Online Ad Giants Should Help Tour, Activity, Attraction Advertisers
More than one in four operators are at risk of business failure within three months, and those numbers will rise significantly should this collapse of travel demand persist.
Yesterday in the Arival newsletter, we published the first results from our Coronavirus Pulse study, and the results are sobering, to say the least. More than one in four operators are at risk of business failure within three months, and those numbers will rise significantly should this collapse of travel demand persist.
Many thousands of tour, activity and attraction businesses around the world have invested in advertising to acquire customers, only to see those bookings evaporate into an unprecedented wave of cancellations. So we call on Google and Facebook to pay it forward by crediting the accounts of thousands of small tour and activity advertisers who have seen their online ad spend go up in smoke.
A Large Market under Threat
New research from Arival valued the sector at US$254 billion in 2019. We estimate there are one million tour, activity and attraction operators worldwide. Many are now in deep crisis. Our Coronavirus Pulse survey of nearly 600 tour, activity and attraction operators worldwide, which we initiated on March 9, 2020, showed that the state of travel’s third-largest sector is dire:
- 28% of operators surveyed are at risk of business failure within three months
- 46% are at risk of failure if travel does not begin to recover within six months
- 37% of total 2020 bookings have been cancelled
- 73% of operators report a decline in 2020 bookings vs. 2019
- The average decline is 52%
And it’s only going to get worse. And it’s small businesses and entrepreneurs that will be hardest hit.
Small Business in the Bullseye
The tours, activities and attractions sector is comprised mostly of small businesses, micro-entrepreneurs and part-time operators. Most have started within the past five years. Our research shows that:
- 86% of operators generated less than US$250,000 in gross sales in 2019
- 50% of tour operators and 45% of activity operators started their business between 2015 and 2019
By comparison, Google and Facebook are two of the largest companies in the world, generating combined advertising revenues of US$204 billion in 2019.
So we call on Google and Facebook to credit the accounts of all tour and activity operators, attractions, experience hosts, ground transfer providers, and third-party resellers for advertising spend on their platforms for the period January 15 to March 15, 2020. This would be a much-needed step to help many small operators get back on their feet when travel demand begins to return.
Arival has launched a petition to make the point. We invite you – operators, distributors, technology companies and all individuals working in tours, activities, attractions and experiences – to sign your name. Arival will present the petition to representatives of Google and Facebook.