Airline employees and Transportation Security Administration (TSA) agents are tasked with managing heavily booked flights, crowded airports, and passengers who’ve forgotten how to behave while traveling. Passengers are experiencing extremely long check-in and security lines, terminals with closed shops and restaurants, and multiple flight cancellations. 

And yet, with the craziness, there is optimism among industry leaders. 

Customer-facing airline and cruise employees might be in the thick of it all—but what about travel marketing teams? How does ad spending and messaging reflect the rapid shifts of the industry.

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Airlines are confidently back in business, but the cruise industry will return slower 

It wasn’t a surprise that people would be eager to travel once vaccinated. But leaders didn’t know flyers would come back this quickly. Airlines and the TSA haven’t been able to hire staff fast enough. 

Even without the return of significant international and business travel, TSA has screened more than 2 million people some days. This level of activity hasn’t happened since March 2020. 

Though it may feel chaotic in airports for the time being, this is good news for airlines and their employees. Federal assistance is set to end on October 1st, but due to this surging activity, travel companies have told employees that they don’t need to fear furloughs. 

United Airlines told 40,000 employees this month that they could count on keeping their jobs this fall, while other U.S. airlines have said they’ll resume hiring pilots.

“This news provides great relief to many of our flying partners who were facing an uncertain future,” wrote John Slater, senior vice president of inflight services.

This good news brings comfort to thousands of families who rely on the industry’s rebound. 

When it comes to cruises, it’s more complicated

The cruise industry was the first industry to make major pandemic headlines as ships became the initial super-spreader locations in the States.

With the country becoming increasingly vaccinated, the CDC recently eased its recommendations for the industry. The caveat was that only vaccinated people should go on board because ships are high risk environments for unvaccinated individuals. 

However, there was squabbling between Florida politicians, cruise lines, and the CDC about how to navigate these new recommendations. Florida passed a law that prohibits cruise lines from requiring vaccinations. 

On top of political and business disputes, cruise lines have had incidents of employees getting COVID, further causing delays. Royal Caribbean pushed back the sailing of Odyssey of the Seas from July 3rd to July 31st because 8 crew members tested positive for Covid. 

While ships may be slower to set sail than planes taking off, recovery is underway. And we can see it in the advertising. 

MediaRadar Insights

Overall, airline and cruise ad spending is building, but is far from 2019 levels. 

Spending is down 58% in 2021 compared to 2019. But it is returning from its lowest point during the pandemic. Q2 2021 spending climbed 53% compared to the same period last year.

To be more specific, in Q2 2021, there were 261 companies spending $65.9mm. In 2020, we saw 260 companies spending $43.2mm. In 2019 there were 390 companies spending $155.7mm on print, digital, and television formats.

The significant drop in the number of airline and cruise line advertisers indicate that though numbers stabilized between 2020 and 2021, as a direct result of the pandemic, the smaller companies that may fly local and operate local pleasure tours are no longer advertising on a national level, if at all.

Looking at the creative messaging from travel companies, we noticed:

• American Airlines still mentions that there are no change fees for flights but doesn’t mention why.
• JetBlue has no mention of the pandemic in their creative.
• Instead of mentioning pandemic restrictions that we know the industry is following, Regent Seven Seas Cruise lines make sure to mention how luxurious their cruises are.
• Royal Caribbean focuses on the adventurous aspect of their cruises.

The travel industry is still figuring out the best way to move forward. As leaders face high demand, staff shortages and a variety of safety standards to maintain, it’s not so simple as turning a time machine back to 2019. 

Spending isn’t anywhere close to ‘normal’ yet, but messaging is moving in that direction as we see less hints of the pandemic and more emphasis on adventure and relaxation.

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Whether it’s cycling trips to tour sites important to the Civil Rights movement or an overdue visit to see grandparents, travel will be a meaningful part of 2021.

As the industry recovers, advertisers can provide answers to the question at the top of many consumers’ minds: where to next?

