Ad Nova Intelligence Report No. 1 / April 15 to May 15, 2020

Ad Nova Intelligence Report No. 1 / April 15 – May 15, 2020

Mexico Economic Outlook

› 2020 GDP decrease estimation caused by COVID-19 -6% to -9%

› In March 2020 the total of urban workers affiliated to the Mexican Institute of Social Security (IMSS) totaled 20,482,943. Of which were 85.9% permanent and 14.1% temporary

› 2021 GDP recovery estimation of 1.5%

› In Q1 61,501 jobs were created (+0.3)

› Q1 2020 Tourism GDP 8.7%

› Because of COVID-19 from March 13 – April 30, 2020, 753,000 jobs were lost

› 2020 GDP growth original estimation of 1%

Gross Domestic Product

that is, 1.2 points lower than last February

18/05/2020

Unemployment Rate

Exchange Rate (USD) › March 2020 Confidence Index rate of 42.6 points

COVID-19 Confirmed cases 49,219

14/05/2020 $24.27 ppd

15/05/2020 $23.95 ppd

18/05/2020 $23.60 ppd

Active

11,105

Suspicious

27,507

Recovered

33,329

Deaths

Government Updates

01

By presidential decree, the Armed Forces will participate in an extraordinary, regulated, supervised and complementary manner with the National Guard (GN), in public security tasks until March 27, 2024.

Source: unotv (Media)

› April 2020 National Consumer Price Index (INPC) decreased -1.01%

02

› Jan - Apr 2020 Consumer Price Index based Accumulated Inflation -0.17%

The first car parts building plants in Mexico reopened on May 12, and this week they would resume exports to provide EU assembly plants that will reopen on May 18

› 2020 Consumer Price Index based Annual Inflation Estimation 2.15 %

Inflation & Consumer Confidence Index

5,177

Source: El Economista (Media)

Average E.R. $20.69 ppd with accumulated loss of $4.76 ppd +25.2%. Causes: fears of a deeper and longer world economic crisis and continued decline of oil prices.

03

Mexico has joined the search for a cure or effective treatment for COVID19. Mexican public and private health institutions and universities, developed 14 scientific projects with clinical trials in 1,500 patients.

Source: Milenio (Media)

Source: Bank of Mexico, Mexico Health Ministry , National Institute of Statistics and Geography (INEGI), 2020 and IMSS (Mexican Social Security Institute)

Government Updates The government announced the economic reopening plan Only 269 municipalities in Mexico can resume their regular activities during the COVID-19 pandemic, since there are no registered cases of virus transmission in these areas.

In accordance with the return plan, which the Government of Mexico has called the ”New Normal", which is divided into three stages. In the first stage that begins on May 18, in which only 269 municipalities in 15 states of Mexico will return to social, economic and school activities.

President Andrés Manuel López Obrador explains that the return to activities is part of a progressive, orderly, gradual and cautious program.

From May 14 to 17, sanitary posts will be placed to protect the 269 municipalities, since they will be first to open school and public spaces.

THE 269 MUNICIPALITIES STATE NUMBER OF MUNICIPALITIES Chiapas 5 Chihuahua 5 Guerrero 11 Hidalgo 1 Jalisco 12 Nuevo Leon 6 Oaxaca 177 Puebla 14 San Luis Potisi 5 Sonora 17 Tamaulipas 4 Veracruz 11 Yucatan 1

New Normal Stages Stage 1 Starts May 18

Stage 2 Starts May 18 -31

COVID19 Free Municipalities

Preparation for Reopening

Restart of Work & School

269 Municipalities At 15 States

Safe Work Spaces Develop Sanitary Filters Protocols and Capacitation

Essential Activities and Building, Mining and Transport industry

Stage 3 Sanitary Alert Status Maximum Alert: Only essential activities High Alert: Some none essential activities Mid Alert: Regular economic activities and public spaces boundaries Normality: Regularization of all activities

Mexican Travel Sentiment The dream of traveling prevails

1. Tourism searches are maintained (2.8 million to national destinations and 1.3 million to international destinations)

2. 63% of trips are postponed, not canceled 3. Trips planned for after July have not been canceled (require certainty) The highest decile concentrates 65.2% of consumption, the effect on income is moderate.

tourism

Source: Anahuac Center for Tourism Research (Faculty of Tourism and Gastronomy of the Anahuac University Northern Campus)

Travel Industry Updates Because of the COVID-19 crisis this Tour Operator have gone out of business.

