Q Spend Sights Report Travel Industry Airline, Car Rental, Cruise and Lodging Categories

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1 American Express Travel Travel Related Services Company, Inc. Inc. All All rights rights reserved. Q Spend Sights Report Travel Industry Airline, Car Rental, Cruise and Lodging Categories Q vs. Q

2 Spend Sights Report Travel Industry: Q vs. Q Airline, Car Rental, Cruise & Lodging Categories Overview: Travel Trends in Q Although consumers continue to feel the effects of a slow economic recovery, the travel sector shows signs of a positive upswing when looking at the third quarter of 2010 compared to Q spending appears to be leading ahead of consumers, across all segments of travel indicating the corporate budget is not as strapped as it has been in recent years. A notable increase in spending occurred within the airline and cruise categories, across consumer and business segments alike. The only category to see a decrease in spending during this busy travel quarter was car rentals, which saw a 1% drop among the ultra-affluent. The Spend Sights Report focuses on US spending during the third quarter of 2010 and draws a comparison against the same period in You will find additional interesting insights about the travel sector in the following pages. Our products consist of aggregated information that is not specific to individual cardmembers or merchants and do not contain any personally identifiable information. 2

3 Q3 Spend Sights: Airline Travelers Mean. Class, That Is. Overall airline travel saw a decrease in first class ticket purchases, down 1%, contrasted by a significant 60% jump in purchase of business class tickets. Economy class tickets saw a 7% uptick overall, showing once again that consumers and businesses are opting for less expensive air travel options (but still want legroom). Change in Spend by Airline Classification (Q310 vs. Q309) 71% 68% 43% 40% 10% Airline Spend Snapshots Affluent consumers overall spend on airline travel rose by 4%, with a 43% increase in spend on business class tickets. Average consumers spent 6% more overall, following the same trend as affluent consumers with a 40% increase in business class tickets. The former group spent 6% less on first class tickets, and the latter spent 4% less on the most expensive ticket classification. Corporate travelers echoed the individual consumers air travel choices. Small businesses spent an incredible 71% more on business class airline tickets, and large businesses spent 68% more on this ticket classification. Small businesses also decreased spend on first class tickets by 4% -6% Affluent Consumer -4% Average Consumer First Class -4% US Small Class US Large 3

4 Q3 Spend Sights: Car Rental Large es Go the Distance in Car Rentals Not only were businesses spending more on air travel, but the trend extended to corporate car rental as well. Average consumers rented more than affluent consumers, and large businesses rented more than small businesses. Cardmember Spending by Segment: Car Rental Industry (Q310 vs. Q309) Affluent US Consumer Average US Consumer Small -1% 1% 5% Large 9% Car Rental Spend Snapshots Affluent consumer spending on car rentals decreased by 1%, and average consumers increased spend in this category by 1%. Small businesses increased spend in this category by 5%, with large business increasing spend on car rentals by 9%. Overall spend on car rental increased 3% in July, 2% in August, and decreased 1% in September, indicating a slight overall downward trend. Repeat renters on the rise - small businesses with 3+ rentals were up 10% and large businesses with the same number of rentals were up 11%. 4

5 Q3 Spend Sights: Cruise Cruises Saw Bookings Increase into Fall The cruise industry saw healthy increases from all customer groups, with average consumers and small businesses spending 8% more overall, and affluent consumers and large businesses spending 7% more in this category. Large businesses increased cruise spending by 47% in a showing for positive corporate spending. 1 - Trip Activity by Frequency of Travel (Q310 vs. Q309) 47% Cruise Spend Snapshots Overall spend per cruise was up within each segment; 7% for average consumers, 13% for affluent consumers, 8% for small businesses, and 18% for large businesses. Average consumers increased their overall spending on cruises by 8% while affluent consumers increased by 7%. Average consumers and small businesses taking 3 or more cruises increased by 13%. Affluent consumers taking two cruises in Q3 increased by 7% while those taking three or more cruises increased by 9%. 7% 5% 9% Average Affluent Small Large 5

6 Q3 Spend Sights: Lodging Economy Lodging Catching Up to Luxury Popularity Spending on luxury lodging increased the most with a 9% uptick. However, upscale and economy were not far behind with increases of 8%, and the midscale bracket showed the lowest increase at just 5%. Economy lodging showed the highest increase in consumer spend per visit with a 9% jump with affluent consumers spending 17% more on economy accommodations in Q3. Ultra-Affluent US Consumer Spending by Lodging Classification (Q310 vs. Q309) Lodging Spend Snapshots Large businesses posted an 11% increase in lodging spending overall, with small business trailing slightly with an 8% increase. Small businesses had an 11% increase in luxury lodging spend and only 9% increase in economy lodging. Average consumers were up 6% in luxury lodging spend, while the ultra-affluent only rose 4% in this category. This mirrors overall lodging spend increases for these groups at 5% and 2%, respectively. Luxury Upscale Midscale Economy 5% 8% 8% 9% Large businesses had the largest increase, 19%, of economy lodging spend among business travelers even though they continue to also book luxury accommodations, up 16%. 6

7 Who Are The Spenders? About the Q Spend Report Travel Industry US Consumers Average = All consumers regardless of spend living in the United States Ultra-Affluent = The highest spending US Consumers living in the most affluent neighborhoods US es Small es = US es with fewer than 100 employees Large es = US es with more than 100 employees About American Express Insights To identify changing habits across the travel industry, American Express Insights examined US consumer and business spending patterns at tens of thousands of travel merchants in the US. The data shown in the Industry IQ reports are derived from transactions on the American Express payment network projected to reflect the general population in the industry, consumer and business segments shown. The data do not represent American Express s own performance in the industry segments shown and do not represent the spending behavior of American Express Cardmembers overall or in any particular card segment. As part of the Global Merchant Services organization within American Express Company, American Express Insights provides in-depth, actionable insights into consumer and business spending at the business, industry and geographic levels, leveraging proprietary transaction data from the American Express network of approximately 90 million cards in force across over 125 markets. For more information about American Express Insights, visit 7