COMPILED AND ASSEMBLED BY THE LOS ALAMOS MEETING AND VISITOR BUREAU, FEBRUARY, 2000

Market AnalysisMarket Analysis

The Los Alamos New Mexico Market

February 2000 Draft

Market AnalysisOur Situation and Opportunities

Market Definition

Industry Analysis

Tourism in New Mexico continues to be a significant activity. Santa Fe, and on asmaller scale Taos, are international tourist destinations year-round and are able tosuccessfully market themselves as such. However, recent trends in visits to majorattractions such as National and State Parks and in the number of trips through theAlbuquerque Internantional Airport show a decline in activity.

As we will see, this trend is reflected (although not as dramatically) in recentexperience of the major tourist attractions in Los Alamos County.

Chapter

1

Visits/Trips at Major NM Attractions

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

1988

1992

1993

1994

1995

1996

1997

1998

Vis

ito

rs/T

rip

s National Parks

State Parks

Albuquerque AirPassengerTraffic

2

Selected Indictors of Recreation & Tourism in New Mexico

1988 1992 1993 1994 1995 1996 1997 1998 %change1997-1998

Employment (monthly averages)

LodgingEstablishments

11,500 12,600 13,000 13,400 13,700 13,600 13,700 13,600 -0.7%

Eating &DrinkingPlaces (1)

39,700 44,500 46,900 49,900 52,100 52,600 53,300 53,600 0.6%

Gross Receipts (2) ($000)

LodgingEstablishments

$343,991 $460,564 $509,333 $537,609 $529,839 $547,781 $570,148 $584,122 2.5%

Eating &DrinkingPlaces (1)

$1,032,791 $1,253,349 $1,362,154 $1,465,764 $1,498,401 $1,513,080 $1,545,881 $1,580,135 2.2%

Lodgers TaxReceipts (3)($000)

$9,026 $14,770 $16,445 $17,609 $17,974 $19,240 $20,204 $20,513 1.5%

Visits to National Parks & Monuments

Annual Total 2,015,070 2,265,400 2,283,499 2,289,092 2,250,766 2,180,832 2,253,186 2,076,080 -7.9%

Quarterly Total:

I 293,315 330,535 348,687 368,023 389,332 380,254 386,869 337,625 -12.7%

II 632,543 724,581 742,753 721,989 733,089 660,622 707,645 670,061 -5.3%

III 770,795 862,751 813,898 798,821 778,390 751,283 793,499 706,432 -11.0%

IV 318,417 347,533 378,161 400,259 349,955 388,673 365,173 361,962 -0.9%

Visits to State Parks

4,870,303 4,301,783 3,855,014 4,363,824 4,884,255 5,010,717 5,206,397 4,953,418 -4.9%

Passenger Traffic at Albuquerque International Sunport (4) (000s)

Total 4,301 5,265 5,613 6,156 6,130 6,619 6,290 6,149 -2.2%

Enplaned 2,145 2,630 2,807 3,078 3,064 3,308 3,139 3,070 -2.2%

Deplaned 2,156 2,635 2,806 3,078 3,066 3,311 3,151 3,080 -2.3%

1998 #s are preliminary

(1) Includes the liquor-dispensers-by-the-drink industry.

(2) Gross receipts figures are derived by summing data from quarterly New Mexico Taxation and Revenue Dept. reports.

(3) Lodger's tax receipts are shown on a fiscal year basis. In previous issues these receipts were shown on a calendar-

year basis.

(4) Commercial airline passengers.

This table was reproduced from New Mexico Business, Bureau of Business & Economic Research @ UNM.

Sources for the data: New Mexico Department of Labor; New Mexico Taxation & Revenue Department; New Mexico

Department of Finance & Administration, Local Government Division; US Department of the Interior, National Park

Service; New Mexico Energy, Minerals & Natural Resources Department, Park & Recreation Division; and City of

Albuquerque, Albuquerque International Sunport.

3

Most trips within New Mexico by travelers from outside of New Mexico are forleisure while most trips originating within New Mexico are for business.