Source: Invertour (Media)

The OTA probably will back off on the purchase of BestDay announced in January. Despegar has had a drop of 95% in reservations, and had to make a structural cut of 40%.

Source: Reportour (Media)

The group is cutting 20% ​of its workforce, so that the impact of the pandemic is as low as possible, in relation to its operation and services. Also, due to the possible cancellation of the acquisition the agency's future becomes uncertain.

Source: Pasillo Turistico (Media)

PriceTravel is currently promoting national product. The OTA is hosting international DMOs webinars to prepare its sales force to sale international destinations when the time comes.

Source: Direct contact with PriceTravel

MegaTravel is one of the only Tour Operators that has not cut off any staff members or reduced working shifts, but is operating under the home office mode.

Source: Direct Contact with the Tour Operator

Travel Industry Updates

Euromundo has launched a campaign for all those passengers who want to buy future trips, that is, more than six months from the date of departure, so that they have a preferential exchange rate.

Source: Publitur (Media)

The Confederation of National Chambers of Commerce, Services and Tourism estimates that up to May 17th the Mexican enterprises will not receive income for over $500K million pesos (around $20.5K Million USD). Being trade, services and tourism the most affected sectors because of the pandemic.

Source: Ladevi (Media)

The Organizing Committee of Tianguis TurĂ­stico refines the technical and logistical details for the digital version of the Trade Show that will be held in September 2020. It will seek to be a virtual networking platform where business appointments between supply and demand occur that allow the reactivation of tourism.

Source: Dinero en imagen (Media)

The 7th edition of the Hot Sale will extend its duration from May 23 to June 1. The largest online sales campaign in Mexico takes on special relevance in the face of the pandemic, and the booming online purchases. Beside the participation of airlines and hotel chains, for the first time, the platform will allow the participation of more than 1,500 small and medium-sized tourism companies.

Source: NITU (Media)

Airlines Update Aeromexico Aeromexico announced that they will restart flights to USA, Canada, Europe, Asia and Latin America starting in May 1st until September. The airline has stated that they will no longer wait for the governments support and will start their own rescue plan for a value of over 900 million dollars.

Source: Forbes (Media)

Viva Aerobus 1st,

The airline announced that starting May they will restart 40 national routes, to and from Cancun, Mexico City, Guadalajara, Monterrey and Tijuana, the airline's operating bases, to support the needs of indispensable travel of their clients. This, in compliance with the current legislations and fulfilling all the hygiene measures issued by national and international health organizations.

Source: La Razon (Media)

Volaris Volaris stated that in spite of the pandemic in the first quarter of the year, its total income was 7,824 million pesos, which meant a growth of 8.7 percent, compared to the same period in 2019.

Source: Milenio (Media)

CICOTUR & CNET CICOTUR(Tourist Research and Competitiveness Center) and CNET (National Tourism Business Council) estimates losses of up to $500 billion pesos and bankruptcy of Mexican airlines are expected if the quarantine extends until May 30 without government aid.

Source: Milenio (Media)

Interjet Interjet's Administration Board assures that the news of the alleged "bankruptcy" and the alleged "suspension of payments" are "false and unfounded". They also said that the airline is complying with its tax obligations according to the conditions of the Tax Administration Service Source: Forbes (Media)

CANAERO The National Chamber of Air Transport, estimates that the Mexican airline industry will have losses for at least $30K million pesos (Over $ 1.2K Million USD) due to the coronavirus crisis.

Source: CANAERO’s Webpage

IATA IATA described as positive the first conversations recently held with the Federal Government of Mexico, through the Ministry of Communications and Transport, with the aim of requesting support for such an essential industry as the airline industry.

Source: Milenio (Media)

Emirates Emirates announces increase in reimbursement capacity, in order to reaffirm its commitment to customers and partners affected by the contingency, the airline prepares to serve 150,000 requests per month, expecting to regularized in August.

