BRAND USA: MARKETING THE USA Graduate Education & Student Research Conference on Hospitality & Tourism Temple University College of Hospitality and Tourism Management January 8, 2016
Travel Powers the Economy and Enhances the Image of the USA #1 Services Export (31% of All Services Exports) ● 75 million international visitors spending $221 billion ● 9% of all U.S. exports ● Generated a $76 billion U.S. trade surplus 2014 (or deficit would have been 15% higher) ● 1.1 million jobs supported by international travelers ● Dominant 14.2% share of world traveler spending (well ahead of Spain and China) ● 6.6% share of world travelers (2nd only to France)
2.7% of GDP
● $1.6 trillion in economic output
Ø $913 billion direct; $663 billion indirect) ● $141.5 billion in tax revenue (federal, state, and local) ● Outpaced job growth in other industries by 37%
7.9 Million Jobs Supported by Travel ● 7.9 million direct (5.5 million direct; 2.4 million indirect) ● Top 10 employer in 49 states and DC*
International Visitation Enhances the Image of the USA ● Surveys show that international visitors to the United States are 74% more likely to have
a favorable view of the USA and 61% more likely to support U.S. policies
*Every state except Rhode Island
Industry Defining Moments March 2010
January 2012
Signing the Travel Promotion Act into Law
National Travel and Tourism Strategy
May 2014 Presidential Memorandum on Travel and Tourism
December 2014 Reauthorization of Federal Funding for Brand USA
The Path to 100 Million International Visitors by 2021 100 million visitors
4.6% CAGR
Market Selection Criteria
GDP (PPP)
GDP (PPP) Growth (2016/2014)
International Expenditure
Long Haul Departures (exc. CA, MX)
Unemployment Index
Civil Liberty
Population
Ease of Doing Business
GINI (Wealth Distribution)
Special Circumstances
Path to 100 Million International Arrivals
30000
25000
20000
15000
10000
5000
0
200120022003200420052006200720082009201020112012201320142015201620172018201920202021
Argentina Australia Brazil Canada Chile China Colombia France Germany India Ireland Italy Japan Korea, Republic Of Mexico Netherlands Russian Federation Spain Sweden Switzerland United Kingdom Venezuela AR+CO+VZ
Path to 100 Million International Arrivals (excluding Canada and Mexico)
6000
5000
4000
3000
2000
1000
0
Argentina Australia Brazil Chile China Colombia France Germany India Ireland Italy Japan Korea, Republic Of Netherlands Russian Federation Spain Sweden Switzerland United Kingdom Venezuela AR+CO+VZ
BRAND USA: WHO WE ARE
Statement of Purpose: Mission & Vision Mission (Purpose) ● Our mission is to increase incremental international visitation, spend
and market share to fuel our nation’s economy and enhance the image of the USA worldwide
Vision (Result) ● Our vision is to be the best in class national destination marketing
organization—earning the USA the largest share of the global travel market and significantly contributing to job creation, GDP, export growth and tax revenues
Statement of Purpose: Foundational Elements Promote the entirety of the USA with innovative marketing that supports all 50 states, the District of Columbia and five territories to, through and beyond the gateways
Maximize and optimize ROI of Brand USA resources by deploying the right messages, through the right channels, in the right markets, at the right times and at the right investment levels
Add and Create Value by pioneering cooperative marketing platforms and programs that grow and leverage the USA brand in ways our Partners would be challenged or unable to do on their own
Inspire, inform welcome and thank travelers while accurately communicating vital and compelling information about visa & entry policies
Build and maintain trusted relationships with stakeholders worldwide through inclusive, proactive and transparent outreach with a commitment to compliance and integrity through words, actions and results
MARKET PRESENCE
Global Long Haul Arrivals and Market Share
Top 10 Markets: 2014 International Visitation RANK
COUNTRY
CHANGE v 2013
2014 ARRIVALS
TRENDS
1
Canada
2%
23.0 million
1st decline after four years of record visitation due to fewer one-night visitors
2
Mexico
17%
17.1 million
More visitors than the UK, Japan, Brazil, China, Germany, and France combined
3
UK
8%
4.2 million
1st increase after four years of declines—but short of 4.7 million visitors in 2000 (a record)
4
Japan
3%
3.6 million
Visitation has declined in 6 of the last 10 years and remains well below 1997’s record 5.4 million visitors
5
Brazil
10%
2.7 million
5th consecutive year of record visitation and a five-fold increase over the past 10 years
6
China
21%
2.2 million
Replaced Germany as the 6th largest market for visitors. Five years ago not among the top 10
7
Germany
7%
2.1 million
Record visitation but falling in the rankings to Brazil and China. Last record his in 1996
8
France
10%
1.7 million
2nd consecutive year of record visitation and spend at $5.9 million
9
S. Korea
7%
1.5 million
5th consecutive year of record visitation—nearly double 2008’s levels
10
Australia
8%
1.3 million
10th consecutive year of record visitation (more than doubled in 10 years)
Top 10 Markets: 2014 International Spending 2014 SPENDING
COUNTRY
CHANGE
1
Canada
4%
$26.3 billion
Represents more than twice the rate of decline in visitation, which dropped 2% from 2013 to 2014
2
China
14%
$24.0 billion
After a decade plus of double-digit growth, China jumped to 2nd place (spending $66 million a day in 2014 in the USA)
3
Mexico
3%
$18.7 billion
Although visitor spending from Mexico increased 3% hit record levels, average daily spend dropped considerably
4
Japan
0%
$17.7 billion
Despite five consecutive years of growth, spending was $1 billion higher in 2000 as Japan continues to struggle.