Source: USDOT-BTS 1995 American Travel Survey

Nationally, expenditures for travel in the U.S. were $495.1B in 1998 and areforecasted to increase by more than 5% per year in 1999 and 2000. At the sametime, "person-trips" are anticipated to be relatively flat over the same time period.

Baseline Travel Data and Forecasts

1997 1998 1999 2000Total U.S. Person-Trips (millions) 1,026.6 1,035.6 1,053.0 1,076.4Percent Change 3.3% 0.9% 1.7% 2.2%Total International Visitors(millions)

47.8 46.4 47.0 48.6

Percent Change 2.7% -2.8% 1.3% 3.3%Travel Price Inflation 173.7 177.1 180.7 186.3Percent Change 3.4% 2.0% 2.0% 3.1%

Travel Expenditures ($billions)U.S. Residents $408.2 $424.0 $446.2 $470.9Percent Change 6.7% 3.9% 5.2% 5.5%International Visitors* $73.3 $71.1 $74.5 $78.3Percent Change 5.0% -2.9% 4.8% 5.1%Total Travel Expenditures($billions)

$481.5 $495.1 $520.7 $549.2

Percent Change 4.3% 2.8% 5.2% 5.5%

Sources: TIA's Forecasting Models (U.S. Resident Travel Forecasts and Travel Price Inflation),

Tourism Industries/ITA (International Visitor Forecasts) Note: * Includes spending within the U.S.

only.

The Travel Industry Association's Fall 1999 forecast predicts that 4th quarter 1999vacation/pleasure travel will have declined from 1998 levels by 1%, suggesting aflattening of recent growth in vacation/pleasure travel.

Facts and analysis of interest:

n Camping is the number one outdoor vacation activity in America. One third ofU.S. adults say they have gone on a camping vacation in the past five years and

Reason for Travel within New Mexico

0 10 20 30 40 50

Business

Visit Friends or Relatives

Leisure

Personal Business

%

Total

Origin outside NM

Origin in NM

4

only 6% of people who have gone camping said it was not for them. Campingvacationers tend to be married with children at home. The average age oftravelers who go camping is 37 and their median household income is $43,000.People who go camping also tend to enjoy hiking, biking, canoeing. Fifty-ninepercent of campers said they traveled with their spouses on their most recentoutdoor vacation and nearly half traveled with their children.

n Canada and Mexico send more travelers to the U.S. than any other foreignnations. About 90% of the foreign travelers who leave Mexico each year cometo the U.S. and 71% of the international travelers in Canada visit America. In1998 13.4 million Canadians and 9.3 million Mexicans visited the U.S.

n Cultural and Historic Tourism is one of the more popular sectors of the travelindustry. A recent TIA survey found that 53.6 million adults said they visited amuseum or historical site in the past year and 33 million U.S. adults attended acultural event such as a theater, arts, or music festival. Cultural and historictravelers spend more, stay in hotels more often, visit more destinations and aretwice as likely to travel for entertainment purposes than other travelers.

n Dining, Shopping, Museums and Tours are the top activities for travelers. Overone-half of U.S. adult travelers (53%) planned activities after they arrived at theirdestination while on a trip of 100 miles or more, one-way, in the past year. Thisequates to 74.3 million U.S. adults. Dining out in restaurants were popular withmore than 67 million travelers (48%) in 1998 and was the most popular activityplanned after arrival at a destination. Going to a shopping area was the secondmost popular spontaneously planned activity (45%), followed by visiting amuseum (26%). Other activities planned after arrival include: sightseeing tour(24%), movie (16%), theme park (15%), religious service (14%), live theater orlive performance (14%) and festival or parade (13%). One-quarter of past yeartravelers (24%) went to some other type of attraction, which they planned afterarrival at their destination

