September 28 2016 board of directors presentation hkedits final

BOARD OF DIRECTORS MEETING Wednesday, September 28, 2016 | 8 a.m.

The Carter Center

CALL TO ORDER DARYL EVANS CHAIR OF THE BOARD AND EXECUTIVE COMMITTEE

WELCOME DR. MEREDITH EVANS DIRECTOR JIMMY CARTER PRESIDENTIAL LIBRARY & MUSEUM

DESTINATION REPORT MARK VAUGHAN EVP/CSO

Atlanta Occupancy – August 2016 August 2016 YTD Occupancy

2015

2016

ACVB Tax Revenue District

74.3%

74.5%

Hotels w/500+ rooms

75.7%

78.1%

Hotels within 1-mile radius of GWCC

73.6%

75.3%

Metro Atlanta

72.1%

71.4%

Source: STR

Demand Share

Top 25 Markets Luxury & Upper Upscale

MONTHLY

YTD

Source: STR

Key Sales Activities • Currently through August we are at 101% of our room night goal and 108% of our lead goal

Direct Sales Events • Trade Show Executive Gold 100 • ASAE Five Star Weekend • ASAE Summit Awards • IMEX • IAEE • Holiday Showcase • CVB Reps Holiday Event • World Travel Market • Ireland Sales Mission • China Sales Mission • International Showcase

San Diego San Diego Washington Las Vegas Anaheim Chicago Washington London Dublin Shanghai Atlanta

MAJOR GROUPS FOR FUTURE YEARS

Green Up = 10% above average Orange Equals = Within 10% +/- of average Red Down = 10% below average

BOOKINGS

Note: These numbers differ slightly from the Productivity Report due changes in room blocks and distribution of booking credit.

August 2016

Additional Rooms

10,389

Grand Total

96,279

Additional Rooms

68,909

2016 YTD

Grand Total

1,071,243

FINANCIAL UPDATE

GREGORY PIERCE EVP/CAO/CFO

ATLANTA CONVENTION & VISITORS BUREAU FINANCIAL STATEMENT SUMMARY WITH FORECAST THROUGH AUGUST 31, 2016

CONSOLIDATED

CONSOLIDATED

2016

2016

2015

2016

2016

2016

ACTUAL

BUDGET

ACTUAL

YTD

FULL YR

FULL YR

YTD

YTD

YTD

VARIANCE

BUDGET

FORECAST

SUPPORT & REVENUE Public Sector

15,697,080

14,837,999

14,557,353

859,081

22,134,003

22,450,000

Private Sector

3,828,100

4,052,885

2,662,453

(224,785)

8,730,915

8,815,000

19,525,180

18,890,884

17,219,806

634,296

30,864,918

31,265,000

5,977,990

5,699,607

5,259,820

(278,383)

9,280,340

9,270,000

593,052

535,849

489,878

(57,203)

923,510

900,000

Direct Promotional Expense

9,879,102

9,872,360

8,338,153

(6,742)

18,700,952

19,150,000

Capital Expense

1,215,156

1,166,478

1,100,193

(48,678)

1,675,000

1,680,000

17,665,300

17,274,294

15,188,044

(391,006)

30,579,802

31,000,000

1,859,880

1,616,590

2,031,762

243,290

285,116

265,000

TOTAL SUPPORT & REVENUE

EXPENSE Payroll & Related Expense Other Operating Expense

TOTAL EXPENSE

EXCESS(DEFICIENCY) OF REVENUE OVER EXPENSE

MARKETING UPDATE ANDREW WILSON EVP/CMO

ATLANTA.NET

END of AUGUST 2016 YTD

SITE VISITS

MOBILE SHARE

YTD Monthly Average

of Site Visits

+ 20% YoY 437,503

+ 15% YoY 523,481

600K

70%

52%

60%

2015 YTD

2016 YTD

60%

500K

Goal 50% 400K 40% 300K 30% 200K 20% 100K

10%

0K

0%

2015 YTD

2016 YTD

ATLANTA.NET

END of AUGUST 2016 YTD

USER ENGAGEMENT YTD Index

120.3

*

vs. 2015

Weighting

Page Views/Visit Mobile

95

25%

Page Views/Visit Desktop & Tablet

99

20%

Soc. Media Engagement **

167

30%

Leisure Newsletter Open Rate

122

10%

Leisure Newsletter Sign-up

63

5%

Ad Clicks

98

5%

Member Clicks

128

5%

Weighted Index

120.3

* 2015 set as baseline = Index 100 ** Social Media Activity is the aggregate of Likes, Comments, Shares and similar activity across Facebook, Twitter, Instagram and Pinterest.

