Travel advertising growth is on course to considerably outpace the ad market as a whole over the next few years, as global travel begins to recover following the pandemic, according to a report from Zenith.
Understandably, the travel industry was one of the hardest hit by COVID-19, with the travel ad market losing 46% of its value in 2020. Now, with the recovery getting into full swing, Zenith forecasts that travel ad spend will increase 24% this year – twice as fast as the overall ad market – before growing by a further 36% in 2022, and 19% in 2023.
Despite this year’s growth, travel ad spend will still be 33% below its 2019 levels – and it won’t be until 2023 that those levels are exceed, when spend is predicted to reach $19.6 billion.
Much of the recovery will be driven by digital, where travel advertisers tend to spend more than the wider ad market. In fact, in 2020, 63% of travel ad spend went to digital, compared to 58% on average. And this digital spend is only set to increase in the coming years.
“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.”
Zenith forecasts that digital ad spend by travel brands will grow by 6% a year between 2019 and 2023. This will lead to travel advertisers spending 70% of their budgets on digital advertising by 2023.
Elsewhere, travel brands spend more on newspapers, magazines, and out-of-home (20%) than the average advertiser (13%), but less on TV (13% versus 24%).
“Travel was one of the earliest sectors to embrace digital as booking went online,” said Ben Lukawski, Global Chief Strategy Officer at 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.”
The fastest growth in travel advertising is expected to come from India and Russia, where spend will be 31% and 21% above 2019 levels by 2023. China (16%), Poland (14%), and the US (13%) are also expected to see relatively fast growth.