2001 Market Review

HSMAI Chapter Presentation

Aruba Statistics

Prepared by

Michele Olivier, SunSpree

& Dyane Vis, AHATA

2001 Regional Segmentation

2001

USA64%

All Other4%

Venezuela55%

Europe10%

Latin Other18%

Colombia27%

Latin19%

Canada3%

Market Changes 2000

Change by Market 2000

7.7%10.6%

13.4%

-10.0%

0.0%

10.0%

20.0%

30.0%

Aruba 7.7% -2.5% 10.6% -2.8% 13.4% -5.9% -6.8%

USA Canada Venezuela Colombia Rest of SA Europe Total

Market Changes 2001

Change by Market 2001

0%

7%

-4%-11%

1%

-10%-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

Aruba 0.4% -9.7% 0.8% -17.5% -10.9% -4.1% 7.4%

USA Canada Venezuela ColombiaRest of Latin

Europe Total

United States MarketUnited States Market YoY Change

-30.00%-25.00%-20.00%-15.00%-10.00%-5.00%0.00%5.00%10.00%15.00%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Aruba

Latin America

Colombian Market Current Economic Situation

GNP down 1.7% Unemployment is >20% vs. 12.45% 1997 Inflation rate 2000 8.8% Main exports of gas and coffee are down Small exports up 17% Devaluation of currency

Ps.2,088 to US$1 2000 average; Ps.2,298 to US$1 Sep 3, 2001 Ps.2,374 to US$1Mar 7, 2002

Market History

In summer 2001, long before 911, Colombia was showing it’s worst year in the last 6. The economic crisis began in the summer, at the same time as insurrections and guerrilla activity in and around the capital of Bogota.

Colombian Market

0

500

1000

1500

2000

1 2 3 4 5 6 7 8 9 10 11 12

Ro

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up

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1999 2000 2001

Tourist Departures

DESTINO 2000 % PARTIC 2001 % PARTIC % VARIACIONARUBA 31108 44.99% 21113 31.25% -32.13%MONTEGO BAY 590 0.85% 400 0.59% -32.20%KINGSTON 250 0.36% 230 0.34% -8.00%CANCUN 3406 4.93% 2224 3.29% -34.70%CURACAO 7534 10.90% 8173 12.10% 8.48%LA HAVANA 12786 18.49% 18750 27.75% 46.64%PTO PLATA 209 0.30% 217 0.32% 3.83%

ANALISIS VISITANTES CARIBE DESDE COLOMBIA - 2000 - 2001 (ACUMULADO A SEPTIEMBRE)

For 2001, internal tourism in Colombia decreased by 1%; pre 911 internal travel was up by 5%. International Tourist Departures have decreased by a marginal 2.3%. This presents a clear picture of market share lost to other destinations. Cuba and the DR have been extremely aggressive in their marketing efforts and in their product pricing.

The same number of people are traveling, but the destinations have changed.

Colombian Tourist Departures to Caribbean Destinations Jan - Sep 2000

ARUBA46%

CURACAO11%

SANTO DOMINGO12%

PUNTA CANA7%

PTO PLATA0%

KINGSTON0%

MONTEGO BAY1%CANCUN

5%

LA HAVANA18.49%

Colombian Tourist Departures to Caribbean Destinations Jan - Sep 2001

CANCUN3%

MONTEGO BAY1%

KINGSTON0%

PTO PLATA0%

PUNTA CANA12%

SANTO DOMINGO13%

CURACAO12%

ARUBA31%

LA HAVANA27.75%

Market Capture

At Year End 2001, Aruba is 18% down in Nights occupied by Colombian Tourists; air seats to the island are down 27%. Business travel is down 62%, which does distort the island statistics slightly.

Colombian Market YoY Change

-70.00%

-60.00%

-50.00%

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Aruba

Forecast & Action Plan

As of June 2002, the government of Aruba must institute a visa requirement for Colombian visitors to Aruba. This will severely impact the Colombian market. It is not a requirement of Aruba, but rather of Holland.

The Aruban Minister of Tourism has publicly expressed that he is not in agreement with this policy.

Using our own circles of influence, we may be able to impact the requirements and ease of obtaining the visa.

Other Latin Market History

In 1999, there was a charter from Brazil and more scheduled air. The charter went away. Business from this segment over the last two years is 70%+ Argentina and Peru.

