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The Art and Science of Travel Industry SEM

Phocuswright and Bing Ads present the future of travel

For advertisers hoping to attract customers who travel – and spend – more than average, understanding trending destinations, shifts in the accommodations landscape, customer loyalty trends and in-destination opportunities is essential.

Unconventional trending destinations

The vast majority of travelers – more than 70%1 – select their destination online, giving digital online advertisers a prime opportunity to influence the decision-making process. Where are these travelers going?

We researched the top 25 destinations on Bing Network with the highest year-over-year growth in search volume. While Cancun and the Caribbean top the list, more unconventional destinations have become increasingly popular, including India, Maldives, Kenya, and Alaska.

Top 25 trending destinations

% YoY search volume on Bing Network 2

Chart showing top 25 trending destinations: Cancun, Caribbean, India, Bangladesh, Maldives, Kenya, Nepal, Grand Canyon, Rwanda, Alaska, Holland, Mississippi, Indonesia, Netherlands, Iceland, Norway, Philippines, Thailand, Ghana, Croatia, Nigeria, Mauritius, Rhine, Bermuda and Greece.

Advertisers can research their own trending keywords using Bing Ads Keyword Planner tool. Other signals that could increase searches for certain destinations include airlines adding new destinations and more convenient routes to major hubs.

Key growth drivers

Increased flight connectivity and air capacity

The proliferation of social media has helped non-traditional destinations become popular. Datamining hashtags and copy on social media platforms can help advertisers get a sense for popular new destinations. Travel advertisers should consider using AI-enabled tools, like Dynamic Search Ads, to match their offerings to travelers' evolving preferences, via search queries.

Image of map showing flight paths

New international nonstop flights

Launched in 2017
Oakland to Barcelona
Oakland to Copenhagen
Orlando to Rio de Janeiro
Orlando to Paris
Orlando to Aruba
Orlando to Santiago
Los Angeles to Hong Kong
 
Coming spring 2018
Sacramento to Cabo San Lucas
Orlando to Amsterdam
Columbus to Cancun
New Orleans to Cancun
Cleveland to Iceland
St. Louis to Iceland
Austin to Frankfurt
Nashville to London
Philadelphia to Budapest
Philadelphia to Prague
San Francisco to Madrid
San Francisco to Hong Kong
 
Coming summer 2018
Boston to Sao Paulo
Denver to Zurich
Los Angeles to Paris
Los Angeles to Amsterdam
Atlanta to Shanghai
   

Travel bug bites international searchers

It's not just U.S. travelers who are planning trips. Bing Network saw major growth in searches from across Europe and Canada. With a strong global presence, advertisers can leverage Bing Network to test international campaigns and uncover an audience interested in traveling to the US.

Bing Network travel search growth in key markets

% YoY travel search volume growth 3

Chart showing percent of year over year travel search volume growth on the Bing Network

Alternative accommodations become mainstream

With private accommodations like Airbnb and VRBO growing at 2x the pace of the overall travel market, the sharing economy marketplace isn't just exploding, it represents a high-value segment of travelers for all accommodations advertisers to target. Seven out of 10 of this audience are frequent travelers. They spend more, and are more likely to plan long-haul trips.4

But this segment doesn't exclusively book rentals for their trips. They often consider both hotels and private accommodations when booking their lodging, citing hotel services and amenities as some of the reasons for switching.

Why do travelers choose to stay in hotels rather than private accommodations? 4

Chart answering the question 'Why do travelers choose to stay in hotels rather than private accommodations?' The answers in decreasing popularity: I prefer hotels, I prefer hotel services, I prefer hotel property amenities, I prefer hotel room amenities, The option never occurred to me.

This trend also coincides with rising popularity of boutique hotels, fueled in large part by the travel preferences of millennials.5 In the past year alone, many major brands have announced launches into this space, wanting to appeal to a millennial traveler seeking a unique, luxe experience primed for that perfect Instagram shot.

 

Boutique hotel industry expected to grow 6

Time line showing new boutique hotel growth

For advertisers, this means that travelers are more open than ever to the variety of lodging options.

Search advertising influences Online Travel Aggregators (OTA) shoppers

For hotel marketers, search ads have value beyond the click – and beyond their own website. In a Bing Ads study designed to help hotel companies understand the value of their search ads, we compared two groups of hotel searchers who wound up on an OTA.

 

Bing Ads helps hotels convince travelers to choose their brands on Online Travel Aggregators 14

graphic showing brand position on online travel agregator
graphic showing % lift for three hotel brands, rancing from 10 to 50% lift.

Search creates brand awareness and increases engagement on OTA channels. Users exposed to brands on Bing via search ads are more likely to visit that same brand product page when they subsequently visit an OTA.

