Revival of tourism industry will bank heavily on destination marketing

Destination marketing is a strategic approach in the travel industry that involves promoting a specific location and its benefits instead of the product or service that a company offers. This could be a country, a town or city or even a specific holiday resort or attraction.

The purpose of destination marketing is to increase customer awareness of a certain destination so that they start to think about visiting, or to help them remember the location when they are ready to go on a holiday. By slipping in subtle calls to action and mentions of a brand’s offering, the idea is that potential customers will decide to book a holiday to that destination through the company that is promoting it.

Destination marketing is also often used by tourist boards of some countries or regions as a way to try and bring more visitors to the region to boost the local economy and establish themselves as a desirable holiday destination.

The main aim of destination marketing is to make the customer aware of and interested in the target location before they arrive. You want to spark an emotional desire to see and experience the place you are offering, as this makes the likelihood of paying for a holiday much higher.

Revenue in the travel & tourism market is projected to reach $854.80bn this year. This revenue is expected to show an annual growth rate (CAGR 2023-2027) of 4.41 per cent, resulting in a projected market volume of $1,016bn by 2027.

The market's largest segment is hotels with a projected market volume of $408.80bn in 2023. In the hotels category, the number of users is expected to amount to 1,333 million by 2027. According to market reports, user penetration is 24.3 per cent in 2023 and is expected to hit 27.2 per cent by 2027. The average revenue per user (ARPU) is expected to be around $0.46k. In the travel & tourism market, 74 per cent of total revenue will be generated through online sales by 2027. In global comparison, most revenue will be generated in the United States ($190.40bn in 2023).

As other verticals are reconsidering their ad spending, travel is maintaining its momentum, with brands upping their digital ad budgets by 22.5 per cent in 2022, which is likely to increase by another 20 per cent this year and a further 15.3 per cent through 2024. Although this growth is obviously pegged against a dramatic Covid-fueled collapse in 2020-2021, no other industry is projected to amplify its advertising investment comparatively over the next two years.

Brands are continuing to tap into pent-up travel demand. Last year, travel-related movement around the US only partially returned to normal with the Delta and Omicron variants disrupting many vacation plans and preventing travel’s full circle rebound. Today, though, digital travel sales are back to where they were pre-pandemic.

Still, there are plenty of obstacles that may yet rear their heads—including rising gas prices, inflation, and economic uncertainty—so it’s important for travel advertisers to be aware of macro factors and be ready to pivot accordingly.

With millions of travellers already planning trips, and a 20 per cent increase in earnings for the global tourism sector, 2023 is looking promising. Travellers will be going one step further to deepen these experiences by having a lasting positive impact on the places and people they visit.

Meanwhile, nearer home, with a projected annual growth rate of 20.7 per cent in 2024, the travel and tourism sector's contribution to India's economy is predicted to reach pre-pandemic levels. Indian tourists will be among the biggest spenders on travel this year. Weekend trips are expected to grow in popularity among the myriad travel options. Travellers between the age groups of 23 and 40 are willing to better their experience and splurge on vacations. Even if it requires occasional spending, travellers would be expected to travel the world, and planning is a common subject.

There has been a noticeable change in travelers’ behaviour in recent years, which has forced companies and destinations to adapt themselves in order to meet travelers’ high expectations.

There are a number of factors driving this change, including the popularity of remote working, the growing concern about sustainability, the desire for flexible cancellation policies and the sentiment of revenge travel.

As we can see from the numbers, international tourism showed strong signs of recovering in 2023. This segment should be fully recovered in the next two years.

Another tourism marketing trend for 2023 is the rise of the metaverse, which takes users on getaways. According to booking.com, over a third of Spanish people are interested in virtual trips. Moreover, 39 per cent of Spanish travellers say that they will be inspired by virtual reality to book their 2023 holiday.