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If it seems like everyone around you has been getting the adventure itch lately, they’re in good company: More than 90% of Americans are planning to take a trip in 2024, with 50% intending to travel more this year than they did last year.
While concerns over inflation linger, with 54% of Americans reporting that the economy is impacting their travel plans, more than half still have ranked travel as a budget priority for 2024. And with "relaxing and recharging” ranking as the number one reason Americans want to travel this year, it seems that a good portion of consumers value the opportunity to unwind enough to feel that travel is worth the splurge, despite inflationary concerns.
Airlines, hotels, and other travel businesses looking to connect with these budget-conscious, relaxation-seeking consumers face new and unique challenges, from shifting consumer habits to rapidly evolving technologies. To set their teams up for success and make the most of the opportunities available to them in 2024, marketing leaders will need to understand these challenges and implement fresh strategies to address them proactively.
Inflation has been a constant thorn in consumers’ and marketers’ sides in recent years, with consumer price inflation increasing by a whopping 19.32% between January 2020 and April 2024. Many consumers are adjusting accordingly and have begun dedicating more of their budgets to travel: Where only 24% of Americans planned to set aside $4,000+ for travel in 2023, that number has risen to 52% in 2024.
Still, price is still top of mind for many consumers—15% have cancelled or postponed a trip in 2024 due to the cost of travel—and travel marketers would do well to factor that into their advertising messaging, emphasizing discounts, low rates and bundles while highlighting value for price-conscious consumers.
Loyalty programs should also be front-and center, as 50% of US consumers in 2023 were airline travel rewards members, and 49% were hotel travel rewards members, according to a panel done by Basis Technologies in partnership with GWI. By crafting ads that highlight value and low rates, travel marketers can speak directly to the factors that are most relevant to consumers.
The initial years of the pandemic brought about many shifts in consumer behavior that are still with us today, including (but certainly not limited to): An explosion of remote work, a renewed focus on health and sustainability, increased digital engagement, and a heightened sense of budget-consciousness. All these factors are now driving new audience segments and travel trends.
For example, the rising number of people who now work from home has helped spur the formation of a new audience segment: “bleisure travelers,” or people who travel for a combination of business and leisure. At the same time, solo travel has increased by 42% among US consumers since before the COVID-19 pandemic, according Basis/GWI research. And, surprise trips are gaining ground amongst US consumers this year, with 52% of travelers interested in taking a vacation where the location and all the accompanying details are a surprise until departure.
Each of these audiences display unique characteristics and behaviors that advertisers can use to connect with them more effectively, and travel marketers who want to reach them should adjust their tactics 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 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, advertisers 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 Hilton Honors 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. Marketing teams 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 customer data platforms (CDPs) and universal reporting systems. 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—especially looking ahead to the cookieless future.
While it might be tempting to imagine that Google will continue to delay the loss of third-party cookies in Chrome in perpetuity, the cookiepocalypse will inevitably arrive, and it will do so in the not-too-distant future. According to Google’s latest announcement, the tech giant’s current goal is to begin cookie deprecation in early 2025. If all goes according to plan (which, granted, is a pretty big “if”), that means travel brands and agencies only have about six months to get their ducks in a row before losing the targeting and attribution enabled by third-party cookies. As such, it’s critical that travel brands and agencies proactively strengthen their team members’ fluency with cookieless targeting and attribution this year in order to set their businesses up for success once third-party cookies are gone for good.
In terms of cookieless advertising solutions, activating first-party data should be a top priority, as most travel brands have the ability to collect large amounts of first-party data from customers and prospective customers through their interactions on brands’ websites and social media pages. However, that data is often siloed across many different third-party vendors, preventing advertisers from leveraging it to its full extent. As such, travel brands must adopt systems like CDPs—which can collect first-party data from many different sources, process and standardize it, and perform real-time segmentation for targeting—to unify their first-party data and use it for cookieless targeting and attribution. CDPs can also empower advertisers to map out their consumers’ buying journeys to assist with attribution.
Contextual advertising will also be an essential targeting solution for travel advertisers in a cookieless world. Given that the majority of US consumers use digital resources to research their trip accommodations before booking, there’s a big opportunity for travel brands of all kinds to connect with consumers in ideal moments as they plan their vacations.
To better connect with their target audiences throughout their customer journey, travel marketers need to keep a pulse on shifts in consumer behavior. 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 who wants to earn solo travelers’ dollars might focus on streaming video ads to build awareness of their products and services, since these travelers often watch online videos to occupy their down time on their solo travels. 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 agency working with a brand that wants to reach 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.
For travel marketers to ensure great experiences for their target audiences and consumers, it’s critical that they embrace the latest technological innovations. And the last couple of years have seen particularly rapid advances in this area, as generative AI has become more popular with consumers and advertisers alike.
First and foremost, travel companies need to ensure their customer-facing technology ensures a great experience, as consumers’ path to purchase is increasingly digital. As noted previously, most US consumers use digital resources to research their trip accommodations before booking, with more and more younger consumers in particular using generative AI tools to assist in their travel planning. And consumers are increasingly reserving their travel digitally, which is driving a growth in digital sales. Data from Vivvix and Pathmatics show that the travel brands who spend the most on advertising are also the top digital advertising spenders, indicating that top brands are tailoring their strategies in response to the rising preference for digital.
For brands, perfecting a digital presence will help with both garnering new customers and retaining existing ones. At the very least, a brand’s digital presence must ensure a good customer experience: When prospective customers see an ad for a 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 the company’s website or to a hard-to-navigate app), that experience can have negative impacts on conversions, not to mention customer loyalty.
Additionally, travel marketers should take advantage of newer technology-driven tactics to maintain a competitive edge. One prominent example of a technology-enabled tactic that travel advertisers can embrace is dynamic pricing. Advertisers working for 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-driven strategy can result in significant benefits for travel advertisers, it can also present distinct challenges. To use dynamic pricing requires much more than just investing in the tech: Marketing teams must also rework their data management processes, including integrating CRM and revenue analytics. 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 advertisers to prioritize data quality and tech stack consolidation.
More and more travelers are looking for environmentally sustainable travel options, with 80% of travelers worldwide agreeing that sustainable travel is important. 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 a brand can’t back up is inauthentic and diminishes consumer trust. 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 they provide.
Additionally, there are strategies that digital advertising teams can use to help minimize their carbon footprint. One such strategy is to prioritize capturing audience attention over serving as many impressions as possible—especially since anywhere from 30% to 40% of online ads are “not ultimately viewed by consumers.” Another is by streamlining 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.
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.
All in all, one of the most important factors in marketing teams’ success this year will be how well they understand their consumers’ behaviors, values, and expectations.
To meet the needs of these travelers, marketing teams must 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 to consider, but hey—so is making all the arrangements for a memorable getaway!
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Agency marketers working in the travel industry are adapting not only to shifting consumer behavior, but also to massive changes taking place in the advertising industry and in the agency world specifically. Curious as to how your agency peers feel about their jobs, their agencies, their industry, and the challenges and opportunities that are shaping their futures? Check out our 2024 Advertising Agency Report to find out.