 68% 53% 55%

54% 68%

$ 51% 53% 60% 54% 54% TOP 25% 53% 68% 51%

54% 68% 51% $85K+ USD 60% TOP 25% 60% TOP 25% 64% URBAN SUBURBAN RURAL $85K+ USD 64% 64% TRAVEL COOKING TV MUSIC EATING OUT 68% OUT EATING & FITNESS EXERCISE FOOD & DRINK FOOD LIVE EVENTS 49% EVENTS LIVE MOVIES Source: Global Web Index AFFAIRS NEWS/C. URBAN SUBURBAN RURAL $85K+ USD TRAVEL COOKING TV MUSIC EATING OUT 68% OUT EATING & FITNESS EXERCISE FOOD & DRINK FOOD EATING OUT EATING TRAVEL TV & DRINK FOOD MUSIC NEWS/ C. AFFAIRS COOKING & FITNESS EXERCISE MOVIES LIVE EVENTS Base: A18-64 49% EVENTS LIVE MOVIES Source:Source: GlobalWebIndex Global Web Index AFFAIRS NEWS/C. Base:Base: A18-64 A18-64

MARKET PROFILE LEISURE TRAVELER PROFILE 82% of Total $116.941B CA RESIDENTS SHORT-HAUL MARKETS LONG-HAUL MARKETS 2019 P VISITOR SPENDING 77% of Total 12% of Total 11% of Total $136.826B MARKET SNAPSHOTS 2023 F SPENDING 1.8 32% 4.0 38% 5.1 35% AVERAGE LENGTH TRAVEL WITH AVERAGE LENGTH TRAVEL WITH AVERAGE LENGTH TRAVEL WITH OF STAY CHILDREN OF STAY CHILDREN OF STAY CHILDREN 12.6% (CALIFORNIA NIGHTS) (CALIFORNIA NIGHTS) (CALIFORNIA NIGHTS) 2018 MARKET SHARE (U.S. SPEND) $520 $950 $1,540 PER TRIP SPEND PER TRIP SPEND PER TRIP SPEND

Sources: Tourism Economics; OmniTrak Group Inc. (TravelTrakAmerica) 139 MARKET SNAPSHOT: CANADA 4.4 Million Travelers MEDIUM/LONG HAUL VACATION ABROAD, TOP 25% HHI 54%/46% 6% 28% 47% 19% MALE/FEMALE54%/46% 6% 28% 47% 19% 54%/46%MALE/FEMALE MALE/FEMALE GEN Z MILLENNIAL GEN X BOOM ERS 18-22 GEN Z 23-36MILLENNIAL 37-55 GEN X 56-64BOOMBOOMERS ERS 1818-22-22 2323-36-36 3737-55-55 5656-64-64

62%/17% MARRIED/SINGLE62%/17% 62%/17%MARRIED/SINGLE 38%38% PURCHASEDPURCHASED TRIP TRIP ABROAD ABROAD LAST 3- 6LAST MOS. 3-6 MOS. MARRIED/SINGLE 38% PURCHASED TRIP ABROAD LAST 3-6 MOS. 36% PLAN TO PURCHASE TRIP ABROAD NEXT 3-6 MOS. 36% PLAN36% PLANTO PURCHASE TO PURCHASE TRIP TRIP ABROAD ABROAD NEXT NEXT 3-6 3-6 MOS. MOS. 46% RENTED A CAR 46% RENTED A CAR 46%82% STAYEDRENTED IN AA HOTEL CAR 82% STAYED IN A HOTEL 11% 1% 46% 82%40% STAYEDSTAYED IN INRENTED A HOTEL ACCOMODATIONS (AIRBNB) 11% 1% CHILDREN IN 46%HH 40% STAYED IN RENTED ACCOMODATIONS (AIRBNB) 13% 3% CHILDREN IN HH 13% 3% 20% 46% 40% STAYED IN RENTED ACCOMMODATIONS (AIRBNB) 3% 20% CHILDREN IN HH 3% 44% 1% 44% 3%1% 3% TOP 10 INTERESTS 37%/22% TOPTOP 10 10 INTERESTS INTERESTS COLLEGE DEGREE/37%/22% POST37%/22% GRADUATECOLLEGE DEGREE/ 13% POST GRADUATE 13% COLLEGE DEGREE/ POST-GRADUATE

47% 59%

47% 59% 67% 51% $ 67% 67% 62%

40% 51% 59%

$ 62% 51% 62% 62% 72%

40% 51% 52% 65%

TOP 25% 62% 72% 62% 72% 52% 52% 65% 65% 80K+ CADTOP = 25% 51%

TOP 25% 67% 80K+ CAD = 51% $60.8K+ US & FITNESS 67% URBAN SUBURBAN RURAL 67% LIVE EVENTS TRAVEL MOVIES COOKING BOOKS EXERCISE FITNESS & FITNESS $60.8K+ US TV MUSIC Source: Global Web Index URBAN SUBURBAN RURAL $80K+ CAD = OUT EATING LIVE EVENTS TRAVEL MOVIES COOKING BOOKS EXERCISE TV MUSIC NEWS/C. AFFAIRS NEWS/C. TRAVEL TRAVEL TV OUT EATING MUSIC MOVIES COOKING NEWS/ C. AFFAIRS BOOKS LIVE EVENTS & FITNESS EXERCISE Base:Source: A18Source:-64 GlobalWebIndex Global Web Index OUT EATING $60.8K+ U.S. AFFAIRS NEWS/C. Base:Base: A18-64 A18-64

MARKET PROFILE AIRLIFT LEISURE TRAVELER PROFILE AVERAGE PLANNING TIME FRAME $3.163B 433 70% of Total 2019 P VISITOR SPENDING WEEKLY NONSTOP FLIGHTS 3-4 10.6 38% MONTHS $3.711B 62,000 AVERAGE LENGTH OF STAY TRAVEL WITH 2023 F SPENDING WEEKLY NONSTOP SEATS (CALIFORNIA NIGHTS) CHILDREN

15.8% 8 NONSTOP ENTRY POINTS $1,790 2018 MARKET SHARE LOS ANGELES ORANGE COUNTY PER TRIP SPEND (U.S. SPEND) PALM SPRINGS SACRAMENTO SAN DIEGO SAN FRANCISCO SAN JOSE VICTORVILLE Sources: DIIO; Tourism Economics; CIC Research; Travel Market Insights (XBorder Canada) 140 MARKET SNAPSHOT: MEXICO 9.6 Million Travelers MEDIUM/LONG HAUL VACATION ABROAD, TOP 25% HHI 55%/45% 12% 48% 32% 7% MALE/FEMALE55%/45% 12% 48% 32% 7% 55%/45%MALE/FEMALE GEN Z MILLENNIAL GEN X BOOM ERS MALE/FEMALE 18-22 GEN Z 23-36MILLENNIAL 37-55 GEN X 56-64BOOMBOOMERS ERS 1818-22-22 2323-36-36 3737-55-55 5656-64-64

60%/21% 20% MARRIED/SINGLE60%/21% 20% 60%/21%MARRIED/SINGLE 46% PURCHASEDPURCHASED TRIP TRIP ABROAD ABROAD LAST 3- 6LAST MOS. 3-6 MOS. 3% MARRIED/SINGLE 46% 3% 40% PLAN46% TO PURCHASED PURCHASE TRIP ABROAD NEXTLAST 33--66 MOS.MOS. Estado de Mexico 40% PLAN TO PURCHASE TRIP ABROAD NEXT 3-6 MOS. 57% RENTED40% PLAN A CAR TO PURCHASE TRIP ABROAD NEXT 3-6 MOS. 13%Estado de Mexico STAYEDRENTED57% RENTED IN A HOTEL CAR A CAR Distrito13% Federal 57%90% 3% 90% STAYED IN A HOTEL 26%Distrito Federal 67% 59% STAYED IN RENTED ACCOMODATIONS (AIRBNB) 3% 90% STAYED IN A HOTEL 26% CHILDREN IN 67%HH 59% STAYED IN RENTED ACCOMODATIONS (AIRBNB) 19% CHILDREN IN HH 10% 67% 59% STAYED IN RENTED ACCOMMODATIONS (AIRBNB) 19% CHILDREN IN HH 10% 7% 7% 46%/14% TOP 10 INTERESTS COLLEGE DEGREE/ TOPTOP 10 10 INTERESTS INTERESTS 2% 46%/14% POST GRADUATECOLLEGE DEGREE/ 9%2% 46%/14% 9% COLLEGEPOST DEGREE/ GRADUATE POST-GRADUATE 65% 77% 65% 74% 77% 77% $ 65% 74% 65% 74% 83% 63% 89% $ 73% 77% 65% 65% 64% TOP 25% 63% PERSONAL PERSONAL 64% 83% 64% 64% 73% 63% 83% 89% 73% 300K+ MXN = 77% 64% TOP 25% 77% PERSONAL PERSONAL HEALTHCARE 64%

$15.4K+TOP US25% PLAYING URBAN SUBURBAN RURAL 300K+ MXN = & DRINK FOOD

URBAN SUBURBAN RURAL TECHNOLOGY EATING OUT EATING MOVIES TRAVEL COOKING FOODS HEALTH SPORTS MUSIC HEALTHCARE

Source: Global Web Index $15.4K+ US PLAYING $300K+ MXN = & DRINK FOOD

URBAN SUBURBAN RURAL TECHNOLOGY EATING OUT EATING MOVIES TRAVEL COOKING FOODS HEALTH SPORTS MUSIC MOVIES MOVIES MUSIC TECHNOLOGY OUT EATING TRAVEL COOKING PERSONAL HEALTHCARE HEALTH FOODS PLAYING SPORTS Base:Source: A18Source:-64 GlobalWebIndex Global Web Index $15.4K+ U.S. & FOOD DRINK Base:Base: A18-64 A18-64

