Partners, Properties, and Rights Holders All Benefit From Verizon’s 5G Sports Investments

BY ADAM GROSSMAN

It is difficult to think of an industry harder hit from COVID-19 than travel. Yet, Memorial Day weekend saw a surge of people traveling that exceeded many experts’ expectations for the holiday. Examining why this occurred has further application in showing how travel sports partnership spending could increase for the remaining portion of 2021.

There were reasons to think that the travel industry could have rebounded sooner than many would have anticipated. As early as June of 2020, Booking.com had “an uptick in activity from ‘dreamers,’ or people scoping out vacations but not committing to booking a room yet, with promotions to keep users looking.”

Memorial Day weekend in 2021 seems to have been the time when these 2020 “dreams” have come to fruition in large part due to wide scale vaccination efforts in the U.S. The challenge is that a perceived decline in travel demand has caused a persistent decrease in advertising from travel companies. For example, MediaRadar found travel-related programmatic ad spending decreased by 79% in Q1 of 2020.

Advertising declines in this sector have seemingly persisted through 2021. Sportico’s JohnWallStreet and Conrad Wiacek head of sport analysis & consulting for GlobalData reported that tourist board sports sponsorship spending was down 70% even with the a projected increase in travel. That is in large part due to the fact that vaccination rates internationally still lag significantly behind those in the U.S. (which causes COVID positivity rates internationally frequently to be significantly higher as well).

Yet, GlobalData expects tourist board partnership investment dollars to return. However, it will be “be dependent on rights holders accepting lower sponsorship value, however” and in the context of “tourism boards…having an opportunity to pick up some of the sponsorship classes vacated by the airlines too.” 

The timing of the Booking.com analysis and the surge in travel for Memorial Day comes at an interesting point for the sports industry. The Booking.com analysis shows that short-term demand declines create medium and long-term opportunities. More specifically, Booking.com shows evidence that those in the U.S. that have been “dreaming” about traveling again for a long time while Memorial Day acted on these “dreams.”

That can seem like music to sports properties’ (leagues, teams, events, and athletes) ears. Travel is one of many categories that historically has accounted for  a significant amount of partnership dollars in the past. Yet, the GlobalData analysis shows that travel partnership spending understandably declined significantly in recent months because of COVID-19. Memorial Day weekend should mean that travel partners will consider returning to historical partnership spending.

Travel partners, however, should consider doing more than that. More specifically, there are deals available with sports properties because, as a result of the “disappearing dollars,” new inventory is coming on-line that can more effectively reach their target audiences at the exact time that audiences are now looking to make purchasing decisions.

Sports partnerships should be particularly attractive to companies that focus on the most lucrative customers in this industry – business travelers. While “corporate trips remain 70% or more below pre-pandemic levels,” a post in Tuesday’s The Wall Street Journal featured the headline “Business Travel Is Coming Back.”

Business travelers are critical to airlines’ revenues and profits given how much they travel and how much they spend on each trip. Our Audience Inference Platform (AIP) has found significant overlap between the demographic profiles of sports fans and business travelers from an income, education, and age perspective.

Travel patterns are a clear example of how properties and partners should examine data around their consumers’ future buying patterns to determine if now is the right time to increase partnership spend. The seeming return of both leisure and business travel, at least in the United States, means that for many the answer is yes.