5

n Golf and Tennis are popular travel activities in the U.S. One in eight U.S.travelers (12%) played golf while on a trip of 100 miles or more, one-way, awayfrom home in the past year. This translates to 17.3 million U.S. adults. Sixmillion U.S. adults (4% of past year travelers) played tennis while on a trip of100 miles or more, one-way, away from home in the past year. Among thesetwo groups, 2.7 million U.S. adults played both golf and tennis while traveling inthe past year. This represents 16 percent of all golf travelers and 46 percent ofall tennis travelers. Golfing travelers averaged 2.6 trips (mean) over the pastyear, with 10 percent golfing on six or more trips. Nearly one-half of golfingtravelers did so on only one trip in the past year (46%). One-third went on eithertwo or three golfing trips in the past year (34%). Sixteen percent of travelerswho played golf said that golf was the most important reason for taking the trip.Over one-half of golfing travelers (55%) said that on their most recent golf trip,golfing was not a primary or secondary reason, but rather just an activity on thetrip.

n National Parks are one of American's biggest attractions. Nearly 30 million U.S.adults (20% of travelers or 15% of all U.S. adults) took a trip of 100 miles ormore, one-way, to visit a national park during the past year. Residents of theRocky Mountain region of the U.S. are most likely to visit a national park with37% saying they included a park visit while traveling. A large share of thesetravelers (70%) participated in outdoor activities while visiting the nationalparks. Among these outdoor activities, hiking (53%) was the most popular,followed by camping (33%) and fishing (19%).

n The Internet and online services are very popular with travelers. Six milliontravelers booked trips online in 1997 and the percentage of travelers who useonline services and/or the Internet for travel plans or reservations jumped from11% in 1996 to 28% in 1997. Meanwhile there was a 19% increase in the share ofAmericans who prefer the Internet for travel reservations, rather than using atravel agent. In 1998 the number of travelers booking online should increase by12.1 million.

n Online travel revenues will grow enormously over the next five years ascomputer users discover booking travel online. Internet users booked $276million in travel online in 1996 including air travel, hotel rooms, car rentals, andother travel products. In 1997, sales tripled to $827 million, and by the year 2002the size of the online travel industry will top reach nearly $9 billion. Airlinetickets accounted for nearly 90 percent of all online travel sales, generating$243 million in revenue in 1996, but by the year 2002, the proportion of airlinetickets purchased online is expected to drop to 73 percent, accounting for $6.5billion in sales. Non-airline sales, mostly hotel and car rental bookings, areexpected to grow from $31 million in 1996, to $2.2 billion in the year 2002 .Online advertising on travel websites will grow from $2 million in 1996, to $282million in 2002.

n Kids programs are popular with family travelers. Nearly 60% of family travelersuse children's services offered on the road but special kids meals (41%) andhotel discounts (30%) are the most popular children's services followed byvideo and other games (22%), supervised activities (13%) and baby-sitting (6%).Among travelers taking children along, those aged 35-44 had the highest use ofchildren's services (71%), while travelers aged 65+ had the lowest use (28%).Travelers with family incomes of $50,000+ have the highest use (67%), whiletravelers with family incomes of <$20,000 have the lowest use (30%).

6

n Mature Americans, those 55 years and older, are less likely to travel than theiryounger counterparts; however, their growing numbers coupled with theirfinancial power and availability of time, make them a very attractive market forthe U.S. travel industry.

n Mature travelers enjoy historic trips and travelers age 55 and older account for32% of all travelers who have visited a historic site or museum. In comparisonto 27% of all U.S. adults have taken a trip to a museum or historic site. Inaddition, 18% of all historic travelers are retired

n Travelers who attend cultural events are more likely to be age 55 or older. Thirtythree percent of all cultural travelers are 55 or older, compared to 27% of theU.S. adult population. Retired travelers account for 19% of all cultural travelerscompared to 15% of the adult population.

n Staying wired while traveling is important to business and pleasure travelers.Fifty-one percent of the 39.8 million business travelers over the past yearbrought their cellular phone with them on a business trip. Twenty-two percentbrought a pager, 20% brought a laptop computer and 6% brought a handheldpersonal digital assistant with them on at least one business trip. Pleasuretravelers are only slightly less likely than business travelers to want to stayconnected while away from home. Forty-six percent brought a cellular phone,18% brought their pager, 6% brought a laptop computer, and 3% took ahandheld personal digital assistant. The increased usage of the Internet and thepopularity of e-mail as a form of communication is evident among manytravelers, as 22% of business travelers used the Internet or e-mail while on abusiness or convention trip in the past year, compared to 10% of pleasuretravelers.

