Skift Take

In 2023, Booking and Expedia spent a combined $13 billion on marketing, with Booking demonstrating better efficiency and global reach. While both still invest heavily in Google, they're shifting towards alternative marketing strategies like price discounting and B2B channels.

Pranavi Agarwal

Booking and Expedia spend a ton on marketing: Nearly $13 billion combined in 2023, up from $10 billion in 2019. And it’s the largest expense for both companies, accounting for roughly half of their total operating expenses. 

But from there, some key differences emerge, according to the latest analysis from Skift Research. 

1. Who Spends More on Marketing? 

For one thing, marketing is gaining in prominence for Expedia (up to 52% of operating expenses in 2023, from 45% in 2019) and declining for Booking (44% vs. 51%.)

2. Who Spends Smarter?  

Another important difference is “marketing efficiency” – how much they need to spend to drive bookings. Expedia was less efficient: It spent nearly 6% of its gross bookings on marketing in 2023, versus only 4.5% at Booking.

Some of this can be attributed to the recent growth of Expedia’s B2B segment because Expedia treats the commissions it pays to its partners as a direct marketing expense. These commissions tend to be higher as a percentage of revenue than marketing expenses from the consumer business. Expedia is also spending more marketing dollars on its vacation rental brand Vrbo and in international markets. 

Booking is trying to clamp down on those costs. “Another thing we saw that we don't talk a lot about it – I won't get too specific – but we saw ourselves using money that we thought was producing a good ROI, and we turned out, it really wasn't,” said Booking Holdings CEO Glenn Fogel on a recent call discussing second-quarter earnings. “And we shut some of these things down.” Booking is also seeing its direct bookings channel grow faster than paid marketing channels. 

3. Pivot to the Merchant Model

Though both companies sourced their gross bookings mainly on an agency business model in the past, they have moved in recent years to the merchant model. 

Under the agency model, hotels list and set their own prices, collect payments from guests, and pay Booking and Expedia a set commission.Under the merchant model, the OTAs negotiate