Aruba Tourism Authority Annual Report 2012

Annual Report

2012

One happy island

Content From the CEO

2

Supervisory Board

6

Corporate Profile

12

Human Resources

16

Aruba Tourism Industry

20

21 22 22

Tourism Performance Cruise Performance Hotel performance

Marketing North America

24 25 29 37 46 48 49 56 57 59 60

Latin America Europe Digital Marketing Branding & Advertising PR & Corporate Communications Niche Marketing Trade Relations Aruba Convention Bureau Cruise Tourism

Strategy Planning and Research

62

Financial Statement Auditor’s Report

66

67

Statement of financial position as at December 31, 2012 Statement of financial performance for 2012 Statement of changes in equity for 2012 Cash flow statement for 2012 Notes to the financial statements Annex to the financial statements

69 70 70 71 72 86

Copyrights by Aruba Tourism Authority.

Unauthorized use or publication for third parties or publication is not authorized without permission.

Design by: NOW! Strategy and Design

ANNUAL REPORT 2012

from the ceo

From the CEO 2012: Another great year for tourism While the closure of the Valero refinery negatively affected Aruba’s economy, tourism has remained dynamic, resulting in positive results in 2012. Overall, 2012 can be regarded as an outstanding year for Aruba’s tourism industry with results surpassing objectives. Stay-over visitor arrivals increased with 4.02%, while the A.T.A. (Aruba Tourism Authority) objective was set at a 3% increase for 2012. In 2012, Aruba’s tourism also had several record breaking months in terms of stay-over visitor arrivals with December (+11.05% YOY) being the best performing month ever, throughout the years, for Aruba.

Aruba’s most important market, the United States, remained flat after a year of challenging performance and significant restructuring of the A.T.A. North American office, as well as significant revamping of its PR and advertising strategy. The Venezuelan market in particular continued to be a key performer in 2012 with a growth of 21.5%, while the deepening of the recession in a great part of Europe resulted in a slight decrease out of the European continent (-1.6%).

The Aruba Hotel & Tourism Association (AHATA) reported positive results in the revenue per available room, +5.8% in 2012 as compared to 2011, while the Central Bank of Aruba (CBA) reported a 3.2% increase in tourism receipts over the first three quarters of 2012 as compared to the same period in previous year.

The average daily expenditure (ADEx) of the island’s visitors is an important objective for the A.T.A.. An increase between 3% to 5% over 2011 was set as the objective for 2012. While monitoring the above-mentioned indicators provided by AHATA and CBA, A.T.A. focused on establishing a more in-depth and complete measurement of the ADEx in 2012. Measurement based on the amended formula was initiated in Q4 2012.

Unlike stay-over tourism arrivals, cruise tourism arrivals closed the year with a decrease of 3% as compared to 2011. This decline was mainly attributable to various cancellations especially during the first months of the year due to weather, mechanical/ operational issues, and the Norovirus on board. However, it is important to note that in 2012, A.T.A. continued to nurture and build upon its strategic partnerships with the cruise lines. As a result, the number of cruise calls and passengers for 2013, secured in 2012, are indicating a projected minimum increase of 20% in number of passengers as compared to 2012.

Overall, Aruba received a total of 1,486,045 visitors during 2012: 903,934 stay-over visitors and 582,111 cruise visitors.

Succeeding while continuing to strengthen A.T.A.’s foundation 2012 can be categorized as the second year of transition for A.T.A., a year in which it continued to build the organization in its new format as an independent legal entity within the public sphere. Continuing to focus on building a solid foundation for the organization, various important administrative procedures, regulations and projects were finalized for the new A.T.A. Besides its intense focus on the formation of the new organization, A.T.A. also submitted various strategic plans and reports in a timely manner.

Noteworthy accomplishments for 2012 include: • On-time submission of A.T.A.’s annual report 2011. This report was submitted to the Supervisory Board of A.T.A. on April 1, 2012, and includes general information, information in relation to the activities of the Supervisory Board and a financial report with an audit on the truthfulness of the financial figures and the lawful spending of funds. A.T.A.’s annual report was approved on June 25, 2012 by the Minister of Tourism, Transportation and Labor, Mr. Otmar Oduber.

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ANNUAL REPORT 2012

• Early 2012, A.T.A. appointed a new director for its North American office. In June, a new advertising and PR agency for the North American market initiated their work for the North American continent. Additionally, at the end of the year, A.T.A.’s North American office was further expanded with a Digital Marketing manager and a Business Development manager for the Northeast region.

• Furthermore, in 2012, A.T.A. together with the Aruba Airport Authority and the Aruba Hotel & Tourism Association met with airline partners biannually to discuss overall performance, opportunities and the upcoming seasons. Likewise, within the cruise industry, A.T.A. participated at major shows and met with its main cruise partners to discuss matters such as opportunities for growth in especially the summer season.

• Among other key developments which took place in 2012 were the appointment of a new advertising agency for Venezuela and the hiring of a strategic representative for the Brazilian market.

• The introduction in August 2012 of an air-ticket charge, the ‘Travel Promotion Levy’ was also a key 2012 accomplishment. In line with A.T.A.’s Business Plan, this airticket charge of US $10 is being collected on all in-bound air passengers to Aruba. This levy is to further strengthen A.T.A.’s marketing, Aruba’s positioning, and ultimately increase yields for Aruba and its partners.

• Key projects in 2012 included significant strides on the area of marketing automation and the commencement of the redesign of the new Aruba.com. The newly integrated and centralized marketing automation platform will provide unique intelligence and predictive competences to A.T.A. and its partners. This unique intelligence will allow A.T.A. to create and strengthen its competitive edge and be ‘two steps ahead’. As for the very important redesign of aruba.com, emphasis has been placed on user engagement and on providing a more personalized digital experience.

The goal is not only to have an optimal and user friendly information portal through aruba.com but to utilize this platform as a medium where one can easily connect to our partners and make bookings/reservations.

• Important to mention is A.T.A.’s ongoing dedication and networking with its strategic partners in the tourism industry.

In 2012, this was fulfilled through such means as the organization of the annual tourism conferences ATCA and CATA which took place in April and March respectively. In addition, A.T.A. organized a North American Market retreat in June 2012 as preparation for the marketing planning of 2013. On World Tourism Day, September 27, a session was organized during which the plans for 2013 were presented to Members of Parliament and to on-island strategic partners.

ARUBA TOURISM AUTHORITY

• On-time submission of A.T.A.’s Corporate Plan and Budget for 2013. This plan was submitted to the Supervisory Board of A.T.A. on September 1, 2012, and contains detailed information on A.T.A.’s objectives, strategic priorities, budget and marketing direction for 2013. A.T.A.’s Corporate Plan and Budget was approved on December 12, 2012.

• In September 2012, A.T.A. initiated a local campaign to further cultivate the awareness of the importance of tourism and commitment to its development. The campaign also highlighted and encouraged the population to participate in the local awareness and certification campaign ‘Mi Compromiso’ (my commitment).

• In October 2012, A.T.A. launched its new creative advertising campaign, “The Ambassadors”, in the North American market. Based on the fact that more people return to Aruba than to any other Caribbean island, A.T.A. featured in its campaign some of the most dedicated loyalists who return annually and recommend the destination to their families and friends. The new look and concept continues to be adopted in other markets where applicable.

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from the ceo

A.T.A. will continue to strive towards living up to its commitment to excel, lead and win the future! To be two steps ahead!

• As per A.T.A.’s request in November 2012, an external company conducted a quick and expert insight on how the current organizational structure, infrastructure and operations affect A.T.A.’s marketing efficiency and effectiveness. The results of the Quick Scan serve as input as well for the new business plan that will be updated in 2013.

• On December 12, 2012, A.T.A. concluded negotiations and signed its first Collective Labor Agreement. The negotiation process initiated in September 2012. As per A.T.A.’s Social Plan (2010), A.T.A. would introduce a Collective Labor Agreement, a goal that was accomplished in a timeframe of less than three months.

Ronella Tjin Asjoe-Croes CEO of the Aruba Tourism Authority

The above-mentioned accomplishments are just highlights of A.T.A.’s 2012 endeavors, strengthening its foundation, reflecting its strategy, and achieving positive tourism results for the island.

In conclusion, I express my sincere gratitude to the Minister of Tourism, Transport and Labor, Mr. Otmar Oduber, and to the Supervisory Board of A.T.A. for their continuous trust and support. Furthermore, the entire A.T.A. team has to be recognized and thanked for their hard work, dedication and commitment. A special thank you as well to A.T.A.’s industry partners locally as well as abroad, and to those who work day in and day out in our tourism industry and who give meaning and content to our slogan ‘One Happy Island’.

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ANNUAL REPORT 2012

1 Supervisory Board

Supervisory Board The Board’s primary functions are to supervise and confirm that the organization properly performs its core tasks and responsibilities within the legal framework set out in the State Ordinance “Landsverordening Instelling Aruba Tourism Authority”, and to share advice and strategies with management.

The Board of A.T.A. consists of seven members:

Jossy Lacle Chair

Mr. Lacle is retired from his position as CEO of W.E.B. Aruba N.V., where he worked for nineteen years. Mr. Lacle holds the Chairman of the Board position for Pension Fund Tourism Sector Aruba, as well as serving as a board member for several entities, including General Medical Insurance (AZV), Aon Dutch Antilles, and Caribbean Mercantile Bank.

Edward Malone

Harry koeman

Board Member

Board Member

Mr. Malone is currently working as an independent consultant.

Mr. Malone has over 35 years of experience in the travel and hospitality industry, earning many awards as recognition for his contribution to Aruba’s tourism. Mr. Malone was a past president of the Aruba Hotel and Tourism Association as well as a past president of the Caribbean Hotel Association.

ARUBA TOURISM AUTHORITY

Mr. Koeman has put his mark on Aruba’s restaurant scene during the twenty-plus years that he has been on the island.

He ranks among the largest employers of Aruba, owning and co-owning the successful restaurants as part of Aruba Wine and Dine. His vision for the future includes focusing on providing the best possible quality experience, from the time a visitor arrives to the time she or he leaves. He also believes in attracting a younger segment through an attractive product suitable for this group .

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CorporateFrom governance the CEO

Warren Stanley

James Hepple

Board Member

Board Member

Mr. Stanley is General Manager at De Palm Corporation. He has experience in management, marketing, and finance positions within key entities on Aruba. Mr. Stanley has been serving as a board member for the Aruba Tourism and Hotel Association since 2000.

Mr. Hepple is the current CEO of the Aruba Hotel and Tourism Association. He has worked on several Caribbean islands during his career, and brings extensive knowledge of the region to the board.

Alberta Myrna Jansen-Feliciano

Ewald Biemans

Board Member

Board Member

Mrs. Jansen-Feliciano is currently the Senior Tourism Policy Advisor of the Minister of Tourism, Transport and Labor, since January 1, 2010. Prior to that, she was the Managing Director of Aruba Tourism Authority from 2002 to December 31, 2009, and the Acting Managing Director from 2000 to 2002.

Mr. Biemans is both owner and CEO of Bucuti Beach Resort and Tara Beach Suites. Recently, he served as the President of the Board of the Aruba Hotel and Tourism Association. Mr. Biemans is a strong advocate of the environment and sustainability.

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ANNUAL REPORT 2012

State Ordinance Reporting to Parliament through the Minister of Tourism, Transport and Labor, A.T.A.’s legislative requirements are outlined in the State Ordinance – “Landsverordening instelling A.T.A. Sui Generis”.

Board Attendance

Primary Function: Oversee and Supervise The Board’s primary function is to supervise and confirm that the organization properly performs its core tasks and responsibilities within the legal framework set out in the State Ordinance. The Board is charged with ensuring that the strategic business plan of the organization and the resulting plans of actions and budget are aimed towards the realization of the tourism policy as defined by the Minister of Tourism, Transport and Labor. Additionally, the Board is charged with monitoring the performance of management and ensuring that the internal control and risk management systems of the institution are effective. The Board is part of the system of checks and balances, and ensures that decisions are made with the best interest of A.T.A. and Aruba in mind. Where deemed necessary, the Board also has the task of advising management on their endeavors, in general.

Supervisory Board composition and membership The members of the Board are appointed, as per the State Ordinance, for a period of 4 years, with the possibility to be reappointed for maximum of one more 4 years term. A.T.A. has a Supervisory Board consisting of 7 members who are experts in business operations and tourism: • Three members are appointed on the Minister’s recommendation; • Three members are appointed by the Minister based recommendation by AHATA of two candidates for each of the three positions; • Chair of the Supervisory Board is appointed by the Minister.

ARUBA TOURISM AUTHORITY

From January 1 to December 31, 2012, there were seven Directors on the Board. Gilberto (Junior) Croes retired from the Board effective March 8, 2012 and Harry Koeman was appointed to the Board effective May 1, 2012.

The Supervisory Board held 13 regular Board meetings during the year. The Board had an average attendance of 85%. In addition, the CEO, CMO and CFO attended the regular board meetings. In addition to the regular Board meetings a total of 8 Board meetings were held with the Minister of Tourism, Transport and Labor and A.T.A.’s CEO, CMO and CFO. In line with article 14 of the State Ordinance, on March 11, 2011, the Council of Ministers officially set a compensation of Afl.750 per each attended meeting per board member, with a maximum of Afl. 24,000 per Board member per year. A total of Afl 99,494.25 was paid as compensation to the board in 2012 (maximum overall for 7 members: Afl 168,000.00).

Highlights of topics discussed during the 2012 Board Meetings In addition to the monthly approval of minutes of the previous board meeting(s), the monthly approval of purchase orders and agreements, and the revision of the financial monthly reports, the following topics were amongst those discussed in the 2012 Board meetings: - Annual Report 2011 - Travel Promotion Levy - State of Industry Performance / Update on Tourism Arrivals and other key A.T.A. objectives - Average Daily Expenditures (ADEx) collection and measurement - presentation on plan of action 2012 - Administrative Organization Procedures - Proposed Amendments to the Law applicable for A.T.A.

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From the CEO As per the regulations applicable for the Supervisory Board, the following rotation schedule has been agreed upon.

Name Board member

Date of Birth

First Appointed on:

Mr. Jossy Lacle (Chair)

October 15, 1949

April 26, 2011

April 26, 2015

September 15, 1964

March 11, 2011

March 11, 2014

Mr. Warren Stanley Mr. Jim Hepple Mr. Ewald Biemans Mr. Ed Malone Mrs. Myrna Jansen Mr. Harry Koeman

End of term, eventual re-appointment

August 20, 1949

March 11, 2011

March 11, 2014

November 8, 1945

March 11, 2011

March 11, 2013

September 16, 1954

March 11, 2011

March 11, 2013

August 7, 1956

March 11, 2011

March 11, 2014

November 12, 1962

May 1, 2012

May 1, 2016

- Regulations Board and Management A.T.A. - Presentation Tourism Product Enhancement Fund (TPEF) and discussion with Board TPEF - Internal Audit Plan A.T.A. - Proposed allocation of Surplus 2011 as well as 2012 - Update on latest Airlift developments - Airlift Strategy - Meetings with Airlines, especially US Airlines - Corporate Plan & Budget 2013 - Collective Labor Agreement A.T.A.

A.T.A.’s funds are spent in accordance to the guidelines set, and in line with good corporate governance. In 2012, the Supervisory Board engaged an external company to develop an Internal Audit Plan. The Internal Audit Plan identified risk areas with their corresponding degree of priorities, as well as controls to be put in place to test and ensure proper compliance to the guidelines as well as good corporate governance. The actual implementation of the Internal Audit Plan is scheduled to commence in 2013.

Approval of Purchase Orders

Board Committees Besides the regular Board meetings, the Supervisory Board carries out its duties through several Board Committees.

These committees make recommendations to the Board and Management.

A committee for formulation of budget and plans for 2013 conducted meetings with Management prior to submission of the Corporate Plan 2013 on September 1, 2012.

For the introduction of the air-ticket charge, a Board committee was established which provided advice and assistance to the Supervisory Board and Management. The committee held several meetings with Management and third parties prior to the introduction of this levy on August 1, 2012.

The Finance Committee comprised of three Board Members was installed in Q3 2012. The committee plays an instrumental role in ensuring the adequacy of internal controls that deal with both effectiveness and efficiency of significant business processes. The committee also reviewed end-of-year financial statements and audited financial statements.

Internal Audit A.T.A.’s internal procedures and controls and financial reporting are imperative to its operation, and should adhere to high standards. Such procedures and controls should ensure that

Through the decision to make the tendering rules that are applicable for the government also apply to the new A.T.A., in instances where these rules grant authority to the Minister, they can be executed by the Supervisory Board. In as far as these rules stipulate that the involvement of the Minister of Finance is required, this involvement shall be exercised by the Minister of Tourism, Transport and Labor. The above-mentioned thus entails that the Board has to approve a number of purchase orders (POs) in line with the tendering rules. As a result, the Board did approve 295 POs in 2012.

External Accountant In 2011, after a bidding process, the Board selected Ernst & Young to conduct the external audit for 2011, 2012, and 2013.

Regulations Supervisory Board In 2012 the Supervisory Board engaged an external company to develop the regulations for the Board and Management. The regulations were discussed with the Minister on August 9, 2012.

Approval of the Minister is expected in Q2 of 2013. With the implementation of the regulations for the Supervisory Board and the Management of A.T.A., and in conjunction with the State Ordinance applicable for A.T.A., A.T.A. has completed all necessary steps to make the entity complete in terms of good corporate governance practices.

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ANNUAL REPORT 2012

2 Corporate Profile

As the Destination Marketing Organization (DMO) for Aruba, A.T.A. is responsible for uniting tourism interests amongst stakeholders/partners both on- and off-island for the purpose of coordinating marketing, business development and partnerships of the destination.

Vision The vision for A.T.A. is to be recognized as a leading and cuttingedge Destination Marketing Organization.

Mission The mission for A.T.A. is to be an innovative and effective Destination Marketing Organization, positioning the brand Aruba as a premier tourism destination, meeting the interests of its stakeholders.

Values Empowerment Empowering the employees to take initiative and to be innovative.

Productivity and Ownership Being efficient, taking ownership and being accountable for the success of the company.

Professional Providing quality service and commitment to internal and external customers.

Respect Giving due respect to self and others and maintaining an environment of teamwork and personal development.

Fun and Passion Having fun and celebrating the small successes in its journey to achieving big successes.

ARUBA TOURISM AUTHORITY

A.T.A. Strategy The vision of A.T.A. is to be achieved through eight core objectives over a period of three years, starting in 2011.

These are: 1. To create an effective organization with clearly defined procedures which will lead to an organization that can respond to the needs of the markets and the industry.

2. To achieve financial independence and establish effective administration.

3. To produce relevant communication in the digital era.

4. To focus on research, strategy and planning.

5. To create a link between supply and demand and be a strategic external sounding board.

6. To offer products that are relevant to Aruba’s target markets in order to further drive competitive advantage.

7. To establish Visitor Centers which are points of contact that provide access to information.

8. To spearhead advertising and branding including “merchandising”.

Tourism Policy 2012 The vision of the Minister of Tourism, Transport and Labor is for Aruba to excel as a tourism destination through sustainable development. To accomplish this, the emphasis will be placed on the economic, hospitality and marketing aspects.