Source: NEEXTT (Media)

Events & Organizations Update World Travel & Tourism Council Global Summit originally planned for April has been postponed for October 2020 and will be held in Cancun.

IPW 2020 was postponed and now will take place May 10-14, 2021, in Las Vegas, Nevada.

Originally planned for July 2020 The Calgary Stampede, in Alberta has been cancelled for the first time in history.

The association is holding different educational webinars for over 2,000 Travel Agents nationwide through the association’s 16 Tour Operators members.

The World Travel & Tourism Council has unveiled a range of new worldwide measures to restart the sector and rebuild confidence among consumers.

The new Safe Travels protocols provide consistency and guidance about the new approach to health and hygiene in the post COVID-19 world.

Tianguis Turistico, one of the main travel trade show in Mexico was postponed because of the COVID-19 pandemic.

Original planned to take place in the city of Merida, at the state of Yucatan in March 2020, the event will now be held in that same city from the 21st to the 24th of March, 2021

Mexico Media Overview Online Media

• Trade media, like Turistampa, has gained more impact digitally due to webinars and conferences with tourism key opinion leaders to analyze the upcoming panorama.

• 70% of trade media is adding virtual tours and seminars through their platforms as new content.

• Consumer and trade media, like Vanidades and Periódico de Viaje, have improved their websites and reinforced social media channels with more and diverse content.

• Digital advertising has increased because top aspirational brands have identified its cheaper cost and more effective reach.

• Media, like Turitips and Viajeros TV, are joining forces to increase their audiences by sharing with each other their data bases.

Print Media

Broadcast Media

• Trade and consumer monthly magazines like Aire, Invertour and Condé Nast, stopped their printed issues for a limited time. Their digital editions are being distributed free or charged in apps for public reading.

• Editorial Televisa Group is evaluating the option to alternate their publications within print and digital. All their digital editions have been distributed for free since March 15th.

• High end life & style magazines (HOLA and CARAS) and Grupo Reforma Newspaper are still being printed and distributed due to their demand on subscription.

• Publishing groups like Business & Luxury Media Group and Lyrsa Comunicación have internally joined databases of their different titles, for subscribers to access all materials.

• Magazines and newspapers with private web content originally only for subscribers, like Grupo Reforma or GIN Media publications, have opened all contents for free access for users.

•

• •

Social Media

@

• • • •

They are broadcasting from studios with social distance and decreasing the presence of people boosting remote work, under Mexico’s Health Ministry indications.

News shows have doubled their audience rating points, while entertainment shows have maintained their audience rating points Radio stations have boosted podcasts of all of their programs to be available almost immediately after the show ends, increasing this audience on own apps and external players like Spotify and Apple Podcasts.

Social Media Channels are getting a better performance due to a most active community.

Complying with the #StayHome trending, vloggers like Alan x el Mundo and Mariel de Viaje, have been sharing virtual tours and travel tips considering their previous experiences for their followers to visit different destinations virtually and plan a next possible trip.

Influencers and bloggers´ content is also focused on sharing cooking recipes, DIY activities, fitness routines, fashion, make up tutorials and health tips.

The audience for vlogger channels has increased in YT, but the payment that they are receiving has decreased up to 75% as sponsors are not investing in advertising in this channel.

Source: Direct Media Contacts

In Kind Trade Media Social Media Campaigns (in Support of Tourism)

01

02 03

04

#UnidosPorNuestraPasion • Florida

10 paradas virtuales • Amsterdam • Calgary • Fort Worth • Jasper • Madrid • Paris • San Antonio • San Diego • Washington • Orlando • Tokyo

05 06

#MomentosMemorables • Argentina • Disneyland • New York • Quito • San Marcos • Spain • Toronto

07

#ProntoEstaremosEn • San Antonio • Texas

Desde tu casa / Inspirational • Florida • Texas • Vancouver

Volveremos a Viajar • Florida • Denver • California • Colorado • Belize

#aftercovid • British Columbia

Source: Facebook

Media Expectations Impacts •

•

Challenges

At the beginning of the quarantine there were downward wage adjustments (50%) and advertising investment cuts.

