Travel: Hilton, Puerto Rico, Vrbo, IHG ads amid inflation and recession fears

As it promotes Puerto Rico as a travel destination in a new campaign, Discover Puerto Rico, the island’s marketing organization, considers several factors when it comes to media placement. A large ? A potential recession. When looking for where to advertise, the agency targets US markets where airfares to Puerto Rico are lowest and avoids regions where flight increases are more expensive.

“The economic uncertainties that we’re building into the formula today are these airfare increases,” said Leah Chandler, director of marketing at Discover Puerto Rico, which has managed marketing for the island since 2018. The organization takes its media buying decisions on a regular basis, taking a market-by-market approach for the new campaign, which is called “Live Boricua” and comes from record creative agency R&R Partners. “If airfares go up 50% or 60% in some markets, compared to others, we have a better chance of capturing visitors who are going to pay less for airfare,” she said. .

It’s one of many strategies travel brands are adopting as inflation and economic uncertainty continue to weigh on consumers and a recession increasingly becomes a reality. After COVID-19 brought travel to a halt in 2020, the industry has spent the past year enjoying a robust return to growth. For many brands, business is now surging above pre-pandemic levels as consumers embark on so-called revenge trips, taking trips that have been postponed during coronavirus shutdowns. Travelers are also combining business travel with leisure travel in the new ‘bleisure’ trend. Hilton recently told Ad Age that its activity this summer exceeded the same period in 2019. “Right now, we’re seeing a strong amount of travel,” said Mark Weinstein, chief marketing officer at McLean, based Hilton in Virginia.

Still, there are signs of a slowdown. As prices rise on essential items, including groceries and daily necessities, consumers may begin to cut back on travel spending. MMGY Global, a travel and tourism marketing agency that tracks demand, found that after peaking in April 2021, demand and intent to travel for leisure has leveled off and started to decline. Consumers seem to be noticing that travel isn’t as affordable as it once was amid rising costs elsewhere and perceptions of affordability have plummeted, according to MMGY data.

“We have now seen a drop in the number of travelers who report having funds available to travel,” said Craig Compagnone, chief operating officer at MMGY. “It tells me that you’re starting to have a segment of travelers saying, ‘We’re circling the wagons, we need to start protecting our revenue with a potential downturn on the horizon. “”

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