HOSPITALITY AND TOURISM ADVISORY SERVICES Introduction and Methodology

HOSPITALITY AND TOURISM ADVISORY SERVICES Introduction and Methodology The Ministry of Tourism Government of Israel November 2006 e Quality in Everything We Do

Agenda 1 Introduction 2 The Approach 3 The Methodology Quality in Everything We Do 1 e

Introduction Quality in Everything We Do 2 e

Introduction A Fully Integrated Team § Fully integrated advisory team; three groups representing the best in class in their respective fields § Unparalleled team in terms of: § Global presence and resources § International and local knowledge § International experience in tourism development and marketing § Technical and process expertise § Proprietary models and unique tourism databases § Comprehensiveness of services offered § Capacity to serve the world’s largest and most demanding clients 3 Quality in Everything We Do e

The Research Team A Fully Integrated Team § The advisory team represents the best in class in their respective fields § Project management and infrastructure assessment § Policy, economic analysis and tracking & forecasting systems § Source markets and future marketing strategy Quality in Everything We Do 4 e

The Research Team Ernst & Young, LLP – Project Leader § World’s largest professional services firm: § 106, 000 employees in 140 countries § Global Real Estate, Hospitality and Construction practice with 3, 500 employees in more than 25 countries serving more than 4, 000 clients § The Hospitality and Tourism Advisory Services group: § Advisor to the leading organizations in the hospitality industry § Knowledge leader in hospitality, tourism and leisure § Extensive international experience § Expertise in hospitality & tourism infrastructure 5 development Quality in Everything We Do e

The Research Team Ernst & Young, LLP – Hospitality & Tourism Advisory Services § Extensive international experience in: § § § § Hotels Resorts Mixed-Use Developments Convention Centers Amusement Parks Sport Facilities Museums Other Leisure Real Estate Quality in Everything We Do 6 e

The Research Team Global Insight – Travel & Tourism Advisory § Track global travel demand by origin and destination § Monitor and forecast tourism for 163 country markets Quality in Everything We Do 7 § Conduct market strategy, investment policy, and tourism economic development analysis for destinations around the e world.

The Research Team Short List of Global Insight Clients § § § § World Travel & Tourism Council NYC and Company Intercontinental Hotels Group Kerzner International Hilton Hotels Abu Dhabi Tourism Authority Travel Industry Association of America (TIA) § US Office of Travel & Tourism Industries § Hong Kong Tourist Board § Ontario Tourism Commission Quality in Everything We Do 8 § Canadian Tourism Commission § Singapore Tourism Board § Visit Britain § Dubai Tourism and Commerce Marketing § Various Resort Developers § American Express § Orlando CVB § Irish Tourism Board § Bahamas Ministry of Tourism § Turkish Association of Travel Agents e

The Research Team IPK International Leading international tourism consulting group Specialist in tourism research and tourism marketing for 35 years § Network of institutes and tourism consultants in all European countries, North America, South America, Africa and Asia/Pacific § Highly skilled researchers and statisticians having vast experience in conducting quantitative and qualitative surveys around the globe § More than 1, 000 tourism studies around the globe successfully completed § Owner of the World Travel Monitor®, the world’s most comprehensive tourism data 9 bank on the European, e Quality in Everything We Do Asian and American outbound travel behavior

The Research Team IPK International Public Sector Clients: § Ministries, § Tourist Boards, § Other public organizations from more than 40 countries worldwide Private Sector Clients: § Hotel Companies § Airlines § Tour Operators § Theme Parks and Other Attractions Quality in Everything We Do 10 § Numerous other international e

The Approach Quality in Everything We Do 11 e

Holistic and Results-Driven Approach Analysis and Practical Strategies Supply Demand - Hospitality & Tourism Infrastructure -Aviation and Investment Policy - Source Markets: Demographics, Attributes, Attitudes & Preferences Development and Marketing Strategies Economic Impact and Return on Investment A New Era of Tourism Growth for Israel Quality in Everything We Do 12 e

The Primary Research in Fifteen Countries § Interviews with 104 tourism industry stakeholders in Israel § 135 site inspections of tourism infrastructure § 500, 000 annual interviews for World Travel Monitor survey § Survey interviews with a total of 8, 400 respondents in 8 countries § 18 focus groups in 8 countries § 51 interviews with international tour operators e 8 in 13 Quality in Everything We Do

The main goal is… To substantially grow inbound tourism and to establish tourism as a leading engine of growth for the Israeli economy Quality in Everything We Do 14 e

The main obstacle… Perception versus Reality Quality in Everything We Do 15 e

Israel – Current Perception Quality in Everything We Do 16 e

Israel – Current Reality Quality in Everything We Do 17 e

The Methodology for the Research of the International Outbound Markets Quality in Everything We Do 18 e

Methodology Phase 1: Research of 17 International Key Markets based on IPK’s World Travel Monitor® Phase 2: Further In-Depth Research of the 8 most promising Markets Based on: - Qualitative Research - Quantitative Research Surveys - Trade Research Interviews Quality in Everything We Do Focus Groups Population 19 Tour Operator e

Methodology of Phase 1 Research of 17 International Key Markets The selection of the 17 outbound key markets was made according to the following criteria: § the most important international outbound markets Consideration of worldwide § the most important markets for Israel at present § markets having a high share of Jewish population and § worldwide coverage: Europe (West and East) America, Asia Quality in Everything We Do 20 e

Fulfilling these criteria, the following 17 int’l markets were selected (in accordance with the Tourism Ministry) Western-Europe Eastern. America Asia Europe § UK § USA § China § Russia § Germany § Canada § India § Poland § France § Hungary § Italy These 17 markets represent § The Nordic § 60% of all outbound trips Countries worldwide § The Netherlands § Switzerland Quality in Everything We Do § 75% of the outbound trips to Israel § 90% of the Jews living in 21 e Diaspora