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It’s Been A Year Since The First Major Lockdown, And People Are Restless

It’s been a year since Wuhan went into lockdown, placing strict limits on the movement of 11 million people between January and April. As the ripple effects spread across the world, the US experienced the greatest economic downturn since the Great Depression. 

However, it’s not news that the public health crisis hurt certain industries more than others.

The travel and hospitality sectors plummeted as people were ordered to stay home and popular destinations were temporarily shut down.

While traveling was off limits, too expensive, or too risky in 2020, many have high hopes for 2021. Widely-available rapid tests and the approval of vaccines have made travel safer. 

“The availability of vaccines and testing will get people comfortable with traveling,” Raymond James airline analyst Savanthi Syth explained. “You’ll see the leisure and the visiting friends and relative travel should come back, relatively quickly.”

Syth expects a 70-80% return in leisure airline travel this summer, when last year, travel was down by 50%. 

As quarantine regulations loosen and restless travelers gain confidence, airlines will see their passengers board again. 

China as a Case Study

In many ways, the US can expect to see travel trends follow those that played out in China. 

Primarily, this means that domestic travel will begin to increase before international travel.

During China’s “golden week,” which occurred the first week of October in 2020 and included two separate Chinese holidays, more than 637 million people traveled domestically, generating approximately $68.6 billion in tourism revenue according to the Chinese government. 

Of course, China put different safety measures in place to make this possible. But urgent vaccine distribution will now enable growth in American economic and travel activity. 

This uptick of domestic travel can already be seen in the US. Online travel and booking websites are experiencing an increase in searches, and the industry expects to see a shortage of available vacation rentals in the summer of 2021.

International travel, however, could be much slower to bounce back as countries deal with the pandemic differently and at varying rates. Currently, international travel is down 70% from this time last year. Many countries have closed their borders to Americans, and the US is now requiring negative COVID tests for those entering the country from abroad.

Experts are citing China’s uptick in domestic travel as a sign that the public is ready to travel again, and will fill that desire with domestic travel while international travel is limited. They also point to this travel boom as an indicator that the tourism market will bounce back sooner rather than later.

2021 Advertising Insight for the Travel Industry

As the public begins to feel safer, travel-related brands can have more confidence in their advertising investments. 

The trend towards domestic tourism and travel means more opportunities for local tourism bureaus to appeal to their own communities. In January of 2020, local tourism saw healthy YoY increase. Once the pandemic struck, these numbers plummeted and regional tourism was down 44%.

By December, these numbers were already improving, with regional tourism seeing a 54% increase in YoY spending for the month of December. 

When it comes to local tourism, Airbnb is one of the biggest providers of giving a more ‘local’ experience to domestic travelers.

Yet, Airbnb was one of many travel companies to decrease their advertising presence last year. They cut advertising costs from $1.18 billion in the first three quarters of 2019, to $545.5 million in 2020. Meanwhile, Vrbo, a key competitor, took advantage of their competitor’s absence to increase spending. The company outspent Airbnb 10:1. 

Amid the increased spending from their primary competitor, and the new pressures that come with being a public company, we predict AIRBNB ad dollars will return in 2021.

As consumer get more comfortable, we expect to see an overall return in dollars. However, the return won’t be immediate or complete. 

As seen in the 2019 airline and hotel numbers, travel brands’ spending tends to peak in the fall as travelers look ahead to the holiday season. In 2020, spend during the peak season was still down 65% YoY.

Because the peak spending time is later in the year, this gives advertisers more time for the population to be vaccinated. If a large portion of the population is vaccinated by the fall, the world could return to normal in time for their peak spending months. Brands would likely spend closer to their normal levels.

However, when taking into all the companies and sub-categories of the travel industry, we don’t expect a full recovery of ad spending in 2021, even if consumers are experiencing a collective restlessness. 

Just as Syth expects a 70-80% return in leisure airline travel this summer, we expect similar patterns in advertising spend this year. However, as the vaccine is distributed, the gap between spending levels could become smaller. We’ll continue monitoring how companies respond to consumers who are ready to go somewhere new. 

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy. 

Here we share how this turbulent ride is impacting travel advertising.

