As we approach the end of the year, we’re covering trends from key markets in 2022. We’ll recap the state of each industry over the past year, the ad strategies of its biggest players, and what we predict 2023 will hold.
The Chinese philosopher Lao Tzu said, “The journey of a thousand miles begins with one step.”
Unfortunately, that step was impossible when all-things travel went on a pandemic-induced hiatus—and the industry felt it to the tune of $935b in lost revenue.
With restrictions largely gone and “revenge travel” sweeping the nation, travel advertisers are getting back into the swing of things.
Here’s what those strategies looked like in 2022 and what they can tell us about 2023.
MediaRadar Insights on Travel Advertising in 2022
Through October 2022, travel advertisers invested $3.7b in ads, representing a 55% YoY; the average monthly investment increased by almost 66%.
A level deeper, Q1 saw the biggest uptick as advertisers from companies like Airbnb, The Walt Disney Company, and Norwegian Cruise Line collectively increased budgets by 113% YoY.
While spending cooled—Q2 and Q3 were up by 49% and 38% YoY—the investments are still impressive.
Combine that with a strong start to Q4 (up by 17% YoY) and more than half of Americans saying travel’s a necessity, even during a recession, and it’s clear that travel advertising is headed for a big 2023.
Top Travel Advertisers in 2022
Launching travel advertising to new heights were companies in five categories—lodging, parks and recreation, cruise lines, U.S. tourism, and airlines—that combined to spend more than $3.1b or 84% of the industry’s investment.
Through October, lodging advertisers spent $1.1b, representing a 53% YoY increase.
A level deeper, advertisers for vacation rentals spent $410mm, driven by sizable investments from Airbnb and Expedia.
In August, Airbnb reported a revenue increase of 58% YoY.
Airbnb Co-Founder and CEO Brian Chesky said, “The second quarter of 2022 demonstrates we have achieved growth and profitability at scale…Our strength this quarter is the result of our ability to stay focused and disciplined while continuing to relentlessly innovate.”
When Chesky spoke in Q3, it seemed like he was reading from the same script.
The past few years have been kind to Airbnb—and its ad spending reflects that.
Through Q3, advertisers increased spending by 120% YoY.
While spending’s up, advertisers are blazing their own trail by moving away from often pricey PPC campaigns in favor of “broader marketing initiatives.”
The pandemic accelerated that shift and pushed more dollars into brand marketing, video, social media, OTT and CTV.
Expedia may not be making headlines like Airbnb, but it’s still growing, with gross bookings up by 58% YoY in Q1.
Despite that growth and continued pressure from Airbnb, advertisers at Expedia reduced their budget by 11% YoY.
Given the company’s growth from a financial standpoint, the decrease in spending could be nothing more than a reset while it rolls out a new strategy. That said, it could also foreshadow what spending will look like in the post-pandemic travel landscape for everyone not named Airbnb.
Parks and recreation
Amusement parks—the driving force in the parks and recreation category—rarely close, so when Walt Disney World shut its doors in 2020, people were shocked.
Its advertisers were undoubtedly shocked as well.
Other advertisers in this category shared this sentiment, so it’s no surprise that spending has increased as the pandemic waned.
Through Q3, parks and recreation advertisers increased spending by 46% to $650mm, with the greatest increase coming in Q1 when it rose by 152% YoY. That said, October experienced a 23% YoY decrease, which could point to a spending adjustment.
The Walt Disney Company
Through October, advertisers for The Walt Disney Company spent 51x that of the next biggest advertiser: Comcast (Universal Studios’ brands).
The almost unbelievable disparity in strategies speaks to the industry—one that Disney has wrapped around its finger—but it could also point to how other advertisers will spend in 2023.
Orlando Universal Resort, for example, was one of the biggest spenders in the resorts category, along with Atlantis Paradise Island and Disneyland Resort.
With Minnie and Mickey dominating this pocket of the industry, others may see the writing on the wall and shift their budgets to less-crowned ecosystems.
Through the first nine months of the year, cruise line advertisers increased spending by 178% YoY to $593mm.
Their most significant increases came in Q1 and Q2 when spending jumped by 247% and 284% YoY, respectively. Spending in Q3 came in at a no-less-impressive 139% increase.
