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Australia/New Zealand Market Growth & Trends by Consuelo G. Jones October 10-12,2012

AUSTRALIA S ECONOMIC PERFORMANCE AND OUTLOOK Australia s economic prospects remain solid compared with those of many developed economies across the world. According to Consensus Economics, Australian GDP is forecast to grow by a robust 3.1% in 2012 and 3.4% in 2013. Economies of resource-rich Western Australia and Queensland are growing particularly strongly but performance in most other states and territories is moderate. Price of domestic holiday travel and accommodation rose by a much larger 7.3%. It suggests a weakening in price competitiveness of Australian domestic tourism which could further tilt Australian travellers choices towards outbound travel. Tourism Australia, June 2012

PERFORMANCE AND OUTLOOK FOR AVIATON DEMAND AND CAPACITY In Australia, international seat capacity increased 7.3% in 2010-11 with all major markets recording growth. The strongest growth was provided by Low Cost Carriers (LCC) from our Asian Markets. Overall capacity is expected to increase by 6.8% to 19.6 million seats in 2011-12 and then by further 5.3% to 20.5 million in 2012-13. Escalation of tension in the Middle East will contribute to the increase in world oil prices. Against this backdrop, some analyst are expecting world oil prices to break the $150 per barrel level in the foreseeable future. If this were to occur, it could be expected to put upward pressure on international and domestic Tourism Australia, June 2012 airfares and local petrol prices- largest cost component of travel to & within Australia.

FORECAST AUSTRALIAN DEPARTURE Period Growth Rate No. of departure 2011-2012 7.8% 8 Million 2012-2013 6.6.% 8.6 Million Long term outlook Average annual growth is expected to be 4.2% forecast to year 2020. Departures reaching 11 Million by 2020-21. Tourism Australia, April 2012

AUSTRALIAN OUTBOUND TRAVEL January December 2011 COUNTRY OUTBOUND TRIP SHARE America 990,200 13% South East Asia 2,416,200 31% North Africa & Middle East 194,900 2.5% Oceania & Antarctica 1,693,300 22% North & West Europe 835,200 11% South & East Europe 371,900 5% North East Asia 819,600 10% South & Central Asia 293,800 3.8% Sub Saharan Africa 140,500 2% Not stated 39,600 0.5% TOTAL ALL DEPARTURES 7,795,200 100% Australian Bureau of Statistics

AUSTRALIAN OUTBOUND TRAVEL January June 2012 COUNTRY OUTBOUND TRIP SHARE America 494,800 13% South East Asia 1,206,800 31.5% North Africa & Middle East 92,900 2.4% Oceania & Antarctica 778,300 20% North & West Europe 417,100 11% South & East Europe 184,800 4.8% North East Asia 426,100 11.0% South & Central Asia 139,000 3.6% Sub Saharan Africa 64,700 1.7% Not stated 20,500 0.5% TOTAL ALL DEPARTURES 3,825,000 100%

TOP 10 WORLD DESTINATIONS January-December 2011 COUNTRIES NUMBER 1. New Zealand 1,100,700 2. Indonesia 877,900 3. USA 798,000 4. Thailand 552,500 5. UK 488,500 6. China 369,100 7. Fiji 337,200 8. Singapore 288,000 9. Malaysia 258,000 10. Hong Kong 224,500 * Philippines 170,736 *Source: Tourism Research & Statistics Division

COUNTRIES TOP 10 WORLD DESTINATIONS January-June 2012 NUMBER 1. New Zealand 506,400 2. Indonesia 427,000 3. USA 396,200 4. Thailand 295,500 5. UK 231,200 6. China 183,100 7. Fiji 149,100 8. Singapore 135,200 9. Malaysia 124,200 10. Hong Kong 111,900 * Philippines 92,648 *Source: Tourism Research & Statistics Division

ASEAN DESTINATIONS January December 2011 Australian Bureau of Statistics COUNTRY OUTBOUND TRAVEL 1. Indonesia 877,900 2. Thailand 552,500 3. Singapore 288,000 4. Malaysia 258,000 5. Viet Nam 210,500 6. Philippines 170,736 Source: Tourism Research & Planning Division

