The US Travel Industry H2 2016 Update: Digital Ad Spending Forecast and Trends - eMarketer
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The US Travel Industry H2 2016 Update: Digital Ad Spending Forecast and Trends

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Executive Summary

US travel marketers will spend $5.96 billion on digital advertising in 2016, a 20.5% gain from 2015 that will see this sector account for 8.3% of total US digital ad spending for the year.

  • Hotel chains are working to reclaim bookings from OTAs with a variety of tools, including stronger loyalty programs and discounts. If a hotel can offer travelers the right experience at the right price, the thinking goes, there is no need for them to comparison shop via a third-party website. To that end, Hilton Hotels created a series of mobile video ads that used 360-degree video to entice travelers to book immediately after viewing the video. The campaign, featuring a property in Barbados, debuted at the end of March; 360-degree video was also used by another Hilton property on its Facebook page. “We’re looking into options for follow-up installments that will further immerse audiences in our portfolio of hotels,” Stuart Foster, Hilton Worldwide’s vice president of global marketing, told [a]listdaily in August.
  • After seeing lower sales of bookings via paid search ads, online travel booking site Priceline in August said it would increase spending on Facebook’s targeted ads, despite some large advertisers saying broader-reach ads work better. Priceline CEO Jeffery Boyd told The Wall Street Journal: “We found that a number of things we’ve done on Facebook work well. We would like to spend more money on Facebook going forward.”
  • New premium business services from airlines United and Delta have spurred competing campaigns. United debuted advertising for its Polaris premium cabin service in Q3 during the Rio Olympics, and planned to continue to spend up to the launch of the service on December 1, including a virtual reality ad to give potential customers an idea of the luxury experience on offer. Delta’s new Delta One business class service, which was announced this August but won’t appear in aircraft until fall 2017, will ramp up that airline’s ad spending in 2017.
  • Another trend taking hold is the mid-priced boutique hotel, which hotel chains are introducing as a way to woo millennial travelers before they develop an Airbnb habit. These hotels, which offer modern conveniences in smaller spaces, will be the focus of a campaign from Hilton for its new line of Tru hotels, which are set to open at the end of 2016. The new entry from Hilton will compete against similar mid-priced hotels from Marriott (AC Hotels) and (Hyatt Centric).

"These figures for US travel sector ad spending are up from eMarketer’s previous forecast, in March 2016, which projected industry spending would total $5.69 billion for the year. Likely increases in ad spending on video and on social media, with a focus on mobile, were factors in revising the expected digital ad investment by US marketers across industries. The higher spending levels in our updated forecast extend to 2020, when travel brands will invest $8.90 billion on digital advertising."

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4 charts are included in the full report:

The US Travel Industry H2 2016: Digital Ad Spending Forecast and Trends

US Travel Industry Digital Ad Spending, 2015-2020 (billions, % of total digital ad spending and % change)

US Digital Ad Spending Growth, by Industry, 2015-2020 (% change)

US Digital Ad Spending, by Industry, 2015-2020 (billions and CAGR)

US Travel Industry Digital Ad Spending, by Format, 2016 (billions and % of total)