Objectives A.T.A. objectives are derived from the tourism policy set by the Minister of Tourism, Transportation and Labor. The main objectives outlined in the Tourism Policy for 2012 are as follows: • To enhance the quality of the product to enrich the visitor experience while contributing to a sustainable tourism development.

• To increase the quality, and when necessary, the quantity of stay-over visitors throughout the year.

• To increase the quality and quantity of cruise visitors, mainly during low season.

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corporate profile

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ANNUAL REPORT 2012

3 Human Resources

ARUBA TOURISM AUTHORITY

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human resources

Human Resources is responsible for promoting and cultivating a highly motivated workforce by making all necessary HR resources available to assist A.T.A. management and personnel in reaching their full professional potential.

Highlights and results • As part of A.T.A.’s transition into a new entity and the need to focus on change management, A.T.A. intensified its training geared towards dealing with change, increasing trust and fostering a culture based on the principles of Steven Covey.

Three major Steven Covey training sessions were organized for all A.T.A. employees, both locally and abroad. These sessions were Speed of Trust, 7 Habits, and 4 Disciplines of Execution. The last session in particular had as an objective to enhance the productivity and effectiveness of not only the individual employee but of the organization at large. Pursuant to completion of the training, A.T.A. focused on the application of all teachings into the daily work routine. Two coaches were appointed to assist and nurture employees and especially managers in the application of the principles learned, based on various tools provided during the training.

• The necessary preparations to include Steven Covey principles in the performance appraisal system, to be introduced in 2013, initiated in 2012. Once implemented it will allow A.T.A. to measure performance, not only based on core competencies, but also based on principles taught through the extensive training sessions held in 2012.

• In 2012, A.T.A. initiated and completed negotiations for its first collective labor agreement which it had to introduce based on the agreed upon ‘Social Plan’ (2010) in which the government and the respective labor union anchored agreements made for the ex-government employees who would be continuing with A.T.A. A referendum in which 21 employees participated was held on March 12, 2012.

Through this referendum, “Sindicato di Trahadornan di Aruba” (STA) was chosen as the representing labor union. A.T.A. and STA initiated intensive negotiations in September 2012, ending these on December 12, 2012 with the signing of a 3-year collective labor agreement. The negotiations were led by the CEO, who was assisted by the HR Manager, the CFO

and a specialized lawyer. It was an intense process, which ultimately resulted in a package with additional benefits for the A.T.A. employees.

• As a new entity, in its second year of existence, A.T.A. continued with the recruitment and selection process to fill several vacant positions, including that of the Area Director for North America. A.T.A. also evaluated its organizational structure and the ability to best meet its objectives based on its human capital. Based on the latter, slight changes were made to its workforce, which illustrate the organization’s strategic priority on areas such as digital marketing, but which also address the ability of certain units to adequately cope with their respective core responsibilities and workload.

In total, in 2012, seven employees were hired including the Area Director for North America, a Digital Marketing Manager for North America, and Digital Specialist for Europe. At the head office, a Business Manager, an IT/Facility Officer, a Communication Specialist and a Junior PR & Corporate Specialist joined the A.T.A. family. Note that these are positions that rolled over as vacant from 2011 and for some of them the focus/title was changed, based on the above.

• The production of A.T.A.’s Personnel Manual was initiated in 2012, and is slated for completion in 2013. The consensus was to finalize this subsequent to the collective labor agreement negotiations in order to take into account agreed upon revisions. In 2012, the HR unit continued with implementation of basic regulations and procedures as well as usage of a web portal to report on illness and make vacation and leave requests.

• In 2012, a total of 53% of A.T.A.’s employees participated in the island-wide tourism awareness certification program “Mi Compromiso”. It is the objective for all employees to be certified by year-end 2013.

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ANNUAL REPORT 2012

Organizational Structure A.T.A. Supervisory Board

CEO

HR Manager

Business manager

HR Assistant

Executive Assistant

BU Marketing

BU Finance & Support

BU Strategy, Planning and

CMO

CFO

Research MSPR

4 Aruba Tourism Industry

Tourism Performance

Visitor arrivals 2008- 2012

By Region

North America

In 2012, International tourist arrivals grew by 4% to reach 1.035 billion, according to the latest UNWTO World Tourism Barometer. Tourist arrivals to the Caribbean reached 20.9 million, an increase of 4%. Aruba saw a 4.02% growth in stayover visitor arrivals, which is in line with the average growth of the Caribbean and the World. Aruba’s market share in the Caribbean is 4.3%.

580,000 575,000 570,000 565,000 560,000 555,000

12 20

11 20

10 20

09 20

08

550,000

20

In 2012, Aruba welcomed a total of 1,486,045 visitors (stayover and cruise) compared to 1,468,946 in 2011, equivalent to an increase of 1.2%.

Objectives 2012: 1. Increase annual global visitor arrivals by a minimum of 3% 2. Minimizing risk and dependency on few markets 3. Increase the average daily expenditure per person per trip across-the-board by 3%-5% 4. Increase amount of cruise visitors by 5%

Latin America

Highlights 2012:

100,000

ARUBA TOURISM AUTHORITY

200,000 150,000

12 20

11 20

10 20

09 20

20

08

50,000

Europe 82,000 80,000 78,000 76,000 74,000 72,000

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12 20

11 20

10 20

09 20

08

70,000

20

1. Stay-over arrivals totaled 903,934, a 4.0% increase compared to the previous year.

2. The top 3 markets for Aruba continued to be the US with a market share of 58.7% (61.1% in 2011), while the Venezuelan market share increased up to 15.8% compared to 13.6% in 2011. The market share of the Netherlands remained stable at 4.4% in comparison to 4.6% in 2011. In 2012, Venezuela remained the main driver of Aruba tourist arrivals’ performance.

3. A.T.A. established an internal metric system for measuring the ADEx. A.T.A. collected thru online surveys send to tourists that visited Aruba during 2011 information on amongst others ADEx, satisfaction with on island experience of our visitors, planning versus booking pattern of our visitors.

4. The number of cruise visitors decreased by 3%, with a total of 582,313 cruise visitors visiting the island, compared to 599,973 in 2011. This decline was mainly attributable to various cancellations especially during the first months of the year due to weather, mechanical/ operational issues, and the Norovirus on board. For 2013 the number of cruise passengers is projected to increase with a minimum of 20% as compared to 2012.

250,000

ARUBA TOURISM INDUSTRY

Cruise Performance

610,000 600,000 590,000 580,000 570,000 560,000 550,000

In 2012, Aruba welcomed a total of 294 cruise calls which transported 582,313 cruise passengers.

540,000

Hotel Performance

12 20

11 20

10 20

09 20

20

08

530,000

In 2012 the average room occupancy went up 2.3 percentage points from 76.5% in 2011 to 78.8% in 2012 (with 2.9% fewer available room nights). The number of occupied room nights remained basically unchanged compared to 2011. Average Daily Rate (ADR) was up by 2.7% with revenue per available room (RevPAR) also up, by 5.8%. Overall Aruba’s hotel performance was better than the Caribbean with an occupancy of 78.8% vs. 66.3% in 2012. Aruba’s RevPAR in 2012 was US$ 40 higher than the Caribbean (US$ 157 vs. US$ 116).

Source: AHATA and STR.

$250.00 $200.00 $150.00

2012

$100.00

2011

$50.00

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ANNUAL REPORT 2012

5 Marketing

North America U.S.A.

JFK and BOS gateways, and an increase in lift out of Atlanta and Baltimore. Although it was possible for consumers all over the US to connect at the hubs, this was still not sufficient to offset the loss in seats from the North East and maintain or increase the visitor numbers from this region.

Overview Overall, the US market was flat in terms of visitor arrivals in 2012 compared to the previous year and the 2012 growth target of 1.5%. Consequently, the US market share declined from 61.1% to 58.7% in 2012. Reasons contributing to this performance include a mild winter, a sluggish economy, high airfares and the fact that 2012 was an election year.

Although the economy started to improve in the second quarter and performance picked up during the remainder of the year, especially during the need period months with a peak growth of 7.7% in September, the US market was hit by Hurricane Sandy in Q4, creating disruption along the Mid-Atlantic and North East regions, and severely impacting Aruba’s largest markets of NY and NJ (NY DMA). Consequently, from a regional perspective, the North East region finished 2012 with a decline of 1.5% with an overall share of visitor arrivals of 53.7% in 2012 vs.

54.4% in 2011 the Mid Atlantic was down by 0.6% and the West decreased by 0.8%. On a positive note, there was a 4.7% growth in the South East and a 2% increase in the Midwest.

Besides the above mentioned external factors, there have been a number of internal changes, with a new Area Director on-board as of April 2012; new advertising, media, and public relations agencies on board as of June 2012; a new Digital Marketing Manager as of November 2012, and a new Business Development Manager for the North East in December 2012.

Throughout the year, A.T.A. worked on joint marketing plans with a number of airlines to develop and maintain demand. Specifically, with Delta, A.T.A. ran a fall campaign to promote the daily JFK - AUA flights which started December 15, 2012. The campaign included out-of-home advertising in New York with ads on busses, newsstand and bus shelters, and next to various digital components on delta.com including ads on online boarding passes.

Besides Delta, A.T.A. worked closely with jetBlue on marketing programs, now the largest carrier from the USA for Aruba. For the need periods, A.T.A. ran joint ads in local newspapers, on jetBlue.com, on digital monitors in jetBlue’s T5 terminal at JFK airport, and on jetBlue’a social media channels through sponsored postings including hidden gems and destination of the week.

To support the need periods, the “Dine on Aruba” campaign was introduced across North America with all operators. This celebrated Aruba’s cuisine and invited guests who booked Aruba to go out and explore island culture and cuisine by redeeming their Dine on Aruba certificates at participating restaurants.

This promotion supports A.T.A.’s focus on the culinary niche, promoted through various other marketing elements (print & events).

Overall, there was sufficient airlift from the US to make the 1.5% growth target. However, in terms of the marketing efforts in core markets, the airlift was unbalanced. There was a decrease in non-stop lift out of the core North East market, especially the

ARUBA TOURISM AUTHORITY

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marketing

Highlight of activities Branding & advertising For the first half of 2012, A.T.A. ran the “Find your happy” campaign previously created by Deutsch which had been in place since 2010. With the Concept Farm coming on board, a new campaign was developed and launched in the fall of 2012.

The focus moved away from displaying the people of the island as the center of the campaign to illustrating why so many visitors return time and time again with the objective of inspiring new visitors to travel to the destination based on such testimonials.

The campaign was used to support the marketing programs focused on the main identified niches, namely Family and Romance, and to draw the audience’s attention to the fact that so many people keep returning and invite people to come find out why.

The campaigns used various media vehicles and were mainly digital (70%), followed by print (15%) and out of home advertising (15%). The Happy Returners campaign allowed A.T.A. to have a platform in place to support (curated) user generated content on aruba.com and the social media channels. The new creative also allows A.T.A. to use a more distinctive look and feel using the key colors embedded in the Aruba logo and branding.

Coop advertising Next to the overall branding and advertising campaigns mentioned above, a number of funds are used for coop advertising with partners. $1.6 M was allocated to coop advertising in 2012, of which 39% was spent with traditional tour operators, 33% with online operators, 9% with airline vacation brands, 9% with airlines, and 9% with hotel partners in specific magazines.

Promotions Next to the above marketing vehicles, promotional opportunities were also bartered for room nights or airfares as needed in exchange for exposure in the market, which is a very cost efficient marketing tool.

A.T.A. implemented over 20 promotions running in 2012 with an estimated media value over $700,000. Through this marketing vehicle, Aruba was featured in such media as the Anderson Cooper Show, Steve Harvey Show, Departures Magazine and Shape Magazine.

Sales Over 2012, A.T.A. continued to pursue targeted shows and events. Besides the skew towards travel shows and events targeting both trade and consumers, A.T.A. presented the island at niche events such as bridal shows and food & wine shows.

The bridal shows enabled A.T.A. to reach both trade and consumers and to showcase the destination wedding and honeymoon offerings and capabilities to a high potential audience, which generated many leads for the on-island wedding planners.

Through food & wine shows in markets such as New York and Los Angeles, Aruba was able to reach an exclusive high net worth audience who were able to savor and experience authentic Aruban cuisine as served by a local Aruban chef. Finally, although the focus has been skewed towards the North East, there has been consistent trade and consumer coverage across all regions in the USA during 2012.

ACE During the year, a renewed focus was given to the ACE agent program with new tools made available through Recommend including a refreshed certification program available on- and offline, quarterly newsletters, and prize giveaways as recognition for top producing ACE agents.

Social media Over 2012, social media was mainly used to highlight and support large in-market events to create buzz for Aruba. A number of the highlighted events included Super Saturday in NYC, the Pebble Beach Food & Wine Show, the T&L Global Bazaar in NYC and the Taste of Aruba event in NYC. Through these buzz social media campaigns, Aruba was able to register more than 50,000 Aruba fans on Facebook, A.T.A.’s main social media channel.

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ANNUAL REPORT 2012

As the new A.T.A. North America team and partner agencies were brought on during 2012, the strategy to win social media was created in terms of structure and collaboration among creative advertising, public relations, content, and community management. This will allow Aruba to drive 24/7 communications within social media in 2013 and beyond.

Canada

e-CRM/CRM

The Canadian market grew in 2012 in terms of visitor arrivals with an impressive 13.3%, exceeding the target of 5.0%.

Consequently, the Canadian market share increased from 4.7% to 5.1% in 2012. Although Winter 2011/ 2012 was off to a slow start due to a mild winter, growth was consistent in the summer and the remainder of 2012. Most of the Canadian operators received marketing support during Aruba’s need period with coop marketing plans and tagging opportunities through Aruba’s Canadian media campaign in Q4 2012. From a regional perspective, Ontario Central remains Aruba’s most important region with a market share of 59% of the total Canadian market.

Toronto is the largest DMA in Ontario Central, representing 28% of this region, and increased by 13% in 2012.

Over 2012, a step-up has been done to re-connect with ACE agents through the Recommend platform. This allowed A.T.A. to provide (re-) certification of ACE agents, training and updates on Aruba, as well as establish new communication opportunities through newsletters and social media with ACE agents.

On the consumer side, A.T.A. NA has leveraged its consumer database to reach out through e-blasts with news, offers, and promotions such as the Dine on Aruba, and specifically reach a targeted audience through coop programs with the inmarket partners. With Ansira brought on during 2012, an overall process for collection, reporting, and communication with trade and consumers will support A.T.A. North America’s activities during 2013 and beyond. This will reach targeted trade and consumers with targeted communications and allow feedback and education on the effectiveness of marketing communications.

ARUBA TOURISM AUTHORITY

Overview

The growth in visitor arrivals in 2012 was supported by the increase in airlift during the summer 2012 and winter 2012/2013 period from Canada. Although the majority of the Canadian airlift is in the winter period, there was an overall growth in airlift for the full year as a result of the new year-round Sunwing charter operation in late 2011 out of Toronto which filled the void of the Transat charter that was cancelled in May 2011.

Montreal remains an attractive market opportunity for Aruba and Sunwing has been actively pursuing direct service out of Montreal to Aruba. Although Sunwing did not start service in 2012, discussions will be ongoing in 2013 for a potential direct Montreal to Aruba service. On a lesser note, after the overall soft winter start of 2012 and its financial impact, Thomas Cook (Sunquest) decided to cut their charter air operations and to contract 50% of WestJet ‘s existing airlift to support their tour package business to Aruba. On the positive side, Thomas Cook (Sunquest) has been showing consistent positive performance

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Coop advertising Next to the overall branding and advertising campaigns mentioned above, a number of funds are used for coop advertising with partners. The purpose of coop advertising is to provide a more sales and promotion-focused message to consumers who are already searching for price points or deals to book their next vacation. It also aims to feature Aruba in secondary markets where Aruba has limited exposure. Over 2012, coop marketing plans were executed with Sunwing / Signature, Thomas Cook / Sunquest, Air Canada Vacations, and Total Vacations. after this change in flight operations and is expected to continue to grow through WestJet.

Highlight of activities

Promotions For the pre-summer and fall period, the Dine on Aruba promotion was offered in Canada through the Canadian operators. Dine on Aruba was well received by A.T.A.’s partners as a value-added island-wide offer to experience Aruba’s diverse cuisine.

Over 2012, there was continued focus on sales calls. Consumer & trade shows focused on the high-income households in the Ontario area as well as other Canadian regions and on the lucrative niches of Romance and Family. In addition, during 2012, Aruba was featured on the Chris Robinson Radio Travel Show, the most important radio travel show in Canada, with listeners from all over Canada, including Ontario and Quebec, which are focus regions for Aruba. Also, the Happy Returners campaign was launched in Canadian media in the second half of 2012, which included out of home media placements in trains and transit shelters, and travel sections in top Canadian newspapers.

Sales

A.T.A. sales and marketing activities were supported with coop marketing plans with tour operator and airline partners leveraging their media assets to reach a potential new younger target audience for Aruba through digital ad placements, newsletters and email blasts, and travel magazines. Finally, due to the large Indian population in Ontario, a pilot project was initiated in November 2012 to target Indian destination weddings by working together with relevant trade agencies, publications, and shows or events. The Indian destination weddings market is an attractive niche for Aruba and will be targeted more heavily in 2013 and beyond.

e-CRM/CRM

Branding & advertising

Over 2012, Aruba pursued classic travel shows and events in Canada, targeting both trade and consumers in mainly Ontario and Quebec. In addition, Aruba targeted bridal / wedding shows in order to reach consumers within the romance focus niche. These provided access to both trade and consumers and showcased Aruba’s destination wedding and honeymoon offerings and capabilities to a large potential audience including the Indian destination wedding market. Besides shows / events, and sales calls, innovative use of webinars allowed Aruba to reach a larger travel agent community over a longer period of time during 2012.

Similar to the U.S., over 2012, a step-up has been done to reconnect with ACE agents through the Recommend platform.

This allowed A.T.A. to provide (re-) certification of ACE agents, training and updates on Aruba, as well as to establish new communication opportunities through newsletters and social media with ACE agents.

On the consumer side, A.T.A. North America leveraged the consumer database to reach out to consumers through e-blasts with news, offers, promotions such as Dine on Aruba, and specifically reach a targeted audience through coop programs with in-market partners.

Aruba’s new ad agency developed a new campaign, Happy Returners, and co-launched in the fall of 2012 in Canada and the US. This campaign was focused on celebrating loyal repeat visitors to the island. The campaign media vehicles used were mainly out of home (64%) and print (36%).

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ANNUAL REPORT 2012

Latin America Highlight of activities

Venezuela

MICE

Overview In 2012, A.T.A. Venezuela celebrated its 40th anniversary with great fanfare. This occasion was announced during the year through media and PR, to the trade and consumers. The celebration ended in an elegant ceremony at the residence of the Netherlands Embassy where the trade and the media were invited, garnering huge media exposure.

The year 2012 was a difficult one for Venezuela since Presidential elections were held on October 7. Hugo Chavez, leader of the socialist movement, in political power for 14 consecutive years, locked horns with Enrique Capriles, opposition leader.

Activities in the country reached a virtual standstill during the last quarter.

The objectives for this market are principally to position Aruba as a destination of choice for conventions. A.T.A. participated in 7 seminars and reached more than 1,800 top executives.

