While almost every industry will most likely feel the effects of the fast-spreading COVID-19, the travel industry is one of the first to be impacted. It is the tip of the spear. MediaRadar wanted to share some insights on what’s already happened.
Big picture: We are impressed by the speed that travel firms are acting. They are conserving cash and dramatically reducing spending. Many brand-name firms have stopped their spend altogether while they assess and develop their plans.
Broadcasters & publishers courting hotel, cruise, and airline advertisers will need to think about what comes next. They’ll need to rebuild public confidence in the aftermath of COVID-19 – and help support these industries fight through this difficult time.
We encourage you to subscribe to our Blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.
Here are answers to questions many have when thinking about the impact of COVID – 19 on the travel industry.
Q: Do we see a deceleration in advertising spend in the travel industry? And if yes, when?
A: Like a car hitting the brakes in advance of an oncoming accident, the deceleration in ad spend within the travel industry has been swift. Looking at both year-over-year, as well as week-over-week, the shift started in mid-February. Key findings:
- Digital & TV spend was reduced sharply. A comparison of the first week of March vs. February, shows a contraction of 33%. The first week of March vs. January is down 30%.
- TV & Digital spend has contracted by 60% & 51%, respectively. Magazine spend is booked farther in advance and has shown no contraction yet. In fact, there was an increase in spend for March issues.
Q: Was there a decrease in travel ad spend across cruises, airlines & hotels?
A: Cruise lines began making sustained cuts to their advertising spend in mid-February 2020, possibly in response to the Princess-Cruise quarantine in Japan. Spend has been cut even more drastically, especially among digital channels, since the beginning of March. Airlines also began noticeably shifting ad spend in Mid-February, especially when looking at year-over-year comparisons. Meanwhile, hotels have only recently changed their ad buying behavior, although it’s dramatic.
Q: How does ad creative shift over time, if at all? Are travel companies changing their messaging?
A: There is virtually no change in ad creative. Hotels, airlines, and cruise lines are continuing to promote destinations and sales. Even Princess Cruises was still promoting its vacations as of last week. In spot-checking the top 5 companies from each category (cruises, airlines & hotels) we found only a single example of a company (Delta Airlines) acknowledging the virus (creative below) with a campaign running on “Business Travel News”. However, Delta was still running regular creative across consumer sites.
Big picture: Last week was astonishing for its speed of change. We expect most travel firms will adjust creative in the coming 1-2 weeks.
Q: How did the week of Saturday, March 7 to March 14 look for all three categories (cruises, airlines & hotels), week over week? Is there any shift in spend at all?
A: All three categories made week-over-weeks cuts to their ad spend when comparing the week of March 8 to the previous week of March 1, 2020.