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

The Increase in Local Travel Wanes

With cabin fever and few options to travel internationally, Americans have been hitting the road to visit domestic tourist locations. 

AirBnB reported that it had more US bookings between May 17 and June 3 than it did the previous year. CEO Brian Chesky said that most bookings were within 200 miles of the visitors’ homes.

Now, with the latest spike in infections, people are more hesitant to travel and some states have reversed their reopening plans. 

Apple Maps reported that there was a clear drop in requests for driving, walking and transit directions in July, reversing the steady increase it had seen since mid-April. The decline is most noticeable in states which have had the largest coronavirus outbreaks, such as California, Texas, Arizona and Florida.

Likewise, airline travel that had been steadily rising since April dropped last week. 

“The near-term rise in COVID cases and quarantine measures appear to be now manifesting in the data and disrupting positive trends,” said analyst Savanthi Syth at Raymond James. Although many consumers want to travel after the last four months, growing unease may curb vacations until the outbreaks subside.

What do these shifts mean for advertisers and publishers?

MediaRadar Insights

When we look back to the beginning of the pandemic, ad spend from the travel industry was dropping off even before the U.S. declared a national emergency. In late February spend was flat compared to the same point a year ago, but by mid-April spend had cratered, down 93% YoY. 

There was a resurgence in spending in June—spend levels quadrupled since the low point. However, with the new surge in cases throughout much of the country, spending in early July began to fall.

• In April and May of 2019 average weekly ad spend from the travel industry was $38M per week.
• In April and May of 2020, that figure was $4M per week.

Before declining again in July, spend levels reached as high as $11M per week.

The largest driver of the recent recovery had been hotel brands. In April and May these brands averaged just a hair over $1M per week in ad spending. However, in the most recent four weeks average weekly spend has been over $4M per week.

Brands like Choice Hotels are leaning into the road-tripping trend with new creative. 

However, with the rise in cases, advertisers are losing steam. For example, ad spend from US Local Tourism Bureaus (e.g. Visit Orlando, NYC Tourism, etc.) hit their highest levels in three months in late June, but have stagnated since, and have even begun ticking back down as states reinstate lockdowns and restrictions.

The ad data suggests that travel plans are up in the air for Americans depending on their risk tolerance and the state of new infections. In response, advertising spend continues to ebb and flow. 

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Now, flights are starting to take off again. American recently announced that its July flight schedule was the strongest it’s been since March—but tickets were purchased mostly for leisure, not business. 

Events have shifted online and virtual meetings have become the norm. Without a vaccine, business travel will be slow to rebound—how are travel brands adjusting to this reality?

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

Virtual meetings reshape business travel 

A recent Uniglobe study found that virtual meetings are becoming part of the makeup of corporate life. 

Thirty percent of participants said “they expect up to 25% of their travel to move to virtual meetings even if a vaccine is broadly available,” while 26% said that number would fall between 25-50%.

More than half of respondents believed that a significant chunk of the meetings and events they previously attended would be virtual even in a post-COVID world. 

Many executives and employees have reported that video conferences are just as effective as face-to-face meetings. Plus, virtual calls reduce the travel costs and time devoted to making in-person deals. Virtual meetings may never fully replace the relationships built in person, but they are becoming more normal. 

This is likely to make executives more selective when choosing which business trips are worth the costs, including time away from family and the office. 

Travel brands are taking notices of this sweeping change.

MediaRadar data shows that, prior to the pandemic, travel brands averaged just over $275 thousand on B2B websites tailored to business travelers. Since COVID-19 began, the average weekly ad spend has fallen to under $20 thousand.

Hotels see a glimpse of recovery from domestic business meetings

Hotels are seeing glimpses of recovery among domestic travelers, especially via car-travel. Right now, traffic is mostly coming from leisure and local business travelers.

Even though the business travel sector will struggle with the lack of full-scale conferences, domestic business meetings and hybrid-events may help supplement losses. 

