What happened to travel in 2020?
2019 was the absolute opposite of 2020, as the travel niche was flourishing and nobody expected the entire industry to crash, which, of course, happened due to COVID-19. Alexey quotes [3:40] the International Air Transport Association (IATA), which noticed that the first significant drop in flights happened in Asia (starting with China in January) and then spread across the rest of the world. This resulted in huge losses to the travel niche, including a revenue loss in aviation that exceeded $447.4 billion.
According to WTO, all countries closed their borders to tourists in April 2020 and travel remained largely depressed till July. In September, 50% of countries eased their restrictions on tourists and the niche slowly started to recover.
Even though the entire world still expects the industry to recover, it has become clear that initial forecasts were too optimistic. IATA has made certain projections, stating that things may not normalize until 2024.
Current industry trends
The key element that now penetrates all spheres and industries is uncertainty. You can never be 100% sure that your flight will not be cancelled and, even though people want to travel, they are either too afraid or simply cannot due to the restrictions in different countries. As a result, travel companies are experiencing significantly lower conversion rates.
Aviation companies and hotels are now providing higher refund rates to encourage bookings. The industry pinned their hopes on pre-booked flights, but even these are being cancelled as travellers are unsure whether now is the right time to travel. No one knows if their destination country will impose a lockdown while you are still there or even whether your home country could shut down its borders at any moment. Consequently, to stay afloat, companies are introducing more flexible tariffs and cancellation policies.
At a time when international trips are still mostly down, domestic travel is gaining popularity, which is likely to continue well into the future. In the webinar, Alexey compares [15:15] statistics on domestic and international travel from Aviasales and Skyscanner.
As the situation is changing very quickly, people are no longer planning their trips in advance, which has resulted in shortened booking windows. This makes it more difficult to predict travellers’ behaviour and make reliable forecasts.
To help users stay informed, travel brands are constantly monitoring the situation and sharing updates. For example, refer your readers to Omio, where they can simultaneously get a clear view of what is happening in different parts of the world and book a trip.
Affiliate marketing in 2020
Affiliate marketers in the travel niche haven’t been spared from the recent changes in the travel market and might have a hard time during the next six to twelve months. One important difference is the increase in holds, meaning that advertisers are now rewarding affiliates only upon completed actions. This model was uncommon for hotels, but has now spread across the industry.
Another unfortunate trend is that some affiliate programs simply shut down or stopped paying commissions, such as KAYAK, BlaBlaCar, and Airhelp. Since these companies weren’t making any profits, there was no point in dedicating budgets to marketing.
While cruise programs were long awaited by many Travelpayouts’ affiliates, the niche suffered worse than most and it will take cruise companies an additional six to twelve months to recover.
New travel products
The pandemic has also provoked the creation of new online products, such as virtual tours, which are now one of the highest trending affiliate marketing offers. There has been a deep interest toward online excursions around the world, but people are still waiting for offline activities to start operating again.
Another new product on the market is COVID-19 insurance. This is a completely separate product that appeared this year and attracts a lot of customers.
Travel statistics from Travelpayouts
In this section, data from several resources has been summed up to show you the current travel trends within different sectors of the travel niche.
One of top trends is the growing popularity of domestic flights, especially in countries with the most “domestic potential”, such as Russia and China. An obvious drawback for affiliates is earning lower commissions for domestic flights compared to internal ones.
Hotels and day rentals
As Alexey explains [19:50], cancelation of early bookings is common. Since affiliate commissions are paid within two months after the customer’s checkout, the situation is a bit different in this sector and the drop began earlier. However, when countries eased their restrictions, people resumed booking hotels.
Tours and activities
Here, the situation was very similar to aviation. People are eager to visit places of interest when traveling. With the introduction of virtual tours, this niche is on the rise and worth investing in.
Based on Travelpayouts’ data, transportation has been badly affected by the current situation compared to other niches. While it may look better in terms of domestic sales, the impact is still enormous.
