Contributions by Alan Amerault, Kalin Kotzev and Fil Lourenco
Catalyst Canada sought to answer the question: does a weaker dollar affect where Canadians want to fly? We predicted that Google searches for domestic flights would increase while searches for flights to international and U.S. destinations would decline. By contrasting Google Trends air travel data from the past four years with Canadian and American exchange rates, we found a correlation. As the Canadian dollar fell, Canadians showed less search interest in U.S. and international flights and more interest in domestic flights.
Our evidence was gathered using Google Trends results from January 2012 to January 2016, with a focus on flight queries for popular destinations including:
We also conducted a hotel search trend analysis with a focus on Toronto, San Francisco and New York. Finally, we analyzed flight searches from airports in close proximity to Canada, Seattle, Buffalo and Detroit in particular. We used trend data for keywords with at least 1,000 monthly search queries or more to draw our conclusions.
The past four years have seen the Canadian dollar decline in comparison with its US counterpart and other foreign currencies. We sought to understand how the devaluation of Canada’s currency impacts how Canadians browse for flights online and the implications for the airline industry. The changes in bookings is already palpable. The CBC published an article evincing that Canadian travel to the U.S. in December 2015 was nearly 21 per cent below the rate of travel in December 2014.
Our results indicate that search queries for domestic and foreign flights and hotels fluctuate in tandem with the weaker Canadian exchange rate in three ways:
1. Non-Domestic Flight and Hotel Searches Fall
In 2015, flight searches for top US locales fell by 19 per cent on average, with Los Angeles, Boston and Las Vegas experiencing the largest declines. As currency fluctuation intensified during 2015, the second half of the year was marked by even further declines in these searches, particularly to leisure hubs like Las Vegas, which saw a 59 per cent decrease in interest. Similarly, we saw a 10 per cent decrease in hotel searches for New York.
Beyond North America, Canadians searched less for popular locations including London and Paris, while Dubai bucked the trend.
2. Domestic Flight and Hotel Searches Rise
In 2015, we saw a 15 per cent rise in Canadian searches for domestic flights out of major cities. Searches for flights out of Vancouver and Toronto grew by 18 per cent. Hotel queries mirrored the Toronto growth, with a 33 per cent increase in 2015 over 2014. External factors that may have played a role include the Pan Am Games hosted in Toronto in 2015.
3. Border Airport Flight Searches Fall
While Canucks are known to fly out of U.S. airports near our borders to save money, we saw significant search declines for flights out of Detroit, Buffalo and Seattle in 2015 in comparison to 2014.
Quick Tips for Advertisers
Fine-tune your reach
Advertisers should look to leverage customer data segmentation, tailoring campaigns to high value customer groups, for example, promote domestic flights to customer segments that are searching more for local getaways. Using Google’s Display Network, travel marketers can hone in on frugal customer segments. In a similar vein, target search campaigns towards universities, focusing on students who are key influencers on their parents for flight options during peak travel times and holidays (fall and Spring Break, for example).
Maximize high-value campaign budgets
Advertisers should not limit search visibility to destinations seeing a decline in traffic, but it would be prudent to place ads and promotions prominently for queries with increased search volume (domestic flights). If search budgets are capped already, consider moving or adding where appropriate.
Use upper-funnel awareness techniques to promote domestic travel and influence cheaper flight options for Canadians
Consider programmatic display or paid social channels to help push interest in domestic flight routes or destinations where the Canadian dollar is still favorable. In addition, generic keywords may be used in much the same way. Rather than raising overall flight options, advertisers can push for specific, promoted routes. Consider this for keywords like ‘cheap vacations’, or ‘affordable vacations.’ Advertisers with a vacation-specific offering will want to promote more popular ‘staycation’ options until dollar parity returns.
Latest posts by Rebecca Nava (see all)
- Catalyst Director of Social Weighs in on Snapchat’s Idiosyncracies and Advertising Potential - Monday Sep 19, 2016
- Weekly Roll-Up: Week of Sept 10-16 - Friday Sep 16, 2016
- Jeff Lancaster Explains Key Mobile Study Findings - Thursday Sep 15, 2016