Special Report: Travel

NEW YORK When Hilton Hotels kicked off its latest campaign last month—centered around National Kindness Week—the chain placed spots on a variety of cable channels including CNN, ESPN and The Weather Channel, as well as select in-flight programming. Also last month, when another major hotelier, Hyatt Hotels, rolled out its $15 million campaign, it, likewise, turned to cable nets including Fox News, Food Network and A&E.

Even as they have slightly increased their spending on network TV as a whole, many of the largest advertisers in the hotel and travel category are tending toward more targeted media, including cable networks, spot TV, Internet and print, over the mass reach of network prime. Thus, as in years past, don’t look for them to be players in this year’s upfront negotiations with the broadcast networks, say those who follow the sector.

“Certainly on a seasonal basis, some travel companies may look at network. But really, travel doesn’t get the return on investment from network TV. [Some major travel marketers] have continued to cut back on it, and I don’t expect that will change in 2007,” explains Henry Harteveldt of Forrester Research in San Francisco.

Adds Harteveldt, “No travel company has money to burn anymore. The travel companies, by design, require media buys that are flexible, and the upfront is not it.”

Hotel and travel advertisers, including airlines, cruise lines, rental car companies, hotel chains, resorts and online travel sites, last year invested a bit more in prime than in recent years, with a total outlay of $201.7 million, up from $173 million in 2005, according to Nielsen Monitor-Plus.

Driving that growth: spending increases from some cruise lines (Royal Caribbean Cruises) and airlines (Southwest). Still, the haul remains relatively puny compared to other categories, and major players such as the airlines continue to favor spot buys in their busiest markets and cable nets tailored to business and leisure travelers.

“Most airlines now have limited budgets, low margins, higher fuel costs. [Their TV advertising focuses on] cable, specific to a region or market. Network just does not suit them as well,” says Joel Chusid, president of Joel Chusid & Associates, a travel industry consultancy based in Dallas.

This past winter, when industry darling JetBlue Airways ran headlong into a public relations storm after nasty weather grounded many of its flights—and flyers—in the Northeast and beyond, it took matters into its own hands, opting to deal with consumers directly by crafting a customer bill of rights and issuing $30 million in vouchers and refunds in favor of an image-boosting prime-time marketing blitz.

At least one other carrier is spending more on prime. Expansion-minded Southwest Airlines last year upped its outlay by 42.7 percent to $19 million versus 2005.

Hotel chains also remain among the biggest users of prime-time television in the travel category. Starwood (whose brands include Sheraton, Westin and W) and Choice Hotels International (Comfort Inn and Quality Inn) both increased their prime-time investment last year.

The cruise lines continue to be the biggest spenders in the travel category. Last year, the No. 1 advertiser in the category, Royal Caribbean Cruises, upped its year-over-year investment by 12.7 percent to $37.4 million, while Carnival Corp. cut spending by 25 percent. Still, Carnival laid out $32.3 million, making it the second-largest player.

Online travel sites including Orbitz, Expedia and Priceline, which brought back longtime pitchman William Shatner in a series of spots in first quarter, continue to devote a chunk of marketing budgets to prime time. Lately, though, the travel sites have been flocking to alternative media, notably Internet and product placement in TV shows and films.

For example, Travelocity developed a partnership with the CBS hit The Amazing Race and last year more than doubled its prime-time investment to $12.1 million. (Expedia, on the other hand, slashed its spending on network prime time by 23.4 percent to $15.9 million.) And the recent feature film Blades of Glory, starring Will Ferrell, included several mentions of Orbitz, which also did a Web tie-in with the film’s release.

As in other categories, hotel and travel advertisers are pouring more of their marketing dollars into the Web.

“Really, the way travel companies increasingly connect and advertise with their customers is online,” Harteveldt said. “Eighty-three percent of leisure travelers are online, and among business travelers, it’s even higher. They have to go where the eyeballs are, and online is a lot less expensive.”