SUMMER CAMPAIGN REPORT 2016

2015

$217,000

$210,800

Impressions

47,794,737

41,672,456

Video Views • YouTube • Facebook

67,260 276,394

N/A N/A

Clicks to Partner Sites Clicks to Atlanta.net

9,401 81,667

31,183 42,314

Display Native Social eMail Broadcast YouTube Print Influencers

Display Native Social eMail Broadcast -

Budget

Key Components

NEW SALES TOOLS

SOCIAL INFLUENCER CONFERENCE • • • • • •

2 ½ Days 70+ Influencers 13 Speakers Host hotel W Atlanta-Buckhead Opening reception Atlanta History Center 10 Atlanta experiences • Buckhead / East Atlanta Focus

• 2015 Highlights • 50 Influencers • 93 Million impressions • Midtown / Downtown Focus • Investment $50,000 • Media value earned - $500,000 (10:1 ROI)

10/12 – 10/15

CFHOF AND CHICK-FIL-A FAN EXPERIENCE UPDATE

DENNIS ADAMOVICH CEO COLLEGE FOOTBALL HALL OF FAME AND CHICK-FIL-A FAN EXPERIENCE

PRESIDENT’S REPORT E

WILLIAM PATE PRESIDENT & CEO

CHINA MARKET BRIEFING U.S.-China Leadership Summit 2016 Michael Merner, Managing Director, Asia Brand USA

China’s Socioeconomic Transformation

● RAPID GROWTH IN HOUSEHOLD

SPENDING: up 9.2% in 2015 – China now has more billionaires than the USA and over 4 million millionaires, second only to the USA

● SOARING MIDDLE CLASS:

● 2010:

50 million

● 2015:

300 million (1/4 of China’s population)

● 2020:

600 million (1/2 of China’s population)

● RAPID URBANIZATION:

still represents only 54% of China’s population versus the 80% average in developed economies

Sources: China Daily; National Bureau of Statistics of China, McKinsey

7

Trend #1: Affluent Segment Trend

• UPPER MIDDLE CLASS & AFFLUENT SEGMENTS: will exceed 100 million households by 2020, each with over $24,000 in disposable incomes • GROWTH: current spending growth rate for this high-spend segment is 17% annually versus 5% for the emerging-middle-class

• IMPORTANCE: will account for 81% of China’s incremental consumption growth through 2020 • SPEND CATEGORIES: the three top spending categories for this segment: food, education and travel • LOCATION: by 2020, 46% of affluent Chinese consumers will live in China’s Tier 3 cities

Sources: China Daily; National Bureau of Statistics of China; Boston Consulting Group

8

CHINA OUTBOUND MARKET UPDATE

Preferred Leisure Activities of China's Middle & Upper Classes 56%

TRAVEL

39%

Reading

28% 23%

Tea Tasting Family Time

15% 13% 11% 9% 8% 8% 8%

Driving Spa Petsitting Wine Tasting Photography Karaoke Fishing Foot Massage

Yachting/Sailing Games Cigar Appreciation Source: Brand USA research

4% 4% 2% 1% 14

China Outbound Travel Market (MILLIONS)

133

2016

Source: CNTA

15

China Outbound Travel Market Growth 2012

83 Million — 6% of China’s population

2013

97 Million — World’s #1 source market

2014

115 Million – Double 2010 levels

2015

120 Million — 9% of China’s population

2020*

250 Million — 14% annual growth

* WTO Estimate Source: CNTA

16

China Overseas Travel Destinations The USA is the only long-haul destination among China’s Top-10 destinations

90% 3%

ASIA

AMERICAS

3% EUROPE 3%

AFRICA

1%

OCEANIA

Source: Brand USA research; Travel Pulse

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Chinese Travel Spending Trends SPEND PER TRIP

