Ad spending by travel companies and destinations continued to grow at a healthy pace during 2000 and into 2001. Figures weren't available at presstime for the full year 2001, but there is no doubt that ad spending took a nosedive after September 11, as marketing strategies for all kinds of travel suppliers had to be overhauled in the wake of the terrorist attacks on New York and Washington, and the subsequent US military response. Figures supplied to us by Competitive Media Reporting, a Taylor Nelson Sofres Company, indicate that total travel ad spending in all US media during 2000 surpassed $3.8 billion, a 7.5-percent increase over 1999 – which in turn had posted a 10.5-percent gain over 1998. And in the first six months of 2001, ad spending totaled $2.1 billion, or 54 percent of the annual total for 2000.
      The hotel industry continues to show the deepest pockets when it comes to advertising. During 2000, total spending in the US by domestic and foreign lodging companies amounted to nearly $1.2 billion, a gain of 3.6 percent. About 85 percent of that total was spent promoting domestic properties.
     By contrast, the airline industry spent more than $725 million advertising in the US during 2000, a hefty 11.9-percent annual increase. Spending to promote domestic air travel rose 17.2 percent to $504.5 million, while advertising budgets for foreign air services were up just 1.3 percent to $220.8 million.
      But the greatest spending increase among all segments of the industry came in the category called "travel services," i.e., travel agents and tour operators. Spending by the top 20 advertisers in that segment during 2000 rose 24.3 percent, to $665.4 million--in large part because of a new competitive battle between giant online travel companies for the attention of the wired consumer. Liberty Travel, the huge chain of traditional travel agencies, remained the biggest spender in this category during 2000; it spent some $46.5 million on advertising, up 9.2 percent over the previous year. But the second-biggest spender was Travelocity.com, which nearly tripled its ad spending in 2000 to $30.5 million. And in third place was Travelocity's arch-rival, Expedia.com. Expedia, which didn't even rank among the top 20 spenders in this category during 1999, almost matched Travelocity during 2000 at $28.6 million. In fact, seven of the top 20 spenders in the travel services category during 2000 were dot-coms.
      Not all categories of travel advertisers posted increases during 2000. Spending by the top 20 car rental companies fell by 9.5 percent from 1999, to $222.3 million; and media buys by the 20 leading foreign tourist boards were off 7 percent, to $89.4 million – although spending by the top 20 state, regional and city tourist organizations within the US rose 10 percent to $123.6 million. In the hotel sector, spending by the top 20 domestic lodging advertisers was off 5.7 percent from 1999 levels, to $302.5 million.
      Spending by the top 20 US theme parks rose a modest 2.3 percent in 2000, to $244.3 million, while the cruise industry's 20 biggest advertisers spent $230.7 million on US advertising, a gain of 4.4 percent.
      Looked at by media type, the travel industry devoted the bulk of its advertising money to newspapers--a good medium for travel, not only because so many newspapers provide editorial support in the form of travel sections, but also because newspapers permit geographically targeted marketing campaigns and have lead times that can accommodate relatively short-notice pricing promotions. Total travel industry spending on national and local newspaper ads in 2000 was nearly $1.6 billion, an increase of 5.1 percent over 1999.
      Spending on all forms of television advertising also topped $1 billion in 2000. The total bill for travel advertisers on network TV and spot TV came to $796.5 million, up 6.2 percent over 1999. Cable TV showed the largest overall increase among all travel advertising categories, however, up 15.2 percent over 1999 to a total of $298 million. Magazine ad spending rose 6.4 percent for 2000, to $745.6 million; and the total for radio ads went up 8.9 percent to $116.5 million.
      The media figures also indicate some significant shifts in marketing strategy by industry segments from 1999 to 2000. For example, in 1999 the cruise industry spent the bulk of its broadcast TV budget on network ads, but in 2000 it shifted the majority of broadcast spending to spot markets; cruise lines also downsized their spending on cable TV by about 20 percent.
