Direct Response TV: Stimulus Funds for the Travel Comeback

By Beth Vendice President, Mercury Media Boston | July 23, 2010

If only the travel industry were like the banks, or the biofuels business. Then it would have this huge stimulus fund to research and develop product, attract new customers and access the capital necessary to grow without the burden of huge debt. However, the travel industry does find itself in a good position presently. It is in the midst of a comeback. But economic comebacks have a flaw, being that access to ready capital. It is time for marketing innovation, a stimulus fund if you will. That stimulus program for the travel business has come in the form of direct response innovation.

Before we talk about those innovations, let's establish the signs of this economic comeback. International travel rebounded in January, boosted by more passengers in premium class cabins, according to the latest data released by the International Air Transport Association.Total passenger numbers on international travel markets rose 5.7% in January compared to a year ago. In January 2009, international travel showed a 3.7% decline compared to January 2008.

Underscoring the depth to which premium traffic fell last year, first and business class travel rose 9.4% in January from the lowest point in 2009, but would still need to increase by 16% to reach the peak recorded in early 2008, IATA says. So travel supply executives need to understand that the ditch was deep and the opportunity to dig out is urgent.

Here's more evidence. According to the U.S. Travel Association for example, 53 percent of all adults plan on booking at least one overnight trip before April. One company, hotel.info, recently declared "crisis-hit 2009 is over." It researched its 210,000 international hotel accounts, for which it handles online booking, and found some amazing results. Almost half of hotels (46.08%) are approaching the new year with cautious optimism, and, according to hotel.info, expect a moderate, albeit slow, recovery. Nevertheless, 24.44% are more optimistic in their outlook, and believe they will be doing significantly more business very soon and will be operating at higher capacity. In contrast, just 6% anticipate a rise in hotel rates this year. Deutsche Bank, normally conservative, believes hotel occupancy rates will rise more than two percent this year.

Oil prices have kept air fares and cruise rates level, although no one can truly predict such a volatile piece of this puzzle. But while the signs of the comeback are all there, the revenue necessary to forge an ad campaign to reach and drive leads for the "in market" customer hasn't gone down. Internet ad rates are expected to increase 10 percent, according to JP Morgan Chase, and travel magazines are holding their rates, if they haven't gone out of business.

The answer is direct response media. We believe that innovating around the direct response model can allow travel suppliers and destinations to not only cross the bridge of reaching more customers, but it can provide compelling incentives for them to take action, and enable travel companies to access that elusive budget to do so. Mercury Media has several reasons to investigate and test direct response TV in this climate.

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