Ad Nova Intelligence Report No.2 / May 16 - June 02, 2020

Ad Nova Intelligence Report No. 2 / May 16- June 2, 2020

International’s Economic Outlook FORWARD-LOOKING SCENARIOS DEPENDING ON RE-OPENING OF BORDERS International tourist arrivals in 2020: three scenarios

•

The scenarios reflect three possible patterns of monthly change in arrivals from April to December 2020 supposing that travel restrictions start to be lifted and national borders opened in early July (Scenario 1: -58%), in early September (Scenario 2: -70%) or in early December (Scenario 3: -78%).

•

These scenarios would put 100 to 120 million direct tourism jobs at risk.

Source: World Tourism Organization (UNWTO)

DOMESTIC DEMAND EXPECTED TO RECOVER FASTER THAN INTERNATIONAL DEMAND International demand would recover by Q4 and mainly 2021 according to the UNWTO Panel of Experts survet reponses

Source: World Tourism Organization (UNWTO)

Mexico’s Economic Outlook Government Updates Exchange Rate (USD) 29/05/2020 $22.17 ppd

01/06/2020 $22.01 ppd

02/06/2020 $21.68ppd

› In Q1-2020, GDP contracted significantly quarterto-quarter: -1.24%

Gross Domestic Product Source: Quarterly Report January-March 2020 , Bank of Mexico.

COVID-19 Confirmed cases 97,326 02/06/2020

Active

16,940

Suspicious

42,151

Recovered

70,308

Deaths

10,637

01

The Government of Mexico, finished Phase 3 and ordered that starting June 1, activities towards the new normality restart.

Mexico City and the states of Jalisco, Nuevo Leon and Quintana Roo, presented the Gradual Plan towards the new normality.

02

The President of Mexico considered that the months of April, May and June will be the most difficult of the economic crisis derived from the COVID-19 pandemic, but that starting in July the economic recovery in the country will begin.

› After remaining weak in the first two months of 2020, the creation of new IMSS-insured jobs fell to unprecedented levels.

Employment Rate

• In F1-May annual headline inflation laid at 2.83% and core inflation at 3.76%.

Inflation

Mexico’s Travel Sentiment Most important factors to travel from June 2020 to July 2021

46% Low interest loans

73% Good travel promotions

76% Assurance that business won't be closed again

93% Business and economic stability

93% New COVID-19 outbreaks

86% None exchange rate price affectation

94% Good implementation of health and sanitization measures

Where are you planning to travel?

Pueblos Mágicos

13%

10%

10%

Mexican Beaches

17%

USA

13% 9%

28%

Cancun America

Heritage Cities Europe

Travelers Situation According to the National Institute of Statistics and Geography (INEGI), international travel decisions are concentrated in the high-income population (socioeconomic deciles 9 and 10), which have not seen a significant affectation at their family income.

70%

77%

23%

None Cancelled trips

Travelers who still working

Travelers who decrease their economic income

Source: 705 surveys conducted by the International Tourism Faculty of the Anáhuac University

Travel Wish 120

100

96

80

97

99

99

99

84

80

77

98

%

70

60

59

64

40 33 27 20

19 13

8

0

0

2

Month

Travel Intention Growth Rate As a result of the rate of postponed flights versus the total % 120 100

100 87 77

80 67 61

60

52 38

40

24 20 10 0 June 2020

July 2020

August 2020

September 2020

Source: 705 surveys conducted by the International Tourism Faculty of the Anรกhuac University

October 2020 Month

November 2020

December 2020

January 2021

February 2021

100

Mexico’s Travel Sentiment Accommodation Preference

4%

4%

Big Properties

4%

64%

6%

Small Properties 16% 57% 25% Still don´t know 12%

Family Property 6%

TYPES OF TRAVEL Family

Couples

Friends

Solo

Business

Vacation Rentals Others

2%

Travel Window

Main reasons for booking at hotel

A

83% Cleaning & Hygiene 7%

B

79% Price

C

69%

13%

Traveler´s comments 20%

D

60%

68%

Cancellation Policies June-December 2020

E

66% Hotel Brand

Source: BestDay Mexico´s Main Clients Survey

1° Quarter 2021 Not planning to travel After COVID-19 vaccine

Travel Industry Updates The main tourist group in Mexico, PriceTravel Holding, was recognized this 2020 by the U.S. Travel Association’s Chairman’s Circle along with with Brand USA, selected Best Day Travel Group as one of the most important travel companies in the world in the marketing of tourist destinations and products in the United States. Source: Trafico Magazine

