U.S. travel booking firms are spending heavily on marketing to get more people to book flights and accommodation on their apps and websites as they look to make the most of a post-pandemic boom in tourism during the upcoming summer season.
After becoming one of the biggest victims of the health crisis, companies including Airbnb Inc (ABNB.O), Booking Holdings Inc (BKNG.O), Expedia Group Inc (EXPE.O) and Tripadvisor Inc (TRIP.O) have quickly turned a corner due to unprecedented demand for travel from pandemic-weary Americans.
About six in 10 Americans have made plans to do at least one summer trip this year, according to monthly data from non-profit firm U.S. Travel Association released in April.
“This could be the biggest summer of travel in our lifetime and the last thing anyone would want to do is miss out,” Bernstein analyst Richard Clarke told Reuters.
The U.S. travel industry is expected to spend 14.2%, or about $4 billion, of their marketing budget this year for digital advertising, according to market research firm Insider Intelligence.
Although the boost in spending is expected to create a dent in profits in the short-term, benefits from the effort may far outweigh costs in the coming years, as travel demand is only set to soar.
“Customers are ready to pay premium prices for bookings. There’s been a lot of savings over the last two years … so even with inflation, there’s enough customers that will pay higher prices just to get some travel in,” HotelPlanner Chief Executive Tim Hentschel told Reuters.
For example, ticket prices in March for U.S. domestic flights were 15% higher month-on-month, according to Adobe Digital Economy Index, but that rise has not hit demand for flying, suggesting Americans are shrugging off the impact of surging inflation at least for now.
