Presented by: Bill Anderson

Greater Miami Convention & Visitors Bureau

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Miami’s tourism economy will continue to expand over the four-year forecast horizon.

After three years of strong recovery through 2012, growth moderated somewhat in 2013 and 2014. We expect a similar pattern of growth in 2015 as the economy continues its pace of recovery.

Growth in international visitor volume will outpace that of domestic visitors over the forecast horizon, and key Latin American markets will contribute to visitation growth.

Based on complete visitation data for 2013, slightly more international visitors arrived in Miami than domestic visitors. Based on visitation through Q3 2014, we expect domestic visitation to slightly outpace international visitation in 2014.

The forecast is based on several fundamental assumptions:◦ The US economy is showing strong fundamentals◦ Global economic growth is set to accelerate modestly in 2015◦ The US travel sector has seriously outperformed and volumes are

anticipated to slow

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Between 2009 and 2014, visits to Miami have grown by an average of 532,000 per year.

A robust recovery has brought Miami visitation to an all-time high of 14.2 million in 2013.

In 2014, 14.6 million visitors are expected to arrive in Miami, representing an expansion of 2.7% over 2013

Growth will average 4.0% between 2015 and 2018, when Miami will host 17.1 million visitors. The current forecast for 2015 represents a very slight upgrade in overall

visitation compared to our November 2014 forecast. The upgrade is primarily attributable to strong US economic fundamentals and moderate global growth in 2015..

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06 07 08 09 10 11 12 13 14F 15F 16F 17F 18F

Total Visitorsr to Miami by Market SegmentMillions

Sources: GMCVB, Tourism Economics

17.1

15.115.7 16.414.6

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Recent performance Recovery in Miami’s tourism industry

has been steady.

Since the trough in 2009, overall visitation has grown 4.5% annually through 2013.

Visitation reached a new peak of 14.6 million in 2014.

In 2013, 49% of these visitors came from domestic markets and 51% from international markets.

In 2014, total domestic visitors (7.30 million) exceeded international overnight visitors (7.29 million)

Miami’s key domestic markets were New York, Chicago, and Philadelphia. Key international markets included Brazil, Canada, and Germany

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07 08 09 10 11 12 13 14F

Total volume, mils (L)

% ch (R)

Steady Volume Growth Since 2009

Sources: GMCVB, Tourism Economics

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Recent performance: the hotel market

The hotel markets is tightening, driven by both demand growth and relatively restrained supply. These supply and demand fundamentals are boosting occupancy and room rates.

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-10

-5

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10

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06 07 08 09 10 11 12 13

Occ %, ppt change (L)

ADR, % ch year ago (R)

...and rising occupancy drives prices

Sources: STR, Tourism Economics

85

90

95

100

105

110

115

120

06 07 08 09 10 11 12 13

Room supply

Room demand

Demand growth is outpacing supply...

Sources: STR, Tourism Economics

12-month moving sum, indexed, January 2006=100

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Miami’s tourism performance is determined by economic conditions in its key source markets, investment in its tourism infrastructure, and its ability to market itself as a destination.

Factors considered in the forecast were production, income, housing and labor market conditions in key domestic and international source markets.

Indicators included in the analysis for source markets were:◦ Gross domestic product◦ Personal income growth ◦ Wage and salary income growth◦ Consumption spending ◦ The level of employment and the unemployment rate

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Growth in Miami visitors by segment

International visitation is expected to outpace domestic visitor growth in 2015 and over the forecast horizon.

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07 08 09 10 11 12 13 14F 15F 16F 17F 18F

Total VisitorsDomestic overnightInternational

Miami Visitor Forecast by Market SegmentAnnual % change

Sources: GMCVB, Tourism Economics

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International visitor volume to exceed domestic

In 2013, more than half of all visitors came from international markets, and this share is forecast to increase to 53%, or 9.1 million visits, by 2018.