MARKET PROFILE AIRLIFT LEISURE TRAVELER PROFILE AVERAGE PLANNING TIME FRAME $866M 518 84% of Total 2019 P VISITOR SPENDING WEEKLY NONSTOP FLIGHTS 2-3 MONTHS $985M 84,000 9.8 1.9 MARKET SNAPSHOTS AVERAGE LENGTH OF STAY DESTINATIONS 2023 F SPENDING WEEKLY NONSTOP SEATS (CALIFORNIA NIGHTS) VISITED AVERAGE BOOKING TIME FRAME 17.0% 9 NONSTOP ENTRY POINTS $1,560 14% 2018 MARKET SHARE FRESNO 1-2 PER TRIP SPEND TRAVEL WITH (U.S. SPEND) LOS ANGELES MONTHS OAKLAND CHILDREN ONTARIO ORANGE COUNTY SACRAMENTO Sources: DIIO; Tourism Economics; U.S. Dept. of Commerce, National Travel SAN DIEGO and Tourism Office, “Survey of International Air Travelers”, CIC Research SAN FRANCISCO SAN JOSE 141 MARKET SNAPSHOT: UNITED KINGDOM 8.3 Million Travelers MEDIUM/LONG HAUL VACATION ABROAD, TOP 25% HHI 50%/50% 50%/50% 8% 8% 34% 34% 45% 45% 14% 14% MALE/FEMALE50%/50%MALE/FEMALE MALE/FEMALE GEN Z GEN ZMILLENNIALMILLENNIALGEN X GEN XBOOM ERSBOOMBOOMERS ERS 18-22 1818-22-22 23-36 2323-36-36 37-55 37-55 56-64 56-64 1. SCOTLAND1. SCOTLAND 37-55 56-64 6% 6% 2. N. IRELAND2. N. IRELAND 1% 1% 4. NORTH4. EAST NORTH EAST 63%/16% 3% 63%/16% 3% MARRIED/SINGLE63%/16%MARRIED/SINGLE 42% PURCHASED TRIP ABROAD LAST 3-6 MOS. MARRIED/SINGLE 42% PURCHASEDPURCHASED TRIP ABROAD TRIP ABROAD LAST 3-6 LASTMOS. 3-6 MOS. 5. NORTH5. WEST NORTH WEST 6. YORKSHIRE6. YORKSHIRE & HUMBER & HUMBER 42% 9% 9% 5% 5% 35% PLAN PLAN35% TO TOPLAN PURCHASE PURCHASE TO PURCHASE TRIP ABROAD TRIP TRIP ABROAD ABROAD NEXT 3-6 NEXT MOS.NEXT 3 - 63-6 MOS. MOS. 8. EAST MIDLAND8. EAST MIDLAND 52% RENTED52% ARENTED CAR A CAR 6% 6% 52% RENTED A CAR 3. WALES3. WALES 91% STAYED91% INSTAYED A HOTEL IN A HOTEL 11. EAST11. OF EASTENGLAND OF ENGLAND 3% 3% 48% 91% STAYED IN A HOTEL 7% 7% 48% 53% STAYED53% INSTAYED RENTED IN ACCOMODATIONSRENTED ACCOMODATIONS (AIRBNB) (AIRBNB) 12. GREATER LONDON CHILDRENCHILDREN IN48% HH IN HH 7. WEST 7.MIDLANDS WEST MIDLANDS 12. GREATER LONDON 53% STAYED IN RENTED ACCOMMODATIONS (AIRBNB) 30% CHILDREN IN HH 5% 5% 30% 10. SOUTH10. EAST SOUTH EAST 9. SOUTH9. WEST SOUTH WEST 17% 17% 7% TOP 10 INTERESTS 7% 41%/25%41%/25% TOPTOP 10 10 INTERESTS INTERESTS COLLEGE41%/25%COLLEGE DEGREE/ DEGREE/ POST GRADUATE 17% COLLEGEPOST DEGREE/ GRADUATE 17% POST-GRADUATE … 42% 42% … 68%

$ 60% 51% $ 56% 51% 56% 56% 51% 52%

41% 65% 67% 52%

41% 65% 67% 65% 67% 63% 52%

TOP 25% 63% 63%

TOP 25% 55% 55% 48K+TOP GBP48K+ =25% GBP = 55% 65% 65% 65% $59.1K+ US & FITNESS FITNESS & FITNESS URBAN SUBURBAN RURAL $59.1K+ US BOOKS URBAN SUBURBAN RURAL AFFAIRS NEWS/C. $48K+ GBP = BOOKS EATING OUT 68% OUT EATING NEWS/C. AFFAIRS NEWS/C.

URBAN SUBURBAN RURAL TRAVEL MOVIES COOKING EXERCISE TV MUSIC TECH EATING OUT 68% OUT EATING TRAVEL MOVIES COOKING EXERCISE TV MUSIC TECH Source:Source: GlobalSource: GlobalWebIndex Web Global Index Web Index $59.1K+ U.S. OUT EATING TRAVEL TV MOVIES MUSIC NEWS/ C. AFFAIRS COOKING TECH BOOKS & FITNESS EXERCISE Base:Base: A18Base:-64 A18-64 A18-64

MARKET PROFILE AIRLIFT LEISURE TRAVELER PROFILE AVERAGE PLANNING TIME FRAME $1.423B 130 81% of Total 2019 P VISITOR SPENDING WEEKLY NONSTOP FLIGHTS 5-6 MONTHS $1.586B 39,000 10.3 3.5 AVERAGE LENGTH OF STAY DESTINATIONS 2023 F SPENDING WEEKLY NONSTOP SEATS (CALIFORNIA NIGHTS) VISITED AVERAGE BOOKING TIME FRAME 11.9% 5 NONSTOP ENTRY POINTS $1,890 12% 2018 MARKET SHARE LOS ANGELES 4-5 OAKLAND PER TRIP SPEND TRAVEL WITH (U.S. SPEND) SAN DIEGO CHILDREN MONTHS SAN FRANCISCO SAN JOSE

Sources: DIIO; Tourism Economics; U.S. Dept. of Commerce, National Travel and Tourism Office, “Survey of International Air Travelers”, CIC Research 142 MARKET SNAPSHOT: AUSTRALIA 2.9 Million Travelers MEDIUM/LONG HAUL VACATION ABROAD, TOP 25% HHI 57%/43% 6% 32% 47% 15% MALE/FEMALE57%/43% 6% 32% 47% 15% 57%/43%MALE/FEMALE MALE/FEMALE GEN Z MILLENNIAL GEN X BOOM ERS 18-22 GEN Z 23-36MILLENNIAL37-55 GEN X 56-64 BOOMBOOMERS ERS 1818-22-22 2323-36-36 3737-55-55 5656-64-64

62%/17% MARRIED/SINGLE62%/17% 62%/17%MARRIED/SINGLE 47%47% PURCHASED PURCHASED TRIP TRIPABROAD ABROAD LAST 3-6 LAST MOS. 3-6 MOS. 1% MARRIED/SINGLE 47% PURCHASED TRIP ABROAD LAST 3-6 MOS. 1% 40% PLAN TO PURCHASE TRIP ABROAD NEXT 3-6 MOS. 40% 40%PLAN PLAN TO PURCHASE TO PURCHASE TRIP TRIP ABROAD NEXT NEXT 3-6 MOS.3-6 MOS. 19% 46% RENTED A CAR 19% 46% RENTED A CAR 9% 82%46% STAYED RENTED IN A AHOTEL CAR 9% 82% STAYED IN A HOTEL 45% 47%82% STAYED STAYED IN RENTED IN A HOTEL ACCOMODATIONS (AIRBNB) 6% 33% CHILDREN IN HH45% 47% STAYED IN RENTED ACCOMODATIONS (AIRBNB) 6% 33% CHILDREN IN HH 45% 47% STAYED IN RENTED ACCOMMODATIONS (AIRBNB) CHILDREN IN HH 3% 29% 3% 29% TOP 10 INTERESTS 40%/20% TOPTOP 10 10 INTERESTS INTERESTS COLLEGE DEGREE/40%/20% 7% POST40%/20% GRADUATECOLLEGE DEGREE/ 7% COLLEGEPOST DEGREE/ GRADUATE 28% 2% POST-GRADUATE 65% 65%

28% 2% 65% 65% 65%

$ 71% 52% 53% 59% 65%

$ 65% 52% 53% 53% 59% 52% 59% 65% 69% 63%

TOP 25% 65% 69% 65%

65% 69% 63% 100K+ AUDTOP = 25% 63% TOP 25% 67%

100K+ AUD = & FITNESS

$68.6K+ US 67% 67% NEWS/C. AFFAIRS NEWS/C. URBAN SUBURBAN RURAL & DRINK FOOD TV EXERCISE FITNESS & FITNESS EATING OUT 71% OUT EATING MUSIC $100K+$68.6K+ AUD US = TRAVEL MOVIES COOKING WILD LIFE NEWS/C. AFFAIRS NEWS/C. Source: Global Web Index URBAN SUBURBAN RURAL & DRINK FOOD TV EXERCISE EATING OUT 71% OUT EATING MUSIC TRAVEL MOVIES COOKING WILD LIFE Base:Source: A18Source:-64 GlobalWebIndex Global Web Index $68.6K+ U.S. OUT EATING TRAVEL TV MOVIES NEWS/ C. AFFAIRS & DRINK FOOD MUSIC COOKING & FITNESS EXERCISE WILDLIFE Base:Base: A18-64 A18-64