Aruba also had a presence in “El Mundo Economia y Negocios (seminar on marketing and social networking) which had more than1000 participants.

Wedding & honeymoon The number of people who marry outside the country has increased, thus providing A.T.A. with the opportunity to position Aruba as a favorite wedding destination. A.T.A. participated in one of the most important wedding shows in Caracas, where more than 1,000 couples attended and learned about wedding and honeymoon possibilities on-island. For this event, Aruba had an app that generated 250,000 impressions, 3680 views as well as more than 10,000 fans on Facebook (arubabonbini).

Sports Despite the country’s situation, Venezuelans seeking places to “escape” helped increase the number of visitors to Aruba in general and supported ATA’s objective for 2012. By year end, Aruba was able to grow this market by 21% while the established target was just 5%. The growth accomplished, was highly significant in allowing the Latin American region to reach and surpass its overall goal. Venezuela, by year end accounted for 68% (143,598 visitors) of the total visitors from Latin America. The strategy executed in the Venezuela market is focused on increasing awareness of Aruba (Marketing 360) and executing the Content Plan (PR and promotions) The focus on key niches was reflected in effort as well as budget, such as MICE, Sports, Wedding and Honeymoon, Entertainment (Shopping/Events) as well as Family and Vacations/Gastronomy/Bonbi.

ARUBA TOURISM AUTHORITY

In 2012, A.T.A. Venezuela supported Aruba’s marathons and made an agreement with a renowned fitness company in the city “Retraining” where Aruba had brand presence on the coaches’ shirts. Aruba´s sports events were also promoted in local events, such as the Marathon Excelsior Gamma in Caracas and the island of Margarita. Aruba received an online promotion on the main target website www.soymaratonista.com.

Family One of Aruba´s most important niches in Venezuela is the family market. In 2012, A.T.A. Venezuela introduced the new mascot Bonbi at different events and caught the attention of parents and kids.

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In 2012, based on the 360° strategy, A.T.A. Venezuela concentrated its focus on the media that influenced each niche in order to optimize resources.

Aruba was present in the Cartoon Network Family 10k Run which attracted more than 2000 people to the Aruba booth for special prizes. Through this event, Aruba received exposure during two days and presence on Cartoon Network for over 3 months.

Aruba had a major presence in children’s events and in schools where Bonbi had the opportunity to communicate the One Happy Family program to over 1,000 people. To further support this niche market, an online campaign was launched attracting a total of 6,269 people to register for more information.

In 2012, tour operators got additional support in Aruba´s institutional ads where their logos and contact information were promoted, making it easier for readers to request rates.

Sales In 2012, the sales department’s goal was to increase the presence of Aruba in agencies. With the addition of a new sales executive in Maracaibo, it was feasible to cover all the main cities of Venezuela. Each executive visited an agency, gave an update of the island and provided the agents with promotional material. The visits helped to increase contact with travel agents and educate the agents how Aruba is positioned as a brand.

Branding & advertising In 2012, based on the 360° strategy, A.T.A. Venezuela concentrated its focus on the media that influenced each niche in order to optimize resources.

Promotions A.T.A. partnered with a cable TV channel for a pre-teen election.

The winners flew to Aruba and helped with the cleaning of the beaches. During the election weeks, Aruba received mentions and coverage. Bonbi was also present.

This year, on the occasion of the 40th anniversary, Aruba awarded agents with the highest sales. A special online page was designed where the agents had to enter their sales to accumulate points and had a chance to win a Samsung tablet.

This strengthened the relationship with travel agents and was an incentive to sell the island.

MICE visits to agencies were important because it allowed A.T.A. to provide more personalized support for the group departments.

In Maracaibo, Aruba had presence with Bonbi during a school event where people could take photos with Bonbi and win raffle prizes.

For the first time, Aruba was present in the main local event in Maracaibo “Los Amanecers”. During a weekend of celebration, Aruba was represented with banners, table banners and raffles.

Coop advertising Aruba offered several official tour operators coop funds based on a minimum number of room nights.

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ANNUAL REPORT 2012

Highlight of activities

Brazil

Aruba participated in major events as BRAZTOA and ABAV as well as events organized by Aruba´s tour operator partners: Nascimento, CVC fair, Visual workshop, Agaxtur, MGM workshop, etc.

Overview In 2012, the Brazilian market under-delivered compared to the 15% target set forth in the Marketing Plan. There were many unforeseen events which affected the possible growth of this market and in fact led to a negative growth of 5.99%, equivalent to 1,343 fewer visitors.

The expectations for 2012 were not accomplished due to the following reasons: - Attractive interest rates were introduced by the Government to encourage and increase domestic consumption; - There was a decrease in tax rates on primary goods (ICMS) which encouraged Brazilians to purchase locally rather than travel to other destinations to buy goods; - In the middle of the year, Aruba lost the GOL flights that used to fly to Curacao and Aruba, leading to a loss of close to 1500 passengers; - In the marketing plan for 2012, it was assumed that A.T.A. would reach an agreement with one or more carriers to fly direct/non-stop to Aruba. This never materialized, however, due to reasons beyond A.T.A.’s control; - Operators were not willing to work with GOL due to disagreement on pricing and terms and conditions.

The aforementioned items remain a challenge, yet A.T.A. continues to push forward in this market, as its value and potential remains enormous. While Brazil has declined in arrivals, this market still represents 10% of the total visitors traveling from the Latin America market.

ARUBA TOURISM AUTHORITY

A.T.A. Brazil ran a promotional campaign during the Bridal Expo along with a contest on Facebook generated 270 fans at the start of the promotion, ending 2012 with more than 49,000 followers.

In 2012, A.T.A. expanded its actions in the MICE segment, participating in 3 important events in Brazil: LACTE, MICE and ABAV Corporate. In addition, seminars were organized at agencies and operators working in this segment such as Alatur, Ancoradouro, Flytour. In addition, a VIP fam was held for 9 companies with potential customers.

Airline marketing programs Avianca and Copa kept their overall numbers steady, showing a decrease in the first half, but recovered significantly in the second. This recovery was mainly due to the cooperative efforts (media) and institutional campaign, in addition to promotions that encouraged traffic mainly from the secondary markets.

Branding & advertising In 2012, A.T.A. conducted an advertising review and Lew Lara was once again selected as the agency of record. The existing campaign (“Stop the time”) was continued as this had only been in place for a couple of months.

The execution of the media plan was slightly delayed due to the agency review. The media plan included targeted magazines (Caras and Claudia Brides); the corporate segment (Radar, Brasil Travel News e Mercado e Eventos); traditional tourism and entertainment magazines such as Viagem & Turismo, Viajar pelo Mundo, Viaje Mais, Lonely Planet, Top Destinos and

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a Caribbean Guide at Viaje Mais; as well as trade magazines: Diario do Turismo, Viagens S/A, Panrotas.

In the digital sphere, Aruba had banners and super banners on consumer websites: Viaje Aqui, Adoro Viagem, Viaje na Viagem, Trip Advisor and also banners in journals focusing on the economy, such as Exame (the Brazilian “Times “), as well as on Google and MSN. Aruba also had presence in some more tourism related websites: UOL Travel, Travel Net, Mundi, Diario do Turismo, MSN, Google and also promotions on Facebook.

Coop advertising In 2012, A.T.A. ran coop campaigns with the top producing operators for the destination: Nascimento, CVC, Turnet, MGM, ADV, MMTGAPNET, Agaxtur, Decolar and Submarino.

Coop campaigns with the main airline partners were executed: Copa, GOL and Avianca.

The coop campaigns included advertising in national magazines with a price point, trade magazines such as Panrotas, online sites, radio, Sony Television, and billboards in the cities where COPA Airlines has flights to Aruba.

Promotions One of the most successful promotions implemented was during the bridal show - Expo Novias - along with activations on Facebook. At the event, in an attractive booth with a scenario of a romantic Aruban dinner, couples were seated at a table for a champagne toast. These photos were uploaded to Facebook for the public, friends and relatives to choose the best couple. The couple with most votes won their honeymoon trip to Aruba.

Aruba also participated in a joint promotion with Turnet in conjunction with the sold-out premiere of “The Life of Pi” movie in the Analia Franco shopping mall in Sao Paolo by showcasing the Aruba destination video at the beginning of the movie.

Sales A.T.A. Brazil organized three road shows: 1) with Trend in six cities reaching 565 travel agents; 2) with Copa Airlines in their top performing cities reaching 336 travel agents and 3) an Aruba roadshow in 4 cities reaching a total of 350 travel agents.

Additionally, 2 workshops were held. The first was with Visual in Sao Paolo City, reaching 300 travel agents and the second was with MMT Gapnet in Sao Paolo and Belo Horizonte, reaching 500 travel agents. In total, 2,051 travel agents were educated.

In addition, A.T.A. Brazil participated in other events targeted to the incentive market, wedding and travel trade shows.

Social media In October 2012, A.T.A. hired CDI Digital as the community manager for the Portuguese Facebook: The main objective was to increase fans, keeping them active through daily posts with pictures and content for users to learn more about Aruba.

Currently the amount of fans in Brazil is at a total of 49,904.

From October to December, the fans in Brazil who chose the Portuguese page increased from 381 to 50,081. The “Talking about this” page also increased from 27 to 2,750 Brazilian fans.

In the promotion “Honeymoon Dream” (My Dreams Honeymoon), a page was created to share the photos and was available as an app. A total of 40,446 views were reported, which was the second only to the Timeline image in number of views.

The Timeline image gained the greatest number of “likes”, comments and shares (with ‘viral effect’) with 776 likes, 245 shares, 43 comments, a 11.28% with ‘viral effect’.

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ANNUAL REPORT 2012

The communications strategy was directed to generate more awareness of the “new Aruba”; younger, relaxed, sophisticated, accessible, close, with a high level of gastronomical offers and activities.

Colombia

Bonbi was created in July 2012 as the official mascot for the family market. It became a new and fresh resource to facilitate interaction with the family group and travel agents. It further provided a playful and impactful way of promoting and selling Aruba.

Overview Colombia increased the number of visitors by 8.5%, amounting to a total of 18,127 visitors in 2012. While this is positive, it fell short of the 38% growth target established in the marketing plan for the year. The market was affected by fierce competition and introduction of Avianca’s new routes to Central America, Havana and Mexico and Copa’s new routes to Jamaica, Bahamas and Cancun. Furthermore, Avianca’s fares to Aruba were very high and detrimental to tourism. To make matters worse, the elimination of the visa requirement for Mexico helped Cancun to become the most demanded destination; tour operators created charters and started up additional operations for Cancun.

Highlight of activities Airline marketing programs The Colombian market is served by Avianca, Copa, Tiara and Inselair. While Avianca remains the largest carrier out of the market, it is noteworthy to mention that Copa grew by 97.63%, Tiara 40.23% and Insel 27.53%, while Avianca remained flat.

Towards the second half of the year, recognizing this erosion in their position, Avianca worked closely with A.T.A. to establish specific “specials” for the island, along with a supporting campaign. This immediately led to a turn-around in sales to the island.

Branding & advertising The main strategy was to focus on marketing and promotional activities to attract potential visitors in the A & B high and mediumhigh income brackets: families, couples and multinational companies that have conventions and incentive trips abroad.

ARUBA TOURISM AUTHORITY

The One Cool Honeymoon program and Aruba’s diverse and extensive gastronomy were presented to couples as some of the main reasons to consider Aruba as the desired vacation destination.

The MICE market was approached on a one-on-one basis through top travel agencies that sell and manage conventions and incentives groups for multinational companies. ACB and A.T.A.’s Cash Incentive, Visa Incentive and VIP Card were the added value elements used to sell Aruba within this market segment.

Additionally, Avianca’s corporate division sent an e-card to 11,000 executives to promote Aruba as a MICE destination.

The communications strategy was directed to generate more awareness of the “new Aruba”; younger, relaxed, sophisticated, accessible, close, with a high level of gastronomical offers and activities. The media mix of magazines, digital, cinemas and radio had a positive effect on the image and awareness of the island.

Coop advertising Coop with Travel Depot on TV, UGA Turismo in magazines, and Viajes Chapinero in events were the few actions undertaken with tour operators. The visa requirement limited the interest of tour operators in investing in seats and advertising. A.T.A., as mentioned, invested in coop activities to push the AVIANCA promotions which offered an attractive net fare for tour operators including Avianca Tours. This program resulted in increased production by the operators for Avianca by 500%. Until 2011, production was limited since there was no net fare.

Sales During 2012, A.T.A. Colombia covered the main markets: Bogota, Medellin, Barranquilla, Bucaramanga, Cucuta, Pereira, Armenia,

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Manizales with Aruba seminars directed to top travel agents; over 500 agents participated and were educated and updated on product Aruba.

Highlight of activities Airline marketing programs

In Medellin, Cucuta, Bucaramanga, Barranquilla, seminars were conducted together with Copa which resulted in increased awareness of the Copa flights to Aruba and an increase of 95% in their traffic from Colombia to Aruba.

Similar to 2011, aggressive coop campaigns with airlines successfully helped increase traffic from the Argentinean market.

Copa Airlines’ campaign took place during the last quarter, and, for the first time, Avianca Airlines participated in a coop campaign with Aruba.

Social media

Branding & advertising

Promotions with Avianca‘s low season fares were announced by a landing page strategy with a result of 1,284 leads. E-mail marketing and Facebook had 6,965 clicks and a conversion rate of 1.56%.

While the marketing strategy for Argentina concentrates primarily on Coop advertising, there is still a portion which focuses on the branding of the destination. To address this, A.T.A. continued to utilize the creative assets of the institutional campaigns for Venezuela and Colombia. Once again, the AB1 segment (upper social classes) and trade were targeted through a media plan consisting of trade and consumer magazines (80%) and online placements (20%).

On the Facebook’s page, a total of 8,040 Colombian Fans were reached by the end of the year.

Argentina

Coop advertising

Overview In 2012, the Argentinean market continued to grow and even surpassed the objective of 15% stipulated in the Marketing Plan.

Year-end 2012, this stellar performance resulted in a growth rate of 24.59%, representing 6% of the total visitors from Latin America for the destination.

While the market performed well for Aruba, this was not without challenges. During the last semester of the year, outbound travel and tourism was strained by a number of restrictive measures imposed by the Argentinean government, prohibiting the

Several coop actions were implemented during the year through traditional wholesalers (35%), airlines (Copa and Avianca - 30%), airline vacation brands (Copa vacations and Taca vacaciones 25%) and large tour operators (10%). The coop plans consisted of a diverse portfolio of actions including online advertising, shopping promotions for consumers, radio, educational presentations and cocktails, magazine and newspaper advertisements and billboards.

Promotions During 2012, the PR agency (BYP) continued to implement promotions on behalf of A.T.A. The Golf and Polo tournaments were covered by ESPN. BYP was also effective in gaining exposure for Aruba through banners on cable TV (Direct TV) and on line. Additional highlights are covered in the PR section of the Annual Report.

purchase of US dollars for travel abroad and restricting frequency of travel abroad to no more than three times per year.

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ANNUAL REPORT 2012

Sales Sales efforts are the most effective action tool for the Argentinean market. A.T.A. Argentina organized seminars, trade shows, blitzes, road shows, workshops and personal visits on a yearround basis starting in March 2012 (after the Argentinean high season); some of these activities were in conjunction with airlines, tour operators and hotel representatives. In total, 19 cities throughout the country were covered.

The ACE program is a core element of the entire sales process.

These trainings are still conducted in the traditional way at the agency offices in 7 cities and through seminars at 3 national universities.

Consumer events A.T.A. Argentina also participated in various consumer events (e.g. the Mini Cooper exposition, wine tasting, Father’s and Mother´s Day events, bridal activities in shopping centers, consumer activities in conjunction with airlines and partners)

Social media Social media efforts included messages targeting A.T.A.’s mailing list as well as specific Facebook campaigns such as the “Embajador Argentino” to garner new fans for the Aruba page.

As of the end of 2012, A.T.A. conducted a thorough PR agency review resulting in the change in agency. As of next year, the incumbent PR agency will be in charge of the implementation of the Social Media strategy in the market.

Chile Overview Net Global was hired in July 2012 to represent Aruba in the Chilean market. Chile, with a strong economy as well as good flight connections on Avianca and Copa, helped to increase and diversify tourism from Latin America. Over the past three years, the Chilean market has grown an average of 30% annually, accounting for 1.5% of total visitors from Latin America by year-end 2012. Though small, this market has been important especially from a Meetings and Incentives perspective, with several hotels benefitting from group business over the past years.

From an accessibility viewpoint, both Copa and Avianca offer very attractive connections through Panama and Bogota; Bogota has a new airport wing which was recently inaugurated and Panama has an attractive tax-free shopping zone. Nevertheless, A.T.A. is continuing to explore additional connections from Chile through the main carrier, LAN, among these, Caracas, which would be ideal.

Highlight of activities One of the initial efforts in 2012 was the VIP fam trip which brought the most important tour operator partners to the island to experience the destination and meet and negotiate with hoteliers.

At the same time, writers from four of the most important magazines in Chile visited the island. A.T.A. organized a roadshow in the market, allowing hotel and other private sector partners to meet and educate Chilean travel agents and tour

ARUBA TOURISM AUTHORITY

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As Chile is a relatively new market for Aruba, the core strategy focused on educating the trade as well as consumers on key attributes of the destination.

operators on their specific products and various trade and consumer activities.

Coop advertising From September 2012 until the end of the year, A.T.A. published 17 ads in four of the most important Chilean media outlets: Domingo, Sabado, Cosas, and Poder & Negocios magazines. A.T.A. negotiated with the Avianca and Copa pool of operators to promote a variety of accommodation options.

The creative used for the ads were the same ones created by A.T.A. Venezuela. Moving forward, however, the development of creative pieces which are more suitable for a new market such as Chile is recommended.

Sales As Chile is a relatively new market for Aruba, the core strategy focused on educating the trade as well as consumers on key attributes of the destination. Hence, a significant amount of time was spent on sales activities.

A.T.A. participated in a workshop of Viajes Falabella, one of the most important tour operators in Chile, reaching over 300 agents. In September, in conjunction with Turaser, A.T.A. participated in the Expo Novias Fair, attended by more than 9,000 consumers. 128 representatives from various Chilean tour operators and travel agencies travelled to Cancun to participate in the first Copa Airlines Convention. A.T.A. was given the opportunity to present destination Aruba and received a very positive response and feedback from the audience. The Chilean tour operator ADSMUNDO offered a workshop on Aruba for its sales department - this was attended by 150+ visitors. The office also trained 180 tourism professionals during sales calls and meetings. Additionally, A.T.A. sponsored small exclusive events organized by tour operators, inviting 40 of their best travel agencies.

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ANNUAL REPORT 2012

Europe Highlight of activities

The Netherlands Overview The Netherlands, Aruba’s strongest market in Europe, had a very challenging year that resulted in arrivals increasing by only 0.24% instead of the targeted 3%.

One of the main promotions included a coop effort with 24 Kitchen– Taste of Life and the well-known television Chef Rudolph van Veen to showcase Aruba’s diverse local culture and culinary offerings. A 50-minute special was recorded on Aruba’s local culture, nature and, above all, on Aruba’s culinary scene. This was broadcast several times in December 2012 and scheduled to run in January, February and March of 2013.

