US air travel in Q4 was down more than 60 percent compared with the previous year, while overseas air travel was down nearly 90 percent through November compared with 2019 according to the International Air Transport Association.
The ongoing fallout of COVID-19, including travel bans and quarantines, has caused the airline business to bleed money and marketers to scale back ad spend. When the crisis hit, the travel industry reduced its ad spending by nearly 50 percent during the first two weeks of March from a year prior, according to MediaRadar. By mid-April, spend was down 93 percent year-over-year.
A resurgence in spending occurred in the summer months when travel’s TV ad spend gradually increased. For example, in July, iSpot.tv data cited by Skift showed that the US travel industry spent $33.9 million on TV ads, more than double compared with the $15.4 million spent in June. Despite the slight increase, travel TV ad spend was still down 77.8 percent from the year prior.
In October, eMarketer revised its travel ad forecast to show that US travel digital ad spend would drop by 41 percent YoY to just $3.24 billion, making travel account for just 2.4 percent of digital ad spending. The $3.74 billion the researcher forecasted for travel ad spending in 2021 barely exceeds the industry’s spend in 2017, which was $3.64 billion.
Though the US Travel Association doesn’t expect travel spending to return to pre-pandemic strength until 2024, travel companies are now planning for the possibility that consumer demand will rebound amid the vaccine rollout.
According to Tripadvisor’s latest research, 77 percent of travelers worldwide say they will be more likely to travel internationally if they receive the vaccine, rising to 86 percent for travel domestically. In the US, those figures are 69 percent and 80 percent, respectively.
Twenty-six percent of respondents globally say that they would only travel to destinations that required visitors to be vaccinated before travel.
Vaccine or not, the data indicate the travel industry could see a sign of hope as 47 percent of travelers globally say they’re planning to travel internationally in 2021, including 45 percent of US travelers.
The road to recovery will be arduous as officials urge consumers to avoid travel and airlines’ debt mounts. Delta reported a $12.4 billion loss for all of 2020, the largest annual loss of the history of the airline. But as people start planning summer vacations, Delta’s chief executive Ed Bastian said the company expects bookings “to start opening up again.”
Bastian expects international travel will take another 12 to 18 months to fully recover, and business travel to be only 25 percent to 50 percent of what it used to be by the second half of 2021.
Southwest Airlines Co. CEO Gary Kelly anticipates domestic business could be in the range of down 50 percent to 60 percent by the end of this year, as reported by the Wall Street Journal.
Transparency will be critical for rebuilding consumer trust. For companies, means continuously updating travelers with their latest health and safety measures in line with pandemic protocols, as well as encouraging them via special deals to travel locally.
“Transparency is the currency of character right now. We talk so much about consumer confidence, but really when you get right down to it it’s about trust and if we earn and maintain the trust of the consumer we’ll have their confidence when it comes time to travel, Brad Dean, chief executive of Discover Puerto Rico told Skift.