The Wholesaler Euromundo is preparing to launch a new platform to market hotels and tourist services in Mexico. Likewise, the company has promotions for international trips that for a specific and short period, offer the commitment by the partner of the Tour Operator, Europamundo Vacaciones that in the event that prices should rise, all reservations will be maintained with the originally contracted price. Source: Ladevi Federal Tourism Minister Miguel Torruco pointed out that the government will reverse its proposal to eliminate so-called long weekends, since he said they are essential for the revival of the sector at the national level. Source: Inversión Turística Facing the reactivation of the tourist activity, the Mexican Association of Travel Agencies (AMAV) is preparing to restart its operations, for which it presented the Distinctive MRT Covid-19 health protocol, which seeks to prevent the virus spread among the collaborators and users, for which, in the last week of May, training began for around 2,500 affiliates nationwide. Source: Pasillo Turistico WTTC announced global health security protocols (Aproved by WHO) that will allow a return to the new normal of travel with strict hygiene and sanitation standards for airports, airlines and tour operators. Measures include deep cleaning (including luggage), use of personal protective equipment, use of infrared scanners and thermometers at the entrance and exit, automation of check-in and reception of luggage, food hygiene protocols, redesign and automation of migratory processes. Source: WTTC

Airlines Update Air Canada Air Canada has launched an abbreviated summer program that offers a choice of nearly 100 destinations across Canada, in the United States, and internationally.

Also starting June 1, it will offer travelers the possibility to choose between a fully transferable travel voucher without an expiration date or convert their reservation to Aeroplan Miles and obtain 65% additional bonus miles. Both options, retroactive to March 1, 2020.

Source: Pasillo Turistico

Viva Aerobus Viva Aerobus, reported that in June it will operate 50 nationals and 2 internationals (Houston). Its offer will be maintained or adjusted depending on demand in the face of the current pandemic. Additionally, the airline guarantees compliance with all security, sanitation and health measures, and offers 2 coverages with additional cost for passenger protection, "Full Refund" in case of cancellation and "Viva Protection" for change of date. Source: Viva Aerobus News Room

Volaris Volaris presented "Con Volaris, seguro vuelas", its new campaign based on three fundamental pillars: safety, flexibility and discounts and low prices, for the benefit of its clients in response to the health contingency caused by COVID-19. Volaris will be taking all necessary measures with a new Biosafety Protocol with which each of the aircraft is cleaned with industrial grade disinfectants before each flight and on each rotation, while the cabin air is completely renewed every 3 minutes with HEPA filter technology. Source: Pasillo Turistico (Media)

Aeromexico Starting on June 1, Aeromexico will perform, on average, 90 operations per day, 15% of the 600 it had before the start of the Covid-19 pandemic. During the months of June to September, the airline will add weekly frequencies on its international routes, including flights from Mexico City to Austin, Amsterdam, Chicago, Dallas / Ft Worth, Denver, Las Vegas, Los Angeles, Madrid, Miami , Montreal, New York, San Antonio, Tokyo, Toronto and Vancouver. In addition to other international routes form Monterrey, Guadalajara, Guanajuato and Queretaro. Source: Ladevi (Media)

Interjet In addition to the financial and economic problems of Grupo Alemán (GALEM) and its airline Interjet, the debt for more than $ 841 million pesos ($38,810,468 USD approximately) that it has with Airports and Auxiliary Services (ASA) for the sale of jet fuel until March of this year is now added. Among other reasons due to the affectations they have had due to the health contingency of COVID19. Source: Milenio (Media)

IATA IATA presented the document “Biosecurity for Air Transport: A Roadmap for Restarting Aviation” in which they highlight two dispositions that could contribute to a radical change in biosecurity measures and improve the process of air travel until a vaccine is found: the Covid-19 Test (when they are scalable and provide reliable and rapid results) and the Immunity passport that could differentiate travelers without risk, when they are endorsed by the scientific community and recognized by governments. Source: IATA

Airlines Update Competitive destinations After more than two months closed, Las Vegas announces the possible reopening of casinos and some hotels in June 4, following the hygiene and safety measures established by the government. Steve Sisolak, Governor of the State, clarified that the reactivation could only be carried out if the health authorities approve it. Different sanitary restrictions will apply to casino tables and slot machines.

Source: Invertour

The Government of Spain announced that on July 1 quarantine will be lifted only for travelers from the 'Schengen area' and the United Kingdom, but the external borders to the European Union will be closed.

