Coronavirus: Google and Facebook face demand to offer advertising credit from tours sector

Research finds nearly half are at risk of collapse if trading does not return to normal within six months

A demand has been made for online advertising giants Google and Facebook to offer tours, activities and attractions firms credit during the coronavirus crisis.

It comes as research found nearly half are at risk of collapse if trading does not return to normal within six months with 73% of firms reporting a bookings decline of more than a half.

Arival, which conducts research for and speaks on behalf of the global sector, described the leading search and social platforms are the two largest beneficiaries of advertising by the sector.

Douglas Quinby, chief executive of Arival, called on them to apply credit for future advertising to help the industry survive the COVID-19 lockdown and then recover.

He welcomed Facebook’s announcement yesterday of a $100 million initiative to help small businesses as a “small first step on a long journey.”

He said: “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. Now it’s time for them to step up and pay it forward by crediting the accounts of these at-risk advertisers.”

New research from Arival has valued the sector at $254 billion and the organisation estimates there are one million tour, activity and attraction operators worldwide.

But they are said to be now in deep crisis. A survey of nearly 600 tour, activity and attraction operators worldwide, conducted by Arival found:

• 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,” said Quinby.

Further research by Arival has found most firms in the sector were established within the past five years and 86% of operators generated less than$250,000 in gross sales in 2019.

Arival pointed out, by comparison, Google and Facebook generated combined advertising revenues of US$204 billion in 2019.

“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,” said Quinby.

He added 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 has invited 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.