n Two out of ten business travelers (21%) combined business and vacation ontheir last business trip. Women and less frequent business travelers are morelikely to combine business and vacation in one trip (25% and 23%,respectively).

n Nearly half of all business travelers (47%) report that attending a meeting, tradeshow or convention was the reason for their last business trip. However,frequent business travelers are much less likely to have traveled for meetingsand conventions on the last trip (21%). Frequent business travelers are muchmore likely to have made their last trip for consulting, sales or companyoperations.

n The demographic profile of the business traveler continues to bedisproportionately male, with 60% of business travelers being male. Theaverage age of the business traveler is 42, and the average household incomeis $76,100. Demographic trends over the past decade have remainedremarkably consistent, with the exception of slight increases in age, moderateincreases in income, and shifts in traveler occupation and industry affiliation.

n Many significant differences are found when comparing business and leisuretravelers. The business traveler is more likely to be a male between 25 and 54,married, and to have children. The business traveler is also more likely to be acollege graduate, a professional or manager and live in a 'two income'household with an annual income of at least $50,000. Leisure travelers are more

7

likely to be single, and have an annual household below $50,000. Leisuretravelers are also more likely to be retired or unemployed.

n Travel Information comes from a variety of sources, but friends and relativesare the number one source for information about places to visit or about flights,hotels or rental cars (43%). Travel agents are the second most popular sourceof travel information (39%) and travel companies such as airlines, hotels orrental car companies were third (32%). One in five past year travelers (21%)contacted a city, state or country’s tourism office to get information about adestination that they planned to visit or about flights, hotels or other travelservices in the past five years. This equates to 33 million U.S. adult travelers.Contacts with travel agents, tourism offices and travel companies include visitsto the web sites of these organizations. In total, 19 percent of travelers visited aweb site to obtain travel information in the past five years.

Length of Trip

Trip durations in 1998 % of total person trips

No nights 13%

One night 15%

2-3 nights 40%

4-9 nights 24%

10 nights or more 8%

Source: National Travel Survey

Roundtrip Distance Traveled by U.S. Residents in 1998

Distance % of U.S. person trips

200-299 miles 23%

300-399 miles 15%

400-599 miles 17%

600-999 miles 15%

1000-1999 miles 14%

2000 miles or more 11%

Outside of the U.S. 5%

Source: National Travel Survey

Season of Travel

Day % of all travel in 1998

Winter 20%

Spring 25%

Summer 31%

Fall 24%

Source: National Travel Survey

n Weekend trips by Americans jumped by a dramatic 70% between 1986 and1996 and they now account for more than half of all U.S. travel . In comparison,non-weekend travel increased by only 15% during the same period. Americanstook 604 million weekend person-trips in 1996 and nearly 80% of the travel wasfor pleasure. Weekend trips are popular year round but summer is the mostpopular time for weekend travel, accounting for 28% of all weekend trips. From

8

1990 to 1998 weekend travel in the U.S. jumped by 41% and accounts for morethan 50% of travel in the U.S. Weekend travel includes a Friday or Saturdaynight stay or both.

Day % of weekendtravel person tripsin 1998

Friday night stay over 7%

Saturday night stay over 10%

Both Friday and Saturday Night 34%

Source: National Travel Survey

n Additional facts about weekend travel in the U..S.

n Sixty-two percent of all overnight weekend travel is for vacation only, 16% is forbusiness and the remaining weekend travel is for other purposes

n The average overnight weekend trip includes 2.6 nights of travel

n Nearly half (49%) of all overnight weekend travel includes a hotel or motel stay.The average stay in a hotel is 2.6 nights

n Twenty six percent of all overnight weekend travel includes children

n Eight-four percent of all overnight weekend travel is by auto/truck/RV/or rentedcar

n The increase in the cost of travel-related services is outpacing the general rate ofinflation in the overall economy as represented by the Consumer Price Index (CPI)

