Nicola Merrifield
Nov 23, 2021

Travel adspend recovery stalled until 2023 despite 36% boost next year

Domestic holidays are expected to remain popular, while business travel has been slower to bounce back, the report by Zenith says.

Travel adspend recovery stalled until 2023 despite 36% boost next year

Travel adspend is set for a 36% annual rise in 2022 but will not return to pre-pandemic levels until 2023, according to new international estimates.

A total $16.4 billion (£12.3 billion) is projected for advertising on airline and accommodation next year across 13 major markets including the UK, the US and China, data from media agency Zenith shows.

The figure is up on the $12 billion estimated for 2021 – which is a 24% increase on 2020 – but is still far off the pre-pandemic level of $18 billion in 2019.

Analysts from Zenith do not expect travel adspend to surpass pre-pandemic levels until 2023, when $19.6 billion should be within reach. “Pent-up” demand for travel by consumers who were restricted during the Covid pandemic will be the main driver for adspend increases over the next few years, the latest Business Intelligence report from Zenith said.

However, the agency warned it will be “a long road back to pre-pandemic spending” after the travel ad market lost nearly half its value in 2020, compared with just a 4% contraction across the whole ad market.

Between 2019 and 2023, India and Russia are expected to see the biggest rises in travel adspend, increasing by 31% and 21% respectively. “Here, rising disposable incomes mean more people are travelling, and existing travellers are travelling more frequently,” the report said.

In the US, where adspend is predicted to be 13% higher in 2023 compared with 2019, the “robust” market is pushing up media prices, in turn creating higher adspend. The UK’s travel adspend is predicted to contract by 0.3% between 2019 and 2023, though France is expected to fare the worst, with spending declining by 8.6%.

Factors including consumer demand, media inflation and adoption of digital technology will dictate these changes, Zenith noted. Despite the improving situation overall, the report warned: “In all markets, though, the recovery of travel advertising from the 2019 baseline will be well behind the growth of the market as a whole.”

Business travel is recovering “much more tentatively” than holiday trips and it is “far from clear” to what extent companies will use remote video-based meetings on a permanent basis.

Meanwhile, in almost all of the 13 markets, travel is expected to become more focused on domestic trips. The pandemic made travellers realise the value of domestic trips – but at the same time there is a rising awareness of the environmental impact of going abroad, the report highlighted.

In the short term, ongoing government restrictions on travel due to the pandemic mean domestic trips, or those within nearby regions, are likely to be more popular with customers, it added.

Jonathan Barnard, head of forecasting at Zenith, said: “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.

“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."

 

Source:
Campaign UK

Related Articles

Just Published

1 day ago

Top 10 car brands in Southeast Asia

Malaysia's largest car manufacturer Perodua pipped other global favourites like Toyota, BMW and Tesla to become Southeast Asia’s top car brand in 2024. Dive into the insights from Campaign’s exclusive research with Milieu Insight.

1 day ago

'All polish, no punch': Adland reacts to Jaguar’s ...

The internet has spoken about Jaguar's radical rebrand with mixed reviews. But what do industry experts think?

1 day ago

Creative Minds: Nutthida Patthanhatirat thrives on ...

This art director’s journey spans from Photoshop struggles to creative triumphs, fuelled by her love of dogs, a taste for luxe, and an unstoppable knack for turning challenges into bold projects.