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Travel Sector Outlook: Road to Recovery in 2021

14 Dec, 2020
Written by Roy Chanth

The COVID-19 pandemic brought the world to a screeching halt and the travel, tourism, and hospitality sector has been among the worst affected. Due to national lockdowns, travel restrictions, and quarantines, travelers have been forced to cancel travel plans, postpone holidays, and forego business meetings.

The travel industry has been resilient to many global crises over the years but has never faced one as grim as this.

The near-term focus for many travel businesses is to find new, inventive, and transformative ways to reach and attract customers. Many businesses and advertisers in this sector are facing these questions:

How will the world travel and when will travel resume?

What will be the 'new normal' of consumers’ post-pandemic travel habits?

How can businesses pivot their marketing strategies to engage travelers at the right time?

Here are some actions that travel brands can take to prepare for the future and the road to recovery:

Brand Build to Be Top of Mind

Even though travelers might not be booking travel in the volumes they once were, now is still a good time for brands to implement thoughtful strategies and messages that resonate with customers in these trying times since 65% customers are more likely to make a purchase from a brand based on how they respond during times of crisis, according to McKinsey & Company.

Many travel brands have jumped right into this type of brand building by giving back and pitching in throughout the pandemic. For example, during the pandemic’s first wave, Delta Airlines flew medical volunteers to Covid-19 hot spots in the US for free; hotels across the UK provided free rooms for healthcare workers; and Carnival Cruise offered their ships to be used as offshore medical facilities. These investments in brand building create positive associations that have long-term benefits - according to research by Bain, brands that invested in their sales activities and marketing during the 2008-09 Great Recession, had faster recovery to profitability after the recession.

Take action: While many travel companies are cutting budgets to preserve cash, they keep in mind that marketing is more important than ever. The affiliate channel has proven itself as a safe harbour for budgets due to its pay for performance nature. Travel brands should consider investing more into the channel during this time and focus on branding initiatives that will place them top of mind with travelers. Leverage CJ’s content publishers and influencers to get your brand’s message out. These types of partners are always looking for new and interesting topics for content and showcasing how your business is providing support throughout the pandemic meets that objective - making it mutually beneficial.

Gain Market Share Now

Travel brands have the chance to leverage customer data now to reevaluate the competitive landscape, position themselves for post-COVID gains in market share, and for direct to consumer selling.

One of the best ways to grow market share is to repeat what’s already working with a similar audience. We advise travel brands to group look-alike customers by interests and online behaviours and use that data to mine for similar look-alike groups within publisher audiences and new geographic regions. This level of insight can be harnessed now to expand a brand’s reach to new customers while also appealing to differing abilities to travel based on location as the pandemic’s impact changes. For example, presenting offers for domestic travel to regions that are newly emerging from lockdowns, versus an international travel offer, will convert better overall.

Travelers are exploring the risks and benefits of booking options by visiting brand sites directly for cancellation policies. These interactions pose an opportunity to establish a direct to consumer relationship. For example, in the cruise category, we expect there will be an opportunity to sell directly to consumers, as many of the small cruise-focused travel agents have floundered and may not recover. Travelers are also weighing the pros and cons of booking options for domestic travel or staycations - direct bookings with hotel brands may strengthen as consumers seek out increased quality assurances and flexibility in their rebooking and cancellation options, but short-term and vacation rentals have been performing well during the pandemic due to their unique selling propositions turned super strengths with larger units for social distancing, more rural or remote locations away from crowded cities, and full-service amenities like kitchens or living space that allow for longer stays.

Take action: The time to harness customer insights, network competitive analysis, and publisher audiences is now. They should be used to expand market share with new customers and inform a promotional strategy with regional differences. CJ’s enhanced integration via travel parameters unlocks this type of data via Insights reporting (Travel Destination and Customer Origin Destination) so you can see which locations are ramping up to travel and when, as well as easily identify the publishers driving the most traffic or conversions in those areas. Publishers with targeting capabilities (geo-targeting, push notifications with geo-fencing, etc.) should plan to showcase them front and centre. Travel brands must also consider how their cancellation policies and travel protections can be highlighted to encourage confidence to book during these uncertain times.

Highlight Safety

In addition to mandated social-distancing, travelers are scrutinising the sanitisation and hygiene protocols of their holiday venues. The industry has responded with 'no-touch' measures at check in and mobile-first technologies, such as contactless payments. The no-touch trend will get a further boost with AI and 5G technologies that can extend the 'no-touch' practice throughout the travel journey, from passports and boarding passes, to keyless hotel entry and digital check-in and check-out at hotels. Long-term investments in new technologies, such as biometrics, hand-free gesture controls, and automated check-in, will transform the travel experience even further to prioritise safety and health.

Take action: Give hygiene measures prime billing on site and in campaigns to differentiate your brand from the competition and also encourage travelers to commit to a booking. There is pent up interest to travel and when it is feasible to do so, travelers will book with brands and venues that have outlined their safety protocols and make it clear that they can help balance being safe and having a good time. Content publishers and paid media exposure such as newsletters are a great way to get the message out via affiliate.

Travel Trends Predictions for Early 2021

When travelers begin booking again in earnest, we anticipate they’ll prioritise certain travel products over others. Those that will see a surge in Q1/Q2 2021 will include:

All-inclusive holidays: For social distancing reasons, resorts that offer an inclusive experience with many on-site amenities and offer enhanced safety measures, such as automatic locks, contactless food delivery, socially distanced dining and staggered room occupancy, will be in high demand.

Car rentals: As domestic travel is given priority over international, demand for car rentals is expected to increase as more and more people will opt for driving over flying to their domestic destinations.

Flexible booking stays: To encourage people to book trips, companies around the world are introducing major changes to their policies, such as last-minute cancellations and more flexible products. These booking types will be in high demand in Q1/Q2 when travelers are looking to book winter holiday and spring break travel plans against a backdrop of rising infection rates in many regions.

Travel insurance: Due to the rising health and safety concerns, travelers are increasingly aware of the importance of travel insurance. Up to 30% of tourists are expected to buy travel insurance before hitting the road, say industry experts. Furthermore, some companies have upgraded their insurance policies to include 'cancel for any reason' and medical evacuation options.

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While the pandemic may have put immediate ambitions on hold, it poses an opportunity for innovation and transformation. The travel industry is resilient, and we have great confidence in its endurance and ability to overcome challenges.

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