• Travel adspend will grow two to six times faster than the ad market as a whole from 2021 to 2023.
• The travel ad market won’t return to pre-pandemic levels of spending until 2023.
• Travel brands will increase their spending on digital advertising from 63% of budgets in 2020 to 70% in 2023.

Travel advertising is poised for rapid growth as brands reset their relationships with consumers after the great rupture of 2020, according to Zenith’s Business Intelligence – Travel report, published today.

forecasts that travel advertising in 13 key markets* will expand by 24% in 2021, twice as fast as the advertising market as a whole, before 36% growth in 2022 and 19% growth in 2023.

As global travel starts to recover, travel brands must rebuild their relationships with consumers as they adapt to the realities of post-COVID travel. Brands will have to refocus their communications on different audiences as they adapt to the decline of business travel as companies coordinate more international business with remote meetings, and address consumers’ concerns about the sustainability of travel, and adapt to growing demand for low-carbon journeys.

Travel advertising was one of the categories hardest-hit by COVID-19. The travel ad market lost nearly half its value in 2020 (46%), while the ad market as a whole shrank by just 4%. Zenith estimates that travel adspend fell from US$18.0 billion in 2019 to US$9.7 billion in 2020.

Pent-up demand for travel will drive rapid growth in travel adspend over the next few years, but it will be a long road back to pre-pandemic spending. Travel adspend will be still 33% below its 2019 level this year, while the ad market as a whole will be 7% ahead. It will take until 2023 for travel to exceed 2019 levels of spending, when it will reach US$19.6bn.

Travel is becoming a digital experience

Travel advertisers spend more on digital advertising than the average brand – 63% in 2020, compared to 58% on average. This is not surprising for a category that has been well ahead of the market in digital transformation, conducting 32% of sales by ecommerce in 2021 compared to 20% for retail as a whole.

Digital travel advertising aims to capture consumers in the early stage of research, through search advertising and display and video ads within relevant content. As travel becomes ever more digital, digital advertising will become even more important for both brand building and conversion. Integrating travel apps with vaccine passports, using them to help consumer navigate local COVID-related rules and bureaucracy, and offering digital concierge services will accelerate the transition of travel towards a seamless digital experience, from initial research to enjoying the destination.

Zenith forecasts digital adspend by travel brands to grow by 6% a year between 2019 and 2023. By 2023 travel brands will be spending 70% of their budgets on digital advertising, an increase from 63% in 2020.

“Travel was one of the earliest sectors to embrace digital as booking went online,” said Ben Lukawski, Global Chief Strategy Officer, Zenith. “Post-COVID, the best-performing brands will complete this transformation by making the total experience digital, from reducing form filling to contactless entry, removing nearly all possible friction from the experience.”

Travel advertisers spend substantially more of their budgets on newspapers, magazines and out-of-home than average (20% in 2020, compared to 13% for the average brand), and substantially less on television (13% compared to an average of 24%). Consumers are looking for choice and value, so media that allow brands to display a range of options and some details of pricing are particularly effective. Travel adspend in print is falling as circulations continue to shrink, but out-of-home is forecast to recover from its slump in 2020 and grow at an average rate of 6% a year between 2019 and 2023.

Brands seek out new travellers in Asia and Eastern Europe

Zenith expects the fastest growth in travel advertising to come from India and Russia, where travel adspend will be 31% and 21% respectively above the 2019 baseline by 2023. Here, rising disposable incomes mean more people are travelling, and existing travellers are travelling more frequently. The same holds true for China and Poland, where adspend will increase by 16% and 14% respectively between 2019 and 2023.

The robust US ad market is pushing up media prices, which is the main reason why travel adspend will be 13% higher there in 2023 and in 2019. Other mature markets will range from +9% to -9% growth over this period, depending on consumer demand, media inflation, adoption of digital technology, and a myriad of other reasons. In all markets, though, the recovery of travel advertising from the slump in 2020 will be well behind the growth of the market as a whole.

“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,” said Jonathan Barnard, Head of Forecasting, Zenith. “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."

*The 13 markets included in this report are Australia, Canada, China, France, Germany, India, Italy, Poland, Russia, Spain, Switzerland, UK and USA, which between them account for 74% of total global adspend. The report covers domestic and foreign travel for business and leisure.