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Published on Thursday, April 2, 2020

Introduce flexible policies to encourage future bookings, says marketing guru



Chief marketing officer of world data travel co-op ADARA, Carolyn Corda, says now is the time for companies to think about the future.


While COVID-19 is impacting all industries, the travel sector has experienced the most serious impact to date given major event cancellations, non-essential travel restrictions and closure of airports around the world. In fact, the situation is so drastic that the World Travel & Travel Council has said that without government intervention, the entire travel sector could collapse - putting up to 75 million jobs globally at risk. 


Following the outbreak, travel brands have sought to tighten their belts and conserve as much as possible in order to weather the ongoing crisis. For example, airlines have cut marketing spend considerably in recent weeks. According to research from MediaRadar, travel digital and TV ad spend in the first half of March compared to the first half of February fell by 44%. Year-over-year, travel advertising investment in the first two weeks of March was also down nearly 50%.


With the UK government announcing it will not be bailing out struggling airlines in the first instance, the need to tighten belts is clear. 


 


The eventual turnaround


It may be difficult to think about the travel sector's inevitable turnaround. However, people will always want to explore and eventually rise in demand will cause the industry to get back on its feet. The industry has survived the impact of global disruptive events such as the eruption of Eyjafjallajökull in 2010 in Iceland and 9/11 in the past. The scale of disruption from Covid-19 is, of course, far more severe than we have seen in the past - but the desire to travel will return with the legal ability to do so.


Despite the industry almost grinding to a standstill, we have already seen the signs of an eventual turnaround. Following the outbreak, we created the ADARA Travel Trends Tracker, which taps into real-time travel data to easily access travel-related consumer behaviour and identify key trends. The tracker utilises anonymised data from over 270 travel data co-op partners and is designed to help travel marketers activate the most informed marketing strategies based on current consumer travel activities.


The data has shown that leisure bookings by families (for over 91 days in the future) in the US soared on March 5 following the decision by many airlines to change their rebooking and cancelling policies. For example, Delta Airlines has changed its policy so that tickets purchased on or before March 9, 2020, for travel until April 30, 2020, can be changed without a service fee. This has boosted bookings, as consumers book flights to a holiday destination of their choice for the coming months with the confidence that if needed, they can update the booking at a later point. As consumers stuck inside may well start thinking aspirationally towards their next trip, now is a good time to introduce flexible policies. 


The data also tells us that flights booked for business travel to EMEA (from both within and outside of EMEA) have been declining steadily since the beginning of February, with a more rapid decline in March. However, for business travel, this is a picture that could fast change once clear dates are set for a return to normal travel restrictions. 


 


Preparing for the future


While it may be difficult for travel brands to think about the future during the COVID-19 outbreak, they must start laying the groundwork to take advantage of an eventual turnaround, lest other travel businesses prepare better and therefore receive greater shares of revived customer interest. 


Setting up the groundwork means understanding customer behaviour and intent and using data to anticipate when demand will pick back up. We know, for example, that customers are still searching for holiday deals for the future, making now a key time to encourage aspirational holidays for later down line. It is, in fact, possible that confinement may encourage even greater bookings to celebrate once restrictions are lifted. 


Travel companies will, therefore, be reliant on customer data in the coming weeks and months. This data can be used to understand when confidence returns and how customers are responding in booking and search behaviour to ongoing news events. Sharing anonymised data in a data co-op allows travel brands to gain richer insights and signals that enables them to better understand their customers, and now is a key moment for such activity. 


While we currently don't know when the travel industry will turnaround, we do know that travel brands that are prepared will reap the benefits of an eventual surge in demand. With consumers across the world self-isolating or working from home, there may well be a pent-up demand for travel after the outbreak and a return in demand to pre-Covid-19 levels. Travel brands must ensure that they have the tools in place to remain competitive once interest rebounds. 


 


 

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