Online travel giants spent more than $14B on marketing in '22

As the world fully reopened to travel in 2022, online travel giants Expedia Group, Booking Holdings, Airbnb and Trip.com Group doled out a record amount of money to capture the attention of consumers.

Across the four brands, spending on marketing (reported by Airbnb and Expedia Group as both sales and marketing) was just over $14 billion for the year – exceeding the amount the four companies spent in 2019 by about $500 million.

The bulk of that spending came from Expedia Group and Booking Holdings, with the two companies disbursing $6.1 billion and $6 billion, respectively, in 2022.

That’s a marked increase for both compared with 2021. That year, Expedia Group spent $4.1 billion and Booking Holdings spent $3.8 billion – both a big jump from the pandemic-induced reduction in spending in 2020 but still far behind 2019 and current levels.

And both online travel giants saw an increase in the cost of marketing as a percentage of revenue. For Expedia Group, marketing came in at 52% of revenue in 2022, up from 49% a year earlier, while Booking Holdings came in at 35% of revenue, up from 34.7% in 2021.

In a call with analysts to discuss the full-year results, Expedia Group CEO Peter Kern discussed the company’s strategy to drive more loyalty and direct business and how that will create more marketing efficiency in the long run.

“We will be investing somewhat more in the loyalty program, but we expect, as we've talked about many times, we think about our investment in acquiring and retaining customers as everything from loyalty to discounting to direct marketing spend and performance brand, et cetera. And we expect to balance those things,” Kern said.

“You're driving more business from direct, and you start to get leverage in what you're spending to add new people to the funnel because the new people become a somewhat smaller piece of the overall pie of business.”

Meanwhile Airbnb – which dramatically cut marketing spending in 2020 – has ramped it back up as revenues have increased. 

But the company’s marketing strategy still leans in to earned media over performance marketing. 

Airbnb spent $1.5 billion in 2022, up from $1.2 billion the year before. But as a percentage of revenue, marketing dropped from 20% to 18%, the lowest among the four OTAs analyzed.

In a call with analysts to discuss the full-year 2022 results, CEO Brian Chesky said, “Ninety percent of our traffic is now direct. It's sustained that since we went public, it's always been about 90%. We have extremely high efficiency on things like performance marketing. And generally, the way we approach our brand is that Airbnb is a pretty ubiquitous brand. So what we really want to do now is continue to invest in awareness around our different innovations.”

And when asked about plans for this year, Airbnb CFO David Stephenson said the company expects to spend about the same amount but will be adjusting the time of its marketing efforts. “We're just getting even earlier in the year to make sure that we're getting our message out to guests around the world. So they're ready to kind of make their bookings for kind of peak summer travel season. ... And so I think it's just we're getting more efficient and effective at the timing. And we think bringing forward a little bit more marketing into Q1 as a more effective use of our dollars.”

Meanwhile, Trip.com Group is the only one of the four OTAs analyzed that reduced its marketing spending in 2022, going from $772 million in 2021 to $616 million last year. 

Those figures are far below Trip.com Group’s outlay in 2019 of $1.3 billion.

As a percentage of revenue, the China-based company’s marketing spending dropped from 25% in 2021 to 21% in 2022.