Economic Outlook

As we have been reporting over the past year, the growth of the US economy has noticeably slowed since levels seen in 2006 and may in fact be entering a recessionary cycle, mainly as a result of declines in the housing market, sustained declines in the value of the US dollar, a rise in oil and fuel prices, an increase in unemployment and a weakened stock market. All these paramount points are undeniably affecting the travel market and making 2008 a very challenging year.

Outbound Travel Market

We’ve included current available data outlining the US overseas leisure traveler market, as well as the top five overseas destinations for US travelers.

Key Travel Market Trends

Despite a weakening exchange rate, the Cruise industry experienced a substantial growth over 2006 and forecasts to hold the demand through 2008. The Cruise market has become increasingly attractive, as the trips are pre-booked in USD, including accommodations and meals.

The Destination Wedding market has also been experiencing significant growth. Destination Weddings have increased by more than 400% in the last 10 years and will continue to increase in the future.

Competitive Destination Review

Over the last 10 years, the competition for travelers has grown as most countries and regions of the world now recognize the value of tourism dollars and the power of the US market in terms of potential visitors with spending money. The Primary competitors of ours islands are Hawaii, Mexico, the Caribbean, Europe and Fiji. Destinations, cruises and resorts around the world promote extensively to the same group of visitors Tahiti promotes too, thereby creating a very competitive environment with many choices for leisure travelers.

Target Customer

Given the fact that Tahiti is more exclusive than the other competitive destinations, the primary demographic target is affluent and educated. These consumers also use the Internet and seek “experiential” vacation destinations.

The islands of Tahiti offer a low number of rooms, of which a high percentage is in the luxury class. This narrows our target segment, as our destination remains exclusive. Throughout the Marketing Plan we note our efforts and actions in targeting affluent, upscale consumers.

The Baby Boomers represent a key target for our destination. According to the US Census Bureau, 57% of all US Households, with incomes greater than $100,000 USD are baby boomers.

Brand Attributes

The brand names for our destination remain highly marketable in North America. The island names “Tahiti”, “Bora Bora”, and “Moorea” have established brand value in the marketplace. The other island names remain highly marketable but have not generated enough awareness to identify them as “brands”.

The brand attributes that most effectively improve the visual impacts of advertising on North Americans are the following:

• Overwater Bungalows

• Lagoons

• Seclusion and Privacy

• Tahitian Culture and Simplicity

• Low Population Density

• No Large Mega Hotels

• Overall Landscape of High Mountains and Small Islands

These brand names and attributes represent a true strength for Tahiti; they highlight the uniqueness and authenticity of the islands.

Nevertheless, our destination still has many challenges it needs to overcome such the lack of multi-dimensional products including: Family Vacations, Golf Vacations, Destination Weddings or All- Inclusive Vacations. In addition, as addressed in the Advertising section, there is a need for more advertising dollars to reinforce the existing brands to the target consumer.

Website

Our key target in North America is educated and affluent. The customer is widely exposed to the Internet and generally uses it as the primary source of information to research and plan a trip. It is thus inevitable and paramount for us to ensure an efficient online presence.

TTNA’s goals for this year are to remain highly visible on search engine results and to provide relevant, accurate, and engaging content.

For the launch of the 2007 Fall Kickstart II Co-op advertising campaign TTNA redesigned and enhanced the site’s “Travel Planner” lead generation tool in an effort to provide consumers a more meaningful and engaging call-to-action mechanism for the campaign. For 2008, we planned further enhancements such as an interactive mapping function using Google maps.

Advertising

TTNA’s advertising for 2008 is primarily to motivate the market, establish booking momentum and to promote off-peak season travel.

Print advertising represents a key element in our advertising campaigns. It helps produce awareness to support our tactical online initiatives within our target markets.

Our current Advertising Campaign “Why Dream in Color” / Kickstart III, which is a Co-op Tactical Advertising Campaign, utilizes online media elements, and provides multiple call-to-action choices for the consumer to generate a real time lead, which in turn is sent to the Co-op Partner.

Public Relations

TTNA’s public relations program will continue to include a focus on the islands currently being branded as “Tahiti’s Hidden Paradise”. We’re currently referring to the islands beyond Tahiti, Moorea, Taha’a and Bora Bora as the hidden paradise islands.

The public relations initiatives allow us to target high-end magazines where advertising has been cost-prohibitive due to the expense of advertising. We will continue to target the affluent publications as well as niche luxury mediums in order to reach our target consumer directly.

We will continue our efforts with the Content Management Program which was launched in 2007. This program was designed in order to ensure that websites offering information on the islands of Tahiti is accurate, and includes TTNA's Key Communication Points.

We will also be incorporating themes into media research trips with our PR Partners such as family travel, sailing and yachting, and spa to name a few.

Partnership Marketing

The goal of the Partnership Marketing program is to create and execute programs that will leverage the highly targeted consumer databases available with such partnerships, into successful campaigns that increase overall visitor arrivals.

Promotions

TTNA will continue to work with all of our Tour Operator Partners to develop the network of specialized travel agents, including Tiare agents, by improving their effectiveness in promoting and selling the destination through training, education, and communication.

We will also continue to promote the destination through targeted trade and consumer travel shows in niche marketplaces and key geographic areas.

The Marketing Plan also includes the shows that TTNA will be attending in 2008.

For 2008, TTNA will still focus on the existing mix of market segments of General Leisure, Honeymoon and Romance, Cruise, Incentive, Spa, Dive and Snorkel, and Soft Adventure, Gay & Lesbian, Family as well as a continued focus on short stay markets. Specific action plans for each of these target markets are included in the Marketing Plan.

Throughout this section we highlight the partner opportunities for both our partners in North America as well as the Tahiti Industry partners. The following areas are covered:

• Co-op Guidelines

• Tahiti Industry Partners

• Travel Agents

• Workshops and Seminars

• E-learning Workshops

• Tahiti Tiare Program

• Industry Communications

Please click here to access the Partner section: www.Tahiti-Tourisme.com/Partners