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6.0

6.5

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06 07 08 09 10 11 12 13 14F 15F 16F 17F 18F

Domestic overnight

International

Miami Visitor by Market SegmentShare of total, %

Sources: GMCVB, Tourism Economics

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Total visitor expenditures Visitor expenditures totaled $21.8 billion in 2012 and will have risen to

$22.6 billion in 2013 and $23.5 billion in 2014 once complete data are available. Over the forecast horizon, visitor expenditures are expected to increase 5.4% in 2015 and 5.1% in 2016. By 2018, total visitor expenditure will amount to an estimated $28.4 billion.

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Visitor expenditures, $billions (L)

% ch (R)

Vistor Expenditures Forecast

Sources: GMCVB, Tourism Economics

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Tightening in the hotel market will continue Similar to previous forecasts, growth in demand is expected to

exceed supply growth for most of the forecast horizon, and rising occupancy rates will drive price growth.

85

90

95

100

105

110

115

120

06 07 08 09 10 11 12 13

Room supply

Room demand

Demand growth is outpacing supply...

Sources: STR, Tourism Economics

12-month moving sum, indexed, January 2006=100

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-10

-5

0

5

10

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06 07 08 09 10 11 12 13

Occ %, ppt change (L)

ADR, % ch year ago (R)

...and rising occupancy drives prices

Sources: STR, Tourism Economics

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Global growth set to accelerate modestly in 2015 The US economy: strong fundamentals, but one

key risk is housing activity Eurozone: On the mend, but one shock away

from… Japan: Abe the archer still adjusting his arrows… China: Is growth closer to 5-6%? Should we

buckle up? Brazil: Can post-election “reset” solve structural

issues?

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Last GDP reading was strong…can this be sustained?

Employment growing strongly Consumers are feeling more cheerful Consumer spending to bounce back into 2015 Key domestic risk is housing activity Orders and shipments continue to grow strongly Capital expenditures on the mend Trade contribution to be neutral in 2015

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2.2% 3.0%

2.3% 2.2%

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Following a difficult 2014 for Latin America, the economic outlook for 2015 is one of diminishing expectations and mediocre prospects.

Growth is weak, below potential, but increasingly diverging.

Inflation is on the rise and policy complacency risks are high.

We expect Mexico, Colombia, and Peru will outperform; Brazil will be challenged, while Argentina and Venezuela will struggle in failure.

On the strategy side, we still opportunities in some local markets, and compelling external debt possibilities across the more fundamentally sound credits.

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3.5

1.3

2.1

3.9

1.4 1.5

2.92.6

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2004-13 2014 2015

Latin America EMEA World

Source: Oxford Economics

% year

Regional comparison: GDP growth forecasts We forecast GDP growth of just 1.3% this year

This is half of what we expected in January!

Who are the culprits?

Everyone! We have downgraded our forecasts for all big economies in Latin America since the start of the year.

But outlook will improve (modestly) in 2015!

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1.2

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Venezuela

Brazil

Argentina

Latin America

Chile

Mexico

Colombia

Peru

Source: Oxford Economics % year

Latin America: GDP growth forecast for 2015

Pacific Alliance countries will outperform…

…while Brazil will continue to drift…

…and Argentina and Venezuela should continue to struggle

(positive growth in Argentina is highly suspicious as data reporting there is not very transparent…)

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Forecast >>>>

2010 2011 2012 2013 2014 2015 2016 2017 2018

Total Visitors, millions 12.6 13.4 13.9 14.2 14.6 15.1 15.7 16.4 17.1

Domestic overnight 6.5 6.9 7.1 7.1 7.3 7.5 7.7 7.8 8.0

International 6.1 6.5 6.8 7.1 7.3 7.6 8.0 8.5 9.1

Total Visitor Expenditures, $ billions 18.8 20.7 21.8 22.6 23.5 24.7 26.0 27.1 28.4

