The full-year 2024 financial reports of the online travel giants Airbnb, Booking Holdings, Expedia Group and Trip.com Group reveal sales and marketing investment of $17.8 billion in total in 2024, up a cool billion from 2023’s figure.
The investments by the four largest global travel entities to acquire customers and strengthen their brands sets a new record and demonstrates the ferocious competition in the market as the intermediaries continue to battle against each other, as well as with suppliers, for customers.
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Trip.com Group increased its sales and marketing investment in 2024 by 29% to $1.6 billion, which the company attributed to more promotional activities “focused on strengthening our global business and brand awareness.”
The increase by the China-based OTA is significantly below its huge 117% increase in 2023 to $1.3 billion, but that was in part a reflection of the fact the company had significantly reduced its spend during the COVID years. The marketing investment in 2024 was 22% of revenue, up a couple of percentage points on 2023.
Airbnb, meanwhile, increased its sales and marketing spend 22% to $2.1 billion in 2024, but the company maintained its investment as a 19% share of revenue. During its earnings call Ellie Mertz, chief financial officer of Airbnb, reiterated that the majority of spend is on brand marketing
“And the way to think about brand marketing is that it is effectively a fixed amount of spend for each market in terms of the minimum amount that you need to spend for that market to be efficient,” she said.
“And so, it is not necessarily a one-for-one like performance marketing in terms of how you need to scale it up. And so, what we've done over the last couple of years is keep the growth of spending against our core markets relatively modest while adding on these incremental new markets and the incremental brand marketing dollars that it requires.”
AI overtones
When you start to look at the marketing spend of the two biggest online brands, Booking Holdings and Expedia Group, while the investment has increased again, the tone from their leaders seems to be changing.
Booking Holdings marketing investment in 2024 was $7.3 billion, representing 31% of revenue and up from $6.8 billion in 2023. Over the years the CEOs of the OTAs have spoken about wanting to reduce their reliance on Google but Glenn Fogel, president and CEO of Booking Holdings, said during its earnings call that the company expects “agentic models to change the way some bookers discover and use our platforms.”
It's worth remembering that Booking.com and sister brand Priceline are “early contributors" to the agent journey as OpenAI named them partners when it launched Operator last month.
During the call, Booking Holdings chief financial officer Ewout Steenbergen also called out how “excited” the company is about the development of social media channels.
“This is a big area of investment for us. We have invested a lot of our technology in this space and expertise working together with some of the large social media channels, particularly Meta, where we have built a very close relationship,” Steenbergen said.
“I don't want to say too much about that from a competitive perspective, but this is very much a bespoke model where both teams from both companies have built a very effective way how we can monetize their leads and our leads, because this is really based on both remarketing and prospecting that comes from both sides, as well as very personalized creative content in terms of feeds.”
Ariane Gorin, the CEO of Expedia Group, which increased sales and marketing expenses 12% to $6.8 billion in 2024, also talked about artificial intelligence during the company’s earnings call, saying it will cause travelers to search in different ways.
“And so we need to make sure that our brands are showing up in those new places where people are using gen AI native search. And fortunately we’ve got a very tech sophisticated marketing team that is making sure we do show up there,” she said.
Nobody really knows how quickly the paid marketing landscape might change but some experts believe the advent of AI assistants or agents require a “holistic refresh.”
Others see the potential of a move from cost-per-click to cost-per-agentic search. Watch this space.