Travel Price Index -- 1994 - 1999

Industry: % Change from Previous Year 1994 1995 1996 1997 1998 1999

RECREATION SERVICES 3.7 3.1 3.6 3.2 2.9 3.3

FOOD AND BEVERAGE 1.7 2.3 2.5 2.9 2.6 2.5

Alcohol Away From Home 2.5 2.9 3.5 3.7 3.0 3.0

Food Away From Home 1.7 2.3 2.5 2.8 2.6 2.5

OTHER LODGING (INCLUDE HOTEL/MOTEL) 3.2 3.9 5.2 4.9 4.6 2.9

TRANSPORTATION 2.4 1.9 3.5 1.9 -3.7 7.4

Airline Fares 3.5 2.5 1.5 3.5 3.0 6.6

Intracity Public Transportation 1.3 2.5 10.7 1.5 -0.9 -1.0

Motor Fuel 1.0 1.0 6.3 -0.1 -13.2 9.3

Other Intercity Transportation 1.4 0.2 1.7 -0.6 3.5 0.1

CPI 2.7 2.7 2.9 2.3 1.6 2.2

TPI 2.4 2.8 3.7 3.4 2.0 3.7

Base year for index: 1982-84=100; Source: Travel Industry Association of America and U.S.

Department of Labor; The Travel Price Index (TPI) was developed by TIA to measure the seasonally

unadjusted inflation rate of the cost of travel away from home in the United States. The TPI is based

on U.S. Department of Labor price data collected for the monthly Consumer Price Index (CPI). The

TPI indicates the price change in travel goods and services available to the consumer in the U.S. and

does not necessarily represent changes in the average fares, rates and other costs travelers actually

paid. The TPI is released monthly and is directly comparable to the CPI.

9

n Lodging occupancy rates nationally have been stable over the past ten years inspite of large numbers of lodging rooms being added annually to the market.

Current Lodging Industry Statistics

OccupancyAverage

RoomRateRooms

Starts(Construction)

1990 63.5% $58.01 n/a

1991 61.8% $58.14 n/a

1992 62.6% $58.96 n/a

1993 63.5% $60.59 n/a

1994 64.7% $62.90 n/a

1995 65.1% $65.89 +84,400

1996 65.1% $70.00 +109,900

1997 64.6% $74.29 +127,500

1998 64.0% $78.47 +126,300

1999 63.4% $82.59 +114,200

2000 63.1% $86.52 +106,300

Sources: Coopers & Lybrand Lodging Research Network, FW Dodge, Smith Travel Research, Bear

Stearns, USA Today

The Los Alamos Market

Market Segment

Key points in defining the market segment of relevance to Los Alamos for visitorservices are business visits associated with Los Alamos National Laboratory andother local businesses and the setting and attractions of Los Alamos for tourismvisitors. Tour operators bring many of these visitors to Los Alamos and should beconsidered a significant segment in of themselves. To some extent, there is anopportunity to address the overall market for general tourism in Northern NewMexico by serving as a hub for visitors.

Kind of Visitor Attractors Detractors

Business Visitors Convenience of location towho they are visiting

Lifestyle considerations:safety, recreation interests

Low price

Relative poor quality of servicesavailable

Accessibility

Lifestyle considerations:entertainment interests

Perceived low value

Tourists interested in LosAlamos

Specific attractions

Lifestyle considerations:safety, recreation interests

Low price

Relative poor quality of servicesavailable

Accessibility

Lifestyle considerations:entertainment interests

Tour Operators Location relative to otherattractions

Lifestyle considerations:safety, recreation interests

Low price

Relative poor quality of servicesavailable

Accessibility; not a true hub

Lifestyle considerations:entertainment interests

Perceived low value

10

Currently, the market is shared by Santa Fe, Albuquerque, Los Alamos, andNorthern Rio Grande communities such as Pojoaque and Espanola. The businessvisitor market is not well characterized but is believed to be shared across theparticipants. Based on patterns of occupancy at the Los Alamos lodgingestablishments, this segment generates the most overnight stays in Los Alamos.Occupancy is high during business days and is relatively low on non-businessdays. There is no clear data on the total size of the market for business visitors toLos Alamos or on the proportion of business visitors who stay elsewhere. LosAlamos immediately gained overnight stays by business visitors when the HolidayInn Express brought additional rooms online in the market. This suggests thatthere were (and may still be) a significant number of business visitors who stay inother communities. However, Los Alamos is limited by the rooms available inseeking market share.

