Another financial quarter, another $4.5 billion invested in marketing by the online travel giants, Airbnb, Booking Holdings, Expedia Group and Trip.com Group.
Talk in recent financial quarters has been of experimenting with other channels such as social media, as well as leaning into advances in artificial intelligence (AI), with a view to reducing reliance on current channels such as Google. Change doesn’t happen overnight, but some new initiatives have been unveiled.
The quarterly and annual marketing spend of these four companies continues to rise as they vie for customers and strengthen their brands in a competitive market.
For 2024, the four invested an eye-watering $17.8 billion in marketing, and while we don’t know how the remainder of the year will play out, Q1 marketing spend was up year-over-year.
Booking Holdings reported a 10% year-over-year increase to almost $1.8 billion in marketing spend for the first quarter of 2025. The figure as a percentage of gross bookings rose one percentage point to 3.8% in the quarter.
Alongside the up in spend, the company reported that its B2C direct mix has been increasing over the past four quarters from a low-60% range a year go to a mid-60% range, as chief financial officer Ewout Steenbergen shared on an earnings call in late April. And, the direct channel growth is expected to continue to grow throughout 2025.
CEO Glenn Fogel said that it would never be 100%, however, “because there’s always going to be somebody new who comes in.”
Steenbergen also said that social media channel spend “continues to scale at attractive incremental ROIs, while successful experimentation has led to improved performance in some of our traditional marketing channels” driving “increased booker volumes at comparable ROIs.”
Social matching
For its part, Expedia Group seems to be leaning more heavily into social through its newly launched AI-powered tool Trip Matching.
The company, which increased sales and marketing spend by 6% to $1.76 billion in Q1, launched the initiative in “early access on Instagram.”
CEO Ariane Gorin said it would enable travelers “to seamlessly build an itinerary based on an Instagram Reel and then book directly on Expedia.”
The strategy is to bring travelers back to the Expedia brand, which will then generate customized itineraries or destination ideas.
Using AI to drive traffic was laid out by Gorin during the company's Q4 2024 earnings report as one of the four ways Expedia is thinking about the technology.
During Q1 earnings, she said that search behavior is changing with consumers going to ChatGPT and other AI players.
“We need to make sure that our brands are showing up well there. Those companies are quickly evolving what they're doing. So, how do we make sure we're there? Both in the organic search but also with these agentic experiences with Operator and others.”
She said “teams are working deeply with those partners,” adding: “What we found is no matter what, because travel is complicated, the idea of being able to buy from a well-known brand that's got all the supply, that's going to service your booking well, gives me confidence that bringing traffic over from there is attractive for our brands versus the worry that people are just going to book somewhere else.”
Beyond core offering and markets
Meanwhile, Airbnb spent $563 million on sales and marketing in Q1, a 9.5% increase from the same quarter in 2024.
The company is looking to expand beyond its core accommodation offering and continues to boost its brand through television advertising. The latest campaign coincided with, and focuses on, the relaunch of its Experiences platform.
The company also continues to invest outside its core markets. During its latest earnings call, chief financial officer Ellie Mertz said priorities, which include “growth in global markets,” remained consistent with what was said in Q4 2024.
“We're taking a much more localized approach to product and marketing in underpenetrated markets around the world. This is a multiyear strategy, but we've already seen encouraging results,” Mertz said.
“For the fifth quarter in a row, growth in these expansion markets significantly outperformed our core markets. In fact, the average growth rate in Q1 in expansion markets was more than double that of our core markets.”
CEO Brian Chesky named the growth markets as Spain, Italy, Germany, Mexico and Brazil, and in Asia—China, India, Korea and Japan.
“We're going to step on the gas. And I think that international will be one of the biggest growth drivers that will get us back to double-digit growth on Airbnb,” he said.
Finally, Trip.com Group stood out in Q1 for increasing its sales and marketing spend by 30%. While the investment of $413 million has a way to go before it catches up on the other online travel agents (OTAs), it remains a big jump for the China-based company.
The OTA increased spend by a similar amount in the first quarter of 2024, a year after China began lifting of pandemic restrictions.
During its earnings call, Trip.com Group spoke about investing in specific demographics such as the silver generation—comprised of older adults, typically over 60—with the company developing a “short-form drama series” to help promote its services to this cohort.