Other Latin Markets

0200

400600800

10001200

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecRoo

m N

ight

s O

ccup

ied

2001 2000 1999

Other Latin Markets

Argentina represents the largest contributor to this segment, with 34% of the nights occupied. Brazil constitutes 16% and Peru 17%.

However, as a point of reference the entire market represents 2.6% of all night occupied in hotels in Aruba.

Other Latin Market YoY Change

-80.00%

-60.00%

-40.00%

-20.00%

0.00%

20.00%

40.00%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Aruba

Forecast

When the President of Argentina admits the country is broke, it does not bode well for the future. The proposed “Pesofication” may protect citizen’s from the worst of the devaluation effects, but businesses will suffer. Assuming the world economy begins to recover in mid-2002, Argentina may return to modest growth in 2003.

Politically, Peru is unstable, but the economy is in somewhat better shape. Unemployment is high, and will remain around 10%. Zero GDP growth in 2001 is expected to increase to 3% for 2002.

Venezuelan Market

Current Economic Situation GNP up 3.2% Unemployment is >12% vs. 14.9% 1999 Inflation rate 2000 16.2% Devaluation of currency

Bs. 679.96 to US$1 2000 average; Bs. 743.10 to US$1 Oct 27, 2001 Bs.1087.8 to US$1 Mar 07, 2002

Market History

Venezuelan Market

0

500

1000

1500

2000

2500

3000

1 2 3 4 5 6 7 8 9 10 11 12

Ro

om

Nig

hts

Occ

up

ied

1999 2000 2001

Market Capture

YTD, the island is flat to LY. Air seats are down 3.6%, so load factors are better this year. A full 15% of this market is VFR and not using hotel rooms. SunSpree and Sonesta own 12.8% of this market. Wyndham & Marriott are a close second with 9% and 8%, respectively.

Venezuelan Market YoY Change

-200.00%

-150.00%

-100.00%

-50.00%

0.00%

50.00%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Aruba

Carnival Moved to March

Forecast & Action Plan

Public/Private Cooperative Actions Planned High visibility in upper-end press & publications Create and promote a variety of packages – dive, shopping,

romance “Hug & Hold” program to encourage repeat guest business.

Oil & Gas represent 84.4% of national exports. Oil prices have decreased and there is a high risk that this will continue. OPEC production restraints undermine Venezuela’s fiscal position. GNP is not expected to grow, inflation has stabilized; high unemployment will not change.The somewhat caste system and the 80:20 rule will not change. Our focus is then on that portion of the market that can travel.

Hotel Statistics Update

HSMAI

AHATA Statistics

Average Occupancy - allOccupancy 2001

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

Jan. Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

AVERAGE Trans.Hotels > 250 rooms

AVERAGE Trans.Hotels < 250 rooms

AVERAGE Time ShareHotels

Large Hotels

Transient Hotels > 250 rooms

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

Jan

Feb Mar

Apr

May

Jun

Jul

Aug

Sep Oct

Nov

Dec

2001

2000

74.76%

Small Hotels

Transient Hotels < 250 rooms

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

Jan Mar May Jul Sep Nov

2001

2000

74.25%

Time Share

Transient Hotels < 250 rooms

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

Jan

Feb

Mar

Apr

May Ju

n

Jul

Aug

Sep Oct

Nov

Dec

2001

2000

80.44%

ADR (Average Daily Rate)ADR HOTELS > 250 ROOMS

$-

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

$400.00

Jan

ua

ry

Fe

bru

ary

Ma

rch

Ap

ril

Ma

y

Jun

e

July

Au

gu

st

Se

pt.

Oct

ob

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No

vem

be

r

De

cem

be

r

To

tal O

cc.

A

B

C

D

E

F

G

H

$129.56

ADR (Average Daily Rate)

ADR HOTELS < 250 ROOMS

$-

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

$400.00

$450.00

$500.00Ja

nu

ary

Fe

bru

ary

Ma

rch

Ap

ril

Ma

y

Jun

e

July

Au

gu

st

Se

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Oct

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No

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De

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I

J

K

L

M

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P

Q

$106.58

Revenue per Available Room> 250 ROOMS 2001

$-

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

Jan

ua

ry

Fe

bru

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Ma

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Ap

ril

Ma

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Jun

e

July

Au

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Se

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Oct

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No

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be

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A

B

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D

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F

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H

Revenue per Available Room

< 250 ROOMS 2001

$-

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00Ja

nu

ary

Fe

bru

ary

Ma

rch

Ap

ril

Ma

y

Jun

e

July

Au

gu

st

Se

pt.

Oct

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