U.S. travel firms flex marketing muscle to lure travelers seeking sun and sand

 U.S. travel firms flex marketing muscle to lure travelers seeking sun and sand

May 13 (Reuters) – U.S. travel companies are spending heavily on marketing to get more people to book flights and accommodations on their apps and websites as they seek to take advantage of a post -pandemic boom in tourism in the coming summer season.

After becoming one of the biggest victims of the health crisis, companies including Airbnb Inc (ABNB.O), Booking Holdings Inc (BKNG.O), Expedia Group Inc (EXPE.O) and Tripadvisor Inc (TRIP.O) easily turned away. a corner because of the unseen need for travel from weary Americans.

About six in 10 Americans plan to make at least one trip this summer, according to monthly data from the non-profit firm U.S. Travel Association released in April.

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“This is going to be the biggest summer of travel of our entire lives and the last thing anyone wants to do is miss,” Bernstein analyst Richard Clarke told Reuters.

The U.S. travel industry is expected to spend 14.2%, or about $ 4 billion, of their sales budget this year for digital advertising, according to market research firm Insider Intelligence.

Even if the increase in spending is expected to result in a reduction in income in the short term, the benefits from the effort could outweigh costs in future years, as the demand for travel is set to increase.

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“Customers are willing to pay premium prices for bookings. There have been a lot of savings over the past two years … so even with inflation, there are enough customers to pay higher prices to can only get into a few trips, ”HotelPlanner’s Chief Executive Tim Hentschel told Reuters.

For example, ticket prices in March for U.S. domestic flights were 15% higher month-on-month, according to the Adobe Digital Economy Index, but that increase didn’t hit demand for flights, suggesting that Americans deny the impact of rising inflation at least. at present.


Travel companies are trying to attract vacationers and are taking all possible steps from improving their websites to offering new services.

Earlier this month, Airbnb chief of finance Dave Stephenson said the company was adding “sales dollars”, even if it would remain relatively steady as a percentage of revenue.

On Wednesday, the San Francisco-based company updated its app and website to allow travelers to divide their holidays between both properties and book houses by browsing multiple listings on categories that do not need to enter a destination. read more

Meanwhile, Booking said it expects second-quarter retail spending to be a slightly larger percentage of gross bookings compared to pre-pandemic levels while rival Expedia expects to “spend on (travel ) recovery “.

Marketing and advertising costs make up the bulk of the total cost of most travel companies, which have to find new and innovative ways to keep people interested in their products.

Booking’s marketing costs accounted for about 46% of total operating costs in the first quarter, while Expedia’s sales and marketing costs accounted for nearly 60% of costs and expenses.

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“We think that this year, in a booming travel market, there is the potential for a once in a generation opportunity to rely on both marketing and merchandising,” Booking Chief Financial Officer David Goulden said earlier this year. month.

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Reporting by Nilanjana Basu and further reporting by Abhijith Ganapavaram of Bengaluru; Edited by Anil D’Silva

Our Standards: The Thomson Reuters Trust Principles.

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