Visa usa-tourism-2011-2

TOURISM OUTLOOK

United States
APRIL 2011

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

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

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

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

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

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

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

William M. Sheedy
Group President, Americas
Visa Inc.

1 VisaVue Travel Data, 2009 - 2010
Page 3

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


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

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

Perhaps even more promising was the fact that growth in spending by both
U.S. and international Visa cardholders was registered across 92 percent of
merchant segments.5 Lodging and restaurants both recognized significant
double-digit increases from inbound and outbound tourism spending – a stark
contrast to the declines of 2008 and 2009. 5

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

4 UNWTO World Tourism Barometer, Advance Release, January 2011

Page 5


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

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

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


Page 6

2010 Monthly Comparison
Perhaps one of the most significant signs of spending increases on Visa cards, with each
tourism recovery is the consistent increase in month netting around $3.1 billion dollars in
international travelers visiting the U.S. each tourism revenue.7
month in 2010.
The month with the greatest increase was
While August and July were the most popular May (25%), followed by March and April,
months for international travelers to the U.S., which each saw 23 percent growth.7
October through December also saw significant


Month-to-Month
Inbound International Spending Comparison
January | +13% $2.6B

$2.3B

February | +18% $2.3B
$1.9B

March | +23% $2.7B

$2.2B

April | +23% $2.8B

$2.3B

May | +25% $2.8B

$2.2B

June | +18% $2.5B

$2.1B

July | +19% $3.1B

$2.6B

August | +15% $3.3B

$2.9B

September | +14% $2.9B

$2.5B

October | +15% $3.1B

$2.7B

November | +20% $3.1B

$2.6B

December | +13% $3.1B

$2.7B

2010 2009

Page 8

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

Page 9

State-by-State Tourism Growth
According to VisaVue data, travel destinations the biggest year-over-year growth were North
such as Florida, New York, California, Texas Dakota (39%), Tennessee (33%), Utah (27%),
and Nevada were the most popular states and Wisconsin (26%).10 In total, 48 of the 50
amongst international travelers to the U.S. states reported year-over-year increases in
during 2010.8 Disney World, Times Square and spending on Visa cards, and of those states,
Las Vegas were some of the top destinations 46 saw double-digit year-over-year growth.10
within those states, respectively.9

International visitors to Florida contributed
more than $6.6 billion on their Visa cards in
2010, followed by New York ($5.6 billion) and
California ($5.4 billion).10 States which saw
9 “Top 25 Most Visited Tourism Destinations in America,” TheTravelZone.com, May 10, 2011

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

New York
+22%

Nevada
+21%

California
+19%
Texas
+16%
Florida
+17%

Page 10

United States Outbound Spending
U.S. travelers ventured outside the country $3.1 billion during 2010, followed by popular
at an increased rate in 2010, spending nearly European destinations including the United
$31 billion on Visa payment cards, a 6 percent Kingdom ($1.6 billion), Italy ($1.3 billion),
increase over 2009.11 France ($1.3 billion) and Germany ($1.1 billion).11

However, American travelers continued to stay Of the top 10 most popular international
closer to home while traveling internationally destinations amongst U.S. travelers, all but one
in 2010, as Canada and Mexico were the saw moderate year-over-year growth according
most popular destinations according to Visa to Visa cardholder spending data.11 Of these
cardholder spend data.11 countries, China (18%) saw the biggest year-
over-year growth, followed by Puerto Rico (9%),
Canada was the most popular destination
Canada (8%), Mexico (7%), and Japan (7%).11
for U.S. international travelers, as they spent
$3.5 billion on their Visa payment cards in the
country during 2010.11 Mexico was a close
second, with American travelers spending

Top 5 Outbound Destination Countries

Canada
+8%
United
Kingdom
+7%
France
+4% Italy
+4%
Mexico
+7%

Page 13


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

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

World Cup Stats
• More than 30,000 U.S. travelers made their way to South Africa for the 2010 FIFA World Cup.13
• U.S. travelers visiting South Africa during the FIFA World Cup spent more than $59 million on
their Visa cards.14
• Interest in the 2010 FIFA World Cup spurred dramatic year-over-year growth for U.S. travelers
visiting South Africa, as spending on Visa cards by American travelers increased by 21 percent
from 2009 to 2010.14

Olympic Winter Games Recap
• The number of U.S. travelers visiting Canada rose by almost 6 percent from the previous year
during the Vancouver 2010 Winter Olympic Games.15
• American travelers visiting British Columbia during the Vancouver Winter Olympic Games spent
approximately $61 million on their Visa cards.16

