This Is a Pivotal Moment for Booking Site Marketing Strategies
Photo Credit: TripAdvisor marketed this property as 'an incredible family-focused club steps from beautiful Son Bou beach on the Spanish island of Menorca.' Online travel agencies such as TripAdvisor are rethinking their marketing spend. TripAdvisor
Skift Take
Suddenly those seemingly free-spending online travel agencies, which have made Google rich, are toning down their big-spending ways. Google shouldn't be too worried: Expedia and Booking Holdings are still spending billions of dollars on search-engine marketing, but they've just become a bit more stingy. And, they hope, wise.
It was almost as if they flipped a switch.
Although the trend started to take shape a year or so earlier, in the second quarter five publicly traded online travel agencies — headquartered in the United States, India and Argentina — all shrunk their marketing spend as a percentage of revenue.
For years, online travel agencies' direct marketing spend in outlets such as Google outpaced their revenue growth, and critics wondered whether this spending bonanza was sustainable.
But in the quarter ending June 30, the two largest travel-marketing spenders, Booking Holdings and Expedia Group, which each devoted about $1.26 billion to direct marketing, recalibrated their marketing spend to decline as a percentage of revenue.
The turnabout is a watershed moment, although it's unclear whether this is the new "normal" or a trend that will get upended before long.
Among the two spending titans, Booking Holdings saw the largest marketing-spending drop, 660 basis points to 35.8 perce