Source:Survey of Hotel Sales Managers, 2/2000

Los Alamos Hotel Occupancy

0 20 40 60 80 100

Sunday

Monday

Tuesday

Wednesday

Thursday

Friday

Saturday

% Occupancy

Oct-May

Jun-Sep

11

Visitation to Los Alamos is seasonal with summer months tending to be “highseason” while winter months bring fewer visitors.

Visitors who are tourists are primarily attracted to Los Alamos by BandelierNational Monument or by the Laboratory and its history (represented by theBradbury Science Museum). There are other smaller attractions such as the

historical museum, art venues, recreational activities (e.g. skiing, golf, swimming,hiking, mountain scenery viewing, athletic events, “fly-ins”) and cultural activities(e.g. concerts, galleries, art fairs, performances, historical commemorations) thatdraw relatively small numbers of additional visitors. By far, most visits are dayvisits of short duration.

Sources: Bradbury, Bandelier, and Robert Charles Lesser Company analysis of business

visitation to LANL, 2/00

Average LT Receipts by Month 1993-99 ($)

$- $5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00 $30,000.00

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Visits to Major Attractions

-100,000200,000300,000400,000500,000600,000

1996 1997 1998 1999

Est

imat

ed V

isit

ors

Bandelier

Bradbury

LANL

Total

12

Contacts at the Los Alamos Visitor Center and the White Rock Tourist InformationCenter have increased over the past three years. Contacts are in the form of visits,phone inquiries, mail inquiries and email inquiries.

Seasonality patterns in inquiries are reflective of the seasonality pattern in LodgerTax receipts.

Annual Visitor Center Contacts

-

10,000

20,000

30,000

40,000

50,000

60,000

1997 1998 1999

13

A new category of visitor contacts in 1999 has been the development of a visitorinformation website which came online in summer. "Requests" were at about 2000per month late in the year and "hits" were about 25,000 per month. Hits are filedownloads from the site. A request is any hit that successfully retrieves content.Requests are more reflective of user behavior. For example, if a user requests asingle page that has three graphics files, the web server might record hits for thethree graphics files and the text page. However, this would only be one request.

Average Monthly Visitor Center Contacts, 1997-99

- 1,000 2,000 3,000 4,000 5,000 6,000

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

14

Lodger's Tax Revenue is a function of the number of rooms available, room ratescharged, and occupancy. The last major change in these variables was theopening of the Holiday Inn Express in Los Alamos.

Customer Profile

Business visitors, although smaller in number represent most of the overnightstays in Los Alamos. Interviews with local lodging establishments indicate thatbusiness visitors are about 85-90% of their current clientele. Business visitors arelooking for convenient, comfortable, quality lodging and services. Perceptionsabout the availability of quality of hotel rooms and lack of dining options after 7 PMare considered to be issues that discourage business visitors from staying in LosAlamos. Business visitors are quite often repeat visitors and like to build

Total Lodger's Tax Revenue

$-

$50,000.00

$100,000.00

$150,000.00

$200,000.00

$250,000.00

1993 1994 1995 1996 1997 1998 1999

$

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relationships and some level of personal connections with the places they visit.Very frequent business visitors like to be recognized and treated as “regulars”.There is some potential for encouraging business visitors to stay over, bringspouse/family along on visits, or return for pleasure travel. The business visitorsegment is dependent on the vitality of external business opportunities with localbusinesses, particularly the Laboratory.