      By contrast, the domestic airlines boosted their network TV spending by more than 50 percent from 1999 to 2000, to more than $95 million. Spending on cable TV ads also grew by about 50 percent, to $30.5 million, but spending on spot broadcast ads went up only slightly, to $79.5 million.
     Travel agencies and tour operators spend the vast bulk of their ad budgets on newspapers – more than $493 million in 2000, a gain of 13 percent – but they more than doubled their cable TV spending from 1999 to 2000, to $26.9 million.
      As for individual companies, Southwest Airlines was the biggest spender in the airline industry, paying out $107.6 million for 2000 advertising – a fractional increase over its 1999 budget. Ranking second was United, up 7.5 percent to $69.9 million; in third place was American, which increased its 2000 ad spending by 14.8 percent to $64.4 million. Among foreign carriers, British Airways boosted its 2001 spending in the US market by 21 percent to $37.4 million. Far back in second place was Qantas, which spent $12.4 million – more than twice what it spent in the US a year earlier.
      The nation's number one tourist attraction, Walt Disney World, is also the top-spending theme park, boosting its ad budget for 2000 by 40 percent, to $85.2 million. Among domestic tourism promotion organizations, the state of Texas remained the number one spender, laying out $18.8 million for 2000 advertising, a drop of 10 percent from 1999. Las Vegas held onto the number two spot, with a 2000 budget that dropped nearly 15 percent from 1999, to $11.4 million. New York State, which hadn't made the top 20 in 1999, vaulted into third place in 2000, with ad spending of $9 million – just a hair ahead of Colonial Williamsburg, which doubled its 1999 spending, to $8.9 million.
      Among foreign destinations, the unlikely winner of the top spending spot in 2000 was South Africa, which devoted nearly $9 million to the US market – some $300,000 more than second-place Puerto Rico (which is listed among foreign destinations in the CMR statistics). The top 1999 spender, Jamaica, slashed its US budget by almost 60 percent in 2000, to $3.8 million, and dropped to the 10th spot in spending.
      In the cruise industry, the biggest spending increase during 2000 came from Renaissance Cruises, which more than tripled its ad budget to $15.3 million as it tried to win back the travel agency market – although its efforts weren't enough to keep the line from going out of business in late 2001. But the cruise brand that spent the most continues to be Royal Caribbean, which increased its 2000 spending by a third over 1999, to $43.2 million. Second-place Carnival Cruise Lines, by contrast, increased spending by a mere 2.3 percent to $28.4 million. Royal Caribbean's sister company, Celebrity, cut its 2000 ad spending by 23.6 percent to $22.6 million, while Princess Cruises posted a 21.5-percent increase, to $22.5 million.
      Hertz remains at the top of the heap in car rental advertising, spending $50.9 million in 2000 – a 27.6 percent decline – plus another $1.8 million to promote its Web site. Second-place Enterprise Rent-A-Car boosted ad spending by 33 pecent for 2000, to $35.2 million, while Avis spent $28.6 million, a 13.6-percent increase.
      Among domestic hotel brands, Holiday Inn remains in the top spot, with a 2000 budget that dropped 15.5 percent to $30.5 million. Hampton Inn and Harrah's spent about $23 million each, while fourth place Best Western posted a 47- percent spending increase for 2000, to $20.4 million. Some leading chains showed significant declines in their 2000 ad spending, including Hyatt, down 27 percent to $13.7 million; Hilton, off 35 percent to $13.5 million; and Embassy Suites, which cut ad spending by 42 percent to $10.5 million. Sandals Resorts spent $25 million on 2000 advertising in the US, more than twice as much as any other foreign hotel brand. Club Med ranked second at $10.1 million.

Tables included in printed version:
(a) Advertising Expenditures in the US for Major Travel Categories, 1999-2001
(b) International Tourism Advertising Expenditures in US (Top 20), 1999-2001
(c) Domestic Tourism Advertising Expenditures in US (Top 20), 1999-2001
(d) Travel Services Advertising Expenditures in US (Top 20), 1999-2001

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