TRAVEL SPEND

$7,500 spend per person

China’s middle and upper classes spend 19% of their annual salaries on overseas travel — dramatically more than any other source country

per trip to the USA -makes Chinese the highest spending visitor group per person per trip to the USA

LUXURY SPEND 75% of Chinese tourists purchase more than 3 luxury items per trip

Source: Brand USA research; McKinsey Consulting

GLOBAL FORCE Chinese tourists make up 25% of global spending on luxury goods

20

CHINESE TRAVEL TO THE USA

% of Chinese Travelers Aspiring to Travel to the USA Percentage of intercontinental travelers* who include the USA on their destination wish list

60% 50%

41%

21%

21%

Mexico

Russia

30%

31%

Japan

Canada

34%

France

42%

52%

45%

37%

India

Germany Australia

UK

Brazil

Korea

CHINA

Source: Brand USA Global Intelligence Program and PhoCusWright, Inc.

23

Likelihood to Visit – Next 6 Months (2015 Research) United States

27%

Australia

18%

France

16%

New Zealand

15%

United Kingdom Brazil

14% 11%

Italy

10%

Switzerland

10%

Canada

10%

Question: When, if ever, are you likely to visit the following countries?

Base: China intercontinental travelers (2014 N=1,002, 2015 N=975) Source: Brand USA Market Intelligence Study

24

Chinese Visitors to the USA

•

As of March 2016, Chinese arrivals are up 16.8% YOY • Tied for 2nd place with South Korea for the strongest growth in 2016 of all U.S. markets • China has soared up the rankings to #4 in terms of overseas arrivals and spending in the USA and is projected to rise to become our top overseas source market within 6 years • By 2021, Chinese arrivals will exceed Germany, France & Australia combined

* Estimate Sources: National Travel and Tourism Office

2003

Under 200,000

2012

1.4 Million

2013

1.8 Million (+23%) #5 overseas market

2014

2.2 Million (+22%) #4 overseas market

2015*

2.5 Million (+17%)

2016*

3.0 Million (+16%)

2017*

3.4 Million (+15%) #3 overseas market

2018*

3.9 Million (+15%) #2 overseas market

2021*

6.3 Million

#1 overseas market

25

China Market Recap: Alignment of Key Factors ● Market Size: massive market size of 1.35 billion ● Market Growth: China's population has grown by the entire population of Australia

in 5 years ● Economic Growth: second largest economy in the world after the USA with

willingness to spend on travel soaring ● Disposable Incomes: Chinese incomes growing at 10% per year ● FX Rate: RMB pegged to the U.S. dollar

● Chinese Desire to Travel: travel is the most desired leisure pursuit for 56% of

middle and upper-class Chinese ● Willingness to Spend: Chinese are the No. 1 spending international visitors to the

USA with 19% of disposable incomes spent on travel on average ● China Outbound Travel Growth: 120 million outbound in 2015 -- world’s # 1

outbound market, with 133 million projected in 2016 ● Potential: less than 9% of China's population is traveling overseas – versus 25%

for Korea ● Growth: Number of Chinese outbound travelers is projected to more than double

in the next 5 years to 250 million Source: Brand USA China research; CNTA

45

Key Factors Driving Chinese Arrivals to the USA ● Tiny USA Market Share: 0.15% of China’s population and 2% of Chinese outbound

travelers ● US Destination Satisfaction: the USA tops the list of most satisfying destinations for

Chinese ● Positioning: the USA has the highest intent to visit of any long-haul destination ● Streamlined US Visa Interview Process: under 5 days with 10-year visa now

available ● Growth in Airlift: massive continuing increases in lift from China to the USA ● Booming Online and Social Media Channels: 700 million netizens with 600 million

via mobile ● Exploding Secondary Markets: over 100 cities with populations of over 1 million ● Booming FIT: with massive growth potential beyond the traditional USA gateways ● Rapid Growth of MICE Market: Perfect China (7,000 pax) Amway (9,000 pax) ● Huge Growth in Niche Travel: golf, ski, study abroad, medical tourism etc.

● Spend: per visitor per day already leads all overseas markets ● Arrivals: #1 overseas market for the USA within 5 years

Source: Brand USA China research; CNTA

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OLD BUSINESS E

NEW BUSINESS

ADJOURN