InterContinental Hotels Group CEO Keith Barr reported that drive-to markets are getting better every week. Similarly, Mark Hoplamazian, Hyatt Hotels Corp. president and CEO, said that the volume of planned business meetings later in the year and early next year are increasing, especially with the availability of hybrid meetings.

Over the past three weeks, hotel brands have accounted for 55% of all B2B travel advertising. During the same period last year, they accounted for only 13%.

For four consecutive weeks, the average weekly ad spend by hotel brands was two thousand dollars. Now, it is climbing back up. It spiked the week of May 24th and came back down to eleven thousand dollars the following week. 

Even though virtual meetings are effective, many business people miss the travel and in-person experience of deals and problem solving. It appears that hotels are trying to tap into that feeling—the creative across brands is positive, emphasizing wellness and lovable experiences. 

International travel will be slower to recover

The Global Business Travel Association polled members in June and found that 60% believed that employees would start traveling within the next three months. Only 24% said they thought international trips would resume during the same time frame. 

One creative solution for international business travel may be “travel bubbles,” or countries agreeing to allow certain travelers to bypass strict quarantine measures. This could require travelers to get tested for coronavirus within forty-eight hours of boarding planes and be subject to tracking. 

The details have yet to be ironed out, and other countries are nervous about the rising number of cases in the U.S.

“There’s a concern around ensuring the corridor is kept whole. If you fly into Washington, the UK and U.S. wouldn’t want you to visit New York for the day,” explains Vice President of SITA Jeremy Springall. “The risk profile of London-Washington is manageable, but if you start traveling around the U.S., it rises, so we’ll need some way of managing people’s travel once they get to the destination, to make sure this arrangement works.”

U.S. travelers are still banned from many regions, including Europe. Until there are systems, policies and technology in place, international business travel will be limited. 

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In the latest April survey from the Tourism Crisis Management Initiative at the University of Florida, 74% of respondents said they felt anxious about travelling within the US, but despite the anxiety, people’s interest in travelling is piqued. 

“Travel is a part of our life and when we aren’t able to do it, we realize how much it plays a role in what we’re looking for in our plans and in our future free time,” explains Director Lori Pennington-Gray. “They’re looking to figure out when they can get back to doing what they want to do, whether that’s seeing the world or going to see their families.”

As the country reopens and the perception of COVID-19 changes, we may see the level of travel anxiety drop. In other countries, including Italy, domestic travel plans are already inching their way back to normal levels.

Will Americans join them? The data suggests advertisers are already counting on it.

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

Will we see a domestic travel boom this summer?

We’ve been stuck at home and are itching to get out of our monotonous lives. Even though summer is typically a time when international travel peaks, travel will look different in post-quarantine times.

In countries most impacted by COVID-19, the amount of interest in international travel to and from has dropped significantly. For example, data from Sojern found that foreign searches for lodging in Spain in July are down by 94% year-over-year.  

Between uncertainty and travel restrictions, people won’t be traveling internationally. Roughly half of all countries closed their borders to tourists and by the end of April, none had lifted the restrictions put in place.  

With international restrictions still in place, we are already seeing domestic travel increase in places that were first impacted by COVID-19. China, for instance, is seeing a boost from domestic tourism.

One analysis conducted in Australia found that their regional destinations and hotels were in a good position to rebound because they will capture the redirected international traffic.

“The potential transfer of outbound visitors to domestic visitors in hotels is considerably higher than the loss of international nights across cities and regional areas,” said CEO of Dransfield Hotels Dean Dransfield. When travellers who were planning vacations abroad turn their trips inward, domestic travel could outweigh the losses of international tourism. 

Americans are behaving similarly. With limited space to roam and cabin fever, 1 in 3 Americans say they are planning a road trip this summer. Road trips will be popular because they give Americans a sense of control of where they can go and see. It feels safer in a personal car, rather than getting on an airplane or public transportation. 

MediaRadar Insights

The travel industry as a whole is hurting and their ad spend reflects that. Ad spending from the travel industry fell dramatically amid COVID-19 and remains low. 

In April, the average weekly spend was just over $5M. In January & February, that figure was at $61M (-92%). 