MARKET PROFILE AIRLIFT LEISURE TRAVELER PROFILE AVERAGE PLANNING TIME FRAME $1.288B 87 88% of Total 2019 P VISITOR SPENDING WEEKLY NONSTOP FLIGHTS 5-6 MONTHS $1.435B 28,000 9.2 3.8 MARKET SNAPSHOTS AVERAGE LENGTH OF STAY DESTINATIONS 2023 F SPENDING WEEKLY NONSTOP SEATS (CALIFORNIA NIGHTS) VISITED AVERAGE BOOKING TIME FRAME 25.7% 2 NONSTOP ENTRY POINTS LOS ANGELES $2,080 18% 2018 MARKET SHARE 4-5 SAN FRANCISCO PER TRIP SPEND TRAVEL WITH (U.S. SPEND) CHILDREN MONTHS

Sources: DIIO; Tourism Economics; U.S. Dept. of Commerce, National Travel and Tourism Office, “Survey of International Air Travelers”, CIC Research 143 MARKET SNAPSHOT: CHINA 138.8 Million Travelers MEDIUM/LONG HAUL VACATION ABROAD, TOP 25% HHI

51%/49%51%/49% 7% 7% 47% 47% 41% 41% 5% 5% MALE/FEMALE51%/49%MALE/FEMALE MALE/FEMALE GEN Z GENMILLENNIAL Z MILLENNIALGEN X GENBOOM X ERSBOOMBOOMERS ERS 18-22 1818-22-22 23-36 2323-36-36 37-55 3737-55-5556-64 5656-64-64

74%/21%74%/21% MARRIED/SINGLE74%/21%MARRIED/SINGLE 44% PURCHASED TRIP ABROAD LAST 3-6 MOS. MARRIED/SINGLE 44% PURCHASED44% PURCHASED TRIP ABROAD TRIP LAST ABROAD 3-6 MOS. LAST 3-6 MOS. 39% PLAN TO PURCHASE TRIP ABROAD NEXT 3-6 MOS. 39% PLAN39% TO PURCHASE PLAN TO TRIPPURCHASE ABROAD TRIP NEXT ABROAD 3-6 MOS. NEXT 3-6 MOS. RENTED A CAR 76%76% RENTED 76% A CAR RENTED A CAR 93% STAYEDSTAYED93% IN A STAYED HOTEL IN A INHOTEL A HOTEL Shanghai Shanghai 93% 12% 12% 58% 58% 80% STAYED80% IN RENTED STAYED ACCOMODATIONSIN RENTED ACCOMODATIONS (AIRBNB) (AIRBNB) CHILDREN INCHILDREN HH58% IN HH 80% STAYED IN RENTED ACCOMMODATIONS (AIRBNB) CHILDREN IN HH

TOP 10 INTERESTS TOP 10 INTERESTSTOP 10 INTERESTS 25%/7%25%/7% COLLEGE 25%/7%DEGREE/COLLEGE DEGREE/ 1% 1% POSTCOLLEGE GRADUATEPOST DEGREE/ GRADUATE 46% 7% 7% POST-GRADUATE 46% 15%

15% 43% 43% 41%

35% 43% 41% 43% 35% 43% 10% 10% 41%

7% 7% 43% $ $ 46% 39% 39% 39% 46% 47% 46% 46% 47% 47% 40% 40% 42% 32% 40% 32% 42% TOP 25% TOP 25% 42% 39% 39% 92% 92% 39% 240K+RMB=TOP240K+RMB= 25% $33.7K+$240K+ US $33.7K+ RMB US = FOOD & DRINK FOOD CARS TRAVEL MOVIES BOOKS COOKING MUSIC FITNESS & EXERCISE FITNESS FOOD & DRINK FOOD CARS TRAVEL TRAVEL MOVIES & FITNESS EXERCISE NEWS/ C. AFFAIRS & DRINL FOOD MUSIC FOODS HEALTH BOOKS CARS COOKING TRAVEL MOVIES BOOKS COOKING MUSIC NEWS/C. AFFAIRS NEWS/C. HEALTH FOODS HEALTH TIER 1 TIER 2 TIER 3 & EXERCISE FITNESS NEWS/C. AFFAIRS NEWS/C. TIER 1 TIER 2 TIER 3 FOODS HEALTH TIER 1 TIER 2 TIER 3 URBAN URBANSUBURBANSUBURBANRURAL RURAL $33.7K+ U.S. TIER 4 TIER TIER4 5 &<&

MARKET PROFILE AIRLIFT LEISURE TRAVELER PROFILE AVERAGE PLANNING TIME FRAME $4.015B 149 59% of Total 2019 P VISITOR SPENDING WEEKLY NONSTOP FLIGHTS 2-3 MONTHS $5.025B 45,000 14.0 2.9 AVERAGE LENGTH OF STAY DESTINATIONS 2023 F SPENDING WEEKLY NONSTOP SEATS (CALIFORNIA NIGHTS) VISITED AVERAGE BOOKING TIME FRAME 37.1% 3 NONSTOP ENTRY POINTS $2,220 19% LOS ANGELES 2018 MARKET SHARE 1-2 SAN FRANCISCO PER TRIP SPEND TRAVEL WITH (U.S. SPEND) SAN JOSE CHILDREN MONTHS

Sources: DIIO; Tourism Economics; U.S. Dept. of Commerce, National Travel and Tourism Office, “Survey of International Air Travelers”, CIC Research 144 MARKET SNAPSHOT: JAPAN 7.2 Million Travelers MEDIUM/LONG HAUL VACATION ABROAD, TOP 25% HHI 57%/43% 4% 26% 49% 21% MALE/FEMALE 57%/43% 4% 26% 49% 21% 57%/43%MALE/FEMALE GEN Z MILLENNIAL GEN X BOOM ERS 18-22 23-36 37-55 56-64 MALE/FEMALE GEN Z MILLENNIAL GEN X BOOMBOOMERS ERS 2% 1818-22-22 2323-36-36 3737-55-55 5656-64-64

2% 68%/24% MARRIED/SINGLE 68%/24% 57% PURCHASED TRIP ABROAD LAST 3-6 MOS. 68%/24%MARRIED/SINGLE 57%51% PURCHASEDPLAN TO PURCHASE TRIP TRIP ABROAD ABROAD LAST NEXT 33-6-6 MOS. MOS. 5% MARRIED/SINGLE 57% PURCHASED TRIP ABROAD LAST 3-6 MOS. 43% RENTED51% PLAN A CAR TO PURCHASE TRIP ABROAD NEXT 3-6 MOS. 5% 51% PLAN TO PURCHASE TRIP ABROAD NEXT 3-6 MOS. 54% 89% STAYED43% RENTED IN A HOTEL A CAR 43% RENTED A CAR 22% STAYED IN RENTED ACCOMODATIONS (AIRBNB) 54% 42% 89% STAYED IN A HOTEL 3% 13% CHILDREN IN HH 89% STAYED22% STAYED IN A HOTELIN RENTED ACCOMODATIONS (AIRBNB) 17% 42% 3% 13% CHILDREN IN HH 42% 22% STAYED IN RENTED ACCOMMODATIONS (AIRBNB) 1% 17% CHILDREN IN HH 5% 1% TOP 10 INTERESTS 5% 76%/4% COLLEGE DEGREE/ TOPTOP 10 10 INTERESTS INTERESTS POST GRADUATE76%/4% 4% 76%/4%COLLEGE DEGREE/ COLLEGEPOST DEGREE/ GRADUATE 4% POST-GRADUATE

43% $ 57% 45%

53% 53% 59% 63% 57% 50% 72% 57% 54% 49% 63% 43% TOP 25% $ 53% 50% 45% 45%

53% 53%

7M+ JPY = 59% 63% 72% 59% 50% 72% 49% 54% 49% 52% $64.7K+ TOPUS 25% 54%

TOP 25% MUSIC TRAVEL MOVIES PLAYING PLAYING SPORTS FASHION NEWS CURRENT CURRENT NEWS AFFAIRS ECONOMY, ECONOMY, FINANCE

7M+ JPY = BOOKS Source: Global Web Index OUT EATING TV URBAN SUBURBAN RURAL 52% Base: A18-64 $7M+$64.7K+ JPY US= 52% MUSIC TRAVEL MOVIES PLAYING PLAYING SPORTS FASHION NEWS CURRENT CURRENT NEWS AFFAIRS ECONOMY, ECONOMY, FINANCE BOOKS BOOKS TRAVEL TRAVEL NEWS/ C. AFFAIRS MOVIES OUT EATING MUSIC ECONOMY, FINANCE TV PLAYING SPORTS FASHION BOOKS Source:Source: GlobalWebIndex Global Web Index URBAN SUBURBAN RURAL $64.7K+ U.S. OUT EATING TV Base:Base: A18-64 A18-64

MARKET PROFILE AIRLIFT LEISURE TRAVELER PROFILE AVERAGE PLANNING TIME FRAME $1.369B 118 53% of Total 2019 P VISITOR SPENDING WEEKLY NONSTOP FLIGHTS 3-4 MONTHS $1.493B 30,000 6.7 2.2 MARKET SNAPSHOTS AVERAGE LENGTH OF STAY DESTINATIONS 2023 F SPENDING WEEKLY NONSTOP SEATS (CALIFORNIA NIGHTS) VISITED AVERAGE BOOKING TIME FRAME 13.1% 4 NONSTOP ENTRY POINTS $2,290 17% 2018 MARKET SHARE LOS ANGELES 2-3 SAN DIEGO PER TRIP SPEND TRAVEL WITH (U.S. SPEND) MONTHS SAN FRANCISCO CHILDREN SAN JOSE