ASEAN DESTINATIONS January June 2012 COUNTRY OUTBOUND TRAVEL 1. Indonesia 427,000 2. Thailand 295,500 3. Singapore 135,200 4. Malaysia 124,200 5. Viet Nam 106,800 6. Philippines 92,648 Source: Tourism Research & Planning Division

AUSTRALIAN ARRIVALS TO THE PHILIPPINES 2000-2011 YEAR VOLUME % INC./DEC. 2011 170,736 15.78 2010 147,469 11.4 2009 132,330 8.9 2008 121,514 8.05 2007 112,466 11.0 2006 101,313 5.0 2005 96,465 8.2 2004 89,175 27.7 2003 69,846-1.3 2002 70,735 3.2 2001 68,541-9.4 2000 75,706-2.6 Tourism Research & Statistics Division

AUSTRALIAN ARRIVALS TO THE PHILIPPINES 2000-2011 Per Year 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Volume Volume

2011 AUSTRALIAN ARRIVAL TO THE PHILIPPINES Per Month 25,000 20,000 15,000 10,000 VOLUME 5,000 0 Tourism Research & Planning Division

TARGET MARKET SEGMENTS TARGET MARKET SEGMENTS HOLIDAY General Tourism Special Interest o Families Divers o Couples / Honeymooners Surfers o Silvers / Retirees Golfers o Students o Groups o Frequent Flyer Program Sports Shoppers HOLIDAY Wellness Bird watching SPECIAL INTERESTS VFR o VFR o Inculcate the Culture of Tourism through: o Involvement in Filipino Fairs/ Bazaars o Promote Philippine Festivals/ Activities o Direct Mail to Filipino Associations o o BUSINESS Convention / Incentive Travel o Incentive Houses o Professional Convention Organizers o Associations / Clubs o Corporations o Frequent Flyer Program BUSINESS

TRAVEL PERIOD The holiday & VFR Market Peak during the 4 school holidays April (2 weeks) July (2 weeks) Oct (2 weeks) Dec/Jan (5 weeks)

INTERNATIONAL MOVEMENT RATE In Terms of Geographic Movement (per 1,000 state or territory population) Calendar Year 2011 Western Australia had the highest movement rate (494 movements/1,000 population) Australian Capital Territory (406) New South Wales (371) Northern Territory (365) Victoria (340) Queensland (292) South Australia (216) Tasmania (168) (Australian Bureau of Statistics, February 2011)

BREAKDOWN OF STATE S TRAVEL (Calendar Year 2011) New South Wales ( 35%) Victoria (25%) Queensland (17%) Western Australia (15%) South Australia (5%) Australian Capital Territory ( 2%) Tasmania (1%) Northern Territory (1%) NSW VIC QLD WA SA ACT TAS NT (Source: Australian Business Statistics, February 2012)

BY PURPOSE OF TRAVEL TRAVEL CHARACTERISTICS January- December 2011 PURPOSE OF TRAVEL NUMBER SHARE HOLIDAY 4,466,700 57 % VFR 1,744,200 22 % BUSINESS 791,800 10 % CONVENTION/ 225,200 3% CONFERENCE EMPLOYMENT 125,700 2% EDUCATION 67,700 1% OTHER& NOT STATED 374,100 5 % TOTAL ALL DEPARTURES 7,795,400 100%

BY PURPOSE OF TRAVEL TRAVEL CHARACTERISTICS January- June 2012 PURPOSE OF TRAVEL NUMBER SHARE HOLIDAY 2,159,200 56.5 % VFR 862,500 22.5 % BUSINESS 410,800 11 % CONVENTION/ 117,700 3% CONFERENCE EMPLOYMENT 62,800 1.6% EDUCATION 35,900 0.9% OTHER & NOT STATED 173,500 4.5 % TOTAL ALL DEPARTURES 3,822,400 100%

Purpose of Travel Holiday VFR Business Convention Employment Education Not stated