5
UK
2%
$13.5 billion
Although spending has grown, visitors to the USA from the UK spent $3 billion more back in 2008
6
Brazil
8%
$13.4 billion
With a decade of spending growth averaging 22% a year, Brazil will likely rival UK for the 5th ranked spot in 2015
7
India
10%
$9.8 billion
Represents five consecutive years of growth--with travel/ tourism exports to India more than doubling in 10 years
8
S. Korea
11%
$7.8 billion
After another record year of spending, S. Korea displaced Germany as the USA’s 8th largest market
RANK
v 2013
TRENDS
9
Germany
2%
$7.4 billion
Once ranked as high as 5th for spending, Germany continued to drop (unable to keep pace with Brazil, India, and S. Korea
10
Australia
9%
$6.2 billion
Despite an 8% increase in visitors, spending dropped 9% (perhaps due to the value of the Australian vs U.S. dollar)
International Arrivals YTD April 2015 Brand USA Consumer-Focused Markets COUNTRY
YTD ARRIVALS
YTD CHANGE
Canada
6,987,464
4.4%
Mexico
5,446,067
6.1%
United Kingdom
1,243,448
8.8%
Japan
1,146,827
No change
Brazil
752,812
3.6%
China
721,505
18.2%
Germany
608,057
9.0%
France
515,189
19.7%
S. Korea
492,073
1.8%
Australia
374,797
8.5%
India
294,191
19.2%
Columbia
224,432
0.3%
Spain
191,689
5.5%
Sweden
187,039
9.2%
BRAND USA TARGET MARKETS
19,185,590
7.5%
Top 20 Markets
20,286,063
2.2%
All Markets
22,991,436
2.9%
Overall growth has slowed substantially compared to 2014—down 2.9% YTD April 2015 compared to growth of 7.5% YTD 2014. Currency exchange rates and world events will continue to create significant headwind.
% of Travelers Aspiring to Travel to the USA Percentage of intercontinental travelers* who include U.S. on their destination wish list
60% 50% 52%
30% 31%
34%
37%
41% 42%
45%
21% 21%
Mexico
Russia
Japan
Canada
France
India
Germany Australia
International travelers in Canada and Mexico Source: 2014 Brand USA Global Intelligence Program and PhoCusWright, Inc.
UK
Brazil
Korea
China
Size of Adult Population Ages 15–64, Amounts in Millions 995
536
139 China 2014 United Nations Population Division
India
Brazil
Size of Adult Population Ages 15–64, Amounts in Millions 79
77 53 42
42 23
Mexico
Japan
Germany
2014 United Nations Population Division
France
UK
Canada
17
15
S. Korea
Australia
Strong U.S. Dollar Impacts International Visitation and Spend to the USA Unfavorable Currency Exchange Value as Reason for Not Visiting US
Jun-15
Aug-15
50% 40% 30% 20% 10% 0% Australia
Brazil
Canada
China
Source: Brand USA Tracking Study Base: Travelers who are not likely to visit the US in the next 12 months
France
Japan
Korea
Mexico
Value of U.S. Dollar Indexed Against 2014 Average 80% 70% 60% 50% 40% 30% 20% 10% 0% -10%
Jan 2014
Source: OANDA
Apr 2014
Jul 2014
Oct 2014
Jan 2015
Apr 2015
Jul 2015
Oct 2015
Canada
Euro
Mexico
UK
Brazil
India
China
Japan
South Korea
Australia
Value of U.S. Dollar Indexed to Period Average (2000-21015 YTD)
50%
CAD BRL EUR
40% 30% 20% 10% 0% -10% -20% -30% -40% 2000
2001
Source: OANDA
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
YTD 2015
MARKETING STRATEGIES
Market Prioritization Our existing brand positioning, the Big Screen Movie, and the following principles guided our planning process:
What do we need to do?
