Skift Travel News Blog

Pakistan has launched a national tourism brand — Salam Pakistan, a first for the country that has been grappling with severe challenges, many of which have been on the economic front.

Prior to the Covid-19 pandemic, the travel and tourism industry contributed approximately $15 billion, accounting for 6% of Pakistan’s total gross domestic product (GDP) in 2019.

However, due to the pandemic’s impact, this figure decreased significantly to $11.6 billion, representing 4.4% of GDP in 2020. Additionally, the number of jobs in the tourism sector declined from 3.45 million in 2019 to 3.63 million in 2020.

Pakistan’s vast tourism potential, which includes remarkable attractions like the world’s second-highest mountain and the ancient Indus Valley Civilization and Mohenjo-Daro, has been plagued by security concerns and political instability since the early 2000s.

In recent years, the government has made efforts to revive the tourism economy, and the launch of the Salam Pakistan brand indicates the country’s commitment to promoting its diverse tourism sector.

On the occasion of last year’s World Tourism Day, Pakistani President Arif Alvi underscored the significance of tourism as a crucial generator of foreign exchange earnings, a catalyst for job creation, and a tool for poverty alleviation.

Alvi drew attention to its role in fostering a sense of harmony among people hailing from diverse regions within the country. The president emphasized the necessity of setting clear priorities to fully harness the vast potential of the tourism sector.

The former Prime Minister of Pakistan, Imran Khan, recognized the great potential of tourism during his speech at the World Economic Forum in Davos in 2020.

To facilitate tourism, Pakistan introduced an online visa facility, which was later extended to 191 countries. It is also looking to develop a draft National Tourism Strategy and Action Plan in collaboration with various stakeholders from the public and private sectors.

With the implementation of government policies and measures to promote domestic and international tourism, Pakistan aims to increase the number of visitors by approximately 30% by 2030.

The country is also becoming an attractive investment destination for new hotel developments. Notably, Hilton and Radisson Hotel Group have signed agreements for upscale hotels in the country, with plans to introduce internationally branded accommodations.

As a result of these initiatives, hotels in Pakistan are witnessing substantial growth in terms of occupancy and average rates, and this positive trend is expected to continue in the coming years.

This summer, Palazzo Avino – a 12th century villa turned five star hotel – has partnered with Maison Valentino on a ‘Summer Beach Takeover’. 

The collaboration will see the renowned fashion house transform the Hotels’ Clubhouse by the Sea, bringing a collection of custom furniture and soft furnishings to the premises. The grounds will be adorned with a range of items including, deckchairs, sun loungers, and beach umbrellas, all featuring Valentino’s iconic shade of red.

Valentino is also set to extend its presence to the boutique located within the property’s grounds on the Amalfi Coast, offering guests a curated selection of Valentino’s latest offerings from the Escape 2023 collection.  

“Growing up in an Italian family when talking about fashion, Valentino was the brand, was the designer, and is linked to Italian history so deeply, and I could not think of a better partner to align our hotel with,” said Mariella Avino, managing director & owner at Palazzo Avino.

The Palazzo Avino x Valentino partnership is the latest in a wave of luxury collaborations between major fashion brands and luxury hotels, proving that the luxury travel market is as lucrative as ever.

At Skift, we are looking to unearth the most creative and forward-thinking innovations in travel through our Skift Ideas Franchise, which includes the Skift IDEA Awards, Skift Editorial Hub and the Skift Ideas Podcast.

You can listen and subscribe to the Skift Ideas Podcast through your favorite podcast app here.

When Ad Age announced its “2023 Creativity Awards” on Monday, it handed one to Hilton for having the year’s “best rebrand.” The hotel giant’s brand platform, “It Matters Where You Stay,” helped the U.S.-based hotel giant differentiate itself from competitors, the trade publication said.

Ad Age praised Hilton’s campaign — created by agency TBWA\Chiat\Day New York — for specifying services and amenities that other hotel chains and online travel agencies such as Airbnb can’t consistently provide, such as confirmed online reservations for connected hotel rooms, digital keys, and pet-friendly accommodations.

“In an era when so many travel brands feature pristine beaches, soaring mountaintops, and other glorious destinations, Hilton got real with its first-ever global marketing platform,” Ad Age said.

