Managing a Travel Budget in a Downturn: What We’ve Learned and What you Should Know

When a crisis hits with the scale and voracity as COVID-19 struck the travel and hospitality industry, a natural adjustment to the advertising budget occurs. The degree to which a brand decides to turn off the faucet or at least allow a drip in ad spending may help determine how quickly and efficiently they get back into the market. 

In the weeks following the initial blow of the COVID-19 pandemic, we’ve seen clients deciding to drastically reduce spending and even pause their programs entirely and stockpile their budgets for better days. It is a completely understandable reaction especially since the majority of the industry has been shut down as a result of increased travel bans and lockdowns.

While we hope that a crisis at the level of COVID-19 is a once in a lifetime event, severe downturns in regional and global economies are a reality that we must plan for. Transitioning from business as usual to financial contraction can be swift such as COVID-19 or gradual. Regardless, there are some strategies brands can adopt to help them recover whenever the time is right. 

Don’t Pull the Plug

Auction data is the driving force behind every decision made in today’s ad space. Without it, marketers are operating blindly, and this holds especially true during a crisis. Even if you have reduced your budget in a significant way, you still need data and insights to understand the market and identify trends that may help indicate a recovery. If someone decided to invest in stocks, they wouldn’t look at a list of companies and arbitrarily pick one. No, they would look at data such as historical prices, volume, company news, earnings, etc. It’s the same in advertising.

As demand softens so do the average CPCs to participate in the auction.

We see one cent bids to be sufficient enough for gathering intelligence through auction data. It’s a relatively cheap proposition when you consider that with a $100 buy you get you  20-40 times more volume. Granted historic data will only be of limited or directional value as the post-COVID world of travel and behaviors will look different, but it can still guide intelligence when making decisions.

Stay tuned

In addition to keeping an eye on your ad data to identify trends and capture every sign of recovery, it is also important to keep abreast of what’s happening with events. There are many who feel that it could take a few years for attendance at large-scale tradeshows and conferences to rebound in full – an obvious hit to the travel and hospitality industries. There are, however, some events that may result in greater opportunities.

Sporting events like the Masters, which has been postponed until November, are so popular with a global following, that there will be opportunities for hotel bookings, air travel, and other hospitality brands to benefit. In reality, the countries and venues that will adapt to the new safety measures the fastest delivering security and peace of mind will be the winners and will gather the largest audiences.


Taking into account that recovery will likely come in stages, it is very important for advertisers to study the data and anticipate opportunities for engagement. As much as we would like to travel to open-up and bounce back to levels pre-COVID-19, that simply won’t be the reality. Due to travel restrictions and border monitoring, it is likely that domestic markets will rebound much faster than any international travel.

Think of it as a map of concentric circles getting bigger until there is overlap among states, nations and regions. If you are part of the first stage of recovery, costs should be lower due to very low levels of competition and publisher incentives to bring advertisers back. Starting early would enable a very high return to revenue and will enable you to add bandwidth to adjust when the competition increases.

Marketers should also overlay non-travel data such as the Rt value to steer investments.

Again, the areas that acclimate to new safety measures will recover faster and should help guide your actions.

Lower Expectations and Maximize Revenue Sources

With no clear-cut window of opportunity and no way to predict the rate at which people will feel comfortable to travel, markets must adopt a mindset of tempered expectations. Just because we get the go-ahead that it is safe to travel, that doesn’t mean people will have the emotional fortitude to do so.

Setting realistic goals with an eye on rates of return will help fine-tune campaigns. Investments in sponsored placements and paid search are key tools to help you to drive increases to your website/property. As demand increases, every hotel will want to grab as much of it as possible. Channels such as sponsored placements can play an important role due to their capability to hone in onto the right audience and destination combination.

Be Flexible

As we’ve had to do in our daily lives, travel marketers and the programs they develop must be ready to adapt. This crisis shows that the future will be difficult to master and control.  Building flexibility into your media spend campaign will enable you to readjust to potential new challenges, adapt, think out of the box, and overcome.

The great RESET

There is no specific recipe for managing travel ad budgets in a scenario like we are facing today. The advancement in technology during the 2008 financial crisis has armed travel marketers with more data, greater options, and the ability to move more quickly and more effectively. It is important to remember that data can serve as a guiding light during a crisis and will likely be the leading indicator of when to be more or less aggressive during campaigns. Remember travel marketers have a great resource to lean on – first-party data collected through rewards and loyalty programs. By collecting first-party data and combining it with new travel relevant data point such as country restrictions and Rt value they will define who is winning – smart data vs big data.

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