Sources: DIIO; Tourism Economics; U.S. Dept. of Commerce, National Travel and Tourism Office, “Survey of International Air Travelers”, CIC Research 145 MARKET SNAPSHOT: SOUTH KOREA 6.0 Million Travelers MEDIUM/LONG HAUL VACATION ABROAD, TOP 25% HHI 53%/47% 53%/47% 6% 6%26% 26% 46% 46% 22% 22% MALE/FEMALE53%/47%MALE/FEMALE MALE/FEMALE GEN Z GENMILLENNIAL Z MILLENNIALGEN X GENBOOM X ERSBOOMBOOMERS ERS 18-22 1818-22-2223-36 2323-36-36 3737-55-55 5656-64-64 23% 23% 37-55 56-64 2% 2% 4% 45% 4% 45% 71%/23%71%/23% 71%/23%MARRIED/SINGLE MARRIED/SINGLE PURCHASED DOMESTIC VACATION LAST 3-6 MOS. MARRIED/SINGLE 52% 52% PURCHASED TRIP ABROAD LAST 3-6 MOS. 4% 52% PURCHASED TRIP ABROAD LAST 3-6 MOS. 4% 39% PLAN TO PURCHASE DOMESTIC VACATION NEXT 3-6 MOS. 39% PLAN 39%TO PURCHASE PLAN TO TRIP PURCHASE ABROAD TRIP NEXT ABROAD 3-6 MOS. NEXT 3-6 MOS. RENTED A CAR 3% 3% 47%47% RENTED RENTED47% A CAR A CAR 83% STAYED83% IN A STAYED HOTEL IN A HOTEL 83% STAYED IN A HOTEL 58% 58% 54% STAYED54% IN RENTED STAYED ACCOMODATIONS IN RENTED ACCOMODATIONS (AIRBNB) (AIRBNB) 3% 3% CHILDREN IN HH CHILDREN IN HH58% 54% STAYED IN RENTED ACCOMMODATIONS (AIRBNB) CHILDREN IN HH 2 % 2 % 6% 6% 2% 2% TOP 10 INTERESTSTOPTOP 10 10 INTERESTS INTERESTS 62%/11%62%/11% COLLEGE62%/11% DEGREE/COLLEGE DEGREE/ POSTCOLLEGE GRADUATEPOST DEGREE/ GRADUATE POST-GRADUATE 4% 2%4% 2% 65% 65% 65% 64% 63% $ $ 63% 57% 60% 78% 76% 78% 60% 59% 78% 76% 64% 76% 64% TOP 25% TOP 25% 60% 57%

94% TOP 25% 57% 94% 65M+KRW=65M+KRW= 57% TV EATING OUT EATING

$654.9K+ US TV MUSIC $654.9K+$65M+ US KRW = OUT EATING MUSIC ECONOMY, FINANCE ECONOMY, 63% MOVIES FOOD & DRINK FOOD 59% FOODS HEALTH 57% TRAVEL PERSONAL HEALTH PERSONAL 63% MOVIES MOVIES TRAVEL OUT EATING NEWS/ C. AFFAIRS ECONOMY, FINANCE PERSONAL HEALTH MUSIC & FOOD DRINK TV HEALTH FOODS ECONOMY, FINANCE ECONOMY, 63% MOVIES FOOD & DRINK FOOD 59% FOODS HEALTH 57% NEWS CURRENT CURRENT NEWS AFFAIRS TRAVEL Source: Global Web Index HEALTH PERSONAL 63%

Source: GlobalWebIndex CURRENT NEWS AFFAIRS Source: Global Web Index URBAN URBANSUBURBANSUBURBANRURAL RURAL $654.9K+ U.S. Base: A18Base:-64Base: A18-64 A18-64

MARKET PROFILE AIRLIFT LEISURE TRAVELER PROFILE AVERAGE PLANNING TIME FRAME $1.233B 59 83% of Total 2019 P VISITOR SPENDING WEEKLY NONSTOP FLIGHTS 2-3 MONTHS $1.482B 20,000 9.1 2.9 AVERAGE LENGTH OF STAY DESTINATIONS 2023 F SPENDING WEEKLY NONSTOP SEATS (CALIFORNIA NIGHTS) VISITED AVERAGE BOOKING TIME FRAME 21% 2 NONSTOP ENTRY POINTS $2,540 15% 2018 MARKET SHARE LOS ANGELES 1-2 SAN FRANCISCO PER TRIP SPEND TRAVEL WITH (U.S. SPEND) CHILDREN MONTHS

Sources: DIIO; Tourism Economics; U.S. Dept. of Commerce, National Travel and Tourism Office, “Survey of International Air Travelers”, CIC Research 146 MARKET SNAPSHOT: BRAZIL 12.4 Million Travelers MEDIUM/LONG HAUL VACATION ABROAD, TOP 25% HHI 53%/47% 53%/47% 6%6% 44%44% 39%39% 11%11% MALE/FEMALEMALE/FEMALE .3% 53%/47% .3% MALE/FEMALE .1%.1% GENGEN Z Z MILLENNIALMILLENNIAL GENGEN X X BOOMBOOMBOOMERS ERS ERS 18-221818-22-22 23-362323-36-36 37-553737-55-55 56-645656-64-64 1%1% .6% .7%.7% .5% .6% .5% 3%3%.5%.5% 61%/20%61%/20% .3% 5% .3%1%1% 5% MARRIED/SINGLE61%/20%MARRIED/SINGLE 46% PURCHASED DOMESTIC VACATION LAST 3-6 MOS. .1% .4%.4% MARRIED/SINGLE 46%46% PURCHASED PURCHASED TRIP TRIP ABROAD ABROAD LAST LAST 3-6 MOS.3-6 MOS. .1% .6%.6% 41% PLAN TO PURCHASE TRIP ABROAD NEXT 3-6 MOS. .2%.2% .5%.5% .7%.7% 41% PLAN41% TOPLAN PURCHASE TO PURCHASE DOMESTIC TRIP ABROAD VACATION NEXT 3-6 MOS. NEXT 3-6 MOS. 3%3% 58% RENTEDRENTED A CAR A CAR RENTED58% A CAR 2%2% 58% 83%83% STAYED STAYED IN A IN HOTEL A HOTEL 9%9% 83% STAYED IN A HOTEL .6%.6% 1% 57%57% 55%55% STAYED STAYED IN RENTED IN RENTED ACCOMODATIONS ACCOMODATIONS (AIRBNB) (AIRBNB) 36% 1% 36% CHILDRENCHILDREN57% IN HH IN HH 12% 55% STAYED IN RENTED ACCOMMODATIONS (AIRBNB) 6%6% 12% CHILDREN IN HH 4%4% 5% 5% TOP 10 INTERESTS 39%/26%39%/26% TOPTOP 10 10 INTERESTS INTERESTS COLLEGECOLLEGE DEGREE/ DEGREE/ 5%0%0%5% 39%/26% COLLEGEPOSTPOST GRADUATE DEGREE/ GRADUATE POST-GRADUATE 67% 67% 75% 70% 75% 70% 67% 75% 77% 77% $ $ 77% 66% 65% 82% 66% 65% 78% 82% 70% 63% 78% 77% 66% 82% 78% 63% 95% PERSONAL 63% 77%

95% TOP 25% PERSONAL TOP 25% 77% TV TOP50K+ 25%BRL= TV

50K+ BRL= HEALTHCARE HEALTHCARE 65% $12.2K+ US PLAYING PLAYING PLAYING

URBAN SUBURBAN RURAL $12.2K+ US TECHNOLOGY URBAN SUBURBAN RURAL $50K+ BRL = OUT EATING MUSIC TECHNOLOGY MOVIES TRAVEL SPORTS BOOKA URBAN SUBURBAN RURAL OUT EATING MUSIC FOOD & DRINK FOOD MOVIES TRAVEL SPORTS BOOKA MOVIES MOVIES TRAVEL MUSIC OUT EATING TECHNOLOGY & FOOD DRINK PERSONAL HEALTHCARE PLAYING SPORTS TV BOOKS Source:Source: Global GlobalWebIndex Global Web Web Index Index $12.2K+ U.S. & DRINK FOOD Base:Base: A18 A18-64 A18-64 -64

MARKET PROFILE AIRLIFT LEISURE TRAVELER PROFILE AVERAGE PLANNING TIME FRAME $445M 4 75% of Total 2019 P VISITOR SPENDING WEEKLY NONSTOP FLIGHTS 4-5 MONTHS $535M 1,100 12.1 2.9 MARKET SNAPSHOTS AVERAGE LENGTH OF STAY DESTINATIONS 2023 F SPENDING WEEKLY NONSTOP SEATS (CALIFORNIA NIGHTS) VISITED AVERAGE BOOKING TIME FRAME 7.7% 1 NONSTOP ENTRY POINT $1,830 17% 2018 MARKET SHARE LOS ANGELES 3-4 PER TRIP SPEND TRAVEL WITH (U.S. SPEND) CHILDREN MONTHS

Sources: DIIO; Tourism Economics; U.S. Dept. of Commerce, National Travel and Tourism Office, “Survey of International Air Travelers”, CIC Research 147 MARKET SNAPSHOT: GERMANY 9.3 Million Travelers MEDIUM/LONG HAUL VACATION ABROAD, TOP 25% HHI