We see how stark the contrast isYear over year. The industry started the year off strong but beginning the week of 3/15 spend was cut dramatically. When we compare the time period of 3/15-5/9 to the year before, ad spending from the travel sector is down 87%.

Tourism within the United States has slowly crept back up from their low. In fact, every week in April we saw WoW improvement in ad spending, going from 280k in the first week of the month to $768k in the last week (+174%). 

By the week of May 17th, spend was back over $1.5M. Despite this positive momentum, spend remains down from last year by over 50%.

In recent weeks, we’ve seen new advertising pushes from brands like:

• Visit California 
• Las Vegas Convention & Visitors Authority
• The Florida Keys & Key West

Las Vegas has recently put dollars behind this ad, running it on TV networks like NBC, CBS, Bravo and E!.

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We’ve had time to adjust our lives and business strategies — and now we have initial data of what happened in some of the strangest months in modern history. 

Last week, we discussed how B2B websites were doing well during this time. Now, we look at which specific B2B industries shifted their online advertising the most between March and April.

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

B2B Companies Going Different Directions

Some B2B companies are experiencing deep losses, while others are experiencing heightened demand. 

Travel

Travel has been cut dramatically as business meetings and events are cancelled. 

Roughly 80% of hotel rooms across the States are empty due to this crisis. 

“The impact to our industry is already more severe than anything we’ve seen before, including September 11th and the great recession of 2008 combined,” according to American Hotel & Lodging Association President and CEO Chip Rogers. While some states are starting to reopen, it is unclear when people are going to start traveling again. 

Experts believe that corporate travel will return to somewhat normal levels before leisure travel — but achieving ‘normal’ levels is likely to take two to five years according to airline research analyst Helane Becker. She noted, however, that it may never fully be the same. 

People are getting in the habit of Zoom meetings and virtual webinars. Digital communication, while not perfect, is becoming the norm. People are social and will want to connect face-to-face eventually, but until there is a vaccine or treatment, virtual meetings are what we have. 

Freight Services and Supply Chain Management

While travel and events struggle, logistics, freight and supply chain management companies are experiencing pressure like they’ve never seen before. Companies that give clients greater visibility into their supply chain maps are gaining increased attention.

“Yes, supply network mapping can be resource intensive and difficult,” say experts at Harvard Business Review. “However, there is no way around it. Companies will discover the value of the map is greater than the cost and time to develop it.” Unlike natural disasters from the past decade, COVID has put enterprises over the edge. Supply chain mapping is now essential for those who don’t want to gamble their business away. 

“The shipping of freight has been fragile in this country,” explains Laurie Yoler, a general partner with Playground Global. “There’s a lot of room to improve reliability and stability.” Now, industry leaders must pick up the slack and invest in new technology or services. 

Finance

Financial institutions, at the center of the 2008 recession, are eager to put out a good image during this time. 

“We’re already seeing increased broadcast ads by non-traditional brands like Rocket Mortgage, stepping in to offer help and guidance,” says CEO at Strum Mark Weber. Instead of being seen as the bad guys as they were in the last recession, financial companies want to be seen as those helping out hurting communities and offering loan assistance. 

While finance companies may be tempted to cut back on advertising, the ones who invest now will be able to accelerate their growth and profitability in the years to come. 

MediaRadar Insights

As these different verticals experience new cuts, demand, or PR opportunities, we see the shift play out in the ad numbers. 

Overall, there were 8% fewer companies placing digital ads on B2B websites — and across fewer sites. 

In March, the average B2B advertiser ran digital ads on 5.1 sites. In April, that number dropped to 4.7 (decreasing 8%).

The categories that saw the biggest drop in number of advertisers were: 

• Travel (-63%)
• Conferences (-31%)
• Food (-18%)

For example, ‘Airlines’ (a subcategory of travel) had 32 different airlines buy B2B ads in March. In April, less than 10 airlines placed ads. 

Not all was negative though. The industries experiencing increased attention made up for much of the loss mentioned above.