Hotel sector metrics

Average daily rate, $ 144.1 153.5 163.7 174.9 184.0 197.0 206.7 210.9 214.5

Occupancy rate, % 70.4 75.6 76.4 77.5 78.4 80.5 80.6 79.9 79.2

Supply, millions of room nights 17.0 17.3 17.5 17.6 17.9 18.0 18.5 19.4 20.2

Demand, millions of room nights 12.0 13.1 13.4 13.6 14.0 14.5 14.9 15.5 16.0

RevPar, $ 101.5 116.1 125.1 135.5 144.2 158.5 166.6 168.5 169.9

Miami Visitor Forecast Summary Table

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Forecast >>>>

2010 2011 2012 2013 2014 2015 2016 2017 2018

Total Visitors, % 6.7 3.5 2.2 2.7 3.5 3.9 4.2 4.4

Domestic overnight 6.2 1.8 0.2 3.1 2.7 2.1 2.2 2.6

International 7.2 5.2 4.4 2.3 4.4 5.7 6.1 6.0

Total Visitor Expenditures, % 10.1 5.4 3.6 3.8 5.4 5.1 4.4 4.4

Hotel sector metrics

Average daily rate, % 6.6 6.6 6.8 5.2 7.1 4.9 2.0 1.7

Occupancy rate, ppt change 5.2 0.8 1.1 0.9 2.1 0.1 -0.7 -0.7

Supply, % 1.8 1.2 0.6 1.8 0.7 2.5 4.7 4.6

Demand, % 9.2 2.3 2.0 2.9 3.4 2.7 3.7 3.6

RevPar, % 14.4 7.8 8.4 6.4 9.9 5.1 1.1 0.8

Miami Visitor Forecast Summary Table, Change

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Comparison to Previous Forecast (Levels)

Forecast >>>>

2012 2013 2014 2015 2016 2017 2018

Total Visitors, millions - (0.00) (0.10) (0.09) (0.09) (0.07) (0.05)

Domestic overnight - (0.00) (0.00) 0.00 0.01 0.04 0.07

International - - (0.10) (0.09) (0.10) (0.11) (0.12)

Total Visitor Expenditures, $ billions - - (0.16) 0.21 0.29 0.15 0.11

Hotel sector metrics

Average daily rate, $ 0.00 0.00 0.15 -1.31 0.40 0.71 -0.04

Occupancy rate, % 0.00 0.00 -0.01 -0.01 0.02 0.01 0.02

Supply, millions of room nights 0.00 0.00 0.09 0.00 0.00 0.07 0.09

Demand, millions of room nights 0.00 0.00 -0.02 0.07 -0.10 -0.15 -0.23

RevPar, $ 0.00 0.00 -0.80 -2.76 3.62 3.62 4.01

Miami Visitor Forecast - Comparison to Previous Forecast (Levels)

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Comparison to Previous Forecast (% Change)

Forecast >>>>

2012 2013 2014 2015 2016 2017 2018

Total Visitors, % 0.0 0.0 -0.70% 0.10% 0.01% 0.14% 0.15%

Domestic overnight 0.0 0.00% -0.06% 0.11% 0.09% 0.37% 0.34%

International 0.0 0.00% -1.34% 0.10% -0.05% -0.05% 0.01%

Total Visitor Expenditures, % 0.0 0.00% -0.71% 1.61% 0.30% -0.60% -0.20%

Hotel sector metrics

Average daily rate, % 0.0 0.00% 0.09% -0.80% 0.89% 0.15% -0.36%

Occupancy rate, ppt change 0.0 0.00% -0.65% -0.44% 3.02% -0.27% 0.56%

Supply, % 0.0 0.00% 0.53% -0.53% 0.00% 0.36% 0.10%

Demand, % 0.0 0.00% -0.12% 0.62% -1.21% -0.29% -0.51%

RevPar, % 0.0 0.00% -0.59% -1.30% 4.05% -0.02% 0.22%

Miami Visitor Forecast - Comparison to Previous Forecast (%)

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■New Air Service at MIA 2014 (Q1 & 2) Airline Originating City Start Date

TAM Belem, Brazil February 2, 2014

JetairFly Brussels, Belgium April 4, 2014

InselAir Aruba Oranjestad, Aruba April 11, 2014

BoA Boliviana de Aviacion

Santa Cruz, Bolivia May 24, 2014

XL Airways Paris, France May 25, 2014

AirEuropa Madrid, Spain May 29, 2014

TAM Fortaleza, Brazil May 31, 2014

Qatar Airways Doha, Qatar June 10, 2014

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