It’s safe to say that cruise line advertisers are back—and Norwegian Cruise Line and Royal Caribbean are riding the wave.
Norwegian Cruise Line & Royal Caribbean
Advertisers for Norwegian Cruise Line and Royal Caribbean, who combined to spend $274mm, increased their budgets by 156% and 146% YoY, respectively.
Like all travel advertisers, budget increases come in the wake of 70% of travelers spending a ton to do anything but stay inside.
That said, their strategies in 2023 are anything but set in stone and will hinge heavily on how the cruise industry recovers—something that these two industry giants don’t agree on.
On the one hand, Norwegian Cruise Line projects that pre-pandemic occupancy is still a year away. To put this into perspective, its Q2 occupancy of 65% paled in comparison to the 107% it reported in 2019.
On the other hand, Royal Caribbean is forecasting triple-digital occupancy.
Under normal circumstances, their ad strategies would reflect their different outlooks. But these aren’t normal times, and cruise lines are fighting to recoup lost revenue.
The more likely scenario in 2023 is a big game of follow-the-leader, with competing cruise lines going toe-to-toe to get eager travelers to board at their ports.
U.S. tourism advertisers spent $432mm through October, representing a 24% YoY increase; September was the only month that saw spending decline.
Advertisers for California Travel and Tourism and Charleston Area Convention & Visitors Bureau were two of the category’s biggest spenders.
California Travel & Tourism Commission
Advertisers for California Travel and Tourism increased their budget by 12% YoY, with peak spending coming in Q1, which makes sense as many Americans fled the cold.
Interestingly, print advertising disappeared in July, followed by a surge in digital spending in mid-September.
Advertisers also invested significantly in TV. Despite an 8% YoY decrease, TV spending nearly topped $20mm.
Charleston Area Convention & Visitors Bureau
Advertisers for Charleston Area Convention & Visitors Bureau increased spending by 24% YoY, but they took a different path than their contemporaries in California.
First, they opted against a spending spree in Q1, which is surprising given the state’s popularity during the winter months.
Second, they didn’t invest a dime in T.V., but they did dish out more than $900k on print ads.
While the contrasting strategies are intriguing, both advertisers are primed to spend in 2023 as travel costs continue to rise and vacations close to home grow in appeal.
Airline advertisers increased spending by 125% YoY to $330mm, thanks mainly to a 234% YoY increase in Q1. The following quarters increased as well, but by a much more tame 70% and 76% YoY, respectively.
The top advertisers—Delta, Southwest, and United—spent $222mm, or 67% of the spending from the category.
Advertisers for Delta increased spending by 265% YoY, some of which went to promote its “Faces of Travel” initiative that aimed to “better reflect the diverse customers we see on our planes every day.”
In tandem with the campaign, Delta partnered with IBM to “identify unconscious bias in our advertising.” The similarity of these initiatives speaks to the company’s positioning and the messaging it’ll likely use throughout its campaigns in 2023.
Delta is also making a concerted effort to go after “premium travelers,” which will undoubtedly impact the ad formats and inventory advertisers turn to in 2023.
Advertisers for United one-upped their Delta counterparts, increasing spending by 304% YoY.
Earlier this year, they launched a new campaign, “Good Leads the Way,” which puts sustainability at the heart of the brand.
United is also shifting “its advertising calendar to be more flexible with both media and message.”
Maggie Schmerin, United’s managing director and head of global advertising and social media, said the new message aimed to answer questions like, “Is this a campaign that another airline can easily come in and put their logo on top of?”
United’s push to be different and “elevate United beyond aviation” will likely impact its strategy and could force advertisers to reallocate dollars to less frequented ecosystems where they can stand out.
Travel Ad Spend Will (Maybe) Soar in 2023
Global tourism arrivals are expected to rise by 30% in 2023, following a 60% increase this year.
While we’re not quite back to pre-pandemic levels, we’re getting there, and advertisers from the travel industry know this. Spending in 2023 should follow suit.
That said, uncertainty persists.
Between the continued economic slowdown, looming COVID concerns, and instability overseas, travel advertisers could backpedal in the blink of an eye.
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