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					 AIG Travel Guard
       25/02/2008



Jean-Claude Baumgarten
   President, WTTC
       Presentation Overview
*   WTTC

*   Global Travel & Tourism

*   A Changing World

*   Summary
                 WTTC Purpose

„To raise awareness of the importance of
Travel & Tourism and to work with
governments to realise the full potential of the
industry in creating sustainable wealth and
jobs’
In Economic Terms...


             Visitor
             arrivals
               vs.
            Economic
             impact
Raising Awareness

      IND ÚSTR IA D E VIA GEM & TUR ISM

      Hospitalidade, recreação, cate
              WTTC
      diversão, transporte, e outros
      serviços relacionados

          introduction of
      ECONOMIA DE V IAGEM &
      TUR ISMO

             Travel &
      Impressão, publicação, energia,
      serviços f inanceiros,
      forneciment o de equipamento,
              Tourism
      alimentos, segurança,
      administração, construção

             Economy
      civil, construção naval,
      forneciment o de bebidas,
      ferro/aço, fabricação de
              Concept
      aeronaves, madeira,
      mineração, produtos químicos,
      têxteis, combustíveis, plást icos,
      serviços de saneamento, f lores,
      decorações , produt os
      metálicos, com putadores,
      arquit etos, desenvolvimento de
      resort s, at acadist as, serviços de
      lavanderia, informática.
Global Travel & Tourism:

   Where We Stand
               World Economy* GDP
* Travel & Tourism GDP associated with
   T&T Demand (Direct and Indirect)
* US$ 5.4 Trillion in 2007 (up 9.4% in current terms)
* 10.4% of Total Gross Domestic Product
   in 2007 (vs. 10.3% in 2006)

  2007
Travel & Tourism Economy by Region
                                                                               World Average
                                               Caribbean
                        Other Western Europe

                       European Union Oceania
                                                                North Africa
                                                  Middle East     Northeast Asia
                                                                   Sub-Saharan Africa
2006 T&T Economy GDP




                                                                 Central and
                                                                 Eastern Europe
(Percent of Total)




                       North America                                  South Asia
                                  Latin America
                                            Southeast Asia




                           T&T Economy GDP Growth 2007-2016
                           (Percent Annualized)
                                          Travel & Tourism Industry
                                                         Worldwide
           Total Demand
                                                   2007 saw continued broad-
           Personal T&T
                                                  based strength in the tourism
         Business Travel


     Government Expend.
                                                  economy, though generally
       Capital Investment
                                                  below 2006 growth rates. In
          Visitor Exports                         2008, growth is expected to
       T&T Industry GDP                              remain healthy despite
            Employment
                                                      economic conditions.
          T&T Econ. GDP


            Employment


                            0      2          4   6



                                2007   2008


10
Results in 2007 better than forecast
                 Direction of forecast revisions

                  Revision of 2008 Forecast
   Real T&T GDP                 Last Year’s 2008     2008 likely forecast
     Economy                       Forecast               Revision
                                 (annual % growth)         (Direction)
Africa                                 5.0                    Up

Asia/Pacific                           5.6                 Constant

Caribbean                              2.2                 Constant

Europe                                 3.1                  Down

Middle East                            5.0                    Up

North America                          3.3                  Down

Latin America                          4.3                    Up

World                                  4.2                  Down

Source: WTTC/Oxford Economics
               International air travel rose at a
                 record 9.3% y-y in November
               Air Passenger Traffic in 2007
                              Annual % Growth
                         November          Jan-Nov
Africa                      5.8                8.6

Asia/Pacific                8.8                7.4

Caribbean                   -1.0               -2.2

Middle East                 18.3               18.8

North America               7.6                5.5

Latin America               20.1               7.8

World                       9.3                7.5
Source: IATA
Encouraging tourism growth- particularly
                  in developing countries
Most developed economies have also seen
        a sustained rise in inbound flows
                         Total Pipeline: Global Regions
                                              Start Next    Early      Total
                               Under Const.                                      Total Rooms
                                               12 Mos.     Planning   Projects


United States                     223,977     315,995      178,415     5,438      718,387

Americas-Other                     69,666      44,228       30,212       864      144,106

Europe                             74,063      38,248       33,325       854      145,636