Foreign tourists arriving in Spain when the quarantine is lifted, probably on July 1, will do so under measures of temperature control and symptoms of Covid-19. Source: El Mundo To boost the reactivation of the Tourism Industry, Destination Canada will invest $30 million CAD with Provincial and Territorial Marketing Organizations to help restart marketing efforts across Canada over the next 18 months. This new partnership with the provinces and territories will enable to deliver locally-led marketing programs encouraging Canadians to discover their back yard. Source

The Italian government has promised to cover one out of every three hotel nights that the tourists spend in the Italian region of Sicily. In addition, it will give away tickets to museums and archaeological sites and will pay 50% of the airfare to this town. Source: El Universal

As an initial stage for the tourism reactivation, Japanese authorities will launch a subsidy plan of up to $ 12 billion dollars that aims to incentive national tourism, by paying up to half the trip for national tourists. No further details have been given on how this program will operate, nor the specific dates of its launch. Source: Invertour Visit Orlando reported that the area's large theme parks (including Disney and Universal) have announced their reopens, while other independent attractions have already reopened.

Although approval by government entities is pending, the most popular parks will resume their activity between June 5 and 15, 2020. Source: Ladevi

Destination Canada

Mexico´s Tourism Media Overview Trade and Consumer Media Content Destinations Reopening Tourism Economic Situation Tourism Health Measures Destinations Attractions

35%

28%

21%

8%

6%

2%

Source: Trade Media (Pasillo Turístico, Turistampa, LADEVI, Invertour, Réport México, Travel Times, NITU, ABZ Turístico) and Consumer Media (Reforma Newspaper, Excelsior Newspaper and Milenio TV)

Hot Sales Webinars

Media is now focusing on the upcoming destinations’ reopening dates; they are sharing specific details about how they would take place and the health measures that will be implemented to assure traveler’s safety.

Would media attend fam trips or events soon?

The new normal travel practices, for media, are expected to take place during late August or early September. According to a media survey, accepting and invitation would depend on the risk that the trip or event would represent for the media team´s health or security.

Trade Media 100%

VS

Consumer Media 50%

Source: Survey Group n=11 media outlets (Pasillo Turistico, Turistampa, LADEVI, Invertour, Report Mexico, Travel Times, NITU, ABZ Turístico, Reforma Newspaper, Excelsior Newspaper, Milenio TV and Nat Geo Traveler LATAM Magazine)

Media Platforms 45% 55% Nowadays, all print outlets count with a digital platform

55% of trade and consumer media outlets is still printing their editions, while 45% are only covering through their digital platforms.

Print Edition and Digital Platform Digital Platform Print Edition Source: Trade Media (Pasillo Turístico, Turistampa, LADEVI, Invertour, Réport México, Travel Times, NITU, ABZ Turístico) and Consumer Media (Reforma Newspaper, Excelsior Newspaper, Milenio TV and Nat Geo Traveler Magazine)

Digital magazines’ editions are available for free, since March 15th, at media platforms like Editorial Televisa Group, Reforma Group, Expansion Group and GINmedia Group.

Source: Based on 36 magazines and 3 newspapers of the mentioned editorial groups

Region Offer by Tour Operator 1

North America

• • • • • • • • • • • • • • • • • • • •

Interjet Vacations – 21% Consolid – 13% Viaje y Punto – 7% Julia Tours – 6% Le Grand Viajes – 6% Mega Travel – 6% PriceTravel – 6% Sierra Madre – 6% Viajes El Corte Inglés – 4% Ya Vas – 4% Mex Jal – 3% Mundo Joven – 3% Sevilla Sol – 3% Viajes Premier – 3% Geo Travel – 1% LASEN Travel – 1% Mundomex – 1% System Operadora – 1% Tac Tours – 1% TourMundial – 1%

6

Caribe and Central America

• •

48% 14%

6%

3

22%

4 5 • • •

Asia

• • • •

LeGrand Viajes – 50% Abiega Operadora – 38% Mundo Joven – 12%

Viajes El Corte Inglés – 24% Travel Shop – 19% Sierra Madre – 16% Le Grand Viajes – 11% Julia Tours – 6% Sevilla Sol – 6% La Casa del Viaje – 3% Mega Travel – 3% Pema – 3% PETRA – 3% Viaje y Punto – 3% VICA Operadora – 3%

• • • • • • • • • • • •

8%

Julia Tours – 67% Viajes El Corte Inglés – 33%

South America

2

Total: 141 packages

Middle East Mega Travel – 64% Viajes El Corte Inglés – 18% Punta del Este – 9 % Travel Viajes Group – 9%

• • • • • • •

Europe Mega Travel – 50% Garin Mayoristas – 10% Mundo Joven – 10% Sierra Madre – 10% Viaje y Punto – 10% Opesa – 5% Voiash – 5%

North America Offer by Tour Operator

Mexico

Canada

6%

• • • •

Mega Travel – 25% Mundomex – 25% Viaje y Punto – 25% Viajes El Corte Inglés – 25%