Branding & advertising The Dutch traveler became more price sensitive as a result of the impact of the Eurozone crisis and rise in commodity prices that slowed the growth of the Dutch economy. As there was little consumer confidence in the economy, consumers held firm to their normal vacation expenditure. During the month of December, the market was especially hit hard with a decrease of 4.87%.

As has been the trend over the last 3 years, consumers wait until the last minute to book their Aruba vacation, hoping for deals. According to tour operators, this trend will continue for the 2013 booking year.

Airlines Aruba is being served by two main airlines from the Dutch market: KLM and Arkefly. As a result of market challenges, seat-only bookings were higher than anticipated, which was helpful in maintaining the flight rotations from Amsterdam for 2012. To push bookings, tour operators offered heavy discounts on packages.

KLM is becoming an ever increasing and important player in the Dutch market. ArkeFly is now also being sold through the online tour operator Expedia, increasing the latter’s importance in the Netherlands.

ARUBA TOURISM AUTHORITY

A shift in strategy was made to offset the perception in the market that Aruba is unattainable for most travelers. A campaign was developed in which branding was complemented by offers from partners such as Kras.nl and Oad Reizen, providing A.T.A. with promotional offers and a ‘vanaf prijs’ message in the market. This differed from prior online-radio campaigns that focused solely on brand awareness with no direct link to price or booking options.

The cross-media campaign had the two-pronged goal of increasing brand awareness in the Dutch market and increasing bookings for the summer period. The campaign included a digital buy on several prominent Dutch websites, 10 and 60 seconds radio spots on 23 well-known Dutch radio stations. Several banners were placed on A.T.A.-Europe’s Dutch micro-site.

Besides online exposure, Kras.nl also distributed print-ads in Algemeen Dagblad and on the front page of HDC.

Coop advertising During 2012, there were three tour operator coop campaigns:

1. TUI NL - online, in-store, direct mail and advertising

2. OAD - website banners, customer email feature, and customer mailer from April - August . OAD is one of the only tour operators in the Netherlands, other than KUONI and Silverjet, that can sell KLM.

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 3. KRAS - online banners, direct mail, SEA Google campaign, exclusive newsletters and print advertising. An additional campaign was planned to push the winter bookings, resulting in positive numbers.

Sales A.T.A. Europe attended several important trade/consumer sales events during 2012.

The Love & Marriage Fair is the largest wedding fair in the Netherlands, attended by 126,551 people, which represents an increase of 3.6% compared to the previous year.

Aruba is very popular as both a honeymoon and wedding destination, as the guidelines for marriage are the same as in Holland.

Aruba also participated this year at the 50+ Fair 2012, which was attended by many repeaters. The island is seen as a desirable destination with good weather and diverse activities.

Along with attendance of hotel representatives, there was a massage stand which was very popular among the attendees at the Aruba booth.

A.T.A. Europe also participated as the main sponsor at the Aruba Dag event 2012 in support of the local Arubans in Holland. In the future, it is recommended that Aruba participate in the VIP section, as members of the Dutch Parliament visit this area.

A.T.A. Europe, along with hotel representatives, once again participated at the Holiday Fair.

Another event in which A.T.A. Europe participated is the Travel Councellors Leveranciersdag 2012. Leveranciersdag brings all Travel Councellors (mobile) travel agents together for a one-day workshop. Travel Councellors are the fastest growing booking tool in the Dutch market, visiting potential travellers at home.

Social media The target for 2012 was to increase the total fans on Facebook to 3,000, a target reached in July. The year closed with well over 3,800 fans. A special Instagram campaign was launched called ArubaGram.

e-CRM/CRM There was not a huge amount of CRM activity. One e-newsletter was sent to the Dutch consumer database in February, March and April. E-letters will continue to be sent out throughout 2013.

Other A.T.A. Europe, along with A.T.A. Aruba, has developed an apartment and villa brochure based on market demand as the Dutch traveler likes to stay with his/her family in smaller accommodations.

A.T.A. Europe was one of the main sponsors for the Caribbean Latin Workshop on the cruise ship Alegria. The A.T.A. team was able to meet travel partners to discuss island investments by foreign companies (HUB).

A.T.A. together with the Cabinet of Aruba participated at NetworKing, a very high-end trade event.

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ANNUAL REPORT 2012

Highlights of activities

United Kingdom Overview The 2012 objective was to increase UK arrival figures by 7% compared to 2011, therefore reaching a target of 14,465 stay over visitors. Unfortunately this was not achieved, as 2012 ended with 13,712 UK visitors which was 1.1% down year-on-year.

The UK was a turbulent market for Aruba in 2012 as, not only did the impact of the Eurozone crisis and rise in commodity prices slow the growth of the UK economy, but Aruba also lost its UK office and presence in the UK with the demise of The Saltmarsh Partnership in May. For six months, there was very little activity in the UK which, combined with a pricesensitive market and challenging trading conditions, meant a very difficult year. Aruba’s presence in the market resumed in November 2012.

The dominant airline for the UK market to Aruba is Thomson Airways (charter), however, due to the challenging conditions and upset with the UK presence as mentioned above, 2012 was a poor year in terms of sales and load factors. This resulted in the loss of the Manchester rotation for 2013.

KLM is becoming an ever-increasing and important player for the UK market. Issues with KLM remain with high flight prices when compared to competing scheduled airlines such as BA and Virgin which offer numerous direct flights to the Caribbean.

This is compounded by the lack of tour operators that receive KLM contracts and the small windows of promotions, which are advised at a very late stage, making it a challenge to get them to market.

ARUBA TOURISM AUTHORITY

A.T.A. Europe attendance at WTM, was focused on making contact with all current tour operators and airlines selling Aruba to let them know that the UK market had representation again and also with the media, to ensure Aruba was considered for future press trips and articles. There was also a focus on quickly generating and managing the social media platforms and updating out-of-date content and contact details for websites, brochures, and other platforms. The overall aim of these two months was to make sure all relevant parties were aware that Aruba was back and serious about the UK, and to determine which strategies and budgets would be utilized for 2013.

Coop advertising During 2012, there were two tour operator and one airline coop campaign: TUI UK - Tour operator and charter flight to Aruba. Coop activities included online, in-store, direct mail and advertising.

Kuoni - A coop campaign ran from April 1 - August 31, 2012, with a mix of activity that included website banners (Kuoni and TripAdvisor), customer email feature, and customer mailer.

KLM - A Facebook campaign ran for four weeks in 2012 in order to generate Facebook likes for the Aruba page, capture data and form a link between KLM and Aruba. KLM provided two free tickets for this promotion.

Promotions There were no barter promotions in the UK market in 2012, but A.T.A. UK did run a promotion in conjunction with high-street sunglasses store ‘Sunglasses Hut’, TripAdvisor, Lonely Planet and Kuoni. This campaign showcased Aruba though lifestyle brands and media. The main aim was to increase awareness, capture data and drive holiday sales via a competition to win a holiday to Aruba.

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Sales

e-CRM/CRM

There were two trade sales events attended during 2012 (Unite Caribbean and World Travel Market) and two consumer events (Destinations: The Holiday and Travel Show and The National Wedding Show. This event was attended by The Saltmarsh Partnership in early 2012.

There was not a huge amount of CRM activity. One e-newsletter was sent to the UK consumer database in February, but, unfortunately, this data was lost when The Saltmarsh Partnership went into liquidation. Since then, new data has been gathered from the Sunglasses Hut campaign and a Facebook competition. These will be actively utilized during 2013, along with any other opportunities to increase the database.

During World Travel Market, London, A.T.A. Europe and A.T.A. UK had 14 meetings which were scheduled with a mix of tour operators, airiness and press, although an additional 10 meetings were completed with media and ad-hoc tour operator appointments. The quality of the attendance was high and there was definitely a more positive response and feeling towards Aruba than in the previous year.

Social media From January - April, there was minimal social media activity, with an average of two tweets and one Facebook post per week via Aruba UK’s social media feeds. Since November, this has increased to an average of 4/5 times per week and the audience has grown as a result of this and dialogue is now open.

A four-week social media campaign ran in November / December 2012 which was in conjunction with KLM. The campaign involved an active Facebook feed on both the KLM and Aruba UK Facebook pages which was supported by a series of ‘Sponsored Ads’, ‘Page Posts’ and ‘Like Ads’ all to promote the opportunity to win a holiday to Aruba and increase the awareness of Aruba. A follow-up email which included a special KLM fare was sent to all those that agreed to receive further marketing material.

Italy Overview The year 2012 was the first one in which Global Tourist represented Aruba in the Italian Market, for both marketing and PR. The year started with the cancellation of the charter flight by Eden Viaggi, forcing A.T.A. to revisit and readjust the growth target of 25% for the year. The new target for 2012 was fixed at 4,000 pax, which was basically reached as Italy closed at 3,963 pax.

The Eurozone crisis has affected outbound tourism and travel from Italy, but considering the severity, it must be said that Aruba has not particularly suffered from this situation.

In this first year, the efforts have been focused mostly on tour operators and travel agents through fairs, workshops, dedicated events, regular sales calls, visits and training sessions with booking departments and sales personnel. The response has been considerable. For those tour operators with Aruba in their existing programs, the Aruba team encouraged the enhancement of their programs with more product offers.

For new operators, the Aruba team succeeded in having Aruba published (i.e. Carreblu, Idee per Viaggiare and I Viaggi dell’Elefante).

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ANNUAL REPORT 2012

The Italian market is special in that many travelers combine city and beach vacations – such as New York and Aruba. This is popular especially among honeymooners and several tour operator programs have combined Aruba with destinations particularly in North America, but also in Canada and South America.

Additionally, Aruba being a relatively new destination in the market, required a significant amount of outreach to the media, both consumer as well as the trade. Periodical newsletters and releases were sent out with product updates and event information of interest to agents and consumers alike.

KLM is the preferred airline to fly to Aruba when Aruba is the only destination being considered for the vacation. When the island is sold as an addition to North America or Canada, travelers fly with US carriers, particularly American Airlines.

During 2012, Global Tourist succeeded in strengthening the relationship with KLM (both sales and PR units), as a result of positive results achieved throughout the year.

During 2012, KLM published several special offers with incredibly tempting rates. The weakness of such promotions, however, has always been that these are announced at the last minute and with a short booking window (generally 7 to 10 days).

The “Aruba.it” project was initiated in late 2012 and targets the final consumer.

The basis of the project is to play off the similarities between destination Aruba and the name of the company, which is the leading internet service provider in the Italian market.

The campaign covers two years and involves a total of 2 million potential customers.

Social media In 2012, Global Tourist created a Facebook page (www.facebook.com/ArubaTurismo), Twitter account (https://twitter.com/IsolaDiAruba ) and YouTube channel for the destination.

German speaking countries Overview While not a large source market, the economies of the Germanspeaking (GS) markets are among the strongest in Europe, with unemployment rates being low and GDP development holding its own.

Highlight of activities Sales In this first year of presence in the market, the focus was mostly on the trade: tour operators and travel agencies.

Aruba was present in the most important tourism fairs and exhibitions, including BIT Milan, a three day CTO road-show for travel agents, an Aruba Roadshow, no Frills Bergamo trade event, TTG Rimini trade event, I Viaggi dell’Airone roadshow and I Viaggi del Delfino events.

ARUBA TOURISM AUTHORITY

Promotions

Although Germany lost its title as “travel world champion” to China in terms of overall spending, expenditures for outbound travel increased further in 2012. German per capita spending is still the highest in the world. It has strong international travel potential and represents a stable and most attractive market due to length of stay, above average spending, and active vacation preferences of travelers.

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TUI Suisse. One fam trip with 15 travel agents visited Aruba in November, implemented jointly with AG Karibik.

A.T.A. Germany was prominently involved in an upmarket Golf tournament with some 270 visitors in Bavaria. Jointly with KLM, A.T.A. Germany promoted Aruba in the high potential LGBT market on the Christopher Street Day parade in Cologne and the German Aids-Gala in Wiesbaden.

The overall objective set in the marketing plan for 2012 was an increase of 16% to 5,735 visitors from the GS markets. By the end of the year, the GS market at year-end grew overall by 13.15% to 5,600 arrivals. Germany showed the biggest increase in Europe with 16.1 % and 4,054 visitors, representing 72.4% of the overall business from the GS markets. This positive growth was achieved through intense educational sessions in the market and close cooperation with Aruba’s traditional tour operators as well as through a continuous media presence. Another factor was the support and good relationship with KLM, combined with increasing interest of Aruba hotels in the GS market.

Trade activities reached all 15 tour operators featuring Aruba and about1,600 travel agents throughout Germany were educated. New tour operators have been identified to start an Aruba program, where mainly the smaller specialists for LatinAmerica come into the picture.

An online summer campaign was executed successfully with FTI consisting of teaser in B2C newsletter, Aruba landing page and direct booking tool.

Branding & advertising Due to limited budget, advertising efforts focused on the key travel trade publications in each market, with a focus on Caribbean special topics. In addition Aruba’s presence was secured in Caribbean specials of selected consumer publications.

Airlines KLM is Aruba’s sole airline partner in Germany, Switzerland and Austria: an upscale non-charter connection with excellent feeders from 15 cities in Germany, Austria and Switzerland, mainly in cooperation with Eurowings.

KLM is known in the market as a good quality airline, and although the price of Aruba is in general higher than that of other Caribbean destinations, the affluent traveler is not discouraged from booking Aruba. The message in promotions emphasizes that the client can book tailor-made trips to Aruba, not limited to seven-day charter flight.

In fall 2012, A.T.A. Germany ran an online campaign with KLM including the main internet portals in Germany, likeTravel 24.de, ab-in-den-Urlaub.de, Focus Reisen and Holiday-Check.

Beyond print advertisements, the focus was on creating exposure packages including advertorials and editorial content as well. The launch of the travel agent online training “One Happy Academy” was supported by banner advertisements on selected trade publication websites and newsletters. An advertisement targeting consumers was published in the annual magazine of AG Karibik.

Coop advertising Coop advertising activities were developed with KLM as well as key tour operators. A one-page advertisement was placed jointly with the tour operator FTI on the last page of a Caribbean supplement in the German trade magazine Travel One. Nontraditional coops were executed as point of sales promotions, as described above.

Promotions

Highlight of activities A.T.A. Germany has been actively present on all major consumer shows in Germany as an integral part of the AGK (ArbeitsgemeinschaftKaribik), as well as at ITB. Road shows have been executed with DERTOUR, FTI and in Switzerland with the prestigious Swiss Tourism Exchange. Travel talks have been executed with DERTOUR, FTI, MeiersWeltreisen and

The integrated campaign Cook it!, with celebrity Chef Mirko Reeh, consisted of several elements, which were mainly implemented as barter deals. Chef Mirko Reeh waived his personal fee for his engagement and journey to Aruba in exchange for an one-page advertorial in this magazine Additionally, Aruba, jointly with KLM, sponsored an AIDS-Gala event in Wiesbaden on December

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ANNUAL REPORT 2012

Sales

e-CRM/CRM

Aruba had a strong presence at various consumer shows, such as CMT Stuttgart, Reisen Hamburg, TB berlin and UFR Friedrichshafen and travel agent road shows, such as DERTOUR summer roadshow, FTI roadshow, MeiersWeltreisen and DERTOUR.

Contacts derived from exhibitions, roadshows and events have been used to create a database. Periodical newsletters to tour operators and travel agents have been sent out throughout the year to this database as well as Global Tourist’s existing travel agent database consisting of 10,000 agents.

Social media

Scandinavia

Social media activities included Facebook and Twitter with the objective of establishing a dialogue with “friends” and “followers” in an open and happy way. In order to reach potential as well as past visitors, at least 2 communications per week were sent on each of the channels. Beyond Aruba´s own social media presence, A.T.A. Europe cooperated with partners in order to also make use of their channels and offered reciprocity to them on the Aruba site.

Facebook and Twitter were important elements of the major integrated campaign “Cook It! Aruba” with, for example, photo galleries, votes, and guest posts by the celebrity Chef Mirko Reeh.

Overview The Nordic region has been stable for the last couple of years, even though the economic recession has been tumultuous and greatly impacted most of Europe. As this recession has not yet totally reached the Nordic region, consumers continue to travel. This is a trend in which consumers will not cut back, mainly because of the long winter seasons. During 2012, more consumers than ever spent their money on travel.

For 2012, the goals set for the Nordic region were based on the inception of the additional flight out of the region. For Denmark, Norway and Finland, A.T.A. established a growth objective of 23% while Sweden was slated to grow by 5%. By the end of the year, the region accounted for a total of 8,456 pax, falling just short of the target which was established at 8,744 pax, due to the lack of performance by the Danish and Finnish markets.

Highlight of activities Airline marketing programs After many years of negotiations, A.T.A. Nordic together with Thomas Cook Northern Europe finally launched a charter operation out of Norway. The charter started at the beginning of December and ends in March 2013. The flight is every 14 days,

ARUBA TOURISM AUTHORITY

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marketing

from Stockholm to Aruba, with a stopover in Oslo, Norway.

It will bring roughly 1,500 pax to Aruba from Norway in the 2012/13 season.

In addition to the Ving charter, KLM continues to be one of the key partners in the Nordic region, as this is the only scheduled airline offering direct flights over Schiphol for those travelers wanting flexibility in their travel dates. However, it is still quite expensive to travel to Aruba with KLM as one must take the early morning flight, a business flight with high fares, in order to make the connection to Aruba in Amsterdam.

Branding & advertising In support of the new Ving flight, an advertising plan was created and executed in Norway to boost the awareness level in that market. The plan included a digital campaign in the Norwegian subway stations throughout the Oslo metropolitan area. A total of 194 spots were shown throughout the public transportation for seven days. The campaign reached a total of approximately 1.8 million commuters.

The campaign took place during the month of December when it is most beneficial to advertise a tropical destination. Additionally, a splash page in the Norwegian language was created on the Swedish version of the Aruba.com microsite.

Sales TUR fair TUR is Scandinavia’s leading fair for the travel, tourism and meeting industries. The annual TUR fairs run for four days at the end March (week 12) at the Swedish Exhibition & Congress Centre in Göteborg.

Roadshow The 2012 Roadshow was a joint effort with KLM. Three cities were visited during this roadshow (Helsinki, Stockholm, Oslo) over three days. KLM was part of the entire roadshow with invited guests in all three cities. The main focus of the roadshow was to reach both existing and prospective tour operators in order to educate them on product Aruba. A total of nine hoteliers joined in this roadshow.

In Helsinki, a total of 11 travel companies attended the brunch workshop in the morning followed by a meeting at the Tjäreborg head office.

In Stockholm, a luncheon meeting was held with Ving Sweden, followed by a sales event in the evening with guests invited by KLM. At this event, a total of 81 sales agents attended from 40 travel companies.

In Oslo, there was a workshop including lunch with eight participating travel companies and three journalists.

Coop advertising Coop advertising is the main marketing tool utilized to reach travel consumers in the Nordic region as many of the travel brands have a broad reach within the market. Nordic consumers tend to choose brands with which they are familiar, such as Ving, especially those charter companies with a strong track record of brand marketing. Additionally, a coop campaign was executed with KLM which pushed business especially during those months when the charter did not fly. This further allowed A.T.A. to broaden its distribution channels through smaller operators or directly through the airline.