Middle East                        63,822      46,192       35,493       501      145,507

Africa                             15,164        8,009       5,076       142        28,249

Asia Pacific                      272,754      80,736       72,534     1,833      426,024

Source: Lodging Econometrics
                                   A Relative Picture
Of total rooms constructed, 45% will be built in
               the United States
        Asia Pacific
            26%



                                               United States
                                                   45%
       Africa
        2%

      M iddle East
          9%


                     Europe
                      9%      Americas-Other
                                   9%
2007 - 2017
WTTC‟s Top Ten Industry Growers - Demand
(2008-2017 Annualized Real Growth, Percent)

        1   Montenegro       10.1
        2   China             9.1
        3   India             7.9
        4   Croatia           7.8
        5   Congo, Dem Rep    7.8
        6   Vietnam           7.5
        7   Romania           7.4
        8   Namibia           7.1
        9   Hong Kong         7.0
        10 Chad               7.0
    WTTC‟s Top Ten Job Creators
(2008-2017 Employment Growth, Jobs)

   1   China         3,222,280
   2   India         2,714,890
   3   Brazil        1,896,923
   4   Japan         1,868,803
   5   Mexico        1,321,671
   6   US            1,085,700
   7   Vietnam        890,916
   8   Pakistan       828,640
   9   Spain          812,779
   10 France          808,848
US Travel &Tourism Total Demand
          (2000 Constant US$ Bn)
US Travel &Tourism Total Demand
               (Real Growth, %)
        US market share of
North America Total Demand
 US market share of
World Total Demand
A Changing World:

  Macro Drivers
                               Headwinds

* Credit crunch continues to be a worry on
    outlook
*   High oil prices may become a major constraint
    on global growth
*   Fear of US Recession dragging down the world
*   Increasing Deficit
*   Housing market in trouble
*   Weaker dollar
      Growth also likely to start feeling the
                        hit of high oil price
UK Brent oil
US $/Barrel
120

100

 80

 60

 40

 20

  0
  1999    2000   2001   2002   2003   2004   2005   2006   2007
Source: Haver
Source : Oxford Economics/Haver Analytics
           Stock Markets Feel the Pressure...
Global stock markets
% year
  30                                         S&P 500
  25                                         FTSE
                                             Nikkei
  20
  15
  10
   5
   0
  -5
 -10
 -15
 -20
Jan 1 2007 Mar 26 2007 Jun 18 2007 Sep 10 2007 Dec 3 2007
Source : Oxford Economics/Haver Analytics
US housing market falling
                     …and global growth to slow
                                    moderately
World: GDP growth
% year
                                                Forecast
12
            China
10

 8

 6
                           US
 4        Eurozone

 2

 0

-2              Japan

-4
 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: Oxford Economics
                               Tailwinds
* Rapidly expanding economic growth in Emerging
   Markets, create a new and dynamic source of visitors
       China
       India
       Russia
       Middle East

* Responsive monetary policy – Quick and decisive
   response by central banks to economic situations

* Strong corporate profitability outside of the financial
   sector

 2008 will see further slowdown but not as sharp as
             period between 2001 and 2003
            Policymakers quickly reacting …

World: Short-term interest rates
 %
8
                          UK
7

6

5

4

3
                   Europe
2

1                                              US

0
1995       1997       1999     2001   2003   2005   2007
Source: Haver Analytics
Consumer spending still strong
    Middle East is the region with the
fastest avg. growth in tourist arrivals
Tourism from China is expected to
      continue to grow strongly…
…and is forecast to reach 100mn
                tourists by 2020
Summary
                                Summary
* WTTC forecasts that the United States is and will
  remain the largest Travel & Tourism industry in the
  world

* A changing world, requires a new mind frame. A
  global slowdown is anticipated, sparked by a US
  recession. However this will be partially offset by
  today's changing world

* The lodging Industry is still showing great strength
  and is growing at an impressive pace, despite the
  anticipated economic slowdown.
 It appears that this saying no longer
                holds:

   “When America sneezes, Europe
catches a cold and the rest of the world
          dies of pneumonia”
“Today, the United States sneezes and
 the rest of the world goes shopping”
   Official Launch
of 2008 TSA research

   March 6, 2008
   at ITB, Berlin
HEADLINE



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