13 South Africa Ministry of Tourism, South Africa, December 2011
15 Statistics Canada, April 2010

Page 14

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

Page 15

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


Page 16
13
VisaVue Travel Data, 2009 - 2010

2010
Inbound Cardholder Spending by Market Segment

$14B

$13B

$12B

$5.2B
$5B
Department Stores

$4.3B

General Retail
Restaurants

$1.7B $1.8B
$1.6B $1.6B
Lodging
Airlines

$1.4B $1.3B
$1.2B $1.2B
$1B

After a sharp The airline industry After double-digit drops from 2008 to 2009, In 2010, general retail
15 percent drop saw a signiﬁcant international Visa cardholders reinvigorated purchases made by
from 2008 to 2009, 24 percent increase spending on both lodging and restaurants. international Visa
spending at in spending by Lodging increased from $4.3 billion in 2009 cardholders increased
department stores international Visa to $5.0 billion in 2010 and represented by 16 percent, totaling
saw positive growth cardholders in 2010, almost 15 percent of total international Visa more than $14 billion
in 2010. Spending by surpassing cardholder spend in 2010. Restaurants compared to
international Visa pre-recession increased from $1.6 billion in 2009 to $12 billion in 2009.
cardholders increased spending by more $1.8 billion in 2010 and represented more This impressive spend
from $1.0 billion to than $2.0 million. than 5 percent of total international amount represents
$1.2 billion. cardholder spending last year. 42 percent of total
international Visa
cardholder spending
in 2010.


Tourism Spending
by Market Segment
Outbound
Similar to the patterns of international Visa continue to grow. Visa will work with retailers,
cardholders traveling to the U.S., American businesses and its U.S. tourism partners to
travelers using their Visa cards increased provide critical spending data that will help the
spending throughout key market segments in country create targeted tourism programs that
2010, making a tremendous comeback promote the country’s growth.
from the 2008 to 2009 period.

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

Page 18

2010
Outbound Cardholder Spending by Market Segment

$19.1B

$15.9B
$15.4B
Other Travel & Entertainment

$6.2B
$5.6B
$5B

General Retail
Restaurants

$2.7B
Lodging
Airlines

$1.8B $1.8B $1.6B $1.8B
$900M $899M $999M $1.1B

From 2008 to 2009, After a dramatic Visa cardholders from the U.S. reinvigorated General retail
the airline industry 19 percent dip from spending on both lodging and restaurants. purchases made by
su ered dramatically 2008 to 2009, Lodging increased from $5.0 billion in 2009 U.S. Visa cardholders
and absorbed a other travel and to $5.6 billion in 2010 and represented traveling
66 percent loss. entertainment related 18 percent of total international Visa cardholder internationally
In 2010 that number expenses saw a spending in 2010. Restaurants increased from totaled nearly
has plateaued to 12 percent increase $1.6 billion in 2009 to $1.8 billion in 2010 and $16 billion compared
$889 million. in 2010. The amount represented 6 percent of total international Visa to $15 billion in 2009,
spent in this popular cardholder spending last year. representing an
category by U.S. Visa extraordinary
cardholders traveling 52 percent of total
internationally spending by U.S. Visa
represented 3 percent cardholders traveling
of total tourism internationally in 2010.
spending
on Visa cards
($1.1 billion).



Looking Ahead

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

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

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

For more information regarding Tourism Outlook: USA and Visa’s tourism
initiatives, please contact globalmedia@visa.com.


Page 20

Methodology
Visa cardholder spending data cited is based upon a review of cross-
border spending on Visa-branded payment cards by cardholders from
key source countries while in the U.S. during the calendar years 2009
(January 1 – December 31, 2009) and 2010 (January 1 – December
31, 2010). These findings are based upon VisaVue® Travel data.
Visa introduced the VisaVue® Travel tourism reports to U.S. tourism
organizations in 2008 and continue to provide them to paid subscribers
within the destination marketing community. The reports are shared
with a broad audience of state and convention and visitors bureau
destination marketing entities provided to paid subscribers within the
destination marketing community. Page 21


Appendix

Appendices
TOP 2010 INBOUND SOURCE COUNTRIES
Issuer Country 2010 2009 Percent Growth (+/-)
1 Canada $9.2B $7.8B 18%
2 United Kingdom $2.5B $2.3B 11%
3 Mexico $2.0B $1.7B 18%
4 Brazil $1.9B $1.2B 63%
5 Japan $1.8B $1.7B 6%
6 China $1.1B $700M 64%
7 Australia $1.1B $861M 32%
8 France $1.0B $975M 6%
9 South Korea $824M $651M 27%
10 Germany $800M $769M 4%
Source: VisaVue Travel Data, 2009-2010

