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Major online travel agencies (OTAs) are intensifying their investments in social media platforms like TikTok and artificial intelligence (AI)-powered search as combined marketing expenditures for the second quarter of 2025 reached $5 billion. This strategic pivot reflects a broader effort to diversify marketing channels and capitalize on emerging technologies to attract travelers.
The move comes as customary performance marketing,while still effective,faces increasing competition. OTAs are seeking more efficient and qualified leads through innovative channels, betting that social media engagement and AI-driven personalization will deliver higher conversion rates and improved marketing leverage. This shift impacts travelers by potentially exposing them to more targeted and relevant travel offers, while also influencing how they discover and book their trips.
Booking Holdings recently announced a partnership with TikTok, enabling in-app hotel bookings. This collaboration represents a significant step towards integrating travel booking directly into social media experiences. The company increased overall marketing spend to $2.1 billion in Q2,up from $1.9 billion in Q2 2024, but CFO Ewout Steenbergen noted that the spend as a percentage of gross bookings improved due to lower brand marketing expenses and a higher direct mix, partially offset by increased social media investment.
Booking Holdings President and CEO Glenn Fogel acknowledged the continued strength of performance marketing, especially Google clicks, but emphasized the importance of diversification. We want to continue to diversify our performance marketing channels to other channels like we are doing with social media,
Fogel stated.
AI’s Rising Influence
The discussion around generative AI took center stage during Expedia Group‘s Q2 earnings call. CEO Ariane Gorin reported that traffic originating from generative AI searches, while currently small, is growing rapidly and converting into bookings at higher rates than other traffic.
She also highlighted the superior qualification of leads generated through AI searches.
Expedia Group is actively collaborating with AI companies like OpenAI and Google to ensure brand visibility within these emerging platforms. Now we’re doing a lot of work with these AI companies…to make sure that when travelers are in their worlds that our brands are showing up well. There’s tech work, there’s marketing work, there’s integration work that needs to happen to make that happen,
Gorin explained. The company’s marketing spend increased to $1.9 billion in the quarter, up from $1.8 billion year-over-year.
Gorin also indicated a need for enhancement in direct marketing spend but anticipates improved marketing leverage
as product enhancements drive direct business and customer retention. She affirmed that AI is a key enabler of productivity and effectiveness.
Key Data: Q2 Marketing Spend
| Company | Q2 Marketing Spend (USD Billions) | Year-over-Year Change |
|---|---|---|
| Booking Holdings | 2.1 | +10.5% |
| Expedia Group | 1.9 | +5.6% |
| Trip.com Group | 0.464 | +30% |
| Total | 4.464 | N/A |
Trip.com Group also increased its sales and marketing expenses, reaching $464 million, a 30% year-over-year increase. This rise is attributed to marketing and promotional investments supporting international expansion. the company furthered its AI initiatives with the launch of Trip.Planner, an AI-powered travel planning tool.
Did You know?
Traffic from generative AI searches is converting into bookings at a higher rate than traditional traffic sources, according to Expedia Group.
Pro Tip:
Travelers can expect to see more personalized travel offers and integrated booking experiences within social media platforms as OTAs ramp up their investments in these channels.
What impact will AI-powered travel planning tools have on the role of traditional travel agents?
How will OTAs balance investment in emerging channels like TikTok with maintaining their existing marketing strategies?
Background: The Evolving OTA Landscape
Online Travel Agencies (OTAs) have historically relied heavily on search engine marketing (SEM) and brand advertising to drive traffic and bookings. Though, increasing competition and the rising cost of advertising have prompted them to explore alternative channels. Social media offers a unique