Advertisment

Travel adspend to grow up to six times faster than ad market as whole from 2021 to 2023: Zenith report

The report, however, mentions that the travel ad market won't return to pre-pandemic levels of spending until 2023

author-image
BestMediaInfo Bureau
New Update
Travel adspend to grow up to six times faster than ad market as whole from 2021 to 2023: Zenith report

Travel advertising will grow two to six times faster than the ad market as a whole from 2021 to 2023, as per Zenith’s Business Intelligence-Travel Report. The report forecasts that travel advertising in 13 key markets will expand by 24% in 2021, twice as fast as the whole advertising market, there will be 36% growth in 2022 and 19% growth in 2023.

The 13 markets included in this report are Australia, Canada, China, France, Germany, India, Italy, Poland, Russia, Spain, Switzerland, UK and USA, which between them account for 74% of total global adspend. The report covers domestic and foreign travel for business and leisure.

The growth in travel adspend is because brands would like to adapt to the realities of the post-Covid world and will refocus their communications on a more varied set of audiences to deal with the decline of business travel. They would also be looking to address consumers’ concerns about the sustainability of travel, and adapt to growing demand for low-carbon journeys.

Travel advertising was one of the hardest-hit categories by pandemic. The travel ad market lost nearly half its value in 2020 (46%), while the ad market as a whole shrank by just 4%. As per an estimation from Zenith, travel adspend fell from US$ 18.0 billion in 2019 to US$ 9.7 billion in 2020.

However, the report adds, there is a long road ahead for the travel adspend to reach pre-pandemic levels. Travel adspend will be still 33% below its 2019 level this year, while the ad market as a whole will be 7% ahead. It will take until 2023 for travel to exceed 2019 levels of spending, when it will reach US$19.6bn.

The report also highlights that brands in this category spend more on digital advertising than the average brand – 63% in 2020, compared to 58% on average. It sits well with the fact that the travel sector conducted 32% of sales by e-commerce in 2021 as compared to 20% for retail as a whole.

Digital advertising will become even more important for both brand building and conversion. Integrating travel apps with vaccine passports, using them to help consumers navigate local Covid-related rules and bureaucracy, and offering digital concierge services will accelerate the transition of travel towards a seamless digital experience, from initial research to enjoying the destination.

The report by Zenith forecasts digital adspend by travel brands will grow by 6% a year between 2019 and 2023. By 2023, travel brands will be spending 70% of their budgets on digital advertising, an increase from 63% in 2020.

“Travel was one of the earliest sectors to embrace digital as bookings went online,” said Ben Lukawski, Global Chief Strategy Officer, Zenith. “Post-COVID, the best-performing brands will complete this transformation by making the total experience digital, from reducing form filling to contactless entry, removing nearly all possible friction from the experience,” he added.

Travel advertisers also spend more of their budgets on newspapers, magazines and out-of-home than average (20% in 2020, compared to 13% for the average brand), and less on television (13% compared to an average of 24%). The reason behind this is that consumers are looking for choice and value, so media that allow brands to display a range of options and some details of pricing are particularly effective. While travel adspend in print is falling, out-of-home is forecast to recover from its slump in 2020 and grow at an average rate of 6% a year between 2019 and 2023.

Zenith is expecting the fastest growth in travel advertising to come from India and Russia, where travel adspend will be 31% and 21% respectively above the 2019 baseline by 2023. The same goes for China and Poland too, where adspend will increase by 16% and 14% respectively between 2019 and 2023.

A robust US ad market is pushing up media prices, which is the main reason why travel adspend will be 13% higher there in 2023 and in 2019. Other mature markets will range from +9% to -9% growth over this period, depending on consumer demand, media inflation, adoption of digital technology, and a myriad of other reasons. In all markets, though, the recovery of travel advertising from the slump in 2020 will be well behind the growth of the market as a whole.

“As travel begins to recover from the unprecedented drop in demand in 2020, brands are rebuilding their relationships with consumers, using digital technology to guide them at every stage,” said Jonathan Barnard, Head of Forecasting, Zenith. “Online video in particular will play a key role in creating emotional connections with consumers, inviting them to take their first step on their digital journey," he added.

Info@BestMediaInfo.com

Zenith report Travel adspend
Advertisment