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 US$14 billion
for the year – exceeding the amount the four companies spent in 2019 by
about US$500 million.
The bulk of that spending came from Expedia Group and Booking
Holdings, with the two companies disbursing US$6.1 billion and US$6
billion, respectively, in 2022.
That’s a marked increase for both compared with 2021. That year,
Expedia Group spent US$4.1 billion and Booking Holdings spent US$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 programme, 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
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 US$1.5 billion in 2022, up from US$1.2 billion the year
before. But as a percentage of revenue, marketing dropped from 20% to
18%, the lowest among the four OTAs analysed.
Group is the only one of the four OTAs analysed that reduced its
marketing spending in 2022, going from US$772 million in 2021 to US$616
million last year.
Those figures are far below Trip.com Group’s outlay in 2019 of US$1.3 billion.
As a percentage of revenue, the China-based company’s marketing spending dropped from 25% in 2021 to 21% in 2022.