If it seems like everyone around you has been feeling the adventure itch lately, they’re in good company: More than 90% of Americans are planning to travel this year, with nearly one in three intending to venture abroad. After the total number of trips taken by US travelers decreased by 33% in 2020, that number has steadily increased and is forecast to continue to grow in the coming years. And, spending in the travel industry reflects this trend. Despite economic uncertainty and the lasting impacts of the pandemic, the travel industry is returning to pre-pandemic levels and experiencing steady growth.
Still, airlines, hotels, restaurants, and other travel businesses across the world are facing unique challenges. From shifting consumer habits to rapidly evolving technologies, there’s a lot for travel marketing teams to juggle. Below, we outline six marketing challenges in the travel industry today as well as the strategies teams can use to address them. Ready? Let’s dive in.
Inflation peaked in June 2022, and while the costs of consumer goods were skyrocketing, so too were travel expenses. In fact, they were increasing even more. As a result, vacationers in 2022 identified price as the most important consideration when selecting their travel providers. With prices remaining higher today than pre-pandemic, most travelers will continue to look at the price tag first, and everything else second.
To address this, travel marketers can lean into messaging that emphasizes low rates and highlights value. For example, ads should draw attention to discounts and bundling whenever possible. Loyalty programs should also be front-and center, with 72% of travelers reporting that a great loyalty program improves their opinion of a travel brand. By crafting ads that highlight value and low rates, travel marketers can speak directly to the factors that are most relevant to consumers.
From the explosion of remote work, to the renewed focus on health and sustainability, to increased digital engagement, to a heightened sense of budget-consciousness, many of the shifts in consumer behavior that took hold during the first couple of years of the pandemic are still with us today. And while they’ve impacted all industries, they’ve had an outsized impact on travel and tourism.
For example, thanks to the number of people who now work from home, a new audience segment has emerged: bleisure travelers, or people who travel for a combination of business and leisure. This new category of travelers is substantial, and on track to overtake the category of traditional business travelers. And of course, the same marketing strategies that work for people traveling exclusively for either business or pleasure won’t be as effective with this new group.
Marketing teams must commit to tracking shifts like these and adjusting their strategies accordingly. This could be by leveraging a customer relationship management (CRM) platform to collect, organize, and research customer data; using machine learning technology to analyze first-party data and identify patterns, trends, and other insights; or by investing in a researcher (or team of researchers) to organize and dig into existing data so it can be used effectively. Regardless of which method(s) they use, marketers must consider the unique wants and needs of these new and emerging groups and adapt their campaigns to meet those needs.
Which leads us to our next challenge…
While personalization in digital marketing has become a must-have for all industries, it’s particularly impactful for travel and tourism brands. In fact, 86% of travelers say they’re looking for personalization during their travel experiences and interactions. And personalization isn’t just a trend on the marketing side—businesses are leaning into it to improve product and service experiences as well.
Delta Airlines, for instance, uses personalization technology to deliver personalized in-flight entertainment, onboard amenities, and more to customers. Hilton also leverages customer data—specifically, data obtained through their HHonors loyalty program—to provide a more intimate and individualized customer experience.
Marketers should personalize the experiences they curate for consumers to complement personalization on the product and services side. For example, a hotel brand might craft one variation of ad creative that emphasizes amenities that would appeal to families, and another that’s geared toward solo travelers. Or, a tourism company that offers immersive local experiences might target audiences 21+ with creative that features alcoholic beverages.
Capturing audience information and leveraging it, however, are two different things entirely. Brands need systems to both collect this data and connect it to their CRM platforms to create personalized advertising experiences. The challenge? Many marketing teams today use a variety of point solutions to navigate the complexity of the digital media landscape. And, as a result, many travel marketing teams struggle with poor data quality and a lack of data consolidation.
There are a variety of ways to address this, from upping your team’s number of data analysts, to investing in tech like universal reporting systems and customer data platforms (CDPs). Marketing teams with robust and secure systems for gathering, storing, and making the most of customer data will be well-positioned to create meaningful and personalized campaigns.
Remember when we mentioned that consumer habits are shifting? One of the reasons that travel marketers need to keep a pulse on these shifts is so they can connect with their target audiences throughout their entire customer journey. By first identifying key shifts in consumer behavior, travel brands can ensure that audiences are seeing the right messages at the right time.
What might this look like in practice? Well, a brand focused on vacation air travelers might focus on Instagram and Facebook to build awareness of their products and services, since these travelers often look for inspiration on social media. By leveraging an omnichannel advertising platform, teams could then retarget these prospective travelers via paid search or native ads as they move from awareness towards consideration and purchasing.