4%

USA • • •

LASEN – 33.3% Tac Tours – 33.3% Viajes Premier – 33.3%

Source: Trade media (Abz turístico, Boletín Turístico, Esenciales, Pasillo Turístico, Tráfico Magazine and Publitur), TO´s Facebook, e-mailing

90%

• • • • • • • • • • • • • • • •

Interjet Vacations – 23% Consolid – 15%Julia Tours Le Grand Viajes – 7 % PriceTravel – 7% Sierra Madre – 7% Viaje y Punto – 7% Mega Travel – 5% Ya Vas – 5% Mex Jal – 3% Mundo Joven – 3% Sevilla Sol – 3% Viajes El Corte Ingles – 3% Geo Travel – 2% System Operadora – 2% TourMundial – 2% Viajes Premier – 2%

Room Nights Average by Travel Window and Season

FALL-SPRING 3 3%

SUMMER-FALL

FALL-WINTER

WINTER-SPRING

5.3 2%

4

6.6 5%

1%

SUMMER 7%

FALL 16%

WINTER 3%

SPRING 0%

3.3

11.4

5.5

N/A

13% SUMMER-WINTER 6.3 50% OPEN REDEMPTION DATE 6 *Room Nights average

% of Room Nights Offer by Region

• • • • • •

51 %

29%

1-5 nights

1-10 nights

National – 78% South America – 16% North America – 3% Central America & Caribe – 1% Europe – 1% Middle East – 1 %

• • • • • • •

13%

6%

1-15 nights

South America – 44% Europe – 12% North America – 12% Middle East – 10% National – 10% Asia – 7% Central America & Caribe – 5%

• • • •

Europe – 45% Asia – 22% Middle East – 22% South America – 11%

*Not specific nights 1% (National) Source: Trade media (Abz turístico, Boletín Turístico, Esenciales, Pasillo Turístico, Tráfico Magazine and Publitur), TO´s Facebook, e-mailing

1-20 nights • • •

Europe – 67% Middle East – 22% Asia – 11%

Tour Operatos Webinars by Region

Headquarters/No. Webinars

Geographical Reach

Cancun – 3

• Campeche • Chiapas • Tabasco

• Quintana Roo • Yucatan

Guadalajara – 20

• • • •

• Michoacan • Nayarit • Sinaloa

Mexico City – 53

• Mexico City • Morelos • Puebla

Aguascalientes Colima Guanajuato Jalisco

• Queretaro • State of Mexico

Consumer Virtual Tours & Webinars by Travel Agencies

01 02 6.5k followers

• • • • • • •

Dubai India Mont Tremblant Peru Barcelona Canada´s trains Peru

• Egypt

8.2k followers

Source: Facebook and e-mailing

In Kind Trade Social Media Campaigns

• France • Vancouver

• France • Madrid • Bilbao • Egypt • Germany • Czech Republic

• Russia • Italy • Slovakia • Rome • Valencia • Japan

• Atenas • Las Vegas

• Panama

• Grece

#Geotravelcontigo #CONSOLIDaridad

#ConectaTuDestino

• Canada • Germany

• Peru • San Antonio

#estaremoslistosparati #planeatusiguienteviaje

Inspirational

• Peru • Russia • Sinai • France #Quedateencasa Busca tu destino

• Argentina

• Disney • France • Moscu • New York

• Budapest • Chile • Croatia • Disneyland Paris • Disney Springs

• Peru • Spain • Turkey • Venecia

#ViajerosInspirandoViajeros #EXPERIENCIALASEN

• Finland • Madrid • Monument Valley

• Nepal • Rome • Vail

• Germany • Paris

• Italy #AprendiendoConTravelShop

Source: Facebook and Instagram

#HistoriasPorEscribir

• British Columbia • Petra Inspirational

#DestinosPanorama

#QuedateEnCasa

• Istambul

Inspirational

• Bahamas • Barcelona • Bolivia • Bora Bora

• Hawaii • India • Petra • Taj Mahal

#VolveremosAViajar

• Colombia • Madrid • Venecia

Inspirational

• California • Canada • Costa Rica • Dominicana • Las Vegas • New York • Peru

• Colombia • Gerona • Istambul

• Italy • Switzerland

#ExperienciasMarplay #VolveremosAViajar

• Costa Rica

#Viajesporelmundo

Destino Internacional

#ViajerosPetra

• Belgium • Egypt • Istambul

• Walt Disney World • Italy

• Las Vegas Inspirational

Social Media presence by Destination 4.5 4 3.5

No. Posts

3 2.5 2 1.5 1 0.5 0

Destination Source: Sample of 55 Business units (TO, Airlines, Wholesalers, Travel Agencies and OTA’s)

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