2010 MONTH-BY-MONTH INBOUND INTERNATIONAL SPENDING COMPARISON
Month 2010 2009 Percent Growth (+/-)
• January $2.6B $2.3B 13%
• February $2.3B $1.9B 18%
• March $2.7B $2.2B 23%
• April $2.8B $2.3B 23%
• May $2.8B $2.2B 25%
• June $2.5B $2.1B 18%
• July $3.1B $2.6B 19%
• August $3.3B $2.9B 15%
• September $2.9B $2.5B 14%
• October $3.1B $2.7B 15%
• November $3.1B $2.6B 20%
• December $3.1B $2.7B 13%

Page 24

Appendices
TOP 2010 U.S. STATES BASED ON INBOUND INTERNATIONAL SPENDING
1 Florida $6.6B $5.7B 17%
2 New York $5.6B $4.6B 22%
3 California $5.4B $4.5B 19%
4 Texas $2.1B $1.8B 16%
5 Nevada $1.8B $1.5B 21%
6 Hawaii $1.3B $1.2B 16%
7 Washington $980M $805M 22%
8 Arizona $802M $688M 17%
9 Illinois $799M $686M 16%
10 Massachusetts $784M $665M 18%

TOP 2010 OUTBOUND DESTINATION COUNTRIES
1 Canada $3.5B $3.3B 8%
2 Mexico $3.1B $2.9B 7%
3 United Kingdom $1.6B $1.5B 7%
4 Italy $1.3B $1.3B 4%
5 France $1.3B $1.2B 4%
6 Germany $1.1B $1.2B -2%
7 Puerto Rico $1.1B $967M 9%
8 China $741M $626M 18%
9 Spain $731M $695M 5%
10 Japan $659M $614M 7%

Page 25

Appendices
OUTBOUND TRANSACTION VOLUME IN TOP MERCHANT CATEGORIES - THREE YEAR COMPARISON
Country 2008 2009 Percent Change 2010 Percent Change
1 General Retail $19.1B $15.4B -19% $15.9B 3%
2 Lodging $6.2B $5.0B -19% $5.6B 13%
3 Restaurants $1.8B $1.6B -12% $1.8B 12%
4 Other Travel &
$1.8B $999M -43% $1.1B 7%
Entertainment
5 Airlines 2.7B $900M -66% $899M —

INBOUND TRANSACTION VOLUME IN TOP MERCHANT CATEGORIES - THREE YEAR COMPARISON
Issuer Country 2008 2009 Percent Change 2010 Percent Change
1 General Retail $13.0B $12.0B -8% $14.0B 16%
2 Lodging $5.2B $4.3B -18% $5.0B 18%
3 Restaurants $1.7B $1.6B -10% $1.8B 15%
4 Airlines $1.4B $1.3B -6% $1.6B 24%
5 Department Stores $1.2B $1.0B -15% $1.2B 3%

Page 26

Appendices
METHODOLOGY
Visa payment card spending by international visitors in the U.S. cited in the previous pages
was evaluated across the following broad merchant spending categories:
• Airlines
• Auto Rental
• Lodging
• Healthcare
• Business to Business Includes printing, freight, commercial goods, industrial
supplies, stationery, office supplies, uniforms, etc.
• Other Retail Includes general merchandise, contractors, confection,
bakeries, home supply, lumber, paint, garden supply, clothing,
software, music, wine/liquor, antiques, bookstores, jewelry,
toys, camera/photo supply, luggage/leather, glassware,
cosmetics, newsstands, etc.
• Remaining Merchant Includes railroads, marinas, ATMs, financial institutions,
insurance, money transfers, etc.
• Other Emerging Includes local commuter transport, taxis, etc.
• Other Travel & Includes buses, boat rentals, airport purchases, duty free
Entertainment purchases, home furnishings, catering, bars, casinos, golf
courses, etc.
• Steamship/Cruise Lines
• Bill Pay Includes courier services, warehousing/storage,
telecommunication services, internet services, and utilities
• Travel Agencies
• Toll and Bridge Fees
• Wholesale Clubs
• Discount Stores
• Department Stores
• Supermarkets
• Oil
• Furniture/Equipment Stores
• Radio, TV and Stereo Stores
• Restaurants
• Quick Service Restaurants
• Drug Store and Pharmacies
• Sporting Goods Stores
• Direct Marketing
• Government

Page 27

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