Travel industry slashes ad spending in half amid coronavirus

Dive Brief:

The travel industry cut its ad spending by about 50% during the first two weeks of March from a year earlier as the COVID-19 coronavirus pandemic spread worldwide. The drop was more extreme on a monthly basis, with TV spending falling by 69% and digital spending contracting by 62% from February, advertising analytics company MediaRadar said in a report shared with Marketing Dive.
Cruise lines started cutting back in mid-February, MediaRadar observed. The firm attributed the decline to the highly publicized quarantine of Carnival's Diamond Princess cruise ship at a Japanese port on Feb. 4, after a passenger from a prior trip tested positive for the coronavirus when he returned to Hong Kong, as reported by CNBC.
Travel-related companies continued to cut back on ad spending during March. Between the first and second weeks of the month, cruise lines decreased ad spending by 30%, airlines by 27% and hotel and lodging brands by 25%, per MediaRadar.

Dive Insight:

Marketers of travel-related services are among the first ones to bear the brunt of the coronavirus pandemic as government authorities worldwide restrict travel and urge people to stay home to lessen the possibility of infection. In the U.S., the Center for Disease Control and Prevention recommended that people defer all cruise ship travel and avoid non-essential travel such as long plane trips. The world's biggest cruise lines, including Carnival, Royal Caribbean, Norwegian and MSC last week announced they were suspending operations until further notice. The airline industry this week asked for a federal bailout to help recover from a sharp drop in travel because of the coronavirus.

MediaRadar recommends that travel-related industries and media outlets plan for the possibility that consumer demand will bounce back as the coronavirus is contained. The firm observed that hotels, airlines and cruise lines hadn't changed their ad creative in the past month, continuing to promote destinations and sales. MediaRadar expects the messaging to change in the next one to two weeks to acknowledge the virus.

"Broadcasters and publishers courting hotel, cruise and airline advertisers will need to think about what comes next, to rebuild public confidence in the aftermath of COVID-19," Todd Krizelman, CEO of MediaRadar, said in an emailed statement to Marketing Dive. "Now is the time to plan the comeback."

The travel industry had been forecast to become one of the top five advertisers in digital media by this year. U.S. travel-related companies were expected to spend about $13 billion on digital media in 2020, researcher eMarketer estimated in July. The growth in digital media spending came as travel-related industries sought to reach younger adults who are more willing than older generations to spend heavily on travel experiences they can share on social media. About one-third (34%) of U.S. adults ages 18 to 34 said they're willing to spend more than $5,000 on upcoming vacations, the most of any age group, per a survey by travel tech firm Travelport. Marketers need to be prepared for the possibility that demand for travel-related services might snap back as the traditionally busy summer travel season gets under way from mid-June through August.