51%/49%51%/49% 6% 6%26% 26% 53% 53% 14% 14% MALE/FEMALE51%/49%MALE/FEMALE MALE/FEMALE GEN Z GENMILLENNIAL Z MILLENNIALGEN X GENBOOM X ERSBOOMBOOMERS ERS 4% 4% 18-22 1818-22-22 23-36 2323-36-36 37-55 3737-55-5556-64 5656-64-64 4% 4%1% 1% .6% .6% 8% 8% 6% 6% 58%/14%58%/14% MARRIED/SINGLE58%/14%MARRIED/SINGLE PURCHASED DOMESTIC VACATION LAST 3-6 MOS. 3% 3% MARRIED/SINGLE 46% 2% 2% 46% PURCHASED46% PURCHASED TRIP ABROAD TRIP LAST ABROAD 3-6 MOS. LAST 3-6 MOS. 39%39% PLAN PLAN39% TO PURCHASE PLANTO PURCHASE TO TRIPPURCHASE ABROAD DOMESTIC TRIP NEXT ABROAD 3-6 VACATIONMOS. NEXT 3-6 MOS. NEXT 3-6 MOS. 21% 21% 4% 4% 46%46% RENTED RENTED46% A CAR RENTED A CAR A CAR 2% 2% 87% STAYED87% IN A STAYED HOTEL IN A HOTEL 9% 9% 87% STAYED IN A HOTEL 41% 41% 45% STAYED45% IN RENTED STAYED ACCOMODATIONSIN RENTED ACCOMODATIONS (AIRBNB) (AIRBNB) CHILDREN INCHILDREN HH IN HH 41% 45% STAYED IN RENTED ACCOMMODATIONS (AIRBNB) 5% 5% CHILDREN IN HH .8% .8% 17% 17% TOP 10 INTERESTSTOPTOP 10 10 INTERESTS INTERESTS 13% 13% 43%/5%43%/5% COLLEGE 43%/5%DEGREE/COLLEGE DEGREE/ POSTCOLLEGE GRADUATEPOST DEGREE/ GRADUATE POST-GRADUATE 25% 25% 69% 69% 46% 46% 69% 71% 71% 71% $ $ 68% 58% 58% 58% 62% 68% 68% 59% 62% 62% 78% 62% 78% 78% 66% 66% 29% 29% TOP 25% TOP 25% 66% 50K+ EURTOP =50K+ 25% EUR = 60% 60% 60% FOOD & DRINK FOOD & DRINK FOOD HEALTH FOODS HEALTH 59% FOODS HEALTH 59% $55K+$50K+ US $55K+ EUR US = SPORTS PLAYING 62% SPORTS PLAYING 62% NEWS CURRENT CURRENT NEWS AFFAIRS CURRENT NEWS AFFAIRS MUSIC MUSIC TRAVEL TRAVEL COOKING COOKING TV TV MOVIES MOVIES TRAVEL TRAVEL OUT EATING & DRINK FOOD NEWS/ C. AFFAIRS MUSIC MOVIES PLAYING SPORTS TV HEALTH FOODS COOKING Source: Source:GlobalSource: Web GlobalWebIndex GlobalIndex Web Index URBAN URBANSUBURBANSUBURBANRURAL RURAL $55K+ U.S. OUT EATING OUT EATING Base: A18Base:-64Base: A18-64 A18-64

MARKET PROFILE AIRLIFT LEISURE TRAVELER PROFILE AVERAGE PLANNING TIME FRAME $934M 54 77% of Total 2019 P VISITOR SPENDING WEEKLY NONSTOP FLIGHTS 5-6 MONTHS $1.038B 19,000 10.1 4.2 AVERAGE LENGTH OF STAY DESTINATIONS 2023 F SPENDING WEEKLY NONSTOP SEATS (CALIFORNIA NIGHTS) VISITED AVERAGE BOOKING TIME FRAME 17.0% 3 NONSTOP ENTRY POINTS $2,070 9% LOS ANGELES 2018 MARKET SHARE 3-4 SAN DIEGO PER TRIP SPEND TRAVEL WITH (U.S. SPEND) SAN FRANCISCO CHILDREN MONTHS

Sources: DIIO; Tourism Economics; U.S. Dept. of Commerce, National Travel and Tourism Office, “Survey of International Air Travelers”, CIC Research 148 MARKET SNAPSHOT: FRANCE 5.6 Million Travelers MEDIUM/LONG HAUL VACATION ABROAD, TOP 25% HHI

59%/41%59%/41% 8% 8%26% 26% 46% 46% 18% 18% MALE/FEMALE 5% MALE/FEMALE59%/41% 5% MALE/FEMALE GEN Z GENMILLENNIAL Z MILLENNIALGEN X GENBOOM X ERSBOOMBOOMERS ERS 18-22 1818-22-22 23-36 2323-36-36 37-55 3737-55-5556-64 5656-64-64 2% 2% 2%2% 2% 2% 2% 2% 3% 3% 29% 29% 3% 3% 51%/13%51%/13% 5% 5% MARRIED/SINGLE51%/13%MARRIED/SINGLE PURCHASED DOMESTIC VACATION LAST 3-6 MOS. MARRIED/SINGLE 39% 39% PURCHASED39% PURCHASED TRIP ABROAD TRIP LAST ABROAD 3-6 MOS. LAST 3-6 MOS. 4% 4%2% 2% 5% 5% PLAN TO PURCHASE DOMESTIC VACATION NEXT 3-6 MOS. 2% 2% 33%33% PLAN 33% TO PURCHASE PLAN TO TRIPPURCHASE ABROAD TRIP NEXT ABROAD 3-6 MOS. NEXT 3-6 MOS.

47%47% RENTED RENTED47% A CAR RENTED A CAR A CAR 83% STAYED IN A HOTEL 2% 2% .6% 83%83% STAYED STAYED IN A HOTEL IN A HOTEL .6% 2% 40%/23%40%/23% 2% 11% 59% STAYED59% IN RENTED STAYED ACCOMODATIONSIN RENTED ACCOMODATIONS (AIRBNB) (AIRBNB) 11% CHILDREN INCHILDREN HH IN HH 40%/23% 59% STAYED IN RENTED ACCOMMODATIONS (AIRBNB) CHILDREN IN HH

5% 5% 3% 4% 3% 8% 4% 8% TOP 10 INTERESTSTOP 10 INTERESTS 63% 63% TOP 10 INTERESTS COLLEGE DEGREE/COLLEGE63% DEGREE/ POSTCOLLEGE GRADUATEPOST DEGREE/ GRADUATE POST-GRADUATE 28% 28% 69% 69% 69% $ $ 57% 59% 59% 54% 59%

55% 74% 72% 74% 55% 54% 74% 57% 54% 72% 52% 57% 72% 52% 52% 62% 17% TOP 25% 62% 17% TOP 25% 62% 49%

TOP 25% 49% 37K+ EUR =37K+ EUR = 49% 59% 59% 59% PLAYING PLAYING $40.7K+$37K+ US $40.7K+ EUR US = PLAYING TV MOVIES SPORTS TECHNOLOGY TRAVEL TV COOKING BOOKS MOVIES MOVIES TRAVEL OUT EATING MUSIC TV COOKING NEWS/ C. AFFAIRS PLAYING SPORTS BOOKS TECH MOVIES SPORTS TECHNOLOGY TRAVEL COOKING BOOKS NEWS CURRENT CURRENT NEWS AFFAIRS EATING OUT EATING MUSIC NEWS CURRENT CURRENT NEWS AFFAIRS EATING OUT EATING Source: Global Web Index MUSIC Source: Source:Global Web GlobalWebIndex Index URBAN URBANSUBURBANSUBURBAN SUBURBANRURALRURAL RURAL $40.7K+ U.S. Base: A18Base:-64Base: A18-64 A18-64

MARKET PROFILE AIRLIFT LEISURE TRAVELER PROFILE AVERAGE PLANNING TIME FRAME $1.26B 56 81% of Total 2019 P VISITOR SPENDING WEEKLY NONSTOP FLIGHTS 5-6 MONTHS $1.477B 19,000 9.3 4.2 MARKET SNAPSHOTS AVERAGE LENGTH OF STAY DESTINATIONS 2023 F SPENDING WEEKLY NONSTOP SEATS (CALIFORNIA NIGHTS) VISITED AVERAGE BOOKING TIME FRAME 20.9% 3 NONSTOP ENTRY POINTS LOS ANGELES $2,370 14% 2018 MARKET SHARE 3-4 OAKLAND PER TRIP SPEND TRAVEL WITH (U.S. SPEND) MONTHS SAN FRANCISCO CHILDREN

