OTA Marketing Spend Grows Despite AI Efficiency Push
Online travel agencies are spending more on marketing even as executives tout artificial intelligence's potential to cut costs and improve returns. Booking Holdings, Expedia Group, and Airbnb all increased marketing budgets in the first quarter of 2026, contradicting the efficiency narrative that has dominated industry discussions about AI adoption.
Booking invested $2.1 billion in marketing during Q1, up 16% year over year and representing 38% of revenue. Expedia spent $1.9 billion, a 6% increase. Airbnb's $751 million represented a 33% jump, the steepest rise among the three.
Direct Bookings Remain the Priority
Despite higher marketing spend, all three companies continue building direct-booking channels where customers book without intermediaries. Booking CEO Glenn Fogel said the company saw double-digit growth in direct bookings in the U.S. market during Q1.
Booking's direct-booking rate held steady in the mid-60% range across four consecutive quarters, according to CFO Ewout Steenbergen. Mobile app bookings climbed to the high 50% range, up from the mid-50% range a year earlier.
Expedia reports that two-thirds of bookings now come through direct channels. Airbnb is targeting expansion markets like Brazil and India with localized marketing campaigns, betting that travelers in these regions will eventually shift to direct bookings.
AI Channels Show Early Promise
Expedia has moved aggressively into ChatGPT ads and answer engine optimization, which Gorin called the company's fastest-growing channel. Traffic and bookings from these AI-driven channels remain small but show encouraging signs around new user acquisition and conversion rates.
CEO Ariane Gorin said AI-enabled tools are driving "hundreds of millions of dollars in realized marketing value through greater productivity and workflow automation." The company points to specific wins: conversion increases for vacation rental brand Vrbo and improved attachment rates across Expedia properties.
Booking's leadership expressed confidence that experience with Google's performance marketing model will transfer to AI platforms, though the comparison has limits. Keyword auctions don't exist in AI systems, but access to structured booking data provides advantages.
The Spend Paradox
The rising budgets suggest that AI for Marketing tools are supplementing rather than replacing traditional spending. Companies aren't cutting overall marketing investment; they're adding AI channels while maintaining spend on proven channels like search and direct traffic.
Airbnb's aggressive expansion in emerging markets explains part of its 33% increase. The company ran 16 local marketing campaigns in Q1 alone, tailoring messages to regional cultural moments. Brazil, barely in the company's top 10 markets two years ago, now ranks third or fourth and compounds at over 20% annually.
Booking and Expedia face different dynamics. Booking's focus remains deepening the direct channel through mobile and loyalty programs. Expedia is testing new channels-answer engines and AI chatbots-while maintaining its core search and affiliate marketing investments.
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