by Laurie Sullivan @lauriesullivan
Source: www.mediapost.com, August 2023
Consumers are spending, making the travel sector the fastest-growing in digital ad spend.
U.S. digital travel sales is forecast to surpass $300 billion for the first time in 2024, while the travel industry drives growth of digital ad spend, according to data released Wednesday.
The latest travel sales and ad spend numbers from Insider Intelligence estimates digital travel sales will grow 20.0% to $296.77 billion, up from $208.44 billion in 2019. Numbers are on pace to surpass $350 billion by the end of 2027.
Increases in digital travel spend has fueled double-digit increases in digital ads by the sector. After reducing ad spend during the pandemic, the U.S. travel industry is now the fastest growing sector in terms of digital advertising, outpacing the category as a whole.
Digital ad spend as a whole will grow 7.8% in the U.S. in 2023. Travel will grow even more than retail, traditionally the biggest growth driver of the online ad market. But some sub-categories will grow spend faster than others.
Search is contributing substantially to the increase in advertising spend. Insider Intelligence estimates search ad spend to contribute $3.92 billion, 57.7%, to the market.
The data released August 2023 forecasts $4.57 billion in 2024 and included adverting that appears on desktop and laptop computers, as well as mobile phones, tablets and other internet-connected devices, as well as contextual text links, paid inclusions, paid listings, and search engine optimization.
Hotels, Airbnb, and VRBO are the top spenders of online ads overall across the travel sector is accommodations companies at $2.7 billion. The sub-category will grow spend 10.9% to $2.70 billion, representing 39.7% of online travel ad spend.
The “other” category takes a close second in spend at $2.68 billion in 2023, up 16.5% compared with 2022. This category includes tourism boards, online travel agencies (OTAs), travel agents, visitor centers, and car rental companies.
Airlines are the third-highest spender of digital ads, accounting for 13.2% of travel spending. It’s also the fastest-growing category, increasing spend 18.1% this year to reach $895.6 million. By next year, airlines will surpass their 2019 peak spending, reaching $1.09 billion, following a steep drop in 2020.
The cruise industry will increase its digital ad spending 14.9% this year to $515.7 million. And while it is down sharply from its peak in 2019 of $790.7 million, Insider Intelligence analysts expect it won’t surpass that level of spend until after 2025.
One thing certain, confirmed bookings are well into 2025 for some of the major cruise lines.