Sources: DIIO; Tourism Economics; U.S. Dept. of Commerce, National Travel and Tourism Office, “Survey of International Air Travelers”, CIC Research 149 MARKET SNAPSHOT: ITALY 5.1 Million Travelers MEDIUM/LONG HAUL VACATION ABROAD, TOP 25% HHI 59%/41% 6% 24% 52% 17% MALE/FEMALE 59%/41% 6% 24% 52% 17% MALE/FEMALE GEN Z MILLENNIAL GEN X BOOM ERS 59%/41% 18-22 23-36 37-55 56-64 1.9% MALE/FEMALE 1.0% GEN Z MILLENNIAL GEN X BOOMBOOMERS ERS 1818-22-22 2323-36-36 3737-55-55 5656-64-64 .2% 1.9% 24.6% 8.0%1.0% 8.3%.2% 57%/16% 24.6% 8.0% MARRIED/SINGLE 9.2% 8.3% 57%/16% 3.0% 57%/16%MARRIED/SINGLE 9.2% 44% PURCHASEDPURCHASED TRIP TRIP ABROAD ABROAD LAST 3- 6LAST MOS. 3-6 MOS. 6.1% MARRIED/SINGLE 3.0% 2.5% 26% PLAN TO PURCHASE TRIP ABROAD NEXT 3-6 MOS. 26% PLAN44% TOPURCHASED PURCHASE TRIP ABROADTRIP ABROAD LAST 3-6 NEXTMOS. 3-6 MOS. 1.4%6.1% 2.5% 50% RENTED26% APLAN CAR TO PURCHASE TRIP ABROAD NEXT 3-6 MOS. 1.7%1.4% 50% RENTED A CAR 10.1% 58% 89% STAYED50% INRENTED A HOTEL A CAR .2% CHILDREN IN HH 1.7% 89%54% STAYEDSTAYED89% INSTAYED INRENTED A HOTELIN ACCOMODATIONSA HOTEL (AIRBNB) 10.1% 5.5% 58% 7.1% .2% CHILDREN IN HH 58% 54% STAYED54% STAYED IN RENTED IN RENTED ACCOMMODATIONS ACCOMODATIONS (AIRBNB) (AIRBNB) .5% 5.5% CHILDREN IN HH 2.3% 7.1% .5% TOP 10 INTERESTS 2.3% 1.3% 32%/4% COLLEGE DEGREE/ TOPTOP 10 10 INTERESTS INTERESTS 1.3% POST GRADUATE32%/4% 14% 32%/4%COLLEGE DEGREE/ COLLEGEPOST DEGREE/ GRADUATE POST-GRADUATE 77% 5.3% 14% 63% $ 71% 77% 61% 77% 61% 5.3%22% 63% 78% 71% 71% 64% 60% 64% 64% TOP 25% $ 68% 61% 61% 61% 22% 32K+EUR= 61% 78% 62% 78% 60% 64% 60% 64% 68%

$35.4K+ USTOP 25% 68% 63% TECHNOLOGY TV TRAVEL COOKING TOP 25% WILDLIFE BOOKS NEWS NEWS EATING OUT EATING

32K+EUR= MUSIC Source: Global Web Index FILMS/CINEMA

URBAN SUBURBAN RURAL 62% URBAN SUBURBAN RURAL 62% Base: A18-64 $32K+$35.4K+ EUR US = TECHNOLOGY TV TRAVEL COOKING WILDLIFE BOOKS NEWS NEWS TRAVEL TRAVEL FILMS/CINEMA OUT EATING MUSIC NEWS/ C. AFFAIRS TECH TV WILDLIFE COOKING BOOKS EATING OUT EATING MUSIC Source:Source: GlobalWebIndex Global Web Index URBAN SUBURBAN RURAL $35.4K+ U.S. FILMS/CINEMA Base:Base: A18-64 A18-64

MARKET PROFILE AIRLIFT LEISURE TRAVELER PROFILE AVERAGE PLANNING TIME FRAME $471M 14 78% of Total 2019 P VISITOR SPENDING WEEKLY NONSTOP FLIGHTS 4-5 MONTHS $536M 3,800 7.7 4.2 AVERAGE LENGTH OF STAY DESTINATIONS 2023 F SPENDING WEEKLY NONSTOP SEATS (CALIFORNIA NIGHTS) VISITED AVERAGE BOOKING TIME FRAME 14.9% 3 NONSTOP ENTRY POINTS $1,690 13% LOS ANGELES 2018 MARKET SHARE 3-4 OAKLAND PER TRIP SPEND TRAVEL WITH (U.S. SPEND) SAN FRANCISCO CHILDREN MONTHS

Sources: DIIO; Tourism Economics; U.S. Dept. of Commerce, National Travel and Tourism Office, “Survey of International Air Travelers”, CIC Research 150 MARKET SNAPSHOT: SCANDINAVIA (SWEDEN) 1.1 Million Travelers MEDIUM/LONG HAUL VACATION ABROAD, TOP 25% HHI 59%/41% 59%/41% 7% 7% 26% 26% 49% 49% 18% 18% MALE/FEMALE59%/41%MALE/FEMALE MALE/FEMALE GEN Z GEN ZMILLENNIALMILLENNIALGEN X GEN XBOOM ERSBOOMBOOMERS ERS 18-22 23-36 37-55 1818-22-22 2323-36-36 3737-55-55 56-64 5656-64-64

1.4% 1.4% 56%/10%56%/10% MARRIED/SINGLE56%/10%MARRIED/SINGLE PURCHASED TRIP ABROAD LAST 3-6 MOS. MARRIED/SINGLE 50% 1.6% 50% PURCHASED50% PURCHASED TRIP ABROAD TRIP ABROAD LAST 3-6 LAST MOS. 3-6 MOS. 1.6% 44% PLAN TO PURCHASE TRIP ABROAD NEXT 3-6 MOS. 44% PLAN44% TO PLAN PURCHASE TO PURCHASE TRIP ABROAD TRIP ABROAD NEXT 3- 6NEXT MOS. 3 -6 MOS. RENTED A CAR 36%36% RENTED36% RENTEDA CAR A CAR 1.5% 1.5% 2.2% 2.2% 87% STAYED IN A HOTEL 57% 57% 87% STAYED87% STAYED IN A HOTEL IN A HOTEL CHILDRENCHILDREN IN HH IN HH 33% STAYED IN RENTED ACCOMODATIONS (AIRBNB) 57% 33% STAYED33% STAYED IN RENTED IN RENTED ACCOMMODATIONS ACCOMODATIONS (AIRBNB) (AIRBNB) 3.3% 3.3% CHILDREN IN HH

2.8% 2.8% 2.7% TOP 10TOP INTERESTS 10 INTERESTS 2.8% 2.8% 2.7% 29.2% 46%/2%46%/2% TOP 10 INTERESTS 1.8% 1.8% 29.2% COLLEGE DEGREE 2.6% 2.6% 46%/2%COLLEGE DEGREE COLLEGE DEGREE/ 14.8% 14.8% 4.4% 4.4% POST-GRADUATE 20% 2.9% 20% 60% 60% 65%

2.9% 65% 65% 51%

48% 66% 3.5% .4% 51% 66% 3.5%1.4% .4% 48% 66% $ 57%

1.4%3.0% 55% $ 57% 55% 3.0% 55% 70% 63% 60% 70% 70%

13.5% 57% 63% 32% TOP 25% 57% 63%

13.5%1.8% 57% 32% TOP 25% 57%

1.8% 51% 600k+TOP SEK=600k+ 25% SEK= 64% $66.7K+ US 64% $66.7K+ US 64% MUSIC FILMS/CINEMA

$600K+ SEK = TRAVEL COOKING EATING OUT EATING NEWS BOOKS054 FOOD & DRINK FOOD TECHNOLOGY TV MUSIC FILMS/CINEMA TRAVEL COOKING EATING OUT EATING NEWS

Source: Global Web Index TRAVEL OUT EATING & DRINK FOOD TV MUSIC FILMS/ CINEMA NEWS BOOKS COOKING TECH BOOKS054 FOOD & DRINK FOOD TECHNOLOGY URBAN SUBURBAN RURAL TV Source:Source: GlobalWebIndex Global Web Index URBAN URBANSUBURBANSUBURBANRURAL RURAL $66.7K+ U.S. Base:Base: A18Base:- 64A18-64 A18-64

MARKET PROFILE AIRLIFT LEISURE TRAVELER PROFILE AVERAGE PLANNING TIME FRAME $661M 27 74% of Total 2019 P VISITOR SPENDING WEEKLY NONSTOP FLIGHTS 4-5 MONTHS $735M 7,500 10.1 3.2 MARKET SNAPSHOTS AVERAGE LENGTH OF STAY DESTINATIONS 2023 F SPENDING WEEKLY NONSTOP SEATS (CALIFORNIA NIGHTS) VISITED AVERAGE BOOKING TIME FRAME 24.9% 3 NONSTOP ENTRY POINTS $1,440 13% 2018 MARKET SHARE LOS ANGELES 3-4 OAKLAND PER TRIP SPEND TRAVEL WITH (U.S. SPEND) MONTHS SAN FRANCISCO CHILDREN

Data shown represents and aggregate of Scandinavian countries — Sources: DIIO; Tourism Economics; U.S. Dept. of Commerce, National Travel Sweden and Denmark shown as examples. and Tourism Office, “Survey of International Air Travelers”, CIC Research 151 MARKET SNAPSHOT: SCANDINAVIA (DENMARK) 640 Thousand Travelers MEDIUM/LONG HAUL VACATION ABROAD, TOP 25% HHI 63%/37% 7% 18% 51% 25% MALE/FEMALE 63%/37% 7% GEN18% Z MILLENNIAL GEN51% X BOOM ERS 25% 63%/37%MALE/FEMALE 18-22 23-36 37-55 56-64 MALE/FEMALE GEN Z MILLENNIAL GEN X BOOMBOOMERS ERS 1818-22-22 2323-36-36 37-5537-5556-64 56-64

60%/10% 13.7% MARRIED/SINGLE 60%/10% 13.7% 60%/10% MARRIED/SINGLE 56% PURCHASED TRIP ABROAD LAST 3-6 MOS. MARRIED/SINGLE 56% PURCHASED TRIP ABROAD LAST 3-6 MOS. 49% PLAN56%PLAN TO PURCHASED TO PURCHASE PURCHASE TRIP TRIP ABROAD ABROAD TRIP ABROAD LAST NEXT 3 -36- 6MOS. NEXTMOS. 3-6 MOS. 36% RENTED A CAR 36% 49%RENTED PLAN A TO CAR PURCHASE TRIP ABROAD NEXT 3-6 MOS. 18.6% 79% STAYED IN A HOTEL 53% 36% RENTED A CAR STAYED IN A HOTEL 18.6% 26.9% CHILDREN IN HH 79%36% 79%STAYED STAYED IN RENTED IN A ACCOMODATIONSHOTEL (AIRBNB) 53% 26.9% CHILDREN53% IN HH 36% 36%STAYED STAYED IN RENTED IN RENTED ACCOMMODATIONS ACCOMODATIONS (AIRBNB) (AIRBNB) CHILDREN IN HH