AUSTRALIAN RESIDENT DEPARTURES BY INTENDED LENGTH OF ABSENCE OF TRAVELLER January-December 2011 INTENDED LENGTH OF ABSENCE DEPARTURE SHARE UNDER 1 WEEK 1,079,300 14% 1 & UNDER 2 WEEKS 2,534,400 33% 2 WEEKS & UNDER 1 MONTH 2,270,100 29% 1 & UNDER 2 MONTHS 1,171,300 15% 2 & UNDER 3 MONTHS 321,400 4% 3 & UNDER 6 MONTHS 260,800 3% 6 AND UNDER 12 MONTHS 158,100 2% TOTAL ALL DEPARTURES 7,795,400 100%

AUSTRALIAN RESIDENT DEPARTURES BY INTENDED LENGTH OF ABSENCE OF TRAVELLER January-June 2012 INTENDED LENGTH OF ABSENCE DEPARTURE SHARE UNDER 1 WEEK 554,100 14.5% 1 & UNDER 2 WEEKS 1,222,800 32% 2 WEEKS & UNDER 1 MONTH 1,122,500 29.4% 1 & UNDER 2 MONTHS 551,600 14.4% 2 & UNDER 3 MONTHS 143,500 3.7% 3 & UNDER 6 MONTHS 136,700 3.6% 6 AND UNDER 12 MONTHS 91,600 2.4% TOTAL ALL DEPART 3,822,800 100%

AVERAGE NUMBER OF NIGHTS PER TRIP BY MAIN DESTINATION (Year ended March 2012) Main destination Average nights per trip New Zealand 11 Indonesia 11 USA 23 Thailand 14 United Kingdom 37 China 22 Fiji 10 Singapore 9 Malaysia 15 Hong Kong 12 Vietnam 19 Philippines 23 (Tourism Research Australia)

MEDIAN AGE Year Ended December For male Australian residents, the peak age group remained the 45-49 years age group For females the peak age group remained at 25-29 years age group. The median age of males and females increased to 41.4 years and 39.4 respectively. (Source: Australian Bureau of Statistics, February 2012)

SEX RATIO (The number of male departures per 100 female departures) 112 males to 100 females The highest sex ratios were 35-39 years age group (131 males) The lowest sex ratios were 15-19 years age group (85 males) (Source: Australian Bureau of Statistics, February 2012)

HOLIDAY TRACKING PRODUCT POLL DATA : JANUARY 2010 - DECEMBER 2011 Place of Residence - Philipines Preferrers and visitors Filter: (January 2010 - December 2011) Weights: (popn. '000) The table below shows the place of residence of Preferrers and Visitors (unweighted) uc 279 105 (popn. '000) wc 206 57 Preference to holiday in the Philippines Took a Holiday to the Philippines in the last 12 months STATES N.S.W. incl. ACT wc 56.782 18.427 v% 27.6% 32.2% Victoria wc 48.01 16.49 v% 23.4% 28.8% Queensland wc 62.959 11.579 28.8% of those who took a holiday to the Philippines in the last 12 months live in Victoria. This is equivalent to 16,490 people v% 30.6% 20.2% 30.6% of those who would like to take a holiday of one night or more to the Philippines live in Queensland. This is equivalent to 62,959 people. South Australia wc 17.465 5.388 v% 8.5% 9.4% Western Australia wc 18.22 4.885 v% 8.9% 8.5% Tasmania wc 0.64 0.353 v% 0.3% 0.6% Darwin - Alice Springs wc 1.442 0.172 v% 0.7% 0.3% Source: Roy Morgan, March 2012

