Travel advertising is poised for rapid growth as brands reestablish relationships with consumers after the 2020 big break. Data from the report Business Intelligence – Travel by Zenith. Zenith expects travel advertising in the 13 key markets to grow by around 24% in 2021. In this way, it will be twice as fast as the advertising market as a whole, before growing by 36% in 2022 and 19%. % in 2023.
As international travel begins to recover, travel brands must rebuild their relationships with consumers, adjusting to the reality of post-COVID travel. Brands will have to redirect their communications towards different audiences. Along the way they will have to adapt to the decline in business travel (as companies manage their international business with remote meetings), address consumer concerns about travel sustainability, and accommodate growing demand for travel. low carbon travel.
Travel advertising was one of the categories most affected by COVID-19. The travel advertising market lost almost half of its value in 2020 (46%), while the advertising market as a whole declined by only 4%. Zenith estimates that travel ad spend fell from $ 18 billion in 2019 to $ 9.7 billion in 2020.
The pent-up demand for travel will drive rapid growth in travel ad spend in the coming years, but it will be a long way to regain pre-pandemic investment levels. Travel ad spend this year will still be 33% below its 2019 level, while the ad market as a whole will be 7% above. We will have to wait until 2023 for the travel sector to exceed the investment levels of 2019, when it will reach 19.6 billion dollars.
Travel is becoming a digital experience
Travel advertisers spend more on digital advertising than the average brand. Specifically, 63% in 2020, compared to 58% on average. This is not surprising for a category that has been far ahead of the market in digital transformation, driving 32% of sales through the ecommerce in 2021, compared to 20% for the retail as a whole.
The objective of digital advertising in the travel sector is to attract consumers in the initial research phase, through the search, display and video within the most relevant content. As the travel industry has become much more digital, digital advertising will be even more important, both for branding and conversion. Integrating travel apps with vaccine passports, using them to help the consumer navigate local COVID-related regulations and bureaucracy. Thus, offering digital concierge services will accelerate the transition of travel to a seamless digital experience, from the initial investigation to the enjoyment of the destination.
Zenith expects travel brands’ digital ad spend to grow 6% annually between 2019 and 2023. In 2023, travel brands will spend 70% of their budgets on digital advertising, an increase from 63% in 2020.
The travel industry was one of the early adopters of digital technology, as reservations began to be on-line. Post-COVID, top brands will complete this transformation by making the total experience digital, from reducing forms to fill out to contactless entry, removing almost all possible friction from the experience.
Ben Lukawski, Global Chief Strategy Officer by Zenith.
Advertisers in the travel sector spend a substantially higher than average portion of their budgets on newspapers, magazines and OOH (20% in 2020, compared to 13% of the average), and a substantially smaller part in television (13% compared to 24% of average). Consumers are looking for options and value, so media that allow brands to display a variety of options and some price details are particularly effective. Travel industry ad spend in print media is falling as print runs continue to decline, but OOH is expected to rebound from its decline in 2020 and grow at an average rate of 6% per year between 2019 and 2023.
Brands Seek New Travelers in Asia and Eastern Europe
The fastest growth in travel advertising is expected to come from India and Russia. Travel ad spend will be 31% and 21%, respectively, above the 2019 baseline in 2023. Here, increased disposable income means more people traveling, and existing travelers are traveling more frequency. The same is the case with China and Poland, where ad spend will increase by around 16% and 14%, respectively, between 2019 and 2023.
The strong US advertising market is driving up media prices. This is the main reason why advertising investment in the travel sector will be 13% higher there in 2023 and 2019. Other developed markets will range between + 9% and -9% growth during this period, depending on demand from consumers, media inflation, digital adoption, and a host of other reasons. In all markets, however, the recovery in travel advertising, since its decline in 2020, will lag far behind the growth of the market as a whole.
As travel begins to rebound from the unprecedented drop in demand in 2020, brands are rebuilding their relationships with consumers, using digital technology to guide them through each stage. The video on-lineIn particular, it will play a key role in creating emotional connections with consumers, inviting them to take the first step on their digital journey.
Jonathan Barnard, Head of Forecasting at Zenith.