Transfers are one of the most underestimated categories and actually have great potential. Nowadays, more than ever, people prefer to stay away from crowded public transportation options, which is why transfers might be the perfect option to promote to your audience.
Car rentals are another great way for travellers to avoid public transit systems. The niche is recovering rapidly and, as long as destinations remain open, car rentals are expected to be in demand.
This niche was not affected that much, as people continued buying insurance policies for domestic travel. When examined on its own, the travel insurance sector is following a similar trend to aviation.
Features of a new travel market
Tourists are not returning quickly as people are still very conscious about the changing situation in the world. A lot is dependent on COVID-19 and the measures taken by the governments in every country. Here are some of the most common features of the travel market in a post-COVID-19 world:
- Low tourist demand
- More cautious tourists
- High demand for domestic travel
- Quick travel decisions, with very little or no planning
Now that you understand the current situation in the travel niche, it’s time to take a look at what’s been going on at Travelpayouts. Naturally, things haven’t been easy, but we’ve made it through!
Alexey presents [26:19] a brief overview of the current state of affairs at Travelpayouts:
- Taking on new team members again
- Not downsizing as much as expected
- Constantly monitoring market changes
- Doing experiments within the company
A lot of Travelpayouts’ marketers rely on their profit from affiliate programs, which is why the crash of the travel industry affected them as well. Travelpayouts did its best to support the affiliates and provided special compensations for those who had a lot of cancellations due to COVID-19. The investment in compensation fees summed up to $100,000 and served as a safety net for a start.
Travelpayouts also invested a lot into developing affiliate tools. One of the most popular and efficient tools among Travelpayouts affiliates is widgets. Now, if a brand has their own widget, there is a 99% chance that it will be included in Travelpayouts.
Since the beginning of the pandemic, Travelpayouts has transferred 22 widgets and created 17 new ones based on its advanced technology.
Another development is called MoneyScript, which allows for the automatic monetization of affiliate links.
To help affiliates save their traffic while some programs are temporarily closed, we’re offering alternatives. For instance, HotelsCombined affiliates can use a special script that automatically directs their traffic to Hotellook.
Travelpayouts tried swapping some widgets for ads. If you didn’t make any commissions, this swap allows you to get cost per view and cost per click from banners. Unfortunately, during the pandemic, the experiment did not provide a sufficient outcome and did not show any significant positive results. The reason for that is the low demand for AdSense during the current circumstances.
Now, marketers can take advantage of the updated Travelpayouts’ plugin for WordPress, which has been rewritten from scratch and works 50% faster. The plugin supports 20 languages in tables, while the Gutenberg plugin allows you to add all Travelpayouts’ widgets to your site.
Another new product is the first WordPress theme for Travelpayouts. After thorough research, we’ve collected suggestions from our partners and developed a dedicated theme with many useful features.
We also enhanced our mobile version so our tools look much better on mobile devices. This was a very important step, as data shows that more than a half of bookings are now done via smartphones.
Last, but not least, are traffic sources. So far, this feature is only available to new users. Basically, you can make a list of all your traffic sources and filter the statistics for each project. This feature is supposed to help you get approved for affiliate programs faster.
Alexey shares [40:37] that Travelpayouts’ priority for the near future is to provide as much support as possible for the travel affiliate marketing community.
Travelpayouts is investing a lot into marketing and educational activities. Now, everyone can get access to various webinars and affiliate marketing tutorials to get more information on how to work with different brands that will help them efficiently earn money online.
To improve affiliates’ experience, the Travelpayouts team is actively working on improving the statistical engine, mobile version, and tools to generate more reliable data. There is also a focus on achieving higher financial transparency for partners, so that they have more control of financial data.
As the market continues changing, more advertisers are coming into the light, especially those who are connected with the domestic market. Thus, the Travelpayouts family will be adding more local advertisers in the near future.
More information and insights on global travel trends can be found in the full version of Alexey’s webinar on YouTube.
You can download the presentation from the webinar at this link.