The worst of the pandemic is behind us, but with talks of recession looming on the horizon, it’s crucial for travel businesses to safeguard their recovery trajectory.

Are travel businesses ready for a global recession?

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Experts all around the world warn that a global recession is near, and travel businesses may soon find themselves spiralling downwards again before they even recover to pre-pandemic levels.
Experts all around the world warn that a global recession is near, and travel businesses may soon find themselves spiralling downwards again before they even recover to pre-pandemic levels. Photo Credit: GettyImages/the.epic.man
About the author
About the author

Antoine Gross is the general manager of Southeast Asia for impact.com, the world’s leading partnership management platform that transforms the way brands manage and optimise all types of partnerships. Antoine has over 16 years of experience in marketing and technology and is responsible for spearheading business development, marketing, sales and account management, with the aim to create transformational growth for impact.com’s clients in Southeast Asia.

No industry was hit harder by the global pandemic than travel and hospitality, but there’s finally light at the end of the tunnel. After two years of record lows, tourist arrivals and occupancy rates are picking up speed thanks to easing restrictions and border reopenings worldwide.

According to travel analytics firm ForwardKeys, international airline bookings to the region reached 38% of pre-pandemic levels by late March 2022, compared to less than 10% at the start of the year.

In Southeast Asia, the pace of recovery has been slower, but the signs still look promising. In April 2022, Google reported rapid upsurges in inbound and outbound travel demand for destinations across Southeast Asia based on search volume. In the case of the Philippines, demand even outstripped 2019 levels.

That being said, it’s not all plain sailing from here on out.

Changing market, new challenges

With high inflation signifying that the world is heading towards recession, operation and advertising costs are going to get a lot more expensive for travel brands.
With high inflation signifying that the world is heading towards recession, operation and advertising costs are going to get a lot more expensive for travel brands. Photo Credit: GettyImages/gustavofrazao

While travel demand is definitely picking up, economic advisors have warned that a potential economic recession may be on the horizon. Many of the biggest players in travel and hospitality remain optimistic, but brands may need to be more prudent about the marketing investments they intend to make.

Skyrocketing demand for paid placements and digital ads amongst travel and hospitality providers will stretch already tight budgets even further. According to a Zenith Media report, travel ad spend will grow up to six times faster than the ad market as a whole from 2021 to 2023, while spending on digital advertising will balloon from 63% of budgets in 2020 to 70% in 2023. With so many brands competing for limited digital ad space, costs per acquisition will likely rise steeply, making it even more difficult to secure healthy returns on investment.

Then there’s the question of whether ads are still working as well as they used to. According to Edelman’s 2022 Trust Barometer, just 8% of people worldwide automatically believe the information in ads to be true, while 21% never trust ads under any circumstance. 37% of global internet users now use ad-blocking software, with Southeast Asian nations having some of the highest adblocking penetration rates in the world.

In other words, things are looking up, but they definitely aren’t returning to normal. So how should the likes of hotels, tour operators and booking sites adapt to these new challenges? With affiliate partnerships, of course.

Keep growing through good times and bad with affiliate partnerships

Travel players banded together to weather the Covid-19 storm, and establishing the right partnerships will once again continue to prove effective in an economic crisis.
Travel players banded together to weather the Covid-19 storm, and establishing the right partnerships will once again continue to prove effective in an economic crisis. Photo Credit: GettyImages/kieferpix

Essentially, affiliate partnerships are performance-based collaborations between a brand and another individual or business, such as an influencer, affiliate or publisher. Partners tap on established relationships of trust to introduce, influence, or persuade consumers to purchase one of the products or services in return for a commission. When done right, affiliate partnerships bring about a whole range of benefits, including sustainable growth, increased brand awareness and improved customer trust, all while keeping costs down.

Affiliate partnerships aren’t an entirely new concept — they’ve been around for a while. It’s pretty common, for instance, for an airline to partner with a hotel or booking site to offer combined flight and accommodation packages. What is new, however, is the strategy of working with not just multiple partners but also multiple types of partners simultaneously.

“Brands have often been focused on mega-affiliates such as coupon or comparison sites,” says Edwina Sunario, digital marketing specialist at Allianz Partners. “But today, things have changed. The customer purchase decision journey has become more complex. That’s why we see the emergence of affiliates like bloggers and influencers that produce value in much more targeted customer segments.”

Allianz Partners has started working with travel bloggers to promote their travel insurance policies. Since Covid-related health concerns are still lingering on most travellers’ minds, travellers searching for the right type of travel insurance are likely to come across and be influenced by a blog recommending Allianz’s offerings over its competitors.

After joining forces with an array of community-driven partnership types, including influencers, content creators, mobile apps, and brand partners, ANZ travel experience provider Big Red Group (BRG) similarly gained access to new, relevant and highly engaged audiences.

Automation and technology to accelerate partnership-driven growth

Just as the travel sector pivoted to digitalisation to meet the changing needs of travellers, the industry must once again tap on the benefits of tech in a new world order where partnerships are key.
Just as the travel sector pivoted to digitalisation to meet the changing needs of travellers, the industry must once again tap on the benefits of tech in a new world order where partnerships are key. Photo Credit: GettyImages/metamorworks

When measuring, tracking and managing their vast networks of partners, both Allianz Partners and BRG relied on impact.com’s partnership management platform to deliver the goods.

“With the help of impact.com, we were able to integrate and scale up our partnership program into a single ecosystem with automated contracting and payment, as well as real-time reports,” Allianz Partners’ Edwina Sunario shares.

For BRG, deploying impact.com meant gaining visibility and control over all stages of the customer journey. The ability to clearly measure and optimise the value of each of their partners led to a 117% increase in return on ad spend year-on-year and a 32% increase in partnerships revenue after just five months.

When the pandemic struck, the travel and hospitality industry learnt to roll with the punches. Now brands like Allianz and BRG continue to embody that spirit of adaptability by embracing affiliate partnerships.

Affiliate partnerships offer a clear blueprint for adapting to the harsh realities of travel amidst a challenging economic climate that combines growth, reach and profitability into a single package. To find out more of how to further tap onto these new opportunities, get in touch with the impact.com team at grow@impact.com. An exciting journey of partnerships-driven growth awaits.

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This article is brought to you by impact.com.

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