Andy Headington, chief executive of travel marketing firm Adido, analysed 12 travel brands to see if online peaks trends follow the positive feedback the trade is currently reporting
With so much riding on this time of the year, it’s vital for the travel industry to spot encouraging signs in the first few weeks of 2023. More generally, this will build confidence across the next 12 months and beyond, while more specifically this will help plan capacity and future marketing campaigns.
The consensus in the industry appears to be that we are now experiencing BC (before Covid) customer demand, and in some instances surpassing those levels. The current peaks period, in particular, is being held up as a success across the sector.
We were heartened by this news, on behalf of the industry and travellers alike, and wanted to test whether this was the case from an online perspective. So we analysed various key facts and figures, both from select travel companies and more general consumer searches, to give an informed look.
Importantly, we fully appreciate every travel brand is unique and has different markets. Products have changed, as well as expectations from travellers, so doing anything truly like-for-like is always going to be challenging. Nevertheless, we wanted to paint a picture using the data we have available, to try and outline those areas experiencing growth and where there is potential room for improvement.
In the first instance, if we simply look at website traffic, it’s clear there has been a spike in online searches across the current ‘peaks’ period. Interest in going on holiday has surged in the UK, which is evident when looking at, for example, volume and demand for some of our favourite destinations such as Spain, Greece and Australia.
So, a promising start, particularly as 2023 peaks was anticipated to be flat by many travel observers in the run-up to the period, with demand instead spread more evenly across the year.
When we look further into the data, at the all-important commercial numbers, it’s clear we have had an equally promising start to the year. Total revenue is significantly up on 2022, with an increase of 49% year on year. With that said, revenue is still down 27% compared to the heights of 2020. While the numbers are moving in the right direction, there appears to be some way to go before we get ‘back to normal’.
Interestingly, if we look even further into that data, we can see that revenue via non-paid searches – i.e. organic visits via search engines, and direct traffic via people entering a company URL into their browser – is less rosy. Sales in 2023 are down nearly 50% compared to 2020, which is nearly double the effect that we’ve seen overall.
This might indicate that loyalty is on the decline, with fewer customers coming back to places they know already, and instead shopping around. It could also mean that Google is doing a better job at pushing down organic listings while highlighting more brand adverts, and therefore reducing overall organic traffic.
More generally, our previous research tells us overall digital marketing spend is still reduced. As confidence returns, budgets increase and online ads are pushed again, investment in marketing – as well as data, CRM and tech – will help those companies who want to get ahead. For companies currently running paid media campaigns, there is room to keep pace with current demand and secure additional holiday bookings.
When it comes to average booking values, again we see a similar pattern with totals being down on 2020 overall, but up on 2022 – although the difference is only a few percent. Overall, booking values are pretty consistent, but with inflation running at around 10%, we could say that actually we are down year on year.
Nonetheless, it’s also worth keeping in mind that many users are still price sensitive, and therefore some travel brands haven’t been able to – or wanted to – increase prices, keeping them at 2022 levels. If the trade is planning using last year’s averages for booking values, this may well be a sensible move.
Perhaps the best news of all is that conversion rates across all data have improved more than any other measure, jumping by over 60% compared to 2022. This would indicate that those customers in the market are keen to book now – so take advantage of that current demand whenever possible. Let’s hope this trend continues outside of the peaks period too.
Overall, the signs for 2023 are encouraging and as things stand we can anticipate a good year, with conversion rates and booking values staying strong and holding up well to 2020 levels. The market for travel is here, which is great credit to agents and the wider industry.
However, a note of caution. For the sector to truly bounce back, we must continue to analyse the data and seize the opportunities it presents us. We need to ensure all available channels are optimised, including online, and continue to build brand presence wherever possible.
With considered approaches in place, and by making investment where possible, the industry may well be on a par with 2020 sooner rather than later.