Possible media outlet closures and layoffs are being expected for June or July.

•

As online content demand has increased, media has to develop, continously, its creative ability to keep a captive audience and customers attention.

•

When the quarantine is over in Mexico (July-August), attendance to media events and FAM trips will be limited.

Opportunities • •

Media should continue to share current, positive and inspirational content with specific destination guides, tutorials, and limited time streamings.

It is very important to communicate destination´s recovery and health measure actions in order to gain travelers trust by including opinion and tourism personalities and leaders in webinars or opinion boards.

Region Offer by Tour Operator 1 • • • • •

2 • • • • • • • •

Total: 206 packages

16%

North America Mega Travel – 79% Mundo Joven – 9% Tac Tours – 6% Travel Impressions – 3% Viajes el Corte Inglês – 3%

28%

9%

South America Mega Travel – 51% Julia Tours – 25% Mundo Joven – 8% Punta del Este – 6% Sierra Madre – 4% Oitsa – 2% Viajes el Corte Inglés – 2% VICA – 2%

15%

4

Asia

• • • • • •

Mega Travel – 42% Julia Tours – 32% Viajes Fama – 11% Mundo Joven – 5% Travel Shop – 5% Viva Tours – 5%

5

Middle East

• • •

Mega Travel – 87% Mundo Joven – 10% Viajes Fama – 3%

26% 3 • • • • • • •

Distribution Channels 80%

20%

Specialized Media (Print/online)

Facebook

Caribe and Central 6 America

Europe Mega Travel – 73% Sierra Madre – 14%.

Mundo Joven – 3% Norma Garin – 3% PETRA – 3% Opesa – 2% Viajes Premier – 2%

• • • • • • •

Mega Travel – 31% Geo Travel – 23% Mex Jal – 14% Mundo Joven – 8% Punta del Este – 8% Travel Shop – 8% Viajes el Corte Inglés – 8%

Source: Trade media (Abz turístico, Boletín Turístico, Mega Traveler, Pasillo Turístico, Tráfico Magazine and Publitur), Facebook, e-mailing

Room Nights Average by Travel Window and Season

FALL-SPRING 10 3%

FALL-WINTER

SUMMER-FALL

WINTER-SPRING

11 9%

10.7 9%

18 1%

SUMMER 13%

FALL 22%

WINTER 5%

SPRING 1%

10.5

11.8

8.1

7

6% SUMMER-WINTER 8

31% OPEN REDEMPTION DATE 7 *Room Nights average

Source: Trade media (Abz turístico, Boletín Turístico, Mega Traveler, Pasillo Turístico, Tráfico Magazine and Publitur), Facebook, e-mailing

% of Room Nights Offer by Region

15 %

54%

1-5 nights • • • • • •

18%

1-10 nights

North America – 38% Central America & Caribe – 23% South Ameirca – 23% Asia – 10% Europe – 3% Middle East – 3%

• • • • • •

South America – 37% North America – 18% Europe – 17% Asia – 13% Middle East – 11% Central America & Caribe – 4%

10%

1-15 nights • • • • •

Europe – 54% Middle East – 27% South Ameirca – 11% Asia – 5% North America – 3%

1-20 nights • •

Europe – 62% Middle East – 38%

*More than 20 nights: 3% (Europe and North America) Source: Trade media (Abz turístico, Boletín Turístico, Mega Traveler, Pasillo Turístico, Tráfico Magazine and Publitur), Facebook, e-mailing