The 17 Int’l Key Markets were surveyed / analyzed regarding: § the general outbound travel behavior § the travel behavior to Israel and as a benchmark § the travel to the most important competitors (Turkey, Greece, Italy, Egypt) Method and Database: IPK’s World Travel Monitor® Quality in Everything We Do 22 e

World Travel Monitor® Facts The World Travel Monitor® is § an annual study surveying the outbound travel volume and travel behavior in all European and all important American and Asian countries, since 1988 § representative of the population in each country § interviewing more than 500, 000 consumers per year (15 years and older) § carried out via telephone interviews (CATI system) § applying the same questionnaire / method in all countries Quality in Everything We Do 23 e

World Travel Monitor® Facts The World Travel Monitor® is § the sole and largest tourism information databank worldwide § providing comparable tourism data on European, American and Asian outbound travel behavior § Clients from the public and private sector are, among others: - The European Travel Commission (ETC) - The UNWTO - Numerous tourism destinations worldwide (Spain, Greece, Italy, Mexico, Brazil, etc. ) - Tour operators (TUI, Thomas Cook, Kuoni, etc. ) 24 Quality in Everything We Do e - Consultancies (Mc. Kinsey, Boston Consulting, etc. )

Methodology of Phase 2 In-Depth Research of the 8 Most Promising Key Markets 8 markets offering the best opportunities for Israel were identified out of the 17 international Key Markets Criteria for the selection (among others): § Size of the market / market prospects § Affinity towards Southeast Mediterranean destinations / Israel § Affinity towards specific products / holiday types § Religious affiliation § Spending behavior / share of high spenders § etc. Quality in Everything We Do 25 e

Based on these Criteria the selected 8 Markets were: America Asia Western-Europe Eastern. Europe § UK § Russia § Germany § US § China § France § Italy § Sweden Quality in Everything We Do 26 e

In-Depth Research Program for each of these 8 Markets 1. Qualitative Research based on 18 Focus Groups 2 Focus Groups per country In the US and UK 3 Focus Groups each Quality in Everything We Do 27 e

Method of Focus Groups § Per group 8 -10 participants (consumers) § Men and women (approx. 50% each) § Different age groups (25 -65 years old) § Middle and higher education and income classes § Religious affiliation (except for China): 2 -3 participants practicing Christians / Evangelicals at least one representative of the Jewish population Quality in Everything We Do 28 e

Method of Focus Groups § All participants with travel experience to the Southeast Mediterranean (especially Egypt, Greece, Turkey) § All participants interested in a trip to Israel / at least 2– 3 persons with travel experience to Israel Selection / identification of participants: § in the scope of pre-screening / pre-interviews Quality in Everything We Do 29 e

Conduction of Focus Groups § The Focus Groups were conducted by institutes specialized in qualitative research (ICC/ESOMAR members) in the individual countries (under the guidance of IPK) § Each Group was guided analyzed by an expert / psychologist specialized in qualitative research § All Focus Groups were conducted according to a guideline of topics Quality in Everything We Do 30 e

Focus Group Tasks Determination of topics such as § § § § awareness / perception of Israel factors of attraction factors of rejection assessment of the different products / offers / holiday types strengths / weaknesses of the offer expectations towards the product comparison with other destinations / competitors etc. as well as a § test of TV commercials Quality in Everything We Do 31 e

In-Depth Research Program for the 8 Top Markets 2. Quantitative Research based on surveys “representative of the population” in each of the 8 markets Quality in Everything We Do 32 e

Sample of the Population Survey § Only persons with outbound tourism experience last 5 years and / or intention next 5 years. § Sub-sample of Jewish / religious people, respectively Evangelicals (depending on the countries’ predominant religious group) § The sample (in each of the 8 countries) was determined by a pre-screening. § The appropriate pre-screening questions were asked in a sample being representative of the population (according sex, age, regional distribution, etc. ). Quality in Everything We Do 33 e

Population Surveys § At least 1, 000 interviews per market § Telephone interviews (CATI method: Computer Assisted Telephone Interviews) in all markets § Random selection of the interviewees § Partner institutes of IPK, specialized in quantitative population surveys in the respective countries § All institutes following ICC / ESOMAR standards / codex Quality in Everything We Do 34 e

Task of the Population Survey Specific questions with regard to Israel were asked, such as § § § § § image of Israel future interest potential for Israel interest in different holiday products factors of attraction / motives of Israel relevance of religious motives price image travel season accommodation preference booking preference future target groups Quality in Everything We Do 35 e

In-Depth Research Program for the Top 8 Markets 3. Trade Research based on 51 Tour Operator Interviews 4. In total for all 8 markets 5. Per market 5 – 8 interviews Quality in Everything We Do 36 e

Method of the Trade Research In accordance with the client, important Tour Operators offering / not offering Israel were chosen for each market: 51 Tour Operators in total Europe: 37 / USA: 9 / China: 5 21 Tour Operators “not offering” Israel 30 Tour Operators “offering” Israel Quality in Everything We Do 37 e

The Tour Operator Interviews were conducted § via telephone § with senior managers responsible for Israel / the Southeast Mediterranean § with the help of a guideline / questionnaire Quality in Everything We Do 38 e

Task of the Tour Operator Survey Determination of topics such as § image of Israel in the tour operator’s view § strengths / weaknesses of Israel § positioning of Israel vs. competitor destinations § interest in including / extending the Israel offer § expectation regarding sales support § aviation and lodging § etc. Quality in Everything We Do 39 e

Method & Data Pool for the International Markets All in all § a very comprehensive data pool § with a high validity and reliability § allowing the development of secured marketing strategies for Israel in the international markets Quality in Everything We Do 40 e

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