Zenith Business Intelligence Travel cover

The hard-hit consumer travel market will have to wait a little longer to rebound to levels last seen prior to the global pandemic, according to a just-released report from Publicis Media's Zenith research division. Global advertising expenditure for the industry is expected to grow two to six times faster than the ad market as a whole over the next two years, with a 24% gain for 2021, and up 36% in 2022 and 19% in 2023, when it is expected to return to pre-COVID levels, according to Zenith's forecast.

“Travel advertising is poised for rapid growth as brands reset their relationships with consumers after the great rupture of 2020,” Zenith's report says. “Many consumers spent lockdown dreaming of travel, and the number of trips taken has risen rapidly as restrictions have loosened. This pent-up demand will drive rapid growth in travel adspend over the next few years, but it will be a long road back to pre-pandemic spending.”

The report, covering the airline and accommodation/hotel industries in 13 markets accounting for three-fourths of total global adspend, including the U.S., shows travel adspend will still be 33% below its 2019 level this year, while the ad market as a whole will be 7% ahead. Zenith expects it will take until 2023 for travel to exceed 2019 spending levels, which it will do by 9%, at which point the wider ad market will be up by 21% vs. 2019.

For the U.S. alone, travel ad spend is expected to increase 13% from 2019 to 2023, powered by a robust ad market pushing up media prices. Judging by Zenith's global forecast of spend by medium, digital will continue to dominate spending, with travel brands increasing digital's share of budget from 63% in 2020 to 70% in 2023. Radio's share of travel's ad budget was 3.1% in 2020, compared to 4.7% for the total ad market. While travel's digital ad spend is forecast to grow 6.4% from 2019 to 2023, radio's is expected to decline 8.6%.

Travel's increasing dependency on digital advertising, outpacing the total ad market, is due to its lead in digital transformation, conducting a third of sales by ecommerce in 2021 compared to 20% for retail as a whole, according to Zenith. “Integrating travel apps with vaccine passports, and using them to help consumers navigate local COVID-related rules and hurdles, will accelerate the transition of travel towards a seamless digital experience, from initial research to enjoying the destination,” the report says. “This offers brands the potential to turn travel back into a curated experience, which consumers used to expect from travel agents, instead of the current pick-and-mix approach.”

Whether looking at consumer spending or advertising, travel was among the categories hardest hit by COVID, as reported by Zenith. Globally, travel spending fell by just over half (51%) in 2020, from $3.3 billion in 2019 to $1.6 billion in 2020, 18 times faster than the 3% drop in consumer spending. The travel ad market, meanwhile, lost nearly half its value in 2020 (46%), from $18.0 billion in 2019 to $9.7 billion in 2020, while the ad market as a whole shrank by just 4%.