Tour Operatos Webinars by Region

Headquarters/No. Webinars

Geographical Reach

Cancun – 2

• Campeche • Chiapas • Tabasco

• Quintana Roo • Yucatan

Guadalajara – 22

• • • •

• Michoacan • Nayarit • Sinaloa

Mexico City – 55

• Mexico City • Morelos • Puebla

Monterrey – 5

• • • •

Tijuana – 4

• Baja California

Aguascalientes Colima Guanajuato Jalisco

Aguascalientes Chihuahua Coahuila Nuevo león

• Queretaro • State of Mexico • Tamaulipas • San Luis • Zacatecas • Sonora

Source: Facebook and e-mailing

Consumer Virtual Tours & Webinars by Travel Agencies

01

• • • • • •

02

• Colombia • Las Vegas/Nevada • Canada

03

• Egypt • Sicilia

India Ocenia Uzbekistan Japan India Iran

5.9k followers

6.5k followers

8.2k followers

Source: Facebook and e-mailing

In Kind Trade Social Media Campaigns

• Jordan

• • • • •

Yukon Quebec Argentina Argentina Toronto

• • • •

Las Vegas Montreal Bali Banff

#estaremoslistosparati #planeatusiguienteviaje #CONSOLIDaridad

• Norway

• Aruba • Alaska

• Argentina • Orlando

• Disneyland • Brazil • Chile • Peru

#SinPerderLaPasionxViajar

• Argentina • California • Emirates • Egypt • Toronto

• • • •

India Brazil Canada Spain

#CUANDOESTOPASE

Inspirational #TeVaAEstarEsperando

• Uruguay • Cuba • Russia • Puerto Rico • Canada • Praga #QuedateEnCasa

• Spain • France • Morocco • Camino de Santiago • Amsterdam • Switzerland • Russia Inspirational

• Australia • Peru

• New Zealand • India

• France

• Peru

#Quédatenecasa

Inspirational

• Laponia #Quédatenecasa

Inspirational

Source: Facebook and Instagram

In Kind Trade Social Media Campaigns

• • • •

• Sicilia

Vancouver London Netherlands Bolivia

• • • •

Ireland Grece Chile Germany

• Italy • Los Angeles • Jerusalem

• Laos Inspirational

#volveremosaviajar

#DestinosPanorama

Sueña ahora, viaja despues

#BuscandoElLadoB • • • • • • • • •

Cuba Colombia Russia Canada Egypt Camboya Tokyo B. Columbia Las Vegas

• • • • • • • • •

Spain Dubai New York Brazil USA Cartagena Universa Banff Peru

#VolveremosAViajar

• Peru • Uruguay • Bogota • Austin • Brazil

• British Columbia

• India • Aspen

• Dubai • Vancouver

#wewilltravelagain

#Mequedoencasa

• Peru • France • Brazil • British • Japan Columbia • Spain • Grecia • Costa Rica #AprendiendoConTravelShop

• Italy • Puerto Rico • Greenland • Bora Bora • Bolivia • Las Maldivas • Philippines #ExperienciaMarplay

• Madrid

• Roma

hagamos algo juntos

Source: Facebook and Instagram

In Kind Trade Speakers Campaigns #ViajerosInspirandoViajeros • Nuria Diosdado – Olympic Artistic Swimmer • Eladio Gonzalez – General Editor, Grupo Expansion • Gabriela Warkentin – Journalist • Javier Risco – Journalist • Mauricio Martinez – Actor • Lambda Garcia – Actor • Juan Pablo Jim – Editorial Director, BADHOMBRE • Paola Norma – Journalist, Food & Travel • Lourdes Botello – General Editor, BBMUNDO • Miguel Conde – Host / Actor

• Cecilia Nuñez – Editorial Director, Food & Travel • Quique Galdeano – Digital Producer • Claudia Candano – General Editor, ELLE • Alex Tienda – Vlogger • Mikel Alonso – Chef, Grupo Biko • Barabara Anderson – Financial Journalist • Arturo Islas – Content Developer • Alfredo Gatica – Actor • Manumanuti – Content Developer • Delia Garcia – Influencer • Jose Pablo Minor - Actor

#CreativeTravelAgents • Miguel Kably – General Director, Creative Travel • Jose Roncero – Regional Director, Virtuoso

• Ruthie Lichtenstein – Administrative Assistant, Creative Travel

#Quédateencasa • Alberto Ramos – Commercial Manager, VAMOS

#ViajaDesdeCasa • Patrick Monney – Adventure Traveler

En Vivo Desde Casa • Mariana Briseño – Marketing, Events & Strategic Alliances Director, CWW

• Jorge Sales Jr – Director, Sales Internacional • Mauricio Gonzalez – CEO, CWW

#QuédateEnCasa • Maurico Bustamante – General Director

Source: Facebook

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