Social media The social media goal for 2012 was to launch the Nordic FB site. Although achieved, the complexity of having four languages is still a challenge. Therefore, A.T.A. Nordic has chosen to focus on one language (Swedish) during 2013. This is based on the fact that Sweden is the largest market for Aruba in the Nordic region.

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ANNUAL REPORT 2012

marketing foreword

Digital Marketing Overview

Aruba.com & site performance

In 2012, the Digital Marketing unit focused on projects to reach and provide potential and existing customers with information in an easy and efficient manner, with the objectives to entize to visit, provide information and convert to bookings. As information channels continue to broaden, A.T.A. focused on several key areas through the use of dynamic new technologies: • the preparation and execution of the redesign of Aruba.com along with CMS personalization • the launch of a new mobile travel guide app • further development of the social media strategy leading to increased engagement • continuous updating of the SEO strategy • a greater focus on integrating Aruba’s web, mobile and social tactics • incorporating a methodology for CRM and Marketing Automation technologies into the A.T.A.’s overall marketing mix

English • Total visitors increased to 4,361,195 in 2012 vs. 4,002,615 in 2011. Although this represents an increase of 9%, it is below the 2012 target of 4,800,000. Unique year over year 2012 versus 2011 visits increased by 7.4%: from 3.2 million in 2011 to 3.4 million in 2012.

The shortfall in regards to total visitors can be attributed to challenges with the sitemap on aruba,com, causing a significant drop in volume of organic traffic to the site and suspension of the digital buy for the month of November due to hurricane Sandy.

• Visitors viewed approximately 3.01 pages per visit compared to 3.6 pages in 2011 and stayed an average of 2.36 minutes in 2012 compared to 3:10 minutes the previous year. The bounce rate was 52% in 2012 compared to 48% in 2011.

It has been difficult to pinpoint the exact reasons for the lower than targeted engagement metrics and higher than normal bounce rates. The new Aruba.com should result in an increase in pages per visit, in an increase in average time per visit, and in a decreased bounce rate.

• A total of 2,308,643 visitors (53% of all 2012 visitors) came to aruba.com from organic sources, such as Google, Bing, and yahoo/ organic.

Highlight of activities aruba.com redesign The new aruba.com redesign project was launched in July 2012. As of December 2012, key milestones related to the project included selection of the web design agency, the initial discovery and requirement gathering, and the creation of the design concept, layout structure and initial content upload.

The new aruba.com design uses large photography, a streamlined navigational structure to deliver a more organized and user-friendly structure, and a curated usergenerated content section (e.g. ambassador’s section and Facebook comments).

Spanish • The Spanish version of aruba.com received a total of 343,133 visits in 2012, of which 260,731 were unique visits.

A total of 136,393 of all 2012 visitors (40%) came from organic sources.

• Visitors on the Spanish site viewed approximately 3.47 pages per visit and stayed an average of 4.19 minutes. The bounce rate was 41%.

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ANNUAL REPORT 2012

Digital Marketing Indicators 2012 4,361,195

Total visitors to aruba.com (English)

3.2M

Unique visitors to aruba.com (English)

3.01

Pages viewed per visit

2.36

Average duration (minutes) per visit

343,133

Total visitors to aruba.com (Spanish)

260,731

Unique visitors to aruba.com (Spanish)

233,000

Represents 12.7% CTR to JackRabbitsystems

95,048

Referral of 40.8% to various hotel websites on JackRabbitsystems

22,110

Downloads of Aruba mobile app

50,000

Fans on Facebook page on aruba.com (English)

9.7%

Engagement rate on English page

100,000

Fans on Facebook page on aruba.com (Spanish)

5.4%

Engagement rate on Spanish page

Booking engine

Mobile App

The JackRabbitSystems booking portal was launched in June 2012 on Aruba.com. Compared to the previous booking portal, this allows a better usage experience and an easier booking process.

The mobile app has as its key objective to stimulate on-island spend through digital marketing efforts and the inclusion of relevant content.

AHATA, as a partner on this specific project, has signed up six hotels to participate with this portal with traffic being sent to their respective websites. Of the six hotels, two have agreed to share sales and booking conversion data. However to date, no actual booking information has been reported to A.T.A. This remains a challenge, as the ideal situation would be that A.T.A. could track conversion based on bookings rather than on leads provided.

During July to December 2012, a total of 233,000 leads (12.7%) were generated from the total 1,822,716 aruba.com visitors during this period. Of these leads, the booking engine generated a total of 95,048 referrals (40.8%) to different hotel websites.

SEO Performance

A.T.A. launched its travel guide app in May of 2012. As per December 2012, there were a total of 22,110 downloads of the application. This number will be used as a benchmark for 2013 and beyond. Currently, 97 companies have purchased a listing on the app, or 80% of the targeted 120 companies for 2012.

Social media The A.T.A. 2012 social media strategy continued to focus on the exploitation of social sites and communities. In addition, the key objective switched from just gaining “friends and fans” to increasing the monthly engagement rate and lead generation tactics.

The 2012 goal of 50,000 fans for the English page was reached and the engagement rate increased from 6% in 2011 to 9.7% in 2012. Similarly, the Spanish facebook page passed a key milestone of 100,000 fans with an engagement rate of 5.4% in 2012.

English In 2012, organic (non-paid) traffic to aruba.com increased by 18% from 1,955,765 to 2,308,643 visits. Organic traffic represents 53% of all visitors coming to the aruba.com site. The key search engine optimization tasks performed by Aruba’s SEO partner included: • Research and Implementation of Caribbean related keywords • Keyword linking and seeding • On-page optimization for the Ambassadors, News and filter pages • Analytics and reporting

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Branding & Advertising Overview In establishing the media plans, the B&A Unit works in synch with overseas A.T.A. offices and partner agencies to ensure that placements are taking into consideration the brand guidelines and target groups established for the market (with their respective travel patterns), while pushing need periods and not losing focus on the high season.

In general, the campaigns in the digital environment have performed well. This has been more intensive for the North American campaign, considering the higher level of investment in digital media. In the European as well as the Latin American markets, the media investment is significantly less than in the US.

For 2012, the digital placements have resulted in a CTR (Clickthrough Rate) performance varying from 0.17 to 1.22% in the US market against A.T.A.’s benchmark between 0.19% and 1.29%.

Out of the 8 categories (travel sites, wedding sites, OTA’s, networks, video networks, weather sites, search retargeting and culinary sites) 6 categories outperformed A.T.A.’s own benchmarks significantly with increases ranging from 18 to 77%. For Latin America, the CTR showed performance varying from 0.05 to 0.07% against a benchmark of 0.05% where all of the markets outperformed the benchmark, except for Venezuela which equaled the benchmark with a 0.05% CTR.

For print, the metrics are more challenging to determine effectiveness. In addition to impressions, it is better to overlay the media plans with the metrics of www.aruba.com, where spikes provide an indication of campaign effectiveness.

During 2012, the B&A Unit also worked closely with the Public Relations and Corporate Communications Unit to further position the organization and the awareness for Brand Aruba locally through PR and logo placements. The Aruba logo was strategically placed throughout events and activities, which had a high impact locally.

In September 2012, A.T.A. initiated its local awareness campaign through which it promoted the “Mi Compromiso” certification program, but also its corporate image, as well as the essence behind the Aruba brand and logo.

A.T.A.’s efforts included television, radio, online and newspaper advertising. The campaign was further supported by, press releases and Facebook activations.

Other actions completed included the Linear Park Monument Sign design, various on and off-island events, branding and awareness Campaign on radio, tv, press, online, wrapping of the Arubus busses and “Mi Compromiso” t-shirts and other giveaways for brand activation, exposure and support.

On uniformity, the B&A Unit successfully deployed a creative refresh, giving Aruba’s image a renewed feeling while remaining within the brand guidelines. From a print perspective, this new creative provided more real estate for the imagery in a full bleed format. This consistency has further been applied across the various media channels and applications.

In 2012, three advertising reviews took place in North America, Brazil and Venezuela. Media plans and coop plans were reviewed and adjusted for 2013.

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ANNUAL REPORT 2012

PR &

Corporate Communications The revamping of aruba.com is one of the most important projects as the destination webpage is the call to action for the majority of A.T.A.’s promotional activities.The E-CRM project is another key endeavor which has required input and guidance from the B&A Unit. Together with the agencies, the B&A Unit has worked on establishing an adequate look and feel for the web pages as well as the creation of templates to be utilized for the various mailings; making sure the logo, type font, tagline, copy, etc. are applied according to the brand guidelines.

Actions completed also included collateral Materials (e.g.

Bonbini brochure, Calendar of Events 2012, Apartment Guide, Aruba Manual, ACE manual and the Meeting Planners Guide), show booth design coordination such as for ANATO, CHTA, Sea Trade and creative Approvals for materials being created by A.T.A. offices and partner agencies, sponsorships, merchandising program, Out of home, Mobile App, co-branding, etc.

The merchandising program included handing out of scarves to students leaving for Holland, including CTA for merchandising in bus wrapping, including Logo shop in “Mi Compromiso” campaign and coordination and purchase of merchandise as give-aways for Fams/ Conferences/press and local sponsorships.

Branding & Advertising Unit Indicators 2012 0.17% - 1.22%

CTR range in the U.S. market for digital placements against 0.19%-1.29% benchmark

0.05% - 0.07%

CTR range in Latin America for digital placements against 0.05%-0.07% benchmark

AWG. 61,120

Total revenues generated through the merchandising program (on-island)

Overview This past year the PR Unit experienced an intensification in shift from traditional PR to an eco-system which now integrates social channels in how A.T.A. communicates directly with consumers as well as the media. With audiences focusing more on referrals, interactions and sharing of information, A.T.A. has had to adopt strategies to ensure its voice was present in this arena as well.

A structure was developed that will allow the dissemination of content in a systematic manner including key messaging in the various markets. Every month, a new topic is introduced where content is collected and distributed to all PR agencies in the form of text, images and videos, which in turn are distributed to the different media. Newsletters are also sent out to all partners and key databases on a monthly and quarterly. Events such as “Aruba in Style”, Aruba International Film Festival and Soul Beach Music Festival provided significant PR for Aruba.

A.T.A. is represented by a total of 7 full-fledged PR agencies and 4 representation companies deploying PR initiatives across markets, which secure the presence of Aruba in their targeted areas. In 2012, there were a few changes that took place: Aruba no longer had a PR representation in the Belgian market as it opted to manage this market without an agency.

Additionally, A.T.A. no longer had a PR company for the UK due to bankruptcy of the agency, On the other hand, there were several agency reviews in 2012 that resulted in the hiring of a new PR agency in North America and Argentina. In addition, Aruba expanded its position within the Latin American market by hiring an agency in Chile to position the destination through sales and PR. As part of the PR efforts, A.T.A. hosts numerous press members on-island, allowing them to experience the destination firsthand.

With the cooperation of the trade relations unit, A.T.A. hosted numerous groups, totaling 164 press members in 2012 from the different markets.

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Table 1 Total Press Members Visits Country

Contacts/inquiries

Argentina

4

Brazil

14

Chile

4

Colombia

31

Venezuela

26

The Netherlands

7

Scandinavia

19

Germany

9

Italy

7

UK

8

Suriname

3

Belgium

4

North America

28

Totals

164

Results: Month Argentina Brazil Chile Colombia Venezuela

Total PR Value 2011

Total PR Value 2012

$ Difference

$398,725.00

$666,300.00

$267,575.00

% Difference 67.11%

$3,563,984.00

$1,866,066.73

-$1,697,917.27

-47.64%

$0.00

$0.00

$0.00

$654,168.00

$1,123,399.00

$469,231.00

71.73%

$6,358,111.83

$16,596,014.84

$10,237,903.01

161.02%

The Netherlands

$1,544,295.85

$1,597,876.92

$53,581.07

3.47%

Scandinavia

$2,230,559.00

$2,682,004.00

$451,445.00

20.24%

Germany

$1,591,249.00

$1,257,560.00

-$333,689.00

-20.97%

$0.00

$751,011.43

$751,011.43

$1,184,790.00

$190,915.40

-$993,874.60

-83.89%

$14,851,150.00

$0.00

-$14,851,150.00

-100.00%

Italy UK Belgium North America Total

$5,724,404.00

$3,037,344.00

-$2,687,060.00

-46.94%

$38,101,436.68

$29,768,492.32

-$8,332,944.36

-21.87%

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ANNUAL REPORT 2012

As stated in the above table, there has been a decrease in PR value for 2012 compared to 2011. Reasons for the decline are as follows: - In 2012, Aruba did not have any PR representation in the Belgian market - The UK market was left without a PR company from midMay until November - There was more print exposure in Brazil compared to 2011 whereas, in 2012, the major exposure received was in online media with a lower PR value compared to print media.

- The North American market underwent a three month transition phase as a result of the selection of a new PR agency

Highlight of activities

Chile

Argentina In 2012, a total of 4 press members visited the island from Argentina on press trips. The press members included a very well-known blogger in the fashion and lifestyle industry for the Aruba In Style event, as well as press members to cover Aruba as a tourism destination. Jorge Rial, a popular journalist with more than 1.6 million followers on Twitter, visited Aruba with his partner, which resulted in a great amount of coverage which appeared in the magazines Caras, Gente and Paparazzi. This market mainly focused on press releases which highlighted Aruba’s attributes such as the beaches, culture and various events such as Carnival.

Brazil Since 2010, CDI has worked as the PR agency of record in Brazil. In 2012, 22 press releases were produced by CDI and 801 pieces about Aruba were published in different media outlets in Brazil. Blogs and websites remained an important

ARUBA TOURISM AUTHORITY

outlet to showcase the island. Exposure in newspapers and magazines increased significantly due to more frequent press trips. A.T.A. Brazil and CDI prepared 3 press trips with 25 prominent journalists visiting the island. A Brazilian actress was also invited to attend the Aruba in Style event. On the web, greater exposure was noticed due to sports and fashion show events in Aruba, highlighting Golf Life, Vogue Online and Garotas Estúpidas Blog. Also, the announcement of Aruba Airlines´ non-stop flight resulted in stories in trade, tourism and general lifestyle publications. General press releases on Aruba tend to get higher exposure whenever there is a connection to Brazil. CDI Digital also started producing content and posts for Aruba´s Facebook fan page in October in Portuguese, where the numbers of fans increased exponentially.

The Net Global Group came on board in July 2012 and was able to develop many interesting PR Activities, above all with the Chilean tourism industry. A fam trip was organized to the island where people from the tourism industry and media were impressed with the itinerary as much as the island. During the same time frame, a road trip with A.T.A. and Aruba´s hotels and service managers was organized in Santiago de Chile. It was a great opportunity to create a closer relationship with Chilean tour operators and travel agencies. The agency also organized a sales blitz and workshops.

Colombia In 2012, AXIA was able to garner a significant amount of press and awareness through on-island events. Three media tours were organized for the Carnival, AIFF and CSJF, where 21 different media representatives visited the island with 31 journalists, resulting in 66 media exposures which included 9 TV programs. In addition, AXIA sent 43 press releases to the

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marketing

media throughout the year. Additionally, the agency arranged a co-branding campaign with Santa Ana Mall, directed at the desired target group. A trip to Aruba was raffled, providing Aruba with major exposure through brand presence in all mall areas. AXIA also organized a meeting with bloggers in order to strengthen their relationship with the island, resulting in creative publications about the AIS.

Venezuela In 2012, the main focus of Venezuela´s PR department was television and radio. One of the strategies that A.T.A. Venezuela focused on was the development of the Electronic Press Kit (EPK) of Aruba´s events for distribution to the TV stations. The distribution of the information and content increased in 2012; 46 press releases were sent out compared to 30 in 2011.

Most of the information was published by online media, which increased the online ROI by 269%, as compared to 2011. Eight hours of Aruba information were aired on television in Venezuela, attributable to the development and distribution of the EPK to the HBO Latino programs which significantly impacted the PR value of 2012. A.T.A. Venezuela also celebrated its 40th anniversary in 2012 with a grand event attended by more than 80 journalists. In 2012, A.T.A. Venezuela prepared 8 press trips for on-island events including sports and concerts, as well as a trip dedicated to interviewing locals for A.T.A.’s 40th anniversary book. The PR department supported 4 social media activities in 2012 by supervising the information and content development for the activities.

were, for the most part, themed and centered around sporting activities on Aruba and the local Aruban culture, known as ‘local hidden gems’. The television coop was set up with a fast growing digital television channel 24 Kitchen, in which a production team and well-known TV chef Rudolph van Veen travelled to Aruba to experience the local culture and cuisine and especially meet the locals. This resulted in the Taste of Life Aruba special, which aired in December, January, February and March. 2012 saw the local cultural theme and ‘hidden gems of the island’ take shape as we moved forward with compelling original stories to show Aruba’s unique and diverse culture.

Another major subject that gained momentum throughout the year was Aruba’s sustainability efforts, somewhat tied in with eco-tourism and Wubbo Ockels’ green voyage to the island.

High-profile media that reported on Aruba or took part in a press trip in 2012 included NOS Journaal, Hart van Nederland, ANP, De Telegraaf, Algemeen Dagblad, Jackie magazine and Men’s Health. The total circulation for 2012 was 364,589,412.

Scandinavia During 2012, A.T.A. Scandinavia arranged 3 group press trips, one of which was dedicated to the launch of the Ving Norway charter. The seven participants of this trip produced a total of 13 articles A press visit from Finland in April resulted in Aruba having the front cover of a magazine. A total of 19 Scandinavian journalists visited Aruba. They were representatives of national newspapers, travel magazines and special interest magazines from Sweden, Denmark, Norway and Finland. A total of 8 press releases and 2 special edition newsletters were sent out.

The Netherlands In 2012, there were 5 press trips and one major television coop.

The coop combined one group press trip, three individual trips, one photo shoot and an individual press trip. The press trips

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ANNUAL REPORT 2012

Germany 2012 was another strong year in the German-speaking markets.

PR generated coverage with a circulation of 56.2 million. Notable in the mix were one group press trip and 2 individual hosting projects. The photo shooting of Germany’s leading women’s magazine Petra, resulted in 33 fashion and destination pages. A total of 17 press releases in addition to exclusive stories featuring Aruba as a destination were sent out covering a wide range of topics. The main focus in the second half of the year was on the major integrated campaign “Cook It!” highlighting Aruba´s culinary assets. The campaign centered around the German celebrity chef Mirko Reeh, and featured a dedicated microsite with Facebook integration. The social media campaign almost doubled Facebook fans to 2,100.

Italy Global Tourist is the agency that has been representing A.T.A. in the Italian market since 2012, handling marketing as well as PR. Global Tourist organized 2 press trips to the island during this first year: one filming a 16-minute video for a TV show called “Alle falde del Kilimangiaro”, which was later broadcasted on the national channel RaiTre with a total audience of 2,288,000 people and more than 1.000 views on the channel’s website, and one press trip that included 6 journalists for different magazines.

During 2012, 16 press releases were sent out to the media as well as periodical newsletters and print and online trade and consumer magazines, freelance journalists, specialized website and magazines. 2012 was the first year that Aruba had presence in the Italian pages and on the social media networks.

A Facebook page, Twitter and youtube channel were created this year.