Chris Silcock, Hilton’s chief commercial officer, spoke about the campaign at the Skift Future of Lodging Forum in London. He said one of the ads, a TikTok video featuring Paris Hilton, had received 40 million impressions as of a month ago. Here’s a clip of the TikTok and Silcock’s explanation of the thinking behind it.

Ad Age wrote an inside piece on the creation of Paris Hilton’s 10-minute TikTok here.

Airbnb executives have talked a lot about how they have reduced their spending on performance marketing (think: buying ads in Google search results) to focus on brand marketing (think: subway posters advertising the company’s new “OMG” category of properties). So how much do they spend on brand and how much on performance?

The short answer is we don’t know for sure. In its first year after going public in December 2020, the short-term rental giant didn’t break out its brand marketing as a share of sales and marketing expenses in its financial results.

This year, though, it began to provide a touch more color, though not enough detail for a full picture.

The company doesn’t disclose how much it spends on performance marketing. Yet it has begun disclosing its year-over-year increases in search engine marketing and advertising spending. In the first nine months of the year, its search engine marketing and advertising expenditure rose by $76.9 million year-over-year. Sadly we don’t know what the total amount of performance marketing was in 2021 to compare it with.

What we can see for sure is that the bump in performance marketing represented a comparatively smaller increase than the company’s increased expenditure on brand marketing. We know that the company increased its brand campaign spending and that the increase was two-and-a-half times as much as the increase of its performance marketing.

In the first nine months this year, the company spent $771.9 million on “brand and performance marketing,” according to financial filings published on Thursday. Of that, $202 million, or 26 percent, represented increased spending on specific brand marketing campaigns.

Sadly, we don’t know the company’s total spending on brand marketing.

But we know the increased spending was meant to support campaigns including its “OMG” category of properties. Since the category’s introduction, the OMG listings have been viewed more than 300 million views, the company claimed this week.

Brand marketing is critical to the company’s ability to continue to attract guests and hosts through direct and unpaid channels, which executives say are cheaper than advertising on Google, Facebook, and other channels.

The company’s other “sales and marketing” costs included personnel-related expenses for its communications teams and for “policy,” which cost a separate $335.7 million in the first nine months of the year — representing a 3 percent increase year-over-year.

Added up, the company spent about $1.1 billion on “sales and marketing” in the first nine months of this year. That was about 17 percent of revenue, far lower than what traditional online travel agencies spend, as Skift has analyzed before.

Boosting Incentive Payments to Customers?

An unspecified amount of Airbnb’s other sales and marketing money was used for referral incentives and coupons. The company has for years made payments to customers via referral programs. Airbnb typically offers a coupon credit for a future booking after a person refers someone to the online agency and that new customer completes their first stay.

The company doesn’t spell out how much it spends on these incentive programs. It appears to mostly lump the amount along with refunds it offers to customers upset with something going wrong in their Airbnb experience.

Intriguingly, the total number of customer payouts for incentives and refunds has increased this year. In the comparable third quarters in 2020 and 2021, Airbnb kept these sums at about $85 million. But in the third quarter of 2022, the total number of incentive payments and refunds rose to $152 million. That was 78 percent more.

Have refunds gone up as the pandemic has ended? Perhaps. But it’s also possible that the company instead increased its referral and related marketing programs, such as where it offers coupons. The company hasn’t broken out the details.

Energy Credits for Hosts in Britain?

On Thursday, the company debuted another type of brand-boosting program. In the UK, Airbnb debuted a sustainable hosting fund worth about $1.1 million (£1 million) to help property managers who want to make their lodging more energy efficient.

Many hosts are struggling to cope with spiking energy costs in the UK because Russia is disrupting energy supplies to Europe during its war on Ukraine.

Airbnb will make grants to hosts of about $3,300 (£3,000). Qualifying actions include switching to a more energy-efficient boiler or heat pump and insulating a roof. Details are at the company’s sustainability fund site.

Overall, Airbnb appears to have found alternatives to paid performance marketing to be more cost-effective. For more context, watch Airbnb co-founder and CEO Brian Chesky explain the company’s strategy in this video from Skift Global Forum 2022.