Drive 100MM annual visitors By 2021 (4.2% CAGR) while achieving FY16 goals
Where should we concentrate our efforts?
Develop market prioritization (plus segmentation) and maximize all markets
How should the brand behave to accomplish these objectives while maximizing consumer behavior?
Create traveler profiles and targeted messaging along the purchase decision journey
Market Prioritization: Structure Establish a tiered market structure to guide strategy, program development and resources Focus & Spend
PRIME VOLUME MARKETS • Insights drive global strategy and development • Original programs and partnerships • Fully integrated media mix, including a combination of broadcast, cinema, out-of-home, events, digital display, online travel experts media, paid search and paid social (assumes website presence, sharing) • Fully integrated co-op programs; trade efforts and execution
TARGETED VOLUME MARKETS • Execution of proven marketing concepts and strategies • Digital display, paid search and paid social (assumes website presence), sharing select co-op programs; trade programs and execution
NEW VOLUME MARKETS # of Markets
• Implement global media programs • Local language / cultural adaptation • Website presence, paid search and social programs for traffic generation, select co-op activities; key trade activities and support
Market Prioritization: Prime Volume Markets
2014
% ‘13
% ‘16
23 MM
- 1.8%
+ 4.7%
17.3 MM
+ 19%
+ 4.8%
4 MM
+ 3.6%
+ 3.5%
• China (Highest Growth Potential)
2.2 MM
+ 21.1%
+ 15%
• Brazil (Highest Growth Potential)
2.3 MM
+ 9.9%
+ 7.4%
• Canada • Mexico • United Kingdom
Source: 2014 Arrivals information—NTTO 2016 % based on the Brand USA Path to 100 million international arrivals
Market Prioritization: Targeted Volume Markets
2014
% ‘13
% ‘16
3.6 MM
- 4%
+ 1.2%
1.3 MM
+ 5.9%
+ 5.3%
960 K
+ 11.9%
+ 14%
• Germany
1.9 MM
+ 2.7%
+ 3.5%
• South Korea
1.4 MM
+ 6.6%
+ 9%
• Japan • Australia • India
Source: 2014 Arrivals Information provided by NTTO 2016 increase percentages based on the Brand USA Path to 100 million international arrivals
Market Prioritization: New Volume Markets
2014
% ‘13
% ‘16
1.6 MM
+ 8%
+ 7.9%
• Sweden
540 K
+14 %
+ 4.8%
• Colombia
881 K
+ 18%
+ 11.9%
• Chile
249 K
+ 17%
+ 11.3%
• France
Source: 2014 Arrivals Information provided by NTTO 2016 increase percentages based on the Brand USA Path to 100 million international arrivals
Customer Segmentation We can deliver more relevance and value to travelers by organizing them into groups with similar characteristics
Leisure
Discretionary
• Couple • Family • Friends
Leisure VFR/Event
Business
• VFR • Weddings, Graduations
• Meeting • Conference
Each of these groups has individual motivations and triggers, and can be identified by “trip persona”
Motivation + Trigger = Trip Persona
Motivation
Trigger
Treat Myself And Have Fun
Need A Break From Routine Ritual/Habit
Escape And Recharge Learn About Different Cultures See Faraway Friends/Family
Destination Calling Visiting Friends/Family Great Deal Celebration Of Milestone
Satisfy A Sense Of Adventure
Event
5 Core U.S. Trip Personas Excitement (Indulge, non-routine) • Entertainment, shopping, dining, nightlife
Favorite (Indulge, ritual) • Repeat visitors (what’s new in town), snowbirds, summer vacationers
Local (Indulge, destination calling) • Quintessential, unique local experiences, off the beaten path in primary destinations, iconic in second tier destinations
Escape (De-stress, non-routine) • Secluded spots, immersive experiences, destination spas
Getaway (De-stress, ritual) • Convenience, comfort, cultural connection
The Purchase Decision Journey
TRIGGERS
Focus Is Critical
TRIGGERS
Brand USA FY16 Market Matrix Prime Volume Markets
9
New Volume Markets
Target Volume Markets
DREAMING
Channels Online Video Display
Channels Online Video
5
RETARGETING SOCIAL
RETARGETING SOCIAL
8
7
Japan
Chile
India
Colombia
7
CONSIDERATION
6
5
Channels Above the Line Online Video Display OTx RETARGETING SOCIAL
Channels
4
RETARGETING SOCIAL
RETARGETING SOCIAL China
6
Germany
Brazil
Australia
4
Sweden
3
ACTIVATION
Channels Online Video Display
2
Channels Display OTx
2
Channels Display OTx
1
RETARGETING SOCIAL
3
RETARGETING SOCIAL UK
1
Mexico S. Korea
Canada
0 0
France
1
2
3
Global 4 Base Plan Elements 5
6
Note: Bubble size denotes population size 7 8 9 ranked across 14 markets