UK 2012 was a challenging year for the UK market as mid-May saw the demise of The Saltmarsh Partnership; therefore Aruba was without a PR agency from mid-May until November 2012.

During this time there was no PR activity.

The Saltmarsh Partnership organized two group press trips that comprised of a total of four journalists: The People newspaper, MSN online and trade publication ABTA Magazine and Joanna Cooke from Travel Weekly.

ARUBA TOURISM AUTHORITY

A total of 14 press releases and two quarterly newsletters were distributed and a total of 22 features appeared in print and 56 online.

North America 2012 was a transition year for the North American market since both the advertising agency and the PR agency went through a review process. For the first five months of 2012, M. Silver Associates was the agency representing Aruba in the North American market. M. Silver hosted seven journalists on assignment to Aruba. Press visits included journalists from the New York Daily News, Cruise Radio, Gannet Newspaper New Jersey, UP! (WestJet Magazine), Blackbookmag.com, Jetsetter. com, American Spa, and Improper Bostonian. Traveling Mom hosted a Twitter party to promote a webisode filmed in Aruba.

MSA also secured promotions with other partners in the market such as SHAPE Magazine, Christie’s Green Auction, New York Pops/Carnegie Hall, Health Magazine, and Super Saturday.

Aruba also had presence at the 2012 Pebble Beach Food & Wine Festival. M. Silver Associates secured coverage of Aruba in 106 print and online articles generating a total of 139,794,263 circulation and $1,420,803 in PR value.

After appointing a new agency for the North American market, The Zimmerman Agency garnered 1.1 billion+ impressions through an impressive mix of journalist experiences, in-market buzz and promotional outreach. The PR team hosted 20 national and top market publications through 4 group press trips, resulting in 75 pages of definition-driven print stories at a 100% projected story production rate. Aruba was also featured in 90% of U.S. and Canadian bridal (No. 1 niche market) publications. The team hosted 20 journalists/bloggers for an Evening of Aruban Artistry, Culture & Cuisine in NYC, generating 10 million+ impressions through online articles and extensive social media interaction with attendees. The agency secured nearly $500,000 in broadcast promotions with The Steve Harvey Show, The Today Show and top-market radio stations, yielding a 51:1 ROI. The team hosted an on-island photo shoot with US Airways Magazine, resulting in an 8-page cover story, as well as an on-island TV shoot with national extreme sports TV show Planet X, reaching 3 million Gen-X / Gen-Y viewers. The Z team also achieved 100% Tier-1 market saturation with inmarket buzz and consumer events in NYC, Baltimore, Boston, Chicago, Washington D.C. and Atlanta, earning the attention of thousands of potential visitors. The Zimmerman agency generated a total of $1,616,541.00 PR value.

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marketing

Each individual is responsible for giving the visitor the feeling of happiness and tranquility. The “Mi Compromiso” campaign also illustrates how A.T.A. is contributing to the development of Aruba’s tourism.

Corporate Communications

around travel and tourism, training on the top social media platforms, and a look at the current conversation around Aruba online. The course took a “hands-on” approach featuring interactive activities and recent case studies from some of the world’s top brands. The main objective was to arm the participants with the knowledge to be successful in the core functions of social media which includes issue management, media engagement, customer support, employee engagement and customer engagement.

Overview The main objective of this unit is to increase awareness on a local level of the role of A.T.A. for Aruba and emphasize the importance of tourism for the island. It is essential to keep the community and partners aware of all the marketing efforts in the overseas markets. Below is a section on the highlights for 2012 other than the local releases, press conferences, monthly statistical releases, newspaper ads, Nos Turismo, and the Aruba Product Update which are distributed on a regular basis.

Crisis simulation In the month of January, a crisis simulation was conducted

by Pulsepoint together with different units such as branding and advertising, digital, and top management. Pulsepoint is a reputation management company which assisted A.T.A. in the handling of the Robin Gardner case in 2011 and also conducted a media training in order to prepare the team for future crisis.

Pulsepoint initiated the crisis manual plan that will have to be finaliz ed by the PR & CC unit in 2013.

Social media boot camp Additionally, a social media boot camp was organized for A.T.A. and partners by Pulsepoint and the PR and Corporate Communications Unit. This boot camp included an introduction to social media trends, an overview of the existing social media

Mi Compromiso local awareness campaign The main objective of this campaign is to elevate community awareness of specifically how individuals can promote Aruba as a brand and learn about their role, vision, and actions with respect to tourism. Each individual is responsible for giving the visitor the feeling of happiness and tranquility. The “Mi Compromiso” campaign also illustrates how A.T.A. is contributing to the development of Aruba’s tourism. During the campaign, the spotlight is being placed on the Aruba Certification Program where those involved in the tourism industry have a chance to learn and refresh their knowledge in all aspects of tourism. It also recognizes those who have excelled in tourism and have won the “Shoco” award. Furthermore, the “Mi Compromiso” campaign features those who work indirectly in the tourism sector who, in one way or another, contribute to the experience of the visitor.

Tourism month In light of Tourism Month, a series of activities took place in September. A.T.A., Animal Rights Aruba and the Ministry of Tourism joined forces to raise awareness of the problem of stray animals. A.T.A. employees volunteered, together with ARA volunteers, and pushed this event by handing out stickers, informational folders, t-shirts, etc. There were also volunteers in

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ANNUAL REPORT 2012

different key spots on the island such as high traffic areas such as roundabouts and events.

On World Tourism Day, September 27, tourism partners were invited to a celebratory morning Entitled “Living up to the Commitment”, the strategic tourism plan and goals for 2013 were presented. The main theme was on “Tourism and Sustainable Energy”. Mrs. Susan Brooks, a well-known international speaker on customer service, was the guest speaker, who also gave a lecture to students of the Faculty of Hospitality, Tourism and Management Studies of the University of Aruba, EPI Tourism and Hospitality Unit and EPB Horeca.

Overall Public Relations Unit Indicators 2012 $29,768,492

2012 PR Ad Value results (US$)

164

Press members who visited Aruba in 2012

1,948,215,778

Media impressions (Online and Printed) 2012

83

Local press releases

Acknowledging San Nicolas’ contribution to Aruba’s tourism product, the A.T.A. Tourist Information Center opened in San Nicolas, conveniently located on the main street across from the bus terminal.

PR summit Every country has its strategy to promote Aruba; therefore each market needs their special PR touch for the strategy and investment to be justified. Based on this philosophy, a successful PR Summit for the global PR partners was organized. Agencies from different countries visited the island, to reconnect with the product, experience new things, share best practices, big ideas and finalize the action plans for 2013.

Toy drive In an effort to support a community of firefighters and their families heavily affected by Hurricane Sandy, Aruba spearheaded a two-week international toy donation in the month of December and donated over 900 toys to the children of these brave men and women in Breezy Point, NY.

ARUBA TOURISM AUTHORITY

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marketing

Niche Marketing Overview Based on various meetings and retreat discussions with hotel partners, it was reaffirmed that Aruba’s core niches are the wedding/honeymoon and family market. The main focus was on revamping programs and identifying opportunities to cater to these niches and, as a result, a committee was formed between A.T.A. and the hotel partners.

One Cool Programs The general consensus among the stakeholders and A.T.A. was that the One Cool Family and One Cool Honeymoon programs have been in place for over a decade and had become diluted over the years. In order to remain relevant, it was imperative that these programs be revisited and revamped. The program names were changed to “One Happy Programs” in order to remain in-line with the One Happy Island brand. Numerous meetings were held with the hotels, yet in the end, many of the proposed changes did not materialize due to costs and logistics that would need to be absorbed by the hotels. Nevertheless, several features were added to the “One Happy Programs.

Wedding market One niche requiring specific attention on-island was the Wedding Market. Many couples travel to Aruba for their dream wedding and it is A.T.A.’s desire to ensure that this special moment becomes an unforgettable one. To assist in the overall experience, A.T.A. hired Total Services to provide a thorough cleansing of the “Stadhuis” of Aruba. This included cleaning of the upholstery and carpeting, and general cleaning of the “trouwzaal”, while the exterior of the building was pressure washed to remove the dust and dirt which had accumulated over time.

Additionally, together with the IT Departments of both A.T.A. and CENSO (Department of Civil Registry), A.T.A. started researching the best solution for the installation of cameras at the “Stadhuis” for online streaming of wedding ceremonies. The research and selection process, which was led by A.T.A.’s IT Department, concluded at the end of the year and the purchase and installation of the cameras will take place in 2013. This service will be available and promoted through the wedding register on aruba.com.

Together with The Knot, A.T.A. organized a breakfast on May 14, 2012, at the Hyatt Regency Aruba for hotel partners and wedding planners. During this event, The Knot presented a recent study performed on the wedding market.

A.T.A. developed a new wedding brochure in cooperation with the Aruba Wedding Association as well as the Wedding Committee.

Dine on Aruba During the year, it was decided that a culinary offering would appeal across a wide variety of niches and subsequently the Dine on Aruba program was launched. This program was strategically promoted to address the off-peak season and to stimulate on-island spend. This campaign offered two $50 AGA gift certificates for bookings made during the months of May 15-30, June, September, October and November. A total of 24 travel partners and over 20 local restaurants participated. A.T.A. invested a total of AFL. 609,970.00 in this promotion, which represents 8,567 gift certificates and/or 4,283 bookings.

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ANNUAL REPORT 2012

Trade Relations Even though this program helped with on-island spend, it was difficult to track whether it produced additional new business.

Instead it was used more as a value-added element. Participating hotels indicated that they were open to the possibility of repeating the campaign but with some adjustments to the process.

Niche Market Unit Indicators 2012 18

Number of hotels participating in the One Happy Honeymoon Program 2013

14

The number of activities providers participating in the One Happy Honeymoon Program 2013

14

The number of hotels participating in the One Happy Family Program 2013

12

The number of activities providers participating in the One Happy Family Program 2013

930

Total number of honoring ceremonies held in 2012

8,567

Total number of gift certificates used during the Dine on Aruba Promotion

$609,970

Amount invested in the Dine on Aruba Promotion 2012

Overview The demand for educational groups and media trips was very high in 2012. In comparison with the previous year, there was an increase in media visits, from 55 groups in 2011 to 69 groups in 2012 (+23.6%), These groups consisted mainly of journalists representing magazines, newspapers and film crews followed by photo-shoots, radio personalities and bloggers A total of 35 travel agent fam trips were organized, which is a 84% increase compared to 2012, representing 415 travel agents. An additional 37 agents came to Aruba on an individual site inspection (ISI). The requests for individual site inspections were mainly from agents coming from the US. One hurdle encountered in 2012, which impeded A.T.A. from executing the programs smoothly, was the lack of available rooms and budget restrictions of the various hotels. This, at times, made it difficult for A.T.A. to secure rooms for the fam and press groups with A.T.A. ending up covering the accommodations portion for mainly international press. A.T.A. is not accustomed to working in this fashion and incurred unforeseen costs. The Aruba Certified Expert (ACE) Program was officially launched in December 2011 with the objective of certifying as many key agents as possible to become Aruba Experts, especially those which are top producers for the destination. As of December 31, 2012, a total of 2,232 agents enrolled in the program, of which 1,572 (70%) completed the course. One important aspect of this program is to be able to track the production of these ACE agents. In order to stimulate reporting, A.T.A. has designed a rewards system granting incentives to those agents that actually provide their bookings to A.T.A. As of year-end 2012, there are a total of 278 ACE agents who reported their production, which amounts to a total of $2,544.666 in bookings to Aruba. The trade department also sends out a quarterly newsletter to the ACE agent database. This newsletter consists of updates on new island developments, hotels, activities, restaurants, etc.

ARUBA TOURISM AUTHORITY

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marketing Total Fam trips 2012 vs 2011 12 10 8 6 4

2012

2

2011

ia

y

av

an Sc

an

Ge

din

rm

um lgi

K.

Be

U.

ly Ita

r do ua Ec

nd lla Ho

ina nt

bia Ar

Co

ge

Br

lom

az

il

la ue Ve n

ez

da na Ca

U.

S.

A

0

Total Press groups 2012 vs 2011 14 12 10 2012

8

2011

6 4 2

da na

rin Su

Ca

e am

ile Ch

um Be

lgi

K. U.

ly Ita

y an rm Ge

nd lla Ho

ina Ar

ge

nt

il az Br

ia

Sc

an

din

av

la ue

A. S. U.

ez Ve n

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bia

0

In 2012, A.T.A. updated the Aruba Manual (for agents), the island tour guide (for A.T.A.’s Trade Liaisons) and created the apartment guide for Europe, USA and Latin America. The Aruba Manual and the island tour guide will be placed on the travel agent website and printed for travel agents during the on-island educational trips.

Trade Unit Indicators 2012 69

Media group visits

35

Fam trip groups

2,232

ACE agents enrolled

1,572

ACE agents who completed the ACE program

278

The trade unit also completed the revision and updating of the travel agent website, developed an agent Facebook page and established a press/fam database of those media and agents visiting the island.

$2,544,666 37

Agents who reported their production Total 2012 bookings to Aruba - reported by the 278 ACE agents Individual site inspections (ISI)

At the beginning of the year, A.T.A. updated the fam trip guidelines and held the annual fam trip meeting with hotel and activities partners. For 2012, the A.T.A. and AHATA members agreed to reinstate the fam trip fee with the season starting one month earlier than usual.

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ANNUAL REPORT 2012

Aruba Convention Bureau Overview During 2012, the Aruba Convention Bureau Unit continued to generate awareness for the destination within the MICE sector with the objective of creating new leads. Marketing programs including advertising were expanded in the U.S. These were carefully selected based on the additional benefits provided, such as registration to a hosted buyer program or an advertorial on the destination. By applying such criteria, ACB was better able to measure its return on investment through the leads acquired.

In total, ACB produced 2,547 new contacts/inquiries as a result of efforts in both the North American & Latin American markets, and 35,391 lead room nights and 14,197 lead assist room nights for the North American Market.

Even though partner numbers were not necessarily higher when comparing YOY 2012 with 2011, which was a record year for many of the hotels and DMCs, the majority indicated that their performance was positive for 2012. According to the survey conducted by ACB among the partners, there was an overall level of satisfaction with the performance of the MICE segment for their respective company.

Furthermore, A.T.A. hired a new sales manager for the North American Market to specifically pursue group business through sales calls, trade shows and database marketing.

Throughout the year, ACB’s team participated in a total of six international tradeshows and nine hosted buyer shows, which allowed more one-on-one interactions and relationship building with planners.

Also noteworthy is the E-CRM plan which was developed to communicate on a more frequent and consistent manner with the contacts in the existing database as well as potential planners acquired throughout the year.

ARUBA TOURISM AUTHORITY

As part of ACB’s long-term commitment to Corporate Social Responsibility (CSR), the concept of Green Meetings was introduced to local partners. ACB made it a priority to include different elements on sustainability in several of its activities throughout the year.

Highlight of activities Increased brand Awareness of Aruba as a MICE destination included refreshing the ACB microsite, developing new creative messaging and developing collaterals.

ACB participated at the following events in the market: - A total of 6 international shows along with Aruba partners: 2 in the U.S. (AIBTM and IMEX), 2 in Canada (Incentive Works and Ignite), 1 in Brazil (LACTE) and 1 in Spain (EIBTM). These shows generated a total of 336 contacts/inquiries - A total of 9 programs: five shows in the United states, 1 in the Caribbean and 3 in Brazil representing a total of 310 contacts/inquiries - Sales Calls and lunch in MN with 10 planners - Through IDSS, a total of 139 new contacts were established.

ACB further co-sponsored 7 “Alta Gerencia” Seminars in Venezuela producing a total of 1762 contacts/inquiries.

On-island, ACB hosted a total of 2 Destination Reviews for North America with the participation of a total of 18 clients, 4 VIP Corporate Fams (2 from Venezuela, 1 from Brazil and 1 from Belgium, representing a total of 35 clients and 25 individual site inspections, 13 from North America and 12 from South America.

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Cruise Tourism ACB improved its working relationship with industry partners through efforts such as - Quarterly Meetings, development and distribution of Quarterly Newsletters, lunch meetings with individual partners and appreciation Lunches.

- Additionally, ACB sponsored an event with the site Florida chapter and sponsored cocktails, dinner or cultural events for in house Fams.

Several promotions were developed to stimulate group business, such as cash incentives, mainly for North America and South America groups, a Visa incentive for Colombia and an on-island VIP Shopping card.

ACB also initiated and promoted green meetings by raising awareness on the subject during the quarterly meetings, and by dialoging with partners in exploring the various opportunities within the MICE industry.

Aruba Convention Bureau Indicators 2012

Overview The original growth objective for cruise visitors was targeted at 7%, but later strategically lowered to 5%. For 2012, cruise arrivals experienced a 3% decrease compared to 2011. The main reasons for this decrease are that March 2011 was a record month with over 100,000 passengers, and the cancellation of over 15 calls, especially during the first three months of the year.

Cancellations were due to several reasons (e.g. weather issues, mechanical/operational issues, and illnesses like the Norovirus on board). Â It is important to consider that the cruise industry schedules itineraries two to three years in advance. During 2012, Aruba reached out and achieved important agreements with different key cruise lines to include the destination as part of their itineraries for both 2013 and 2014. These agreements included Royal Caribbean Cruise Line, Pullmantur and Carnival Cruise Lines. The additional calls are expected to contribute to an increase of 20% in cruise arrivals in 2013, reaching just over 700,000 cruise passengers.

2,547

New contacts/ inquiries in North America and Latin America

35,391

Lead room nights

Months

Calls

Actual # PAX

Crew

14,197

Assist room nights

Jan

50

94,917

37,580

6

International shows participation

36,962

9

Hosted buyer programs

2

Destination reviews

4 25

Cruise Calls & Arrivals 2012 per month

Feb

44

94,234

March

43

84,628

34,527

April

33

69,852

28,012

VIP Corporate fams

May

3

8,164

2,911

Individual site inspections

June

3

8,406

2,804

July

6

13,162

4,729

Aug

7

11,552

4,214

Sep

3

6,481

2,483

Oct

18

26,405

12,571

Nov

35

68,002

28,225

Dec

49

96,510

38,309

294

582,313

233,327

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ANNUAL REPORT 2012

Highlight of activities In addition to securing important agreements that would impact the cruise industry for future years, the main efforts with the objective to increase annual visitors included the establishment of a Cruise committee thereby creating a platform to foster collaboration, communication and partnership among the key stakeholders within the Aruba cruise industry, renewal of the FCCA (The Florida Caribbean Cruise Association) membership and participation in six industry events.

- Visitors arriving on December 24 and 31, 2012 received locally made Christmas sweets at the Cruise Terminal, creating an element of surprise with the intention of enhancing the overall experience of the visitor.

Cruise Unit Indicators 2012

Efforts to stimulate on-island spend by cruise visitors, included a revamped Crew Incentive Program, an educational morning jointly with APA, for the local tour operators as part of the Tour Guide Excellence Program and distributing a total of 100,000 cruise maps among cruise passengers at the terminal. Â The Welcome Back Campaign continued during October 2011 - September 2012 with the objective to convert cruise passengers into stay over visitors. This consisted of distribution of the destination DVD among cruise visitors, which the visitors then log-on to a webpage where they register to win a trip back to Aruba. Through registrations, A.T.A. was able to capture the names of the visitors and communicate with them with the objective of converting them to stay-over visitors in the future. Additionally, to enhance the guest experience while on-island, Aquila Center of Cruise Excellence also provided training sessions.