Individual tourists are looking for interesting, welcoming experiences and haveoften already committed themselves to an itinerary and base of stay for their visitprior to their arrival in NNM and Los Alamos. To the extent that visitors come backto NNM, there is an opportunity to impress them and influence them to base theirnext visit at Los Alamos. The individual tourism segment is dependent on overalleconomic conditions and disposable income for pleasure travel. Individual touristsoften learn about or become aware of the opportunity to visit Los Alamos once theyarrive at their hotel in Santa Fe or Albuquerque through visitor guides, tourismbrochures, or word of mouth. Distribution of the visitor guide or otherinformational materials, ads in destination visitor guides, and word of mouth arethe most likely prompts for a day visit to Los Alamos.

A significant number of tourism visitors to Los Alamos are brought here asmembers of tours. In such cases, the tour operator becomes the primarycustomer. Relationships should be developed and services should be targeted torelevant tour operators if we want Los Alamos to be more than a "drive-by". Touroperators are looking for additions to tour itineraries that “fit” and that will offerinteresting experience for their clients. To the extent that adjunct services areavailable at reasonable rates for servicing the tour (e.g. food, interesting shopping,“local color”), the tour operator has additional options to work with. The touroperator segment is dependent on demand for tours and can be best accessed bybuilding relationships with tour operators and reputation and supporting servicesfor servicing them.

In looking at visitation by state and country, New Mexico, Texas, California, andColorado continue to be the leading states of origin for our visitors in that order.International visitors have increased in the past year. Canada remains the highestinternational origin, second is England, and third is Germany.

The Business Visitor

n Typically Male

n Expense account; often on government per diem

n Time is $

n Research collaborator, Sales person, Consultant, Government employee,Construction contractor

n Emotional influences: status;

n Practical influences: expense account limitations; travel time to airport;convenience in arrangements for business meetings; things for spouse/travelcompanion to do; availability of afterwork services

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The Individual Tourist

n Day visitor

n Older

n No Children

n >$200/day

n Willing to drive

n Emotional influences: memorable experience; making a personal connection;safety; "safe adventure"

n Practical influences: saving money; receiving value for expenditures

The Tour Operator

n Working within a fixed budget; looks for stops to add interest to tour withoutadding costs; tour may have a theme (i.e. art, Southwest culture, history, etc.)that operator is trying to match up with

n Wants options clearly laid out; does not want to have to create the options

n Emotional Influences: personal feelings about the work of LANL; personalinterests; relationships

n Practical Influences: Saving money, ease of making arrangements, timeconsiderations

Competition

Santa Fe's strengths are size of marketing budget, variety of entertainmentpossibilities offered, variety of accommodation (price and quality), focus on serviceto visitors, and organization to serve visitors. Santa Fe's weaknesses with respectto the Los Alamos market include location (distance from Los Alamos), lack of anyparticular focus on Los Alamos’ target market, and high pricing ofdowntown/northside Santa Fe properties (relative to Los Alamos). Santa Fe'sstrategy is mass marketing for tourism. Santa Fe is positioned as “the CityDifferent”, a unique international destination. We will respond to Santa Fe as acompetitor by focus on service to our target market. We will position Los Alamosas an alternative to Santa Fe by emphasizing convenience, lower pricing, safety,and small town familiarity.

An emerging competitive threat is from locations such as Pojoaque and the Citiesof Gold Hotel which offers new rooms, competitive pricing, and greaterconvenience relative to Santa Fe properties. The Espanola market has similarattributes.

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Competitive Roundup

Competitive Roundup Los Alamos Santa Fe Pojoaque/Espanola

Number of Hotel Rooms 316 4500 124/179

Number of Bed &Breakfast Rooms

80 400 ?

Estimated PromotionBudget

$100K $917K ?

Quality of Rooms Basic - littlerange

Broad Range Range

Dining Options Limited inevenings

Good Fair

Entertainment Options Limited Good Limited

Avg. Published Pricing $92 $110 $68

Perceived Safety Excellent Questionable Questionable

Location/Convenience toLos Alamos

Excellent 45 minutes 30 minutes

AdvertisingEffectiveness

? Good ?

Capacity Limited excepton weekends

Better onweekdays

?

Appearance Poor Broad Range Eclectic

24-Hour Availability /Support

limited Yes ?