ACCOMPLISHMENTS

ACCOMPLISHMENTS for January- September 2012 INCREASED VISIBILITY OF THE DESTINATION. Increased partnership with the top wholesalers to produce Philippine tour packages: Qantas/Viva Holidays Pinpoint Travel Group Select Vacations Adventure World Infinity Holidays Allways Dive Expedition Dive Adventure All About Asia World Expedition Joint collaboration with the industry i.e. hotels, airlines, media and wholesalers. e.g. Food festivals o Grace Hotel (August 2012), with Via Mare, PAL, San Miguel Brewery o Shangri la Hotel (October 2012) with PAL, San Miguel Brewery o o o Famtrips ( in collaboration with PAL, Shangri-la hotels) Media, trade and MICE Michelle Wranick, journalist Glenn A. Baker- journalist Matt Grainger- photographer

o o o Famtrips (in collaboration with PAL, Shangri-la hotels) o VIVA Holidays o Adventure World o Allways Dive o PAL MICE Group print) o o William Leung, journalist PAL Media Group SBS TV Island Feast Advertising (online and Etravelblackboard Travel Daily Publications Trade o Travel Weekly o TravelTalk Glossy Magazine o Asia Today w/editorial o Holiday for Couples o Sport Diving Magazine o Golf Escapes o Well Being Magazine o o o o o o o o Luxury Magazine Holiday with Kids Vacation & Living Golf Vacations Harper s Bazaar Get Lost Magazine Newspapers WISH /Weekend Australian ESCAPE Section /Sunday Telegraph Re-printing of theme/major destination brochures and distributing supply to partner wholesalers and retail shops. Boracay/Cebu/Palawan/Baguio/Bohol/Palaw an/bicol Wholesalers/ Agent Training Seminars Your Workshop (on -line) Infinity Holidays/Flight Centre Qantas Holidays/VIVA Holidays

MICE Participation in AIME 2012 Outdoor Promotional Campaign (October 2012) Train Billboards ( 8 panels in Sydney s Central Business District) Tram Advertising ( 20 footer panels in 20 Melbourne CBD depots) Bus Advertising ( 20 footer panels in 40 Sydney CBD depots) City banners ( total of 35 along in George Street & The Rocks, Sydney) Production of Give-aways USB Tool kit/keychain Bags

WHOLESALERS DOING THE PHILIPPINES Qantas Holidays/ Viva Holidays Infinity Holidays Pinpoint Travel Adventure World World Expedition Dive Adventures Allways Dive Expedition Specialist Holidays STA Travel TourFlair Travel Access All About Asia Peregrine China Best Tours Select Vacations

SAMPLE OF PHILIPPINE TOUR PACKAGES Pinpoint Travel/SIA Holidays

WORLD EXPEDITION

SPECIALIST HOLIDAYS Weekly Newspaper Ads

WHAT HAS TO BE DONE TO ADDRESS THE MARKET TRENDS Maintain and increase partnership with the top wholesalers to produce and expand Philippine tour packages: Qantas/Viva Holidays Pinpoint Travel Group Honeymoon Worldwide Holidays Adventure World Infinity Holidays Specialist Holidays Specialist Holidays Dive Adventure Allways Dive Expedition World Expedition Joint collaboration with the industry i.e. hotels, airlines, media and wholesalers. e.g. food festivals, famtrips, advertising, seminars Given the current popularity of reality TV shows and the huge following around programs such as The Voice, MasterChef and Dancing with the Stars, we suggest to create customer experiences in the Philippines which enable consumers/trade to have a personal experience around their key area of interest. Packages need to be developed accordingly. Examples of this concept as follows. The Voice Holiday Package- Holiday in the Philippines and make your own personal CD at a recording studio with back up Filipino singers. MasterChef Holiday Package- Attend a cooking school as part of your holiday/take the kids with you and make it a family event. Dancing with Stars Holiday Package- Have dancing lessons, get dressed up and have a video created of your performance. Tie up with wholesalers i.e. come up with special tour packages. Also, groups will be accompanied by media writers for release in publication, social media, etc.

