Travel Trend Report: How Digital Advancements Are Shaping the Industry
The way customers interact with travel brands is changing. While in the past, travelers relied on physical brochures and brick-and-mortar agents to plan and make their bookings, technological advancements have shifted large parts of that experience to online channels. Last year, 83% of consumers opted to book at least one trip over the internet, either by themselves or by turning to an online agent. Increased usage of smartphones and digital devices means that customers have access to abundant information about destinations and modes of transportation, enabling them to research and compare many options before making a decision.
This creates a challenge for travel brands that need to break through the noise in a world where consumers are presented with vast amounts of data and inspiration. While the industry was early to incorporate automated solutions for bookings and customer service, human interaction still plays a significant part in delivering personalized experiences. As travelers continue to migrate online, brands will have to find ways to maintain these relationships on and across digital platforms.
Travel Grows Online and on Mobile
Digital platforms have become increasingly important in the travel customer’s purchase journey. Last year, global digital travel sales saw a 10% increase to $694 billion, particularly driven by exceptional growth in Latin America and China. Customers are not only turning to online channels to book their travels; these platforms also serve as vehicles for exploration and research. Global travelers reportedly spend an average of 53 days looking at 28 different websites before they make a purchase. And more than 50% of customers turn to social media at some point during the research process.
The rise of mobile technologies has played an important role in disrupting the global travel market. 60% of travelers use a smartphone travel app on a regular basis. Customers are increasingly using smartphones not just for research, but also to purchase travel-related products and services. 80% of last-minute bookings and nearly 90% of last-minute travel searches happen on mobile devices.
Travelers and Social Media
Social platforms have become the primary tools for travel planning and inspiration. A recent report from Facebook shows that 67% of users turn to Instagram to research destinations, and 62% used the platform to build excitement ahead of upcoming trips. Younger travelers are particularly prone to use social media as their primary source of inspiration. Millennial Facebook users are 1.4x more likely than Gen Xers to use the platform to look for new destinations. The vast majority of millennial consumers – 89% – plan trips and activities based on what their peers have posted across digital channels.
Travel Brands on Digital Platforms
It’s not only customers who have migrated online; travel brands around the world are also shifting focus to digital. Last year, 47% of total ad spend across the industry was allocated to digital platforms, and 75% of companies are looking to spend even more on these channels going forward. Social media has become increasingly important for travel advertisers and currently accounts for 30% of total digital media spend. This compares favorably to other digital disciplines such as paid search (19%) and programmatic display (10%).
According to Adaptly data, travel brands spend the most on social media at certain key periods throughout the year. Overall investment patterns follow seasonal travel trends and are highest in the spring, when many customers are finalizing their summer vacation plans. While spend figures were particularly low in early and late 2018, total investment for the year saw a 57% increase compared to 2017.
Facebook is the preferred social platform for travel advertisers, currently accounting for 60% of total investment. Nevertheless, the industry spends more on Instagram and Pinterest than most other industries – 25% on Instagram and 9% on Pinterest, compared to a cross-industry average of 16% and 6%, respectively. The travel industry is particularly well-suited for visual marketing, so we expect investment across these platforms to remain strong going forward.
Our data shows that many travel brands turn to Twitter for conversion-focused objectives. In 2018, 61% of spend was allocated to conversion formats, compared to only 16% on awareness. These figures stand in stark contrast to investment patterns on Instagram and Facebook, where the vast majority (70%) of spend goes to consideration ads. An analysis of trends across other industries shows a more even split across the funnel, especially on Twitter, where the cross-industry average is 22% on conversion-focused ads and 25% on awareness. As digital platforms continue to release visually appealing conversion ad products, it will become even easier for travel brands to take a full-funnel approach to marketing across these channels.
Top Trends in the Travel Industry
The travel industry is undergoing a major technological transformation, but many companies have already incorporated digital elements to their customer experiences. Last year, 80% of bookings were made without human interaction, and 69% of travelers used voice search functionalities when planning and booking trips. Nevertheless, as technological advancements continue to disrupt the industry, many brands are struggling to engage and retain customers. The increased use of smartphones has made the travel industry more competitive, giving shoppers access to a constant stream of information and inspiration. In order to cut through the noise, travel brands have to deliver customer service and experiences that go beyond travelers’ expectations.
Click below to download our 2019 Travel Trend Report and learn more about the trends that are currently shaping the industry. Plus, get insights on the implications for advertisers and how brands can best prepare for the continued digitalization of the industry.