Advertising Spend - Luxury Travel

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Advertising Spend - Luxury Travel Companies

In 2018, the Thomas Cook Group made an advertising expense of £146 million ($186.3 million) and generated a revenue of £9,584 million ($12,229 million). Hence, Advertising spend as a % of revenues computes to 1.52%. Alternatively, we could not find the percent revenue of ad spending for majority of the companies. The detailed strategy has been presented for information not available in this research. Alternatively, the key findings apropos of the request are highlighted below. We have presented the compiled information in the attached spreadsheet.

1) Travcoa

  • The company operates as a private entity and does not feature any public financial filings. According to Zoom Info, the company's total revenues are estimated to be $7.5 million. Alternatively, no information was available about the marketing or advertising spends by the company in recent years.

2) Scott Dunn

  • The company operates as a private entity and does not feature any public financial filings. According to Zoom Info, the company's total revenues are estimated to be $29 million. Alternatively, no information was available on the marketing or advertising spends by the company.

3) Abercrombie & Kent Ltd

  • The company operates as a private entity and does not feature any public financial filings. According to Zoom Info, the company's total revenues are estimated to be $2.8 million. Alternatively, no information was available on the marketing or advertising spends by the company.

4) Micato Safaris

  • The company operates as a private entity and does not feature any public financial filings. According to Zoom Info, the company's total revenues are estimated to be $4 million. Alternatively, no information was available on the marketing or advertising spends by the company.

5) Tauck Inc

  • The company operates as a private entity and does not feature any public financial filings. According to Hoovers, the company's total revenues are estimated to be $76.47 million. Alternatively, no information was available on the marketing or advertising spends by the company.

6) BackRoads

  • The company operates as a private entity and does not feature any public financial filings. According to Zoom Info, the company's total revenues are estimated to be $50 million. Alternatively, no information was available on the marketing or advertising spends by the company.

7) Zicasso

  • The company operates as a private entity and does not feature any public financial filings. According to Zoom Info, the company's total revenues are estimated to be $8.2 million. Alternatively, no information was available on the marketing or advertising spends by the company.

8) Exodus Travels

  • The company operates as a private entity and does not feature any public financial filings. According to Crunchbase, the company's total revenues are estimated to be $27 million. Alternatively, no information was available on the marketing or advertising spends by the company.

9) Butterfield & Robinson

  • The company operates as a private entity and does not feature any public financial filings. According to Zoom Info, the company's total revenues are estimated to be $161.8 million. Alternatively, no information was available on the marketing or advertising spends by the company.

10) TUI Group

  • In 2018, the company's total revenue reached €19,523.9 million ($22,365 million) in 2018. The company has not disclosed any information apropos of its marketing or advertising spend in the filings or its annual report.

11) Thomas Cook Group

  • In 2018, the Thomas Cook Group made an advertising expense of £146 million ($186.3 million) and generated a revenue of £9,584 million ($12,229 million). Hence, advertising spend as a % of revenues computes to about 1.52%.


RESEARCH STRATEGY

We started our research to identify the information about companies that catered around their services and product profiles. It was found that the total revenues for all the companies apart from Thomas Cook Group and TUI Group have been culled from various credible company databases and hence are estimated revenues for each of them. The primary reason for the data to be missing can be due to the fact that companies are privately-held entities, not requiring disclosing financial details about their operations. Alternatively, disclosing ad spends may provide competitors an in look into the marketing vigor and efforts of a company and hence due to competitive reasons many companies choose not to disclose the same. To get an understanding of the advertising spends for the companies, we deployed the same set of strategies for each of them. Below is the deep dive into the strategies used.
STRATEGY 1:
We scoured through the official sources of information like websites, press releases, and business profiles for each of the respective companies. These are one of the most potential sources where any company discloses information around its advertising efforts or marketing strategy, and hence the idea was to leverage it prima facia to check for the advertising spend info for each of the companies. However, no pertinent information could be found for any of the companies. Alternatively, all the information found catered around the description of various luxury travel services, their key positioning, competitive advantage, and various running offers of each of the luxury travel companies.

STRATEGY 2:
Next, we searched through credible company databases like Hoovers, Crunchbase, ZoomInfo, Craft, etc. The database acts as a potential source of financial information and provide an aggregation of external media and press articles around a company. The idea was to scour through them to check for the marketing or ad spend around the respective companies. However, all the information found catered around the business descriptions, financing raised, and estimated revenues for the respective companies and no pertinent information for the marketing spend could be located via this strategy.

STRATEGY 3:
We tried to triangulate the information using the annual reports, filings, presentations, supplemental information filings, and earnings call transcripts for each of the respective companies. The idea was to check if we can locate any information around marketing spend being X% of revenues or Y% of the total operating expenses of a company. Since we had the revenue information for each of the companies, and the operating expenses are also reported by all companies, we could have triangulated the dollar number for the advertising spend. However, apart from Thomas Cook Group and TUI Group, none of the other companies had any financial filings available as they were privately held. While we were able to locate the advertising spend for Thomas Cook Group from its 2018 annual report, the information was not reported by the TUI Group in its filings; hence, the triangulation strategy did not materialize for any of the companies with missing data.

STRATEGY 4:
Alternatively, we scoured through third-party broker research reports from GS, Deloitte, McKinsey, RBS, JPM, Bloomberg, among others. Normally brokers do track the detailed expenses and their breakout for the companies in their portfolio in order to be updated with the valuations, and hence, we decided to leverage this research path. However, none of the companies with missing data were found to have analyst coverage due to their private nature. The TUI Group did have the analyst coverage, but none of the research reports were accessible in the public domain.
STRATEGY 5:
Next, we tried to expand the search beyond the 24-months time-frame. We tried to check if we could locate the marketing spend information from older years (2015-2016) and use the expenses CAGR over the past 2-3 years for the respective companies to arrive at the current marketing or advertising spend. Also, we tried to check if we could locate any spending information around the major advertising campaigns done by the respective companies during the year and use the same as a proxy for overall ad spend assuming that bulk of the spending would have been constituted by the major or prominent campaigns done during the year. However, no relevant data points could be found. All the information from the past again catered around the various promotions and campaigns launched by the respective companies with no data on the overall marketing spend or spend on major campaigns done during the year.

STRATEGY 6:
Lastly, we scoured through media articles, blogs, and statistics like Forbes, Bloomberg, WSJ, Reuters, Capital IQ, Live Mint, Statista, AdAge, Adweek, Marketing Daily, Advertising Age, Unbounce, Adland, among others. These are again potential sources where any marketing or ad spend related information could be found especially when it forms a substantial expense for a company, and hence we checked on this research path. However, the strategy did not yield any fruitful results, and all the information found catered around marketing budgets in general and how they varied by industry.
Sources
Sources