WHAT HAS TO BE DONE TO ADDRESS THE MARKET TRENDS Joint specials with wholesalers/retail chains and suppliers for the lean months. Printing of theme/major destination brochures and distributing supply to partner wholesalers and retail shops. Strengthen promotions in other key states such as Queensland, Western Australia, Australian Capital Territory and Northern Territory. ( QLD and WA s economy are growing stronger due to mining business ; WA and NT are closer proximity to the Philippines- shorter travelling hours; There is a low cost carrier Jetstar currently operating Darwin/Manila/Tokyo route and many low cost Asian carriers serving Perth/Asian routes; There is a dramatic, active increase in number of locals visiting travel shows in Canberra signifying potential market. ) Joint collaboration with low cost airlines as Jetstar, Air AsiaX, Silk Air. Joint promotion, twining with ASEAN- Trade shows, printing of ASEAN Supplements Run on of train billboards Long term mobile advertising Participate at CRAVE Night Markets (October 2013) Visit www.cravesydney.com Participate as a major sponsor at AIME in Melbourne.

PROJECTED TARGET ARRIVALS NTDP Projected Target No. of Arrivals from Australia : YEAR TARGET NO. 2013 256,359 2012 203,168

NEW ZEALAND

NEW ZEALAND OUTBOUND TRAVEL Year End June 2011 COUNTRY OUTBOUND TRIP SHARE % Oceania 1,247,579 60.4 Asia 287,476 13.9 Europe 168,755 8.2 America 133,324 6.4 Africa and & Middle East 39,310 1.9 Not stated 193,558 9.4 TOTAL ALL DEPARTURES 2,070,002 100% Statistics New Zealand

NEW ZEALAND OUTBOUND TRAVEL Year End June 2012 COUNTRY OUTBOUND TRIP SHARE % Oceania 1,269,060 58.9 Asia 314,200 14.6 Europe 179,180 6.8 America 152,020 8.3 Africa and & Middle East 36,520 1.7 Not stated 205,700 ` 9.5 TOTAL ALL DEPARTURES 2,156,680 100%

COUNTRIES TOP 10 WORLD DESTINATIONS January-December 2011 Statistics New Zealand NUMBER 1. Australia 986,170 2. Fiji 99,706 3. USA 97,933 4. UK 92,019 5. China 66,422 6. Cook Island 63,925 7. Samoa 43,612 8. Thailand 33,718 9. India 32,353 10. Canada 19,275 * Philippines 12,782 *Source: Tourism Research & Statistics Division

COUNTRIES TOP 10 WORLD DESTINATIONS January-June 2012 Statistics New Zealand NUMBER 1. Australia 455,180 2. USA 55,800 3. UK 47,140 4. Fiji 41,780 5. China 30,180 6. Cook Island 29,420 7. Samoa 20,120 8. Thailand 18,920 9. India 16,240 10. Canada 9,300 * Philippines 6,644 *Source: Tourism Research & Statistics Division

ASEAN DESTINATIONS Year End June 2011 COUNTRY OUTBOUND TRAVEL 1. Thailand 32,718 2. Malaysia 21,206 3. Singapore 16,847 4. Indonesia 15,581 5. Philippines 13,671 6. Viet Nam 11,635 Statistics New Zealand

ASEAN DESTINATIONS Year End June 2012 COUNTRY OUTBOUND TRAVEL % INC/DEC. 1. Thailand 38,940 19 2. Malaysia 23,080 2.7 3. Singapore 19,400 15.2 4. Indonesia 18,380 18 5. Philippines 15,600 14.1 6. Viet Nam 12,440 6.9

NEW ZEALAND ARRIVALS TO THE PHILIPPINES 2007-2011 YEAR VOLUME % INC./DEC. 2011 12,782 12.89 2010 11,323 7.61 2009 10,522-1.41 2008 10,672 4.08 2007 10,254 DOT Tourism Research & Statistics Division

NEW ZEALAND ARRIVAL TO THE PHILIPPINES January - December 2011 MONTH VOLUME January 1,008 February 703 March 1,029 April 1,296 May 1,109 June 955 July 1,138 August 879 September 803 October 955 November 1,005 December 1,902 TOTAL 12,782 % GROWTH RATE 12.89 DOT Tourism Research & Statistics Division