8.9% FYN 7.5% TOP 10 INTERESTS 8.9% FYN 23.9% 32%/16% 7.5% COLLEGE DEGREE TOPTOP 10 10 INTERESTS INTERESTS 23.9% 32%/16% 32%/16%COLLEGE DEGREE COLLEGE DEGREE/ 20% POST-GRADUATE

20% $ 64% 64% 53% 50% 57% 48% 24% 56% 57% 64% 71% 53% 50% TOP 25% $ 59% 48% 53% 54% 71% 50% 48% 24% 56% 450k+ DKK = 57% 48% 59% 71% 64% $66.7K+TOPTOP US25% 25% 59% BOOKS NEWS CURRENT CURRENT NEWS AFFAIRS 64% TRAVEL POLITICS & DRINK FOOD 48% TV

450k+ DKK = FILMS/CINEMA 54% COOKING EATING OUT EATING MUSIC

Source: Global Web Index 64% URBAN SUBURBAN RURAL $450K+$66.7K+ DKK US = BOOKS Base: A18-64 TRAVEL TV OUT EATING MUSIC NEWS/ C. AFFAIRS FILMS/ CINEMA COOKING POLITICS BOOKS & FOOD DRINK NEWS CURRENT CURRENT NEWS AFFAIRS TRAVEL POLITICS & DRINK FOOD 48%

Source: GlobalWebIndex TV FILMS/CINEMA 54% COOKING EATING OUT EATING Source: Global Web Index $66.7K+ U.S. MUSIC Base: A18-64 URBAN SUBURBAN RURAL Base: A18-64

MARKET PROFILE AIRLIFT LEISURE TRAVELER PROFILE AVERAGE PLANNING TIME FRAME $661M 27 74% of Total 2019 P VISITOR SPENDING WEEKLY NONSTOP FLIGHTS 4-5 MONTHS $735M 7,500 10.1 3.2 AVERAGE LENGTH OF STAY DESTINATIONS 2023 F SPENDING WEEKLY NONSTOP SEATS (CALIFORNIA NIGHTS) VISITED AVERAGE BOOKING TIME FRAME 24.9% 3 NONSTOP ENTRY POINTS LOS ANGELES $1,440 13% 2018 MARKET SHARE 3-4 OAKLAND PER TRIP SPEND TRAVEL WITH (U.S. SPEND) SAN FRANCISCO CHILDREN MONTHS

Data shown represents and aggregate of Scandinavian countries — Sources: DIIO; Tourism Economics; U.S. Dept. of Commerce, National Travel Sweden and Denmark shown as examples. and Tourism Office, “Survey of International Air Travelers”, CIC Research 152 MARKET SNAPSHOT: INDIA 50.5 Million Travelers MEDIUM/LONG HAUL VACATION ABROAD, TOP 25% HHI

56%/44%56%/44% 22% 22% 55% 55% 20% 20%4% 4% MALE/FEMALE56%/44%MALE/FEMALE MALE/FEMALE GEN Z GEN ZMILLENNIALMILLENNIALGEN X GEN XBOOMX ERSBOOMBOOMERS ERS 18-22 1818-22-22 23-36 2323-36-36 37-55 3737-55-55 56-64 5656-64-64 Dehradun Dehradun 6% 6% 20% 20%1% 1% 53%/43%53%/43% 6% 6% MARRIED/SINGLE53%/43%MARRIED/SINGLE 45% PURCHASED TRIP ABROAD LAST 3-6 MOS. MARRIED/SINGLE 45% PURCHASED45% PURCHASED TRIP ABROAD TRIP LASTABROAD 3-6 MOS.LAST 3-6 MOS. 3% 3% 40%40% PLAN 40%PLAN TO PURCHASEPLAN TO PURCHASE TO PURCHASE TRIP ABROAD TRIP TRIP NEXTABROAD 3-6 MOS.NEXT NEXT 3-6 3-6MOS. MOS. 4% 4% 85% RENTED85% A RENTED CAR A CAR 85% RENTED A CAR 93% STAYED IN A HOTEL 10% 93% STAYED IN A HOTEL 10% STAYED IN A HOTEL 53% 53% 79%93% STAYED 79% IN STAYED RENTED IN ACCOMODATIONS RENTED ACCOMODATIONS (AIRBNB) (AIRBNB) CHILDRENCHILDREN IN HH IN HH 53% 79% STAYED IN RENTED ACCOMMODATIONS (AIRBNB) 14% 14% CHILDREN IN HH 8% 8% 6% 6% 14% 14% TOP 10TOP INTERESTS 10 INTERESTS 14%/22%14%/22% TOP 10 INTERESTS COLLEGE14%/22% DEGREE/COLLEGE DEGREE/ POSTCOLLEGE GRADUATEPOST DEGREE/ GRADUATE POST-GRADUATE 12% 4% 4% 55%

1% 12% 55%

1% 55% 51% 51% 51% 61%

$ $ 46% 47% 47% 47% 47% 46% 47% 48% 47% 46% 48% 49% 48% 49% 49% TOP 25% 51% 51% 84% TOP 25% 51% 84% 720K+TOP INR=720K+ 25% INR= 47% 47% $720K+$10.1K+ US$10.1K+ INR US = 47% PLAYING SPORTS PLAYING TV CURRENT NEWS AFFAIRS TECHNOLOGY 61% TECHNOLOGY MOVIES SCIENCE FITNESS & FITNESS EXERCISE PLAYING SPORTS PLAYING TV CURRENT NEWS AFFAIRS TECHNOLOGY 61% TECHNOLOGY MOVIES SCIENCE MUSIC FITNESS & FITNESS EXERCISE FOOD & DRINK FOOD TECHNOLOGY TECHNOLOGY SPORTS PLAYING & DRINK FOOD MUSIC TRAVEL MOVIES & FITNESS EXERCISE TV SCIENCE NEWS/ C. AFFAIRS TRAVEL

Source: Global Web Index MUSIC FOOD & DRINK FOOD Source:Source: GlobalWebIndex Global Web Index URBAN URBANSUBURBANSUBURBANRURAL RURAL $10.1K+ U.S. TRAVEL Base: Base:A18Base:-64 A18-64 A18-64

MARKET PROFILE AIRLIFT LEISURE TRAVELER PROFILE AVERAGE PLANNING TIME FRAME $1.167B 10 47% of Total 2019 P VISITOR SPENDING WEEKLY NONSTOP FLIGHTS 2-3 MONTHS $1.470B 2,300 23.5 2.8 MARKET SNAPSHOTS AVERAGE LENGTH OF STAY DESTINATIONS 2023 F SPENDING WEEKLY NONSTOP SEATS (CALIFORNIA NIGHTS) VISITED AVERAGE BOOKING TIME FRAME 14.5% 1 NONSTOP ENTRY POINT $1,940 6% 2018 MARKET SHARE SAN FRANCISCO 1-2 PER TRIP SPEND TRAVEL WITH (U.S. SPEND) CHILDREN MONTHS

Sources: DIIO; Tourism Economics; U.S. Dept. of Commerce, National Travel and Tourism Office, “Survey of International Air Travelers”, CIC Research 153 FY19/20 BOARD COMMISSIONERS

CHAIR Joe D’Alessandro Jordan Meisner James Bermingham President & CEO, Senior Vice President - Field Operations, Managing Director, San Francisco Travel Association Hyatt Hotels & Resorts Montage Hotel and Resorts Michael Dunne Lenny Mendonca VICE CHAIR OF MARKETING Area Vice President of Operations, California, Director, Gene Zanger Hilton Worldwide Go-Biz Partner, Kevin Fat Sima Patel Casa De Fruta Parkway, LLC Chief Operating Officer, CEO, VICE CHAIR OF OPERATIONS Fat Family Restaurant Group Ridgemont Hospitality Paula Beck Robert Gleason Peter Ronchetti Vice President of Global Accounts - West, President and CEO, President & General Manager, Avis Budget Group Evans Hotels Legoland California Resort CHIEF FISCAL OFFICER Dan Harvey Carl Schuster Dan Gordon Division Vice President, CEO-Managing Partner, CEO, The Hertz Company Wolfgang Puck Worldwide, Inc. Gordon Biersch Karen Irwin Bobbie Singh-Allen Gary Buffo President and COO, EVP & COO, President, Universal Studios Hollywood California Lodging Industry Pure Luxury Transportation John Kelliher Pete Sonntag Jim Burba Founder, SVP - Mountain Division, President, Grapeline Wine Tours Vail Resorts Burba Hotel Network Brian King Paul Tormey Anthony Cannella Global Officer - Digital, Distribution, Revenue Regional Vice President & General Manager Vice President, Strategy & Global Sales, California, NorthStar Engineering Group Marriott International AccorHotels Jason Clarke Tom Klein Benjamin Webster General Manager/Vice President, Owner, Office Managing Shareholder, Enterprise Rent-A-Car Rodney Strong Wine Estates Littler Mendelson PCD29 Peter Clarke Terry MacRae Ernest Wooden VP - CMH Operations West, CEO, President & CEO, InterContinental Hotels Group Hornblower Cruises and Events Discover Los Angeles Russ Cox Noreen Martin Executive VP of Operations, President & Chairman, Interstate Hotels & Resorts Martin Resorts, Inc.