Strengths, Weaknesses, Opportunities, Threats

Strengths

The Los Alamos National Laboratory is a $1B-plus multi-disciplinary researchinstitution that requires both research and business interactions with people andorganizations from around the world. The international history surrounding theworld-changing development of nuclear weapons puts Los Alamos on the map.

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Bandelier National Monument, as part of the National Park System puts Los Alamoson the map in a national sense independent of the existence of the Laboratory andits history. The natural beauty of the Los Alamos setting, the appeal of mountainrecreation opportunities, the rich local and regional history and culture, and thesophistication of the local populace in a small-town rural setting play supportingroles to the primary attractions of Los Alamos.

In marketing, our most powerful assets are our indirect connection to the marketingof the National Park System, our proximity to Santa Fe and the need of Santa Fe tobe able to promote interesting day trips as part of the experience of visiting SantaFe, and the draw of business activity with the Laboratory. Los Alamos draws dayvisitors largely on the coattails of Santa Fe and Albuquerque.

LACDC’s strengths are in its connection to the local community at-large andspecifically the local business community, established relationships to LANL, andsynergies with other business development activities such as the Chamber ofCommerce, MainStreet, Small Business Development Center, and Research Park.

Weaknesses

n Too many opinions; lack of consensus of approach with what are fairly limitedresources for tourism promotion activities

n Lack of coordination of attractions

n Limited accessibility other than by private vehicle

n Perceptions of poor value in hotel services

n There are limited numbers of hotel rooms in the community; the communitycan only absorb relatively small numbers of additional overnight stays unlessmore rooms are built

n Limited entertainment and service options for visitors; relatively few localservices are aimed at/interested in serving visitor market outside of standardworking hours; this manifests in the "they roll up the streets at 8PM"perception.

n Misinformation about Los Alamos, its setting, and its history confuse visitorsand potential visitors. For instance, lack of knowledge that the town and theLab are not the same thing and health concerns about proximity to the Lab arecommon. Last year's Wall Street Journal article about Los Alamos wascompletely misinformation.

Opportunities

There are opportunities apparent in a number of areas:

n The impending purchase of the Baca Ranch and the anticipated creation of aNational Park-like entity would create another significant attraction to the LosAlamos area.

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n The Los Alamos Research Park will enable greater interaction between LANLand private companies that could result in increased business visitation.

n Establishing relationships with tour operators seems to be an area that has notbeen addressed by prior efforts; an opportunity exists to cultivate relationshipsin this area.

n There is an effort underway in the community to establish a plan for the futureof the downtown Los Alamos; this effort is actively evaluating communityinterest in amenities that would be valued by community residents and visitorsalike.

n Occupancy patterns in Santa Fe hotels (full on weekends, space on weekdays)and Los Alamos hotels (full on weekdays, space on weekends) suggest anopportunity to work together providing that appropriate relationships can beestablished.

n Based on national trends, focus on the "drive market" could offer the potentialfor filling more lodging rooms on weekends. The drive market is characterizedas origins that are far enough away from Los Alamos that a visitor would notconsider Los Alamos or Santa Fe a day-trip, but close enough to make aweekend (or long-weekend) visit practical by driving here. Examples of originsin the drive market are Durango/Farmington, Pagosa Springs, ColoradoSprings, Pueblo, Amarillo, Lubbock, Alamagordo, and Las Cruces.

n There is fertile potential for increasing weekend occupancies by creation ofweekend packages in the areas of “edu-tourism”, recreation (golf, swimming,skiing, skating, and hiking), and cultural events (concerts, performances, andfestivals).

Threats

• There is an ever-present potential for LANL and National Park Service budgetreductions and the potential for general economic fluctuations which couldnegatively impact business and pleasure travel.

• There is the potential for competitive developments that would provide visitorswith increasing lodging options close to Los Alamos.

• The traditional base of individual visitors to Los Alamos tend to be older;familiarity and interest in the history of the beginnings of the atomic age mayfade as the people who lived through this era age.

• Los Alamos continues to viewed very negatively by a part of society that is anti-nuke. To the extent that this attitude discourages visitors or motivates othersto discourage visitors, it poses a threat. This may be linked to continuation ofmisinformation that is circulated about Los Alamos.