The categories that saw the biggest increase in number of advertisers include: 

• Analytics Services (+45%)
• Online Education (+38%)
• Financial Consulting (+31%)

In terms of spending, categories that increased their B2B buying the most include:

• Freight Transportation Services (+9x)
• Banks (nearly +3x)
• Pharmaceutical Companies (+94%)

While these shifts were sudden, it is unlikely that the transition back to ‘normal’ spending will be as swift. As this uncertain economy continues to run its course, we will monitor how advertisers respond. 

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Travel ad spending dropped suddenly. Trade show cancellations are snowballing. Meanwhile, streaming services are ramping up. 

While all business is affected by this pandemic, some industries are getting the short end of the stick more than others. We took a look at “at-risk” industry ad spending from last year. This gives us some insight into the money that is at stake over the next few months. 

We encourage you to subscribe to our Blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

“At-risk” industry spend in Q2 of last year 

As we approach Q2, we know that advertising spending is going to look dramatically different than it did last year.

Last year, in Q2 alone, more than $31B was spent on advertising across all media formats. Over 205k unique brands ran ads.

When looking at industries that spent on advertising, we can identify the industries that now appear to be the most “at-risk” due to this virus. 

At-risk industries include:

• Restaurants 
• Films
• Lodging 
• US Tourism
• Cruises
• Airlines
• Auto Dealerships
• Foreign Tourism
• Movie Theaters

Made up of 12.5K brands, the at-risk industries spent $2.6B on ads. 

By far, the largest spenders were restaurants and bars. This category saw 4.5k brands spend almost $1.2B. 

Now, as dine-in restaurants and bars are being ordered to close across the US, they are facing extreme hardship. This crisis will completely change how restaurants do business, and how they promote products. 

A look at restaurant ad spend

While restaurants spent $1.2B in Q2 of last year, most of those dollars did not come from local mom and pop shops: 91% of the spend came from major chains.

Restaurants like McDonald’s, Burger King and Taco Bell are not immune to the impact of coronavirus, but are not the ones going under. Instead, Charley Grant at the Wall Street Journal predicts they are likely to take up even more of the market share as they pivot and have greater ability to rebound in a less-saturated market.  

McDonald’s has already closed its dining rooms and moved all services to delivery. Other major chains have done likewise. Chains that were already set-up for delivery services (i.e. Dominoes) are expected to do well as we ride this out. Consumer behavior hasn’t changed, and people are likely going to want something to lighten up their cooking load and bring them comfort in such harrowing times.  

We have not yet seen any shifts in ad buying behavior week-over-week from major chains and it is unclear how these companies will respond in the future.  

Will they stay on track with advertising to promote delivery options, or perhaps to take up even more market share? Time will tell. 

Travel industry ads are looking grim

Lodging, US Tourism, Cruises, and Airlines certainly have a bleaker outlook. 

While restaurants can temporarily pivot to take-out and delivery, these industries are facing true hardships. In Q2 last year they combined for nearly $850M in ad spend.

In terms of companies that are removing ad spend, we will be watching airlines in particular. During Q2 last year 72% of their budgets were spent on digital ads. Digital is bought (and likely, cancelled) with the shortest notice compared to TV and print. 

So far, the travel industry has quickly reduced its ad spend. Spending cuts started in mid-February. Comparing the first week of February to the first week of March, we saw a decrease in ad spend by 30%. 

Specific TV events

We will continue to monitor specific events that bring in significant ad revenue, like sports events for example. 

On March 11, after one player on the Utah Jazz tested positive for coronavirus, the NBA announced that it would be suspending the rest of the season. 

During Q2 last year (when playoffs took place), the games brought in $689M in total TV ad spend. This will be by far the biggest hit, as it is almost double the ad revenue generated by the other three sports games in Q2 combined.

Almost all major sports have been suspended or cancelled around the world, except for the most obvious sporting event of the year: the Olympics. The Olympics, scheduled to start July 24, have not yet been cancelled. 

Only time will tell how much money is left on the table for advertisers to spend, which industries will increase their spending and which will proceed more conservatively. 

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