Travel advertisers were confronted with a major decision after September 11, 2001: Should they spend more on advertising to spur travel by people who were apprehensive but fence-sitting? Or should they cut their budget to save money and wait for better times?
      Of course, it wasn't just September 11 that was keeping many travelers at home; it was also the poor state of the economy, job uncertainty, and the loss of savings in the stock market. Meanwhile, corporations cut back their budgets, reducing the volume of business travel.
      Unfortunately, we couldn't track ad spending by month or by quarter for 2001; the figures supplied to us by CMR/INS Media Intelligence US and the Publishers Information Bureau are for annual US ad spending by travel suppliers. And on an annual basis, trends varied by industry. Note: In all categories below, we are reporting on data covering the top 20 ad spenders in that category, not the entire sector.
      Airlines understandably cut back on their advertising spending, as they normally do after a crisis or an accident. The top 20 US airlines' total 2001 ad spending to promote mainly domestic routes plunged by 19 percent from the previous year, to $320.8 million. Dollars devoted to advertising mainly international operations dropped by 9.3 percent in 2001, to $162.1 million, for the 20 largest spenders. In the domestic market, Southwest Airlines (which has no foreign routes) is the perennial big spender, outpacing its larger rivals by two or three to one; Southwest spent nearly $91 million in 2001, down from $108 million a year earlier.
      British Airways spent $31.8 million in US media during 2001 to promote its international operations, putting it in first place despite a $5.6-million spending decrease year over year. Qantas, in second place during 2000 with a $12.4 million budget, spent only $3.5 million in 2001. Likewise, Iberia slashed its US budget in 2001, dropping out of the top 20 after ranking third in 2000 with $11.9 million. Air Jamaica vaulted into second place in 2001 by boosting its outlay some 73 percent, to $18.3 million. Virgin Atlantic also poured more money into US media, more than doubling its year-earlier spending to $17.8 million in 2001.
      The two largest US airlines, American and United, spend lots on both domestic and international promotions, but during 2001 their total US spending for all advertising fell - down 11 percent for American to $54.4 million, down 20 percent for United to $49.1 million.
      Domestic airlines have traditionally favored newspapers over other media, and that held true in 2001 - although their combined spending on newspapers in local and regional markets dropped by 15 percent from 2000, to $85 million. But they slashed spending on magazine ads by almost 50 percent, to $20.6 million. Spending was down across the board on network and spot TV, cable TV and national spot radio - although domestic carriers boosted their outlay for outdoor advertising in 2001.
      International airline promotions also favor print, and the top 20 airlines in 2001 slightly increased their spending on magazines and local newspapers, although they cut back significantly on ads in national newspapers and on cable TV spending. Ad dollars devoted to spot TV markets plunged by almost 50 percent, to $12.4 million.
      In contrast to the troubled airlines, hotel companies spent more on advertising in 2001. For the top 20 domestic hotel spenders as a group, expenditures in 2001 rose 8.2 percent over the previous year, to $327.4 million, although the spending increase was greater for some large companies. Holiday Inn remained on top of the domestic spending heap, laying out $38.3 million in 2001, an increase of 25 percent. The 2001 spending boost was 32 percent for Best Western at $27 million, 84 percent for Marriott at $20.6 million and 41 percent for Holiday Inn Express at $19.3 million. As the industry moved into 2002, however, Holiday Inn slipped to third place in spending during the first six months, behind Universal Orlando Resort and Choice Hotels.
      Among international properties buying ads in the US, Sandals Resorts-Caribbean is the big spender, boosting its budget by 56 percent for 2001 and doling out $22.3 million - more than twice as much as second-place Our Lucaya in the Bahamas. In the first half of 2002, Sandals Caribbean remained in the top spot, followed by Best Western International, Starwood and Hilton International.
      Since three-fourths of domestic travel is by car, it might not be a surprise that domestic hotels spend more of their ad dollars on outdoor than on any other medium, and in 2001, they laid out $68.3 million for billboards, up from $54.8 million in 2000. Network and spot TV ads consumed $66 million in domestic hotel dollars in 2001, down fractionally from the previous year. Spending on local newspapers and magazines fell in 2001. Magazines are the favored medium for international hotels, although the $40.2 million they spent on periodicals in 2001 was down almost $3 million from the previous year. The car rental industry has been plagued by financial problems, and they only got worse when business travel fell off during 2001. Thus it is no surprise that the cash-strapped companies cut back on their ad spending. The top 20 rental firms expended $163.3 million on ads in 2001, down more than 26 percent year over year.
      During 2001, replacement vehicle specialist Enterprise Rent a Car surpassed Hertz in ad spending to take over the top spot. Enterprise boosted its budget by 8 percent over 2000, to $38.2 million, while Hertz slashed spending for 2001 by 29 percent from the previous year, to $36 million. Avis cut back even more, reducing its ad spending from $28.6 million in 2000 to a mere $9 million in 2001. Ad spending for 2001 was down 12 percent for ANC Rental, whose two units - National and Alamo - spent more than $17 million each as the company went into Chapter 11. Another recent resident of Chapter 11, Budget, saw its ad spending slide by 33 percent in 2001, to $16.6 million.