Other events accomplished were: - Honoring Ceremony for Captain Domenico Tringale on November 29, 2012. Captain Tringale was instrumental in bringing Carnival Cruise Lines back to the island.

- Holiday Gift Project: Aruba was chosen again by the FCCA to be the recipient of the 2012 Holiday Gift Project for 200 less fortunate children. Aruba selected Fundacion Pa Nos Comunidad (FPNC) to receive this generous gesture from the industry partners.

ARUBA TOURISM AUTHORITY

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582313 294

The total number of Cruise Passengers that visited the island in 2012 Total number of cruise calls in 2012

9

The number of 1st Calls in 2012

6

Number of summits, conferences and conventions attended during 2012

484

The number of registrations received for the Welcome Back Campaign (Oct 2011 to Sep 2012)

6 Strategy, Planning & Research

In 2012, the Strategy, Planning and Research (SPR) unit continued to focus on researching consumer, market, and industry trends and on providing several insights reports to the A.T.A. and tourism stakeholders.

Summary of activities Conduct relevant, timely and accurate research Soul Beach Musical Festival In May 2012, A.T.A. hired a consulting team headed by Dr. Manuel Rivera to conduct an economic impact study of the 2012 Aruba Soul Beach Music Festival (ASBMF).

The SPR team supported Dr. Rivera with the data collection and the data coding processes of the research. A total of 314 surveys were collected and consequently coded and analyzed.

During the 3 days a total of 9,974 people were counted at the entrance of the festival. Aside from data from the immigration cards, this data was further used to validate the attendance at the 2012 edition of the ASBMF, especially the tourism flow.

Online survey To better understand our visitors and have this information at our fingertips, A.T.A. initiated the process of surveying those who have already visited the destination. One of the surveys’ key objective was to gather data on average daily expenditure.

In addition, it allows A.T.A. to obtain information about our visitors’ motivations, on-island activities, and impressions of the Aruba tourism product. The surveys were conducted in 3 languages; English, Spanish and Portuguese. In order to assure that the response rate provides a representative sample, A.T.A. raffled two tickets to Aruba in 2012. A total of 12,294 surveys were collected in 2012, of which 7.7% (7,757 respondents) pertained to the English survey, 4.6% (3,585 respondents) to the Spanish survey, and 17.5% (952 respondents) to the Portuguese survey. The results of the survey will be available in Q2 of 2013. In 2013, A.T.A will continue to collect surveys on a monthly basis.

ARUBA TOURISM AUTHORITY

Cruise visitor satisfaction survey In the last quarter of 2012, SPR drafted a survey for cruise passengers in order to obtain information about Aruba’s cruise visitors, their motivations, activities while on island, on island spending behavior and impressions of Aruba. The collection of the data will start in the second quarter of 2013.

FAM and media survey Throughout 2012, the Trade unit collected a total of 163 Familiarization (FAM) and 131 Media surveys. The goal is to collect feedback from media and travel agents regarding their impression of Aruba and cover topics, such as transportation, accommodations, Aruba in General, dining, activities, nightlife, A.T.A. representatives, competitors and sales, but most importantly to utilize this feedback to improve the overall experience and strategy. SPR conducted the data analysis of the surveys, which resulted in two reports with recommendations for the Trade unit and its partners.

Attitudinal Survey In Q4 2012, A.T.A. deployed an attitudinal survey amongst its past US visitors. The survey focused on capturing travel preferences and behaviors, as well as gathering attitudinal information. The data collected will be used to develop the Attitudinal Segmentation model, which will help understand the underlying motivations driving behaviors. The Attitudinal Segmentation and the Demographic Segmentation will be used to inform the development of A.T.A.’s customer messaging strategy and calendar. The survey gathered information about vacation preference in general, decision-making process, attitudes driving vacation decisions and Aruba specific information. Both models will be finalized in 2013.

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STRATEGY, PLANNING & RESEARCH

Other research A latent demand study for the Netherlands was conducted in 2012, which gathered motivational data on reasons why the potential Dutch visitors do not visit Aruba. In addition, the SPR Unit assisted in gathering feedback for other imperative research areas, which resulted in a MICE satisfaction research, Focus Group Sessions for the US market, BREA (cruise) research and user friendliness tests of aruba.com.

Revamp and innovate current processes and methods In 2012, A.T.A. hired a highly specialized agency in the area of database mining and marketing, based in the US. The global disparate data sources, including data of past Aruba visitors as well as other prospects and updates, will be centralized and analyzed, with the intention to create one central robust and relational database, which will provide A.T.A. with the possibility to submit queries and receive summarized information, reports, and geo-targeted lists. In 2012, the structure of the data mart was developed and the company started working on the North American data, which included cleaning the address and emails, eliminating duplicates etc.

In addition to building a relational database, the agency took over the production of the monthly USA Designated Market Area (DMA) reports, resulting in an improved and expanded monthly report for North America. In 2013, these DMA reports will be merged into and hence will become part of the online dashboard created for A.T.A. In addition to the DMA reports, A.T.A. and the contracted agency also conducted an analysis of the potential impact of hurricane Sandy (US / October 2012), so as to determine how this would impact the visits of US past visitors to Aruba over the immediate period post Sandy.

Lastly, both parties have been working on 5 models (in order of completion), which are the Ensemble Segmentation model, the Acquisition model, the Media Mix model, the Forecast model and the Economic Impact model. The Ensemble Segmentation model will identify homogenous groupings of customers based on similarities in demographics and attitudinal attributes. The first phase of the Ensemble Segmentation model has been completed in 2012, as A.T.A. completed an attitudinal survey in the 4th quarter of said year. This information is consequently being appended to the identified segments.

The heat maps from our main markets in the USA were also completed in 2012. The maps illustrate where there is a concentration of our most valued customers as well as which DMA’s feature a great penetration of potential Aruba visitors (desired profile).

Foster local strategic alliances A.T.A. has also undertaken many steps to integrate sources and enrich data. Efforts did include various meetings between A.T.A. and CBS regarding CBS’ exit survey. Parties discussed possibilities of integrating data collection as well as sharing costs. Discussions are to be finalized in Q2 of 2013.

In 2012, A.T.A. drafted an agreement with the Tax Department (SIAD) which will support A.T.A.’s ability to gather more intelligence (especially as it concerns the ‘Tourism Levy’, which is A.T.A.’s main source of income). This agreement has been approved by the Council of Ministers in 2013. A.T.A. is currently awaiting final steps on behalf of the government, in order to proceed.

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ANNUAL REPORT 2012

A.T.A. also drafted an agreement with the Central Bank of Aruba, which basically includes information exchange from both ends.

This agreement is scheduled to be finalized in quarter 2 of 2013.

A.T.A. did also have initial conversations with the Department of Economic Affairs, in order to start working on further improvements of the existing tourism module within the Maruba model, and in order to ensure synergy and avoid overlap of data capture through different models.

As usual, A.T.A. did also play a key role in feeding information for numerous purposes, including the various rating agencies which Aruba has been subject to; Fitch Rating’s and Standard and Poor Ratings for Aruba and Offering Circular Government of Aruba.

Communicate continuously through data sharing and reporting In 2012, A.T.A. continued to focus on the provision of independent, accurate, and timely data which it gathers through the immigration cards. In February, May, July, September and October the team of 5 managed to break their own record by reporting the month results on the first of each subsequent month and processing on average 215 cards per hour.

For the remaining months, except for November, the team reported the results consistently before the 4th of the month, contributing further to the diligent and timely provision of results.

In November, the team reported on the 5th, mainly due to the slowness of the line with airport.

SPR Indicators 2012 215

Average cards per employee per hour

3,120,578

january until June (backlog 2012) total cards scanned

10,783,35

Total amount of hours worked during the backlog

In 2012, A.T.A. continued producing and distributing monthly statistical reports containing statistical information on visitor arrivals, airlift, cruise, and marketing information, which is complemented by hotel performance information collected by AHATA The unit produced a tourism intelligence 2011 report and an annual statistical yearbook.

It was the intention to expand the unit with a research specialist in 2012, despite of several efforts and interviews; A.T.A. was not able to find a suitable candidate and will continue to work diligently on filling this position in 2013.

ARUBA TOURISM AUTHORITY

Product Aside from A.T.A.’s yearly contribution towards the island’s cleanliness, such as through its sponsorship of trash bins around the island, and its contribution to the Aruba Reef Care Project, and to the island’s security through its financial support to the Aruba Hospitality and Security Foundation, A.T.A. participated in several committees and did initiate or complete several key product related projects in 2012.

A.T.A was part of the evaluation committee in charge of selecting the most suitable party to run an accommodation at the current “Bushiri” property. A.T.A. did also participate in several other committees, including; Business Innovation District (B.I.D.), which is a concept led by the Prime Minister where such bodies would be charged with the stimulation of innovation and promotional efforts of particular areas on the island, including the ‘downtown’ area.

The SPR unit also assisted with other product development projects, such as ‘Townhall webcams’, where A.T.A. worked closely with the respective authority to have webcams installed at this location, and to clean up the location and to ensure that it remains clean (especially for destination weddings).

In 2012, the necessary research and initial preparations were conducted for a ‘Marketing Toolkit’. Through this toolkit, A.T.A. envisions providing businesses (SME’s) with practical tools, which will allow them to dispose of A.T.A. business intelligence and tips, become more digital savvy, dispose of certain A.T.A. branding assets, be aware of promotional opportunities and A.T.A. services, and more, all through a dedicated platform. These are part of the efforts of A.T.A. to be closer to retailers, restaurants and other business categories in order to foster brand alignment (one voice) and more engagement between A.T.A. and key business sectors, which are integral to the strategy of enhancing the visitor’s experience.

Notwithstanding the above-mentioned, it has to be noted that the position of Product Specialist has remained vacant in 2012.

Despite of several interviews, A.T.A. was not able to find a suitable candidate and is working diligently on filling this position in 2013.

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7 Financial Statements

ARUBA TOURISM AUTHORITY

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ANNUAL REPORT 2012

Statement of financial position as at December 31, 2012 (before appropriation of surplus / deficit)

Assets (in thousands of Aruban florins)

Actual 2012

Actual 2011

Current Assets Cash at bank (1)

12,236

Receivables (2)

13,744

14,736 12,214 25,980

26,950

274

122

26,254

27,072

Non-current assets Property and equipment (3) Total assets

Liabilities and equity (in thousands of Aruban florins)

Actual 2012

Actual 2011

Current liabilities Accounts payable Payable to Aruba Government - Department of Finance (4) Salaries, taxes and social security premiums (5)

13,021

6,973

7,216

10,114

856

813

Provisions (6)

21,093

17,900

1,946

2,092

Equity (7) Capital Accumulated surplus Net (deficit)/surplus current year Emergency Fund Marketing and Promotion

Total equity and liabilities

ARUBA TOURISM AUTHORITY

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(2,158)

(2,158)

6,038

-

(3,865)

7,638

3,200

1,600 3,215

7,080

26,254

27,072

Financial statementS

Statement of financial performance for 2012 (in thousands of Aruban florins)

Actual 2012

Budget 2012

Actual 2011

Revenues Tourism levy contributions (10) Travel promotion levy (10) Other revenues

57,974

51,576

55,554

3,202

7,473

-

141

370

204

Total operating income

61,317

59,419

55,758

Personnel expenses (11)

7,811

8,935

6,648

52,698

45,576

35,384

1,963

2,191

1,814

52

29

24

Marketing and promotions (12) Office expenses (13) Depreciation property and equipment (3) Other operaring expenses (14)

2,658

2,584

2,650

Total operating expenses

65,182

59,315

46,520

Surplus / (deficit)

(3,865)

104

9,238

-

-

1,600

(3,865)

104

7,638

(3,865)

104

9,238

Allocation to equity reserves: Allocated to ‘Emergency Fund Marketing and Promotion’ Allocated to equity - Net (deficit)/surplus

Statement of changes in equity for 2012 (in thousands of Aruban florins)

Balance at 1 January, 2011

Emergency Fund Marketing and Promotion

Accumulated Surplus

Capital

Net surplus/ (deficit) current year

Total equity

-

-

-

-

-

3,024

-

-

-

3,024

Unpaid capital from the government (7)

(3,000)

-

-

-

(3,000)

Transfer of pension liability (7)

(2,182)

-

-

-

(2,182)

-

-

1,600

8,036

9,636

(2,158)

-

1,600

8,036

7,478

-

-

-

(398)

(398)

Restated balance - December 31, 2011

(2,158)

-

1,600

7,638

7,080

Balance at January 1, 2012

(2,158)

-

1,600

7,638

7,080

Appropriation of prior year surplus

-

6,038

1,600

(7,638)

-

Net deficit current year

-

-

-

(3,865)

(3,865)

(2,158)

6,038

3,200

(3,865)

3,215

Capital contribution (7)

Surplus current year Balance at December 31, 2011 Restated items

Balance at December 31, 2012

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ANNUAL REPORT 2012

Cash flow statement for 2012 (in thousands of Aruban florins)

Actual 2012

Actual 2011

Cash flow from operating activities Operating surplus

(3,865)

9,238

Adjustments for: depreciation (3) net movements pension liabilities (6)

52

24

(146)

(90) (94)

(66)

Changes in working capital: increase in accounts receivables decrease/(increase) in prepayments increase in accounts payable increase in taxes and social security premiums increase in payable to Aruba Government (Department of Finance)

(2,292)

(10,712)

762

(1,502)

6,048

6,973

43

813

(2,898)

10,114 1,663

5,686

(2,296)

14,858

Additions to Property and equipment (3)

(204)

(122)

Cash flow from investing activities

(204)

(122)

Cash flow from operating activities Cash flow from investing activities

Cash flow from financing activities

-

-

Net (decrease)/increase in cash at bank

(2,500)

14,736

Cash at bank at beginning of period

14,736

-

Cash at bank at end of period

12,236

14,736

ARUBA TOURISM AUTHORITY

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Financial statementS

Notes to the financial statements Entity information The financial statements of the Aruba Tourism Authority SG for the year ended December 31, 2012 were authorized for issue in accordance with a resolution of the directors on March 28, 2013. Aruba Tourism Authority SG (“A.T.A.�) was incorporated under the statutory body Sui Generis per state ordinance (2011 no 13 and 14) dated February 17, 2011. A.T.A. is domiciled in Aruba; the registered office is located at L.G. Smith Boulevard 8, Oranjestad, Aruba.

The entity is the destination marketing organization for Aruba responsible for uniting tourism interests amongst the on- and off-island stakeholders/partners for the purpose of coordinating destination marketing, destination business development and destination partnerships.

The entity’s activities include promotion of Aruba: - as an attractive destination for vacations, business meetings and conferences; - to increase the visitors expenditures; - to improve its image; - as a tourist destination.

The entity presents budget amounts although it is not required to do so, as its budget is not made available to the general public.

Restated comparative figures The entity received some invoices and a credit memo of significant values after the 2011 financial statements have been approved and issued. As the entity was not aware of these pending invoices and credit memo, they were not accounted for in the 2011 financial statements. As a result, the comparative figures in the 2012 financial statements are adjusted as required

by IPSAS 3 Accounting Policies, Changes in Accounting Estimates and Errors.

The nature and amount of the corrections can be specified as follows. (in thousands of Aruban florins) Personnel expenses Marketing & Promotion expenses Contribution expenses

2011 137 (359) 620 398

Basis of preparation The financial statements of the Entity have been prepared on a historical cost basis. The financial statements are prepared in Aruban florins and all values are rounded to the nearest thousands (Afl 000), except when otherwise indicated.

The financial statements have been prepared in accordance with International Public Sector Accounting Standards (IPSAS) as issued by the International Public Sector Accounting Standards Board (IPSASB).

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ANNUAL REPORT 2012

Summary of significant accounting policies Judgments and estimates The management of the entity makes various judgments and estimates when applying the accounting policies and rules for preparing the financial statements. The principal judgments and estimates, including underlying assumptions, are set out below.

Pensions The carrying amount of the defined benefit pension plans is calculated actuarially, which requires assumptions to be made concerning the discount rate, the expected rate of return on the plan assets, future salary increases and future pension increases, as well as mortality rates. Given the long-term nature of these pension plans, the estimates are significantly uncertain.

Impairment Impairment exists when there is a loss in the future economic benefit or service potential of an asset, over and above the systematic recognition of the loss of the asset’s future economic benefits or service potential through depreciation. Management assesses at end of the reporting period whether there is any indication that an asset may be impaired.

Foreign currency translation The financial statements are prepared in Aruban florins, the functional and presentation currency of the entity. Transactions denominated in foreign currencies are initially carried at the functional exchange rates ruling at the date of transaction.

Monetary balance sheet items denominated in foreign currencies are translated at the functional exchange rates ruling at the end of the reporting period. Non-monetary balance sheet items that are measured at historical cost in a foreign currency are translated at the functional exchange rates ruling at the date of transaction. Non-monetary balance sheet items that are measured at current value are translated at the functional exchange rates ruling at the date of valuation.

ARUBA TOURISM AUTHORITY

Exchange differences arising on the settlement or translation of monetary items denominated in foreign currencies are taken to the profit and loss account, with the exception of exchange differences resulting from net investments in foreign activities.

Exchange differences arising on the translation of non-monetary balance sheet items denominated in foreign currencies that are carried at current value are taken directly to the revaluation reserve, provided the changes in value of the non-monetary items are likewise taken directly to reserves.

The assets and liabilities of foreign activities are translated into the entity’s presentation currency (Aruban florins) at the rate of exchange ruling at the end of the reporting and the income and expenses of these foreign activities are translated at the average rate of exchange for the year. Resulting exchange differences are taken directly to the legal foreign currency translation reserve.

On the disposal of a foreign activity, the cumulative exchange differences taken directly to the reserves are taken to the profit and loss account as part of the gain or loss on the sale.

Offsetting Assets and liabilities are only offset in the financial statements if and to the extent that: - an enforceable legal right exists to offset the assets and liabilities and settle them simultaneously; and - the positive intention is to settle the assets and liabilities on a net basis or simultaneously.

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Financial statementS

Property and equipment Property and equipment in use Property and equipment in use by the entity are carried at the cost of acquisition (less any investment grants) net of accumulated depreciation and accumulated impairment losses.

Costs of major maintenance are recognized under cost when incurred and if the recognition criteria are met. The carrying amount of the components to be replaced will be regarded as a disposal and taken directly to the profit and loss account. All other repair and maintenance costs are taken directly to the profit and loss account.

Depreciation is calculated on a straight-line basis over their expected useful economic lives, taking into account their residual value. Changes in the expected depreciation method, useful life and/or residual value over time are treated as changes in accounting estimates.

Retired property and equipment are carried at the lower of cost and their fair value less costs. If the expected fair value less costs is significantly higher than the carrying amount, with the assets being held for sale, an incidental revaluation is carried out and taken to the revaluation reserve. The revaluation is recognized as a separate item in the profit and loss account when the increase in value is realized.

A tangible fixed asset is derecognized upon sale or when no further economic benefits are expected from its continued use or sale.

