COVID-19: Google and Facebook must step up to help businesses
Online ad giants should be stepping up to help tourism operators as they suffer from the fallout of the COVID-19 outbreak.
That's according to research authority Arival, who says companies like Google and Facebook should carry forward advertising credit to help tour, activity and attraction operators
Douglas Quinby, chief executive officer at Arival, says two largest beneficiaries of the sector's advertising spend should apply credit to future advertising to help the industry survive, and then recover.
Quinby said Facebook's March 17 announcement of a US$100 million initiative to help small businesses was “a welcome but small first step on a long journey.
“Google and Facebook have become incredibly important partners to the travel industry worldwide. They have profited handsomely from the risk-taking of these enterprises over the past decade,” he adds.
“Now it's time for them to step up and pay it forward by crediting the accounts of these at-risk advertisers.
According to research from Arival, the sector was valued at US$254 billion in 2019. Arival estimates there are one million tour, activity and attraction operators worldwide.
"They are now in deep crisis," says Quinby.
An Arival survey of nearly 600 tour, activity and attraction operators worldwide, conducted March 9-13 2020, showed that the state of travel's third-largest sector is dire due to coronavirus:
- 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%
“These numbers show an industry in trauma – and it's only going to get worse,” Quinby says.
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, Arival says.
Arival's research shows that 86% of operators generated less than US$250,000 in gross sales in 2019, while 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.
"Now is the time for big to help small," says Quinby.
“Arival calls on Google and Facebook to credit the accounts of all tour and activity operators, attractions, experience hosts, ground transfer providers, and all third-party resellers for advertising spend on their platforms for the period January 15 to March 15 2020,” he explains.
"Google and Facebook need to take the “long view” on this. 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. It invites operators, distributors, technology companies and all individuals working in tours, activities, attractions and experiences to sign their name. Arival will present the petition to representatives of Google and Facebook.
On 31 March Quinby will present findings from Arival's study of the global operator landscape, as well as the impact of coronavirus on tours, attractions and activities in a live online event.
"Arival has also launched Arival Online, a series of live online events through April to help tour, activity and attraction operators weather these unprecedented times and prepare their business for the future. Arival Online features interviews with industry leaders, informational workshops and presentations on a range of topics to help operators connect, learn and grow," Quinby adds.