Brand USA Marketing ● Partnerships and Funding: Strong and Growing – 500+ Partners through 2015 (up from 89 in 2012, 339 in 2013 & 475 in 2014) – Maximizing the federal match of $100 million with 90+% Partner program retention rate
● Consumer Campaign: Expanding – Includes any combination of broadcast, OOH, print or digital marketing in 14 markets in FY15 – Digital and social footprint in 11 languages
● Trade Outreach: Reaching Influential Travel Trade – International representation nurturing B2B travel trade & media relationships in 25 markets in FY15 – USA pavilions at 30+ international shows in FY15 – Doubled the number of events, road shows, sales missions & MegaFams in FY15 – Expanding online training platform to 5 additional markets in FY15
● Cooperative Marketing Platforms and Programs: Increasing and Delivering Value – Research significantly expanded to include market profiles, competitive set analysis, predictive and performance tracking – 100 new co-op platforms with more than 200 opportunities with 85% directly targeting the consumer – Brand USA Originals – Affinity Programs – Market Specific
The USA Campaign
Consumer marketing campaigns in 14 markets that generate 81% of inbound travel to the USA
● Australia ● Brazil
● Canada ● Chile
● China ● Colombia
● Sweden ● France ● India ● Mexico ● Germany ● Japan ● South Korea ● United Kingdom
International Representation Network
Marketing Initiatives in nearly 40 markets: Reaching more than 90% of inbound travel to the USA
● ● ● ● ● ● ● ● ● ● ● ●
Argentina Australia Austria Belgium Belize Brazil Canada Chile China
● El Salvador ● ● France ● ● ● ● Costa Rica
Guatemala Germany Honduras Hong Kong India Ireland Italy
● ● ● ● ● ●
Japan South Korea Mexico Netherlands New Zealand Nicaragua
● Russia ● Sweden ● Singapore ● Switzerland ● Spain ● Taiwan
● United Arab Emirates ● United Kingdom
Discover America with Peter Greenberg ● Produced and hosted by Peter Greenberg, multi-Emmy
Award-winning producer and the Travel Editor for CBS News
● Modeled after Peter’s Royal Tour series for public television – King of Jordan, President of Mexico, Prime Minister of New Zealand, Prime Minister of Israel ● In Discover America, Peter will be guided by America’s
own set of royalty
– Global stars of film, television, music and sports, who will give Peter the “royal tour” of their favorite places, journeys and experiences within the states where they were born, raised or live
● Distribution via Brand USA’s international media
partners and other platforms
● 30-minute episodes, each devoted to a single state.
Production completed in the following states: – South Carolina
– Alaska
– Louisiana
– Tennessee
“National Parks Adventure” ● Narrated by Robert Redford ● Multi-million dollar partnerships – Global: Expedia Media Solutions – Global: Subaru – Domestic: REI (Recreational Equipment, Inc.)
● World premiere will be held in Washington,
D.C. on February 10, 2016, followed by premieres in-market in key international markets
● Marketing communications tool kits to be
provided to Brand USA partners once theater schedule is finalized
MARKETING THE WELCOME
Market the Welcome Arrival Hall Package for Airports, Embassies, and Destinations
• Out of Home Elements • Marketing and Entry Process Materials • Video Components Distributed via: Ø International Arrival Halls Ø In-flight Video Ø Partner, Airport, Embassy, ESTA, and Federal Websites Abroad Ø DiscoverAmerica.com, TheBrandUSA.com Ø Digital Channels Ø Consular Areas of Embassies
AND IT’S WORKING!
Marketing Effectiveness Consideration: Ad Influence on Intent to Visit +67%
Ad Recallers / Correct IDers / Differential in Intent to Visit 7% 6% 5% 4%
+171%
3%
+47%
2% 1% 0% -1%
2013
2014
2015
2013
2014
Brazil
Brazil
Brazil
Mexico
Mexico
Source: Ipsos
2015
2014
2015
2013
Mexico Germany Germany China**
2014
2015
China
China
Over the past two years, Brand USA’s marketing efforts have generated…
6.5 2 incremental jobs 50,000 supported each year 15 billion 2 billion billion
$
million
in incremental spending
incremental visitors
Nearly $
Federal, state, & local taxes $ close to
in total economic impact
In partnership with
More than
500
partners
94
partner program
% retention
Travel Industry and Consumer Information Travel Industry: @BrandUSA on Twitter TheBrandUSA.com
Consumer: @VisitTheUSA on Twitter Facebook.com/VisitTheUSA VisitTheUSA.com
THANK YOU!