NEW ZEALAND ARRIVAL TO THE PHILIPPINES January August 2012 MONTH VOLUME % GROWTH RATE January 1,161 15.2 February 903 20.63 March 1,237 20.2 April 1,233-4.9 May 1,017-8.3 June 1,093 14.5 July 1,189 4.5 August 857-2.5 TOTAL 8,690 7.06 DOT Tourism Research & Statistics Division

TRAVEL CHARACTERISTICS 2008 BY PURPOSE OF TRAVEL HOLIDAY (42%) VFR (32 %) BUSINESS (14 %) CONFERENCE & EDUCATION/ MEDICAL (3%) OTHER (1%) Holiday VFR Business Conference & Education/Medical Other (Ministry of Tourism, September 2009)

SHORT-TERM NZ TRAVELLER DEPARTURES to the PHILIPPINES and PURPOSE (Annual- June) 2011 2012 Business 1,143 1,540 Conventions/Conferences 249 240 Education 26 60 Holiday/Vacation 5,102 5,240 Unspecified/Not Collected 288 480 Other 414 440 Visit Friends/Relatives 6,449 7,600 TOTAL All Travel Purposes 13,671 15,600 (Ministry of Tourism, September 2009)

TRAVEL PERIOD June to September are the most popular months to travel abroad (38%) Also December, due to Christmas holiday period (10% of all departures); 15% of all VFRs departing this month. January- March are the weakest months. Average length of absence is 19.9 days. For holidays travellers (17.2 days) For VFR (24.8 days) For business travellers (14.2 days) Median length of absence is 10 days.

INTERNATIONAL MOVEMENT RATE (trips/100 people) 2008 New Zealanders have relatively high propensity to travel abroad, at 46 trips per 100 people, compared to an international average of 14 trips/100 people. This is also higher than other island nations like Australia, South Korea and Japan. (Ministry of Tourism, September 2009)

REGION OF ORIGIN OF NZ DEPARTURES (2008) Auckland ( 45%) Canterbury (13%) Wellington (12%) Waikato (7%) Bay of Plenty (5%) Rest of NZ ( 19%) Auckland Canterbury Wellington Waikato Bay of Plenty Rest of NZ (Source: Ministry of Tourism, September 2009)

Auckland residents had the highest propensity to travel overseas (62 trips/100 people.) Wellington ( 50 trips/100 people) Canterbury (45 tips/100 people) Nelson (44 trips/100 people) Bay of Plenty (37 trips/100 people) Number of trips per 100 people Southla Waikato Taranaki Marlbor Otago Bay of Nelson Canter Welling Auckland 0 50 100 Number of trips per 100 people

Auckland residents are less likely to visit Australia than other New Zealand residents and more likely to visit the Pacific Islands and North East Asia. This is due to the diverse ethnic population the Auckland region and the proximity to Auckland international airport.

Characteristics of Outbound Travel Median age group 40-49 years Those aged under 20 years, 40-49 years and 50-59 years feature strongly in the holiday category Gender split - 51% male - 49% female Females outnumber males in the holiday (53% to 45%) Business travellers are predominantly males (76%). (Ministry of Tourism, September 2009)

Average Spending New Zealanders spent an average NZ$2,142 per trip and NZ$ 108 per day. (Excluding international airfares.)

Air Services to New Zealand New Zealand has 6 international airport that are served by 19 international airlines which fly between 33 overseas airports. In 2008, there were 29,100 flights departing from New Zealand, an average of 80 flights per day. The majority of flights are to Australia (66%) Asia (17%) Pacific Islands(13%) America (8%) Middle East (5%) Europe (3%) Ministry of Tourism, September 2009

Flights to/from New Zealand There are no direct flights to/from the Philippines. Emirates Singapore Airlines Cathay Pacific Japan Airlines Malaysian Airlines Royal Brunei Thai Airways Qantas Airlines Air Asia X

Dual Destination Travelling When New Zealanders travel overseas they often visit more than one country. Short-haul destinations such as Australia and the Pacific are usually main destinations. Major hub destinations such as Hong Kong and Singapore are more common as secondary destinations