Financial assets

a past event (the taxable event) and expects to receive future economic benefits or service potential from those resources.

Receivables are recognized when it is probable that the future economic benefits associated with the asset will flow to the entity and the fair value of the asset can be measured reliably.

The degree of probability attached to the inflow of resources is determined on the basis of evidence available at the time of recognition, which includes, but is not limited to, disclosure of the taxable event by the taxpayer.

Receivables are recognized initially at fair value. After initial measurement, such financial assets are subsequently measured at amortized cost, less impairment or uncollectible (in the form of a provision).

Impairment of financial assets The Entity assesses at each end of reporting period whether a financial asset is impaired. If there is objective evidence of impairment, the amount of the impairment loss is determined and recognized in the statement of financial performance.

The amount of impairment losses on financial assets carried at amortized cost is calculated as the difference between the carrying amount of the asset and the best possible estimate of the future cash flows, discounted at the effective rate of interest of the financial instrument determined on the initial recognition of the instrument. If the decrease in impairment relates to an objective event occurring after the impairment was recognized, a previously recognized impairment loss is reversed to a maximum of the amount required to carry the asset at amortized cost at the time of the reversal if no impairment had taken place.

The impairment loss reversal should be taken to the statement of financial performance. The carrying amount of the receivables is reduced through the use of a provision.

Receivables Receivables are financial assets with fixed or determinable payments. Receivables arising from taxes satisfy the definition of an asset when the entity controls the resources as a result of

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ANNUAL REPORT 2012

Cash at bank

When financial liabilities are recognized initially, they are measured at fair value, plus directly attributable transaction costs. After initial measurement, financial liabilities are carried at amortized cost using the effective interest method. Gains or losses are recognized in the profit and loss account when the liabilities are derecognized, as well as through the amortization process.

Cash and cash equivalents are carried at their face value.

Pensions The entity operates two pension plans: one is classified as a defined contribution plan and the other one is classified as a defined benefit plan. The defined contribution plan is administered by Pension Fund Tourism Sector Aruba. The defined benefit plan is administered by APFA. The defined contribution plan is a post-employment benefit plan under which an entity pays a fixed contribution into a fund, and which will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods. It implies that the entity is only required to pay the agreed contributions to the funds. The contributions due are taken to the profit and loss account. Contributions payable and refunds receivable are included under current liabilities and current assets respectively.

The defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. Under this benefit plan, the entity is obliged to provide the agreed benefits to current and former employees and actuarial and investment risks fall, in substance, on the entity.

Financial liabilities A liability is recognized when it is probable that an outflow of resources embodying future economic benefit or service potential is required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

ARUBA TOURISM AUTHORITY

Derecognition of financial assets and liabilities A financial instrument is derecognized if a transaction results in the transfer, to a third party, of all or nearly all rights to economic benefits and of all or nearly all the risks attached to the position.

Leasing Assessing whether an agreement contains a lease is based on the substance at the inception date of the agreement.

The agreement is regarded as a lease if the fulfillment of the agreement depends on the use of a specific asset, or on whether the lease contains the right of use of a specific asset.

The entity as lessee Under finance leases (with the risks and rewards of ownership of the lease transferred substantially to the lessee), at the inception of the lease, the lease property and related liability are carried at the lower of the fair value of the lease property at the inception of the lease and the present value of the minimum lease payments. The lease is initially recognized including the initial direct costs incurred by the lessee. Lease payments are apportioned between the interest expense and repayment of the remaining balance of the liability, with the remaining balance of the net liability bearing a constant rate of interest.

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Financial statementS

The capitalized lease property is depreciated over the shorter of the term of the lease and the useful economic life of the property, if there is no reasonable certainty as to whether ownership of the property is transferred to the lessee at the end of the term of the lease.

Under operating leases, the lease payments are charged to the profit and loss account on a straight-line basis over the term of the lease.

Cash exchange differences are included separately in the cash flow statement. Transactions for which no cash or cash equivalents are exchanged, including finance leases, are not included in the cash flow statement. Lease payments under finance lease contracts are considered to be cash outflows from financing activities to the extent that they relate to repayment installments and as cash outflows from operating activities to the extent that they relate to interest payments. Income from sale and financial leaseback transactions is presented as cash inflow from financing activities.

Income Recognition of taxes An inflow of resources from a non-exchange tax transaction recognized as an asset is recognized as revenue, except to the extent that a liability is also recognized in respect of the same inflow. As the entity satisfies a present obligation recognized as a liability in respect of an inflow of resources from a nonexchange tax transaction recognized as an asset, it reduces the carrying amount of the liability recognized and recognizes an amount of revenue equal to that reduction.

Expenses Expenses are determined with due observance of the aforementioned accounting policies and allocated to the financial year to which they relate. Foreseeable and other obligations as well as potential losses arising before the financial year-end are recognized if they are known before the financial statements are prepared and provided all other conditions for forming provisions are met.

Cash flow The cash flow statement has been drawn up using the indirect method. The cash and cash equivalents in the cash flow statement consist of cash at bank and in hand and readily negotiable securities. Cash flows denominated in foreign currencies are translated at estimated average exchange rates.

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ANNUAL REPORT 2012

Other explanatory notes Cash at bank (1) There are no significant restrictions on the availability of cash and cash equivalents. They are at the entity’s free disposal.

Receivables (2) (in thousands of Aruban florins)

Actual 2012

Actual 2011

Tourism levy

9,973

Travel Promotion Levy

3,031

-

697

1,146

Prepayments Payments in transit Other

Other receivables include a provision for bad debts of Afl 128,000 (2011: Afl 128,700).

ARUBA TOURISM AUTHORITY

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10,712

-

276

43

80

13,744

12,214

Financial statementS

Property and equipment (3) Computer equipment

(in thousands of Aruban florins) Net book value at January 1, 2011

Furniture & fixtures -

Total -

-

Additions

122

24

146

Depreciation

(12)

(12)

(24)

110

12

122

110

12

122

Net book value at December 31, 2011

Additions

118

86

204

Depreciation

(31)

(21)

(52)

87

65

152

Cost at December 31, 2012

240

110

350

Less depreciation at December 31, 2012

(43)

(33)

(76)

Net book value at December 31, 2012

197

77

274

Property and equipment are depreciated as follows: - Computer equipment is depreciated on a straight-line basis over their estimated useful economic lives of 3 years, with the exception of investment property, which is not depreciated.

- Furniture & fixtures are depreciated on a straight-line basis over their estimated useful economic lives of 5 years, with the exception of investment property, which is not depreciated.

Property and equipment carried at cost do not include capitalized interest charges.

Payable to Aruba Government - Department of Finance (4) Payable to Aruba Government - Department of Finance concerns payments made by the Department of Finance in the name of the entity during and just after the privatization to facilitate a smooth start of the entity’s operations.

Salaries, taxes and social security premiums (5) (in thousands of Aruban florins)

Actual 2012

Actual 2011

Wage tax payable

362

247

AOV/AWW payable

206

170

AZV payable

195

152

93

177

-

67

856

813

Pension contribution payable Salary payable

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ANNUAL REPORT 2012

Pension liabilities (6) The entity’s defined benefit plan which is administered by APFA is partly funded by APFA. Since January 1, 2011, APFA charges an extra premium to cover for the deficit accrued during the years before. This extra premium equals 12.5% of the salaries and will be charged until the earlier event of end of service, retirement or January 1, 2026. The entity provides for all future extra premiums, as it relates to an event (employment service) of the past.

The present value of the unfunded obligations can be specified as follows: (in thousands of Aruban florins)

Actual 2012

Present value of obligations

1,946

2,092

-

-

1,946

2,092

Fair value of plan assets Present value of unfunded obligations

Actual 2011

Movements in pension liabilities were as follows: (in thousands of Aruban florins)

Actual 2012

Actual 2011

Balance at January 1

2,092

2,182

Contributions

(197)

(195)

Actuarial gain

(46)

-

Interest cost

92

100

5

5

1,946

2,092

Current service cost Balance at December 31

For the year 2012 Afl 51,000 (2011: Afl 105,000) is recognized as expense.

The principal actuarial assumptions used were as follows: Actual 2012

Actual 2011

Discount rate

5%

5%

Future salary increases

3%

3%

The plan is valued by an independent actuary using the projected unit credit method. The last actuarial valuation was carried out as at December 31, 2012.

ARUBA TOURISM AUTHORITY

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Financial statementS

Equity (7) Capital The capital base amounted to Afl 3,024,000 at the end of the reporting period. This amount comprise of Afl 3,000,000 capital contribution receivable in cash and Afl 24,000 contribution of assets from the Aruba Government. However, as the Afl 3,000,000 from the government has not been received yet by the entity, this amount is reduced from capital in accordance with accounting standards.

In addition, upon incorporation of the entity, the government transferred to the entity all pension liabilities from employees related to their past employment at the government (for the amount of Afl 2.2 million). This transaction has been recorded in capital.

Capital management Management considers that capital includes accumulated surpluses or deficits and surpluses or deficits for the year.

The entity uses the equity reserve ‘Emergency Fund Marketing and Promotion’ to account for the required reserve. The reserved funds should be deposited in a separate bank account not belonging to the freely spendable liquid assets. As of December 31, 2012, the reserved funds have not been deposited yet in a separate bank account not belonging to the freely spendable liquid assets. Management intends to transfer the reserved funds in 2013 from the freely spendable liquid assets to an escrow account. Within the first five years, the entity should build up its reserve to a maximum level of 25% of the budgeted annual income from tourism levy. The funds should only be used for unexpected extraordinary expenditures for marketing and promotion of the Aruban tourism sector when it is threatened by external factors.

For 2012, management proposes to reserve Afl 1.6 million from accumulated 2011 surplus to the equity reserve ‘Emergency Fund Marketing and Promotion’.

In accordance with state ordinance, the primary objective of the Entity’s capital management is to build up liquid reserves in order to be able to finance additional expenditures for marketing and promotion of the Aruban tourism sector, necessary for external factors that threaten the tourism sector.

Arrangements not shown in the statement of financial position (8) Operating leases - entity as lessee The entity has concluded operating leases as lessee relating to office and storage spaces, vehicles and copy machines. The future minimum lease payments can be broken down as follows: Less than 1 year

(in thousands of Aruban florins)

Between 1 and 5 years

More than 5 years

Office and storage spaces

861

2,333

8,031

Vehicles

100

96

-

Copy machines

49

124

-

1,010

2,553

8,031

Other commitments not shown in the statement of financial position The entity’s contractual commitments, predominantly for marketing and promotion expenses, totaled Afl 23,947,632 at December 31, 2012 (2011: Afl 12,752,569).

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ANNUAL REPORT 2012

Financial risk management (9) General The entity’s primary financial instruments serve to finance the entity’s operating activities or directly arise from these activities.

The entity does not enter into transactions in derivatives. The entity’s policy is not to trade in financial instruments.

The principal risks arising from the entity’s financial instruments are credit risks, liquidity risks, cash flow risks and price risks, which comprise foreign exchange, interest rate and market risks.

The entity’s policy to mitigate these risks is set out as follows:

Foreign exchange risk The entity is exposed to foreign exchange risks arising from purchase transactions denominated in a currency (US Dollars, Euros and Venezuelan Bolivar Fuertes) other than the entity’s presentation currency. As the US Dollar is pegged to the Aruban florin, the entity is only exposed to foreign exchange risks related to transactions in Euros and Venezuelan Bolivar Fuertes. As the entity is only exposed to purchase transactions, the foreign exchange risk is reduced to minimal, as the payment transaction is in the hands of the entity. Furthermore, when dealing with Venezuelan service providers, the entity only enters into agreements denominated in US dollars. As a result, the entity’s policy is to not hedge foreign exchange risks.

Interest rate risk The entity does not have non-current receivables. As a result, management does not expect the interest rate to be significant.

Credit risk The entity receives tourism levy revenue from the tax authority of the Aruba government. Payment of tourism levy is strictly governed by the tax law, and as a result, tourism levy revenue

ARUBA TOURISM AUTHORITY

is collected effectively and efficiently. The entity also receives travel promotion levy revenue through a collection agency International Air Transport Association (IATA). The travel promotion levy is also governed by tax law and collected effectively and efficiently from participating airlines.

As a result, management believes that the entities credit risk is minimal.

Liquidity risk The entity receives tourism levy revenue on a monthly basis.

Management manages its expenditures based on its budget and monitors closely the expected receipt of tourism levy revenue based on macroeconomic tourism information. The liquidity risk is perceived by management as minimal.

Fair value The entity’s financial assets and liabilities are all expected to be recovered or settled no more than twelve months after the end of the reporting period. As a result the net book value approximates the fair value.

Revenues (10) Tourism levy The entity’s primary income is tourism levy revenue. The entity is the legal beneficiary of all tourism levies collected by the Tax Authority of the Aruba Government. The Tax Authority is responsible for the complete and timely collection of the tourism levy, and audit of the tax declarations of hotels and resorts.

Travel promotion levy The entity receives additional income from travel promotion levy, starting September 2012. The entity is the legal beneficiary of all travel promotion levies collected by IATA. The travel promotion levy is a fixed surcharge of US$ 10 on travel tickets to Aruba.

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Financial statementS

Personnel expenses (11) (in thousands of Aruban florins)

Actual 2012

Salaries

5,627

Security premiums

Budget 2012 4,971

Actual 2011 4,842

1,032

1,388

985

Pension

392

1,003

367

Other staff costs

760

1,573

454

7,811

8,935

6,648

Marketing and promotions expenses (12) (in thousands of Aruban florins)

Actual 2012

Budget 2012

Actual 2011

Branding and advertising

19,312

17,301

14,823

Promotional opportunities

9,481

6,414

4,343

Coop campaigns

6,961

5,841

4,694

Consumer and trade shows

4,768

4,719

2,373

E-marketing and other digital projects

3,607

3,261

1,762

Public relations

2,888

3,099

1,673

Promotional materials

1,344

1,301

1,593

Marketing fees

1,234

1,420

1,139

Other

3,103

2,220

2,984

52,698

45,576

35,384

Total marketing and promotions expenses

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ANNUAL REPORT 2012

Office expenses (13) (in thousands of Aruban florins)

Actual 2012

Budget 2012

Actual 2011

Rental of real estate

906

941

906

Communication

390

266

374

Utilities

203

241

173

Repair and maintenance

150

147

90

Equipment rental

114

142

108

98

428

88

102

26

75

1,963

2,191

1,814

Office supplies Other Total office expenses

Other operating expenses (14) (in thousands of Aruban florins)

Actual 2012

Budget 2012

Actual 2011

Professional services

923

687

831

Contribution to Aruba Hospitality Security Foundation

720

720

720

Contribution Caribbean Tourism Organization

519

652

621

Transportation expenses

149

173

157

Bank charges

130

70

44

Insurance expenses

88

118

52

(Release)/addition to provision for doubtful accounts

(1)

-

129

Other contributions

78

103

81

Other expenses

52

61

15

2,658

2,584

2,650

Total other operating expenses

ARUBA TOURISM AUTHORITY

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Financial statementS

Segment information (15) Business segments The entity operates in one business segment.

Geographical segments (in thousands of Aruban florins)

2012 Aruba

South America

North America

Europe

Total

Income: Revenues

61,317

-

-

-

61,317

Expenses

20,383

10,301

26,766

7,732

65,182

Assets and liabilities: Segment assets

25,476

30

584

164

26,254

Segment liabilities

14,656

2,419

3,034

2,930

23,039

Additions to fixed assets

204

-

-

-

204

Work force (average fte)

40

8

2

3

53

Other segment information:

(in thousands of Aruban florins)

2011 Aruba

South America

North America

Europe

Total

Income: Revenues

55,758

-

-

-

55,758

Expenses

14,478

6,668

18,755

6,619

46,520

Assets and liabilities: Segment assets

22,888

44

3,321

819

27,072

Segment liabilities

13,998

872

3,856

1,266

19,992

Other segment information: Additions to fixed assets

122

-

-

24

146

Work force (average fte)

32

3

10

4

49

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ANNUAL REPORT 2012

Related party disclosures (16) general Related parties of the entity can be specified as follows: - Aruba Government: o Department of Finance o Tax Authority o Department of Tourism - Management and its members - Supervisory Board and its members Transactions and balances with Aruba Government and its departments have been separately presented in these financial statements.

Remuneration of key management personnel The remuneration, including pension charges and other benefits, of current and former members of Management and the Supervisory Board charged to the entity in the year under review and the number of persons is specified as follows.

2012 Actual Remuneration

(in thousands of Aruban florins) Management Supervisory Board

2012 Budget Remuneration

Average number of persons (fte)

613

590

3

95

87

7

2011 Actual Remuneration

(in thousands of Aruban florins) Management Supervisory Board

There were no loans or advances granted by the entity during the year (2011: nil).

ARUBA TOURISM AUTHORITY

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2012 Budget Remuneration

Average number of persons (fte)

619

575

3

70

168

7

FINANCIAL STATEMENTS

Annex to the financial statements Reconciliation 2012 marketing and promotion expenses to budget The financial statements are prepared based on the accrual principle whereas the budget is not. Accrual principle means that committed amounts but not yet incurred (whether prepaid or not) are not recorded and presented as expense in the financial statements. This note depicts reconciliation between actual and budgeted marketing expenses. (in thousands of Aruban florins)

Reconciliation 2012

Original budget

45,576

Amendments

10,178

Amended budget

55,754

Committed but not incurred

(666)

Budgeted but not spent

(2,390)

Total marketing and promotion expenses

52,698

Committed but not incurred A total amount of Afl 666 thousand has been committed to marketing for the launch of various airlines routes which did not materialize, such as Tiara Air marketing agreement for new routes and the launch of the Sao Paulo route with Aruban Airlines.

Budgeted but not spent The amount of Afl 2.4 million budgeted but not spent can be broken down as follows: (in thousands of Aruban florins)

Unspent Budget

Airlift

954

North America

392

Latin America

512

Europe

369

Other

163

Total unspent marketing and promotion budget

2,390

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ANNUAL REPORT 2012

Airlift

Europe

This amount represents funds committed for airlines with potential opportunities which did not materialize prior to the end of 2012.

This amount was mainly unspent in the UK, Germany and Nordic Region due to: a) the UK market being left without much marketing activities between May and November, as A.T.A.’s representative’s office in the UK closed; b) lack of specific opportunities in Germany; c) co-operatives, sales and advertising opportunities in the Nordic region which did not materialize.

North America This amount was mainly unspent in Canada due to: a) meetings, incentives, conferences and exhibition activities being covered by the overall North America budget; b) Public Relations steered out of the US market; c) transition from the previous agency (M. Silver Associates) to the current agency (Zimmerman); d) changes in the Aruba Certified Expert trainings. These trainings were encouraged and completed through the online educational program from Recommend magazine; e) database marketing which did not start in 2012.

Latin America This amount was unspent across key markets but mainly in Venezuela due to: a) switching by A.T.A. of advertising agencies, leaving funds in the advertising account; b) funds allocated for marketing of a new non-stop direct flight out of Sao Paulo, which did not take place; c) certain opportunities for co-operatives in Colombia which did not materialize; d) change in public relation agencies in Argentina throughout the year. Consequently, some funds remained available for public relations as well as for sales.

ARUBA TOURISM AUTHORITY

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