The Covid-19 pandemic has impacted businesses all over the world in a variety of sectors, with many of these effects being negative. One which continues to be challenged because of current travel regulations and reduction in travel in general, is digital travel advertising.
1. Comparisons with previous years
The massive decrease in travel is expected to keep digital advertising spending in the United States significantly down for the next few years. According to eMarketer, digital ad spending in the country plummeted to $2.99 billion in 2020 and it will take until 2023 for it to reach $4.54 billion, a comparable amount to 2018 levels of $4.8 billion and lagging behind 2019’s spending of more than $6 billion. The year 2020 also saw a change in advertising, with the majority of remaining marketing focussed on messages related to hygiene, safety and flexible policies instead of booking. In fact eMarketer state that no other industry declined as fast or spent as little in 2020, however they estimate that this year’s spend will be $550 million more than last year, reaching $3.54 billion.
Whilst travel accounted for 4.2% of all US digital ad spending in 2019, eMarketer estimates this to now account for less than 2%. An example can be seen in Booking Holdings and Expedia Group, who in 2019, spent $4.97 billion and $6.03 billion, respectively, on marketing.
However last year, both these companies greatly reduced their marketing budgets, Booking Holdings spending $2.2 billion and Expedia Group spending $2.5 billion. In comparison, in the first six months of this year Booking Holdings has spent $1.45 billion on marketing and Expedia Group $1.86 billion, showing some improvement.
2. Slow recovery
Although pent-up consumer demand has provided travel advertisers with more of a reason to spend this year, campaigns are still focused on cleanliness messaging, and months of closed borders and unreliable flight schedules have led them away from international travel and toward local and regional destinations. Less than a third of people in the US travelled in 2020, according to the American Hotel & Lodging Association, whilst there was also a decline in 2020 hotel bookings. Although large companies like Delta expect leisure travel to rebound this year to 85% of pre-pandemic levels, business travel remains very lows and this somewhat limits advertising budgets for the travel industry.
