Survey: Ad spend of travel industry sees explosive growth in first quarter of 2023

Local ad spend in Hong Kong has surged significantly in the first quarter of 2023, reaching a total value of HK$6.85 billion with a YOY increase of 22%. Meanwhile, the ad spend of the local travel industry saw an impressive YOY increase of 324% in the first quarter.

According to admanGo, the considerable growth in local ad spend can be attributed to the lowered comparison base last year due to the impact of the fifth wave of the pandemic. During the first quarter of 2023, as the preventative measures against the outbreak gradually eased, life in Hong Kong gradually returned to normal.

In addition, the implementation of the quarantine-free travel between Hong Kong and mainland China in early January of this year resulted in an increased exchange of people and opportunities for local businesses to expand into the mainland tourism market. The decline in pandemic cases has boosted market confidence, compelling enterprises to increase their advertising investments to improve brand recognition and drive sales, ultimately leading to an upsurge in local ad spend in the first quarter.

With the issuance of new consumption vouchers in mid-April and the upcoming Labour Day Golden Week in May poised to provide further opportunities for various industries, Hong Kong advertising market is expected to continue a steady growth trajectory.

The Top 10 industries with the highest ad spend generally saw an increase, with industries ranked eighth to tenth being outside of the top 10 last year. The eighth-ranked travel industry saw a YOY increase of 324% in the first quarter. Data showed that the industry has experienced explosive growth in ad spend after the resumption of social activities, ranking first among the Top 10 Industries in terms of growth rate.

The ad spend of restaurants (ranked ninth) also increased to 37% YOY, while the ad spend of fashion, accessories and eyewear (ranked tenth) increased by 67% YOY in the first quarter. Data reflected that some industries that were greatly affected by the epidemic have increased their advertising efforts in Q1 2023.

With the implementation of the Hong Kong and Mainland China quarantine-free travel, the atmosphere in the local property market has also started to improve. Many property developers have taken advantage of this mini-boom in the property market to launch new properties. 40% of ad spend in the residential property category was attributed to Novo Land under SHKP, Oysterbay under MTR Corporation, Koko Rosso under Wheelock, and ATR under Star Properties, resulting in a 49% YOY increase for the fourth-ranked Property & Real Estate in the first quarter.

Despite a 6% YOY decline for the first-ranked banking and investment services in the first quarter, both HSBC Group and Hang Seng Bank in the Top 10 Advertiser Groups recorded a YOY increase of 19% and 104% in their ad spend in the first quarter respectively. This reflected that specific banking groups continued to allocate more resources to advertising and promotion in the first quarter.

Most of the Top 10 Advertiser Groups recorded positive YOY increase in ad spend in the first quarter. MTR had the highest increase in ad spend among the groups, with a 779% YOY increase in the first quarter. DFI Retail Group and A.S. Watson Group, both in the retail industry, saw a YOY increase in ad spend of 36% and 73% respectively. Other top 10 Advertiser Groups that recorded positive YOY increase in ad spend included Vita Green Health Products (21%), P&G (25%), GSK (72%) and LVMH Group (47%).

In terms of media, ad spend for free newspapers and outdoor increased by 39% and 20% YOY respectively. In the digital media sector, mobile and social media ad spend recorded YOY increase of 44% and 23% respectively in the first quarter.

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