Or, a travel company targeting road trippers might focus on connected TV (CTV) and other digital video channels during early stages of the customer journey, as well as roadside digital out-of-home (DOOH) billboards, since these travelers watch a lot of online videos and spend a significant amount of time on the road. With retargeting, advertising teams can then place additional, personalized ads across digital channels like audio (for the drivers listening to their favorite music and podcasts) and social media (for the passengers posting photo dumps of their travels) to move these customers further down the funnel. By both leaning into current consumer trends and thinking holistically about their path to purchase, travel brands can make meaningful connections with travelers throughout their individual journeys.
Technology is constantly evolving. Consider the fact that, back in 2010, hotel and airline apps were just getting started, yet now they are an integral part of most travelers’ experiences. For travel marketers, there is a constant need to keep up with the latest innovations to ensure great experiences for target audiences and current customers.
First and foremost, travel companies need to ensure their customer-facing technology ensures a great experience. When traveling (or planning for travel), many customers look for flexibility and efficiency in the booking process. And, in 2022, nearly twice as many travelers chose to book directly with a provider online than through an online travel aggregator. For brands, this means that leaning into innovations in technology will help with both garnering new customers and retaining existing ones. At the very least, your digital presence must ensure a good customer experience: When prospective customers see an ad for your company but encounter overly-complex or faulty tech when they click on it (i.e., their click brings them to a “page not found” error on your website or to a hard-to-navigate app), that experience can have negative impacts on conversions, not to mention customer loyalty.
Additionally, travel companies should take advantage of emerging technologies to maintain a competitive edge. One prominent example of a new(er) technology that travel businesses can embrace is dynamic pricing. Airlines and hotels can use factors such as time of year, day of the week, and corporate versus leisure travelers to estimate the right price point to drive conversions. Using technology backed by artificial intelligence, it’s possible to make these adjustments based on daily changes in market demand. Some pricing engines have the power to update fares as often as every 15 seconds, and businesses are starting to see the huge difference this makes in bookings.
Though this new technology can result in significant benefits for travel companies, it can also present distinct challenges. To use dynamic pricing requires much more than just investing in the tech: Businesses must also rework their data management processes, including integrating CRM and revenue analytics. And, this can be made even more difficult if customer data is messy or has not been consolidated to a single interface—another reason why it’s so important for travel and tourism brands to prioritize data quality and consolidation.
In the wake of the pandemic, more and more travelers are looking for environmentally sustainable travel options. This can prove to be both a challenge and an opportunity for travel brands and companies. In 2022, these were some of the top sustainability practices vacationers expected from travel providers:
And while it’s true that marketing teams may not have much say in their company’s larger sustainability initiatives, there are ways they can prioritize the environment through their advertising practices.
First and foremost, marketing teams should avoid greenwashing at all costs. Making sustainability claims that your brand can’t back up is inauthentic and diminishes consumer trust in your company. And, these damages often extend beyond tarnishing a brand’s reputation: Making false or misleading claims can negatively impact customers’ experiences with the products or services you provide.
Additionally, there are strategies that digital advertising teams can use to help minimize their carbon footprint. One such strategy is to focus on attention metrics and eliminate impressions below a certain threshold. Since anywhere from 30% to 40% of online ads are “not ultimately viewed by consumers,” focusing on attention metrics can help advertisers reduce unnecessary emissions from these unseen (or sparsely viewed) ads. Another way that teams can help reduce their carbon emissions by streamlining their internal processes to reduce the amount of computing power needed for a typical campaign workflow. Rather than using many point solutions, consolidating to a single, automated platform for every step of the campaign can help advertising teams further minimize their environmental impact (and make their lives simpler, to boot!).
By leaning into sustainability, even in ways that may not be immediately apparent to consumers, travel and tourism brands can back up authentic statements about their commitment to the environment—and in doing so, match their consumers’ values.
It’s clear that travel and tourism marketers are facing a variety of demands. To meet the needs of today’s travelers, they need to be flexible and intentional, consider the entire customer journey, lean into personalization, emphasize their value in an authentic way, and adapt to innovations in technology. It’s a lot, but hey—so is making all the arrangements for a memorable getaway!
Speaking of innovations in technology, advertising automation is a powerful tool for simplifying the campaign process and improving performance. It consolidates disparate point solutions into a single platform, empowers teams to make data-driven decisions through a comprehensive analytics dashboard, and allows for a simplified billing and reconciliation process.
Interested in learning more about how advertising automation can help travel brands reduce manual labor and spend more time meeting the complexities of today? Check out our guide, Meeting the Moment with Advertising Automation, for everything you need to know.