The marketing spend of online travel giants such as Booking Holdings and Expedia Group is an area that continues to make headlines, so it feels like a good place to start. The annual eye-watering investment in attracting customers increases annually, with the exception of the pandemic when travel stopped.
In 2018, Booking and Expedia spent $10.6 billion in marketing, whether they dubbed it performance and brand advertising or selling and marketing expenses. The spend was up 8% on 2017's figure, with Expedia's investment accounting for $5.68 billion of the total and Booking Holdings accounting for $4.96 billion.
By way of comparison, as well as to demonstrate the ongoing fierce competition for customers in online travel, Expedia and Booking's combined spend on sales and marketing in 2024 was approximately $14 billion.
Room for startups?
Established online travel players committing such large sums to marketing raises the question as to whether startups in the space can gain a foothold. The good news in 2018 was that funding was plentiful; in fact, it was a y
Phocuswright tracked more than 350 individual investments into travel-related startups over the course of 2018. Notable rounds included $800 million in India-based hospitality startup OYO. Other large rounds over the course of the year went into the mobility sector and in specific companies such as LimeBike, Grab and Lyft. GetAround, Ola and Cabify also got a look in when it came to the multi-million investments in mobility and ride-hailing startups.
Tours and activities was another segment that piqued investor appetite in 2018, with Klook, Tiqets, TourRadar and Peek all landing significant rounds. And let's not forget corporate travel, with companies including Tripactions (now Navan) landing more than $200 million in 2018 and TravelPerk securing $65 million over two rounds.
What's interesting is that some of the companies mentioned above, such as Lyft and Grab, have since gone public, while others, such as Klook and Navan, are the subject of current rumors or have confirmed plans to seek a public listing.
The balance sheets of established companies also allowed for acquisitions in 2018, especially in the corporate travel and distribution arenas. American Express Global Business Travel (GBT) kicked off the year with a £400 million bid for HRG.
Consolidation across the tours and activities segment was also a feature of 2018 with Tripadvisor announcing the acquisition of Bokun in April, just one day after Booking Holdings announced its acquisition of FareHarbor. Both companies could clearly see the potential of the growing, yet fragmented and technologically unsophisticated experiences segment alongside the opportunity of rounding out their offering to travelers.
Amadeus announced its intention to acquire hospitality solutions provider TravelClick for $1.5 billion in August, signaling its interest in strengthening its hotel technology unit and putting pressure on Sabre's presence in the space.
A further, much talked about deal that never came to fruition was Sabre's plan to buy Farelogix, announced in November. The $360 million acquisition was scrutinized by regulators over the course of 2019 and 2020, and Sabre finally pulled out in May 2020 following a decision in April to block the deal by the United Kingdom's Competition and Markets Authority.
Bookending the year was Travelport's announcement of a $4.4 billion takeover by Elliott Management Corporation four years after going public.
Signals for the future?
It's hard to conclude whether any of the above moves signaled what was to come, especially in light of the pandemic. The big are getting bigger with American Express GBT planning to acquire rival CWT, a deal that has been delayed through attracted regulatory scrutiny but should now be complete in the third quarter of 2025. Amadeus has secured a greater foothold in hotel technology, securing deals with Marriott and Accor on top of an existing IHG deal. Sabre has divested its hospitality technology business to asset management company TPG.
Travel companies were also preoccupied by external competition in 2018 with both Amazon and Google adding pressure to an already competitive landscape alongside newer entrants such as Airbnb.
The peer-to-peer accommodation platform got many to sit up and take notice in February when it announced its strategy to bring in more one billion guests annually by 2028. But perhaps attracting even more attention was its plan to compete head on with Booking.com and Expedia.
A series of announcements from Google included an upgrade to its travel search on mobile, combining flights, hotels and an "explore" element into a single point. The search giant also tested a search engine for a tours and activities product through its Touring Bird platform in the year.
Meanwhile, Amazon announced Alexa for hospitality, with Marriott International as the project's first partner. The news created a flurry of excitement about the online retail giant's potential to get further into travel. It also created many a prediction about voice for travel research and booking, some of which has resurfaced in 2025 as Amazon released Alexa+.
But a bigger concern in 2018, particularly for Marriott, was the admission of a cybersecurity attack involving 500 million customer accounts and dating back four years to its merger with Starwood, announced in 2015. The news put the significant threat of cyberattacks for the travel industry in the spotlight, with subsequent breach announcements from British Airways, MGM Resorts, easyJet and a second for Marriott.
AI in 2018
Finally, what about artificial intelligence (AI)? It's talked about all the time across all segments of travel now, surely it was getting a mention or two seven years ago? It was. This quote from Richard Holden, then a vice president at Google, didn't age too badly:
"The convergence of machine learning, artificial intelligence and cloud computing will make increased relevance possible for travel companies of all sizes—no matter how sophisticated your technological capabilities are. This creates a tremendous opportunity for all of us to simplify and streamline the entire consumer journey."
Holden is now involved as a board member and adviser with AI startup DirectBooker alongside former Google colleague Sanjay Akhil and Steve Kaufer, co-founder and former CEO of Tripadvisor.
Tags: travel industry, Amazon Richard Holden, Google, Airbnb, Expedia, PhocusWire
