Key travel trends advertisers should know for 2018 January 2018 Research Travel White paper Share using Facebook Share using Twitter Share using LinkedIn Share using Email Download the whitepaper The Art and Science of Travel Industry SEM Phocuswright and Bing Ads present the future of travel Watch the webcast 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 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. 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 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 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 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 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 Base: U.S. travelers who clicked ads online access (N = 1,183 ) In-destination opportunities 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 +16% Heavy international flier (in the past three years) +30% Stayed over one month on a personal international trip +88% $7,500 to $9,900 in travel spending (in the past six months) +9% Taken five to six personal domestic trips (in the past six months) +12% Purchased a car rental online (in the past six months) 31M PC searchers not found on Google Key recommendations for travel advertisers 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. 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 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. Capitalize on the growing international traveler base on Bing Network. Influence travel purchases on OTAs with search ads. Hotel ads ease the booking experience by showcasing offerings in the SERP. Help travelers book activities, too. Remarketing lets you target travelers searching for things to do at their destination. 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 Download the whitepaper Linda Shi Marketing Communications Manager, Bing Ads Research Travel White paper Sources 1. Phocuswright and Microsoft, Future of Travel, 2017. 2. Microsoft internal, U.S., January 2016 – June 2016 vs January 2017 – June 2017. 3. comScore qSearch (custom), July 2017. Bing Network includes Bing, Yahoo Search (searches powered by Bing), and AOL Search Network. 4. Private Accommodation Muscles in on Hotels in the U.S. and Europe, Phocuswright April 2017. 5. “Why every major hotel brand wants in on the boutique hotel business”, Skift, December 2014. 6. Boutique Hotels: Market Research Report, IBIS World, June 2017. 7. “Starwood plans to expand W Hotel chain, The Telegraph, March 2012. 8. ”Marriott debuts Moxy Hotels in Milan Italy”, Breaking Travel News, September 2014. 9. “World’s largest hotels group expands boutique offering”, This is Money, December, 2014. 10. “True by Hilton Launch,” Event Marketer, July 2017. 11. “AirBnB to launch new brand to complete with boutique hotels”, Hospitality News, August 2017. 12. “Best Western launches lower-priced boutique hotel brand for young travelers”, LA Times, September 2015. 13. West Elm Hotels. 14. Microsoft Internal Data, June 1 – 7, 2017. 15. Microsoft Internal Consumer Decision Journey Study, 2017. 16. Phocuswright’s Tours & Activities Come of Age: Global Travel Activities Marketplace 2014-2020. 17. comScore, PlanMetrix, U.S. August. 2017, industry categories based on comScore classifications. 18. Microsoft internal data; pilot performance data from the Travel vertical using “Bid Only” targeting on Bing Owned & Operated traffic, July 2017. CTR is click-through rate, and CVR is conversion ratio. 19. Microsoft internal data, all devices, US (Sep, 2017).