      In the first half of 2002, Avis - now a Cendant subsidiary, as is Budget - bounced back by outspending Hertz $16 million to $11 million. However, that doesn't take into account Hertz Online, which had a separate budget of $8.6 million during the first half of 2002, as the company devotes more effort to enticing consumers into its Website. Meanwhile, Enterprise outspent them both at $21.6 million during January-June 2002.
      Network TV is the favorite medium for the big rental companies; in 2001 they devoted $68.1 million to network ads, about $13 million less than they spent in 2000. Cable TV spending dropped slightly to $32.7 million, but newspaper ad spending (not counting national newspapers) by rental firms took the biggest hit in 2001, dropping almost 50 percent from the previous year, to $26 million. Those same patterns were holding true in the first half of 2002 as well.
      After a brief downturn in late 2001, the cruise industry's sales revived quickly, thanks to discounting and steady advertising. The industry as a whole laid out $237 million for the year, a slight gain of 2.7 percent over 2000. Industry giant Carnival Cruise Lines boosted its ad spending in 2001 by 52 percent over the previous year, to $43.1 million, but it still lagged behind perennial big spender Royal Caribbean, which devoted $46.4 million to 2001 advertising.
      In the first half of 2002, Royal Caribbean outspent Carnival by more than 50 percent, $38.7 million to $25 million. Princess Cruises, which spent $25 million during 2001, a slight increase over the previous year, laid out just $9.3 million in January-June 2002, less than the $9.7 million of Norwegian Cruise Line. Media that took in $13 million from Renaissance Cruises in 2001 got nothing in 2002 - the line went out of business. Cruise lines have been turning more and more to newspapers and network television to promote their products - newspapers for pricing promotions and network for image creation. In 2001, the cruise industry reduced its ad spending on magazines, spot TV and cable TV, but boosted spending on newspapers from $69.8 million in 2000 to $90.6 million, and on network TV from $24.7 million to $33.1 million. In the first half of 2002, cruise lines spent more on network TV ads - $35.4 million - than they did in all of 2001.
      We tend to see substantial swings in the amount of ad dollars spent by various local and national government tourist promotion organizations; they shift from year to year depending on the government's revenues, other spending priorities and the officials in charge. And 2001 was no exception. Among domestic tourism promotional offices, Las Vegas outspent all competitors by $10 million, boosting its 2000 budget by128 percent and laying out $26.1 million to attract visitors. Ranking second was the state of Florida, with 2001 spending up 106 percent year over year to $16.2 million. Texas dropped from first place in 2000 to third in 2001, cutting back its budget 15 percent to $15.9 million. Just short of that number was New York State's $15.8 million in 2001, a gain of 70 percent over the previous year. Going into 2002, Las Vegas continued to outspend its rivals, at $15.5 million during January-June, followed by Texas at $13.4 million and Orlando at $10.5 million.
      During 2000, the biggest foreign spender on US tourism advertising was an unlikely candidate - South Africa, which devoted $8.9 million to attracting Americans. But in 2001, Mexico tripled its year-earlier budget to take over the top spot at $16.6 million. The Bahamas, with a 60 percent increase, ranked second in 2001 at $11.4 million, followed by Puerto Rico (counted as an international destination in these listings), Ireland and Bermuda, all spending more than $8 million in 2001. During the first half of 2002, Britain broke into the top five on the spending roster - behind Mexico, the Bahamas, Puerto Rico and Jamaica - laying out $5.6 million.
      Walt Disney World in Florida usually spends more than twice as much as any other domestic attraction or theme park, and 2001 was no exception. Disney World spent $96.6 million on advertising, compared with a mere $41 million for second-place Six Flags Theme Parks. The Disney organization also spent $24.6 million in 2001 to promote its new Disney's California Adventure park, as well as $6.6 million for sister attraction Disneyland in California. Overall, the Disney parks spent $130 million in advertising in 2001, a 30 percent increase over the previous year; Universal Studios spent $33.8 million, a 36 percent reduction from 2000.
      Providers of travel services - travel agencies and tour operators - spent 7.5 percent less on advertising in 2001 than they did the previous year, a total of $269.2 million. The big trend in this sector is how online travel agencies are coming to dominate: During the first six months of 2002, only one of the top five spenders was a traditional storefront travel agency group - the big Liberty Travel chain, which spent $34.6 million on ads in January-June 2002 and $49.1 million in all of 2001. The next four on the list were all dot-com travel sellers - Expedia, which spent $27 million on ads in the first half of 2002; Travelocity, at $15.7 million; Orbitz at $14.1 million; and Hotwire at $9.7 million.

Tables included in printed version: (a) Advertising Expenditures in the US for Major Travel Categories, 2000-2002 (b) International Tourism Advertising Expenditures in US (Top 20), 2000-2002 (c) Domestic Tourism Advertising Expenditures in US (Top 20), 2000-2002 (d) Travel Services Advertising Expenditures in US (Top 20), 2000-2002

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