154 FY19/20 COMMITTEE MEMBERS BRAND & CONTENT Diane Stracuzzi Julie Wagner Jose Luciano Dennis Quinn Kimberly Adams Pebble Beach Company Beverly Hills Conference & Sonoma Valley Visitors Universal Studios Hollywood Visit Temecula Valley Susan Thomas Visitors Bureau Bureau Kathryn Smits Visit Huntington Beach - Scott White Los Angeles Tourism & Amber Burke INTERNATIONAL & North Lake Tahoe Surf City USA Greater Palm Springs CVB Convention Board Resort Association John Urdi Ernest Wooden BRAND USA Nicky Tang Annie Allen Ilsa Butler Mammoth Lakes Tourism Los Angeles Tourism & Disneyland Resort CityPass, Inc. Evans Hotels Tim Zahner Convention Board Jeff Van Langeveld Stephen Andrews Andrew Chapman Sonoma County Tourism Walt Disney World, DIGITAL TASK FORCE Passport Resorts Incline Village Disneyland Resort, Disney CEO DESTINATION Seth Chalmers Pepe Avila Cruise Line and Aulani Annika Chase Visit West Hollywood Visit Anaheim Michael Vanderhurst Disneyland Resort COUNCIL Kimberly Adams Shawn Hack Benjamin Eastman Mammoth Lakes Tourism Brian Chuan Visit Temecula Valley Payless Car Rental - San Diego Tourism Authority Michael Wambolt South Coast Plaza - An San Diego Airport Tammy Blount Kristen Esposito Visit San Luis Obispo County International Shopping Ariane Hiltebrand Destination Monterey County Convention Simon Property Group - Sarah Winters Sonoma County Tourism Chuck Davison & Visitors Bureau Corporate Headquarters High Sierra Kerri Kapich Visit San Luis Obispo County Jay Burress Ed Fuller Brian Wright San Diego Tourism Authority Agnelo Fernandes Visit Anaheim Orange County Visitor Santa Monica William Karz Association Terranea Resort Joe D’Alessandro Travel & Tourism Los Angeles Tourism & Hubertus Funke Hubertus Funke San Francisco Travel Li-Chun Hsu Young Association Convention Board San Francisco Travel San Francisco Travel DFS North America Peter Kock Association Association Chuck Davison LEGOLAND California Resort Michelle Israel PUBLIC RELATIONS Lindsey Gallagher Visit San Luis Obispo County Kathleen Kubota San Diego Zoo Global Stephen Andrews Visit Napa Valley Edwin Fuller San Diego Tourism Authority Ashley Johnson Passport Resorts Charles Harris Orange County Visitor Association Mark Lapidus Visit Laguna Beach Laurie Armstrong Gossy Visit Anaheim Linsey Gallagher Brand USA Sean Keliiholokai San Francisco Travel Omark Holmes Visit Napa Valley Jessy Lynn Perkins Visit Dana Point Association Santa Monica Visit Santa Barbara Liz Bowling Travel & Tourism Katherine Janega-Dykes Deleyse Langdale Dave Rhein North Lake Tahoe David Miller Visit Santa Barbara Sonoma County Tourism Terranea Resort Resort Association Universal Studios Hollywood Misti Kerns Diane Mandeville Dan Rosenbaum Annette Brown Julie Mino Santa Monica Convention & Cannery Row Company Visitors Bureau San Francisco Travel Visit Temecula Valley Oxnard Convention & Laura Manriquez Association Lisa Cesaro Visitor’s Bureau Tom Kiely Santa Cruz County Bertin Salas Yosemite Hospitality Jeff Miraglia Visit West Hollywood Conference & Visitors Council Mariela Ure Katie Denbo Greater Palm Springs CVB Kelly Miller Millie Matz Universal Studios Hollywood Pebble Beach Company Ted Molter Visit Huntington Beach - Santa Barbara Hotel Group Surf City USA Rob O’Keefe Candice Eley San Diego Zoo Global EDITORIAL TASK FORCE Gary Sherwin Monterey County Convention San Diego Tourism Authority Jeffrey Morris Sonya Bradley Visit Newport Beach & Visitors Bureau Jamie Foley Visit West Hollywood Visit Sacramento Joe Terzi Gary Orfield Los Angeles Tourism & Colleen Pace Agnelo Fernandes San Diego Tourism Authority Greater Palm Springs CVB Convention Board Greater Palm Springs CVB Terranea Resort Mike Testa Michael Parr Christina Glynn Donald Skeoch Hilary Feutz Visit Sacramento Wente Vineyards Visit Santa Cruz Los Angeles Tourism & Terranea Resort Claudia Vecchio Vineyard Tasting Room Brittney Hendricks Convention Board Katherine Janega-Dykes Sonoma County Tourism Matt Penchuk Oxnard Convention & Visit Santa Barbara Monterey Bay Aquarium Visitors Bureau

155 Karna Hughes Steve Rathje Mary Ann McAlea Darien Schaefer Rand Hardy Visit Santa Barbara Visit Anaheim Folsom Tourism Bureau Big Bear Pier 39 Lara Kaylor Carl Ribaudo Elizabeth Nalagan Sarah Sherman Robert Haswell Mammoth Lakes Tourism Strategic Marketing & Ridgecrest Area Convention Sierra-at-Tahoe Placer County Visitors Joyce Kiehl Research, Inc and Visitors Bureau John Urdi Bureau Greater Palm Springs CVB Robert Thibault Wes Rhea Mammoth Lakes Tourism Jane Howard Sarah Kruer Greater Palm Springs CVB Visit Stockton Gilroy Welcome Center Visit Newport Beach Rhonda Salisbury WELCOME CENTER Lisa Jackson RURAL Kathie Ammar Nancy Light Yosemite Sierra Visitors Guest Service Solutions Kimberly Adams Desert Regional Tourism Wine Institute of California Bureau Susan Jennrich Visit Temecula Valley Agency Lauren Salisbury Darien Schaefer Outlets At San Clemente Cheryl Bagby Joaquin Baena Santa Monica Travel & Big Bear Craig Kaufman Ventura Visitors & Global Marketing & Sales, Tourism Travis Scott California Welcome Center Convention Bureau Inc. Richard Stenger Visit Mendocino County - Salinas Laurie Baker Karen Baker Redwood Coast Parks Jennifer Talt-Lundin Myrna Lozada Shasta Cascade Wonderland California Welcome Center Ventura Port District Santa Rosa Convention & Birgitt Vaughan Association - Merced Kathy Vreeland Visitors Bureau Sonoma County Tourism Julie Benbow Laurie Baker Visit Buellton Debbie Manning Elisabeth Wieselthaler-Tolley Humboldt County Shasta Cascade Wonderland El Dorado Hills San Francisco Travel Convention and Visitors Sarah Winters Association Chamber of Commerce Association Bureau High Sierra Susan Brown Lisa May Deborah Wakefield Matt Billingsley California Welcome Center SNOW Shasta Cascade Wonderland CityPass, Inc. Bakersfield Convention & - Salinas Amber Burke Association Visitors Bureau Brad Calkins RESEARCH & ROI North Lake Tahoe Tiffany McKenzie Molly Cano Santa Rosa Convention & Brett Allor Resort Association California Welcome Center San Bernadino County Visitors Bureau San Francisco Travel Kelly Campbell - Auburn Economic Development Lorraine Chapman Association Vail Resorts Management Alex Pace Agency Greater Ontario Convention Anne Briones Company Global Marketing & Sales, Jonathan Farrington & Visitors Bureau/ Carol Chaplin Inc. Universal Studios Hollywood Yosemite Mariposa County Ontario Convention Center Lake Tahoe Visitors Sherri Pellegrini Susan Bruinzeel Tourism Bureau Jason Chase Authority El Dorado Hills San Diego Tourism Authority Jody Franklin Outlets At San Clemente Colleen Dalton Chamber of Commerce Shannel Crane El Dorado County Visitors Leslee Gaul Truckee Tourism Business Lydia Petroff Visit Anaheim Authority Visit Oceanside Improvement District Visit Oceanside Sheldon Duncan Joyce Kiehl Matt Gebo Christine Horvath Jennifer Rodriguez Universal Studios Hollywood Greater Palm Springs CVB Mammoth Lakes Tourism Squaw Valley Resort The Outlets At Barstow Gay Fontana Melyssa Laughlin Ruth Geresy Katie Hunter Erik Rodriguez Fresno/Clovis Convention & Visit Vacaville Truckee Donner Sierra-at-Tahoe Citadel Outlets Visitors Bureau Doug Lueck Chamber of Commerce Eddie Kirsch Lynn Saunders Bill Hendricks Ridgecrest Area Convention Pam Gimenez Big Bear Visitors Bureau Truckee Donner Cal Poly RPTA and Visitors Bureau Gilroy Welcome Center Joani Lynch Chamber of Commerce Wendy Kheel Tony Lyle Andrey Gorbachenko Mammoth Mountain Ski Cynthia Schmitt Los Angeles Tourism & Lake Tahoe Visitors Greater Ontario Convention Area, LLC Citadel Outlets Convention Board Authority & Visitors Bureau/ John McColly Rob O’Keefe Lisa May Ontario Convention Center Barbara Scott-Blakely Mountain High Resort Monterey County Convention Shasta Cascade Wonderland Amanda Hall California Welcome Center - Matt Peterson Barstow & Visitors Bureau Association California Welcome Center - Rebecca Paredez Lisa Mayo Boreal Ridge Corp. San Francisco John Urdi Visit Temecula Valley Tuolumne County Visitors Michael Reitzell Mammoth Lakes Tourism Bureau California Ski Industry Association

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