Group A was exposed to a hotel brand’s search ads on Bing and the control Group B was not. We then followed their subsequent booking activity on the OTA site. Group A, previously exposed to a hotel’s search ad was more likely to visit that same hotel brand’s property page on the OTA site. We conducted this experiment with three different hotel advertisers with positive results across the board — a 10%, 21%, and 50% click lift for the various hotels.

 

Improving traveler loyalty

The majority of U.S. travelers belong to a loyalty program — 93% in airline programs and 64% in hotel programs1 — that's over a billion accounts. Even though these numbers are growing year-over-year, more than half of their members (54%) are inactive.

Membership does not equal loyalty.

To better understand the consumer decision journey for searchers who visited a travel loyalty domain, we analyzed 1,000 unique users across loyalty domains in the flight, airline, hotel and cruise industries. In research Bing Ads commissioned with Phocuswright, we found that travelers who belong to loyalty programs comparison-shopped across multiple travel sites.

Loyalty program members are more likely to recall and engage with ads

Travelers who found ads helpful with trip planning by hotel loyalty status 1

Chart showing % of travelers who foind ads helpful with trip planning by hotel loyalty status

Base: U.S. travelers who clicked ads online access (N = 1,183 )

In-destination opportunities

Pie chart showing travel segment size, Airlines 40%25, Hotels 33%25, Activities 10%25, Other 9%25 and Rail 8%25.

Global travel market share by segment

Many travel advertisers focus on the planning stages of their customers’ journey, helping travelers secure their accommodations and transportation. For travelers, though, the journey has just begun. Travel activities is the third-largest – and fastest-growing – segment in travel, comprising 10% of travel market share in 2016.

Travel activities — all of the things travelers do when they get there — is travel's third-largest segment 16

Even though more than 80% of gross bookings occur offline, Phocuswright predicts travel activities have reached their tipping point. According to a 2017 survey of U.S. travelers, 53% of them shopped for travel activities online during their last trip.1

Additionally, activities suppliers using third-party reservation systems have grown over 400% since 2011.16 The biggest online travel agents – including Expedia, Booking.com, Ctrip, Airbnb and TripAdvisor – have all moved into this space. With innovation from both resellers and suppliers, gross bookings for online tours and activities are expected to more than double from $12 billion in 2015 to $27 billion in 2020.16

Conclusion

Shifts in the travel landscape are creating new opportunities for travel marketers to reach high-value, frequent travelers at every stage of their decision journey. Search advertising plays a significant role in how these travelers research and book their next adventure, and with the right strategies, it can help marketers turn those new opportunities into increased sales. With a 10% YOY increase in search volume and an 11% increase in click, Bing Network’s growing global reach offers performance marketers the tools and audience to win the millions of travelers searching on Bing.

Compared to Google, the Bing Network Audience takes longer trips and spends more on travel: 17

airplane icon

+16%
Heavy international flier
(in the past three years)

suitcase icon

+30%
Stayed over one month on a personal international trip

money icon

+88%
$7,500 to $9,900 in
travel spending
(in the past six months)

map icon

+9%
Taken five to six
personal domestic trips
(in the past six months)

car icon

+12%
Purchased a car rental online
(in the past six months)

group of people icon

31M
PC searchers
not found on Google

Key recommendations for travel advertisers

  1. Monetize new trending destinations before your competitors. Using the Bing Ads Keyword Planner tool, you can choose keywords with confidence. Keyword suggestions come from rich insights based on travel industry trends and marketplace competition. Dynamic Search Ads give you a competitive advantage by dramatically reducing setup and day-to-day management time, while at the same time identifying and capitalizing on new queries and sources of revenue for your business.

  2. Sway travelers looking for accommodations. In-market Audiences gives you curated lists of users that have been in-market for a specific purchase category, helping you focus on the bottom of the buying funnel. Ads shown to Travel In-market Audiences saw up to a 36% greater CTR and up to a 77% greater CVR than the same ads without In-market Audiences.18

  3. Give loyalty members a reason to stay loyal. Custom Audiences let you to use your incredibly rich, first-party audience data to create audience segments that cannot easily be created with website activity alone – customers you can target with personalized offers that will keep them loyal over time.

  4. Capitalize on the growing international traveler base on Bing Network.

  5. Influence travel purchases on OTAs with search ads. Hotel ads ease the booking experience by showcasing offerings in the SERP.

  6. Help travelers book activities, too. Remarketing lets you target travelers searching for things to do at their destination.
     

    Remarketing vs Non-Remarketing Deltas

    Chart showing Remarketing vs. Non-Remarketing Deltas

    Remarketing increases CTR and Conversion Rate, while lowering Cost per Acquisition in travel.19

For even more recommendations, download the travel marketing checklist and get more tips for influencing high-value, frequent travelers.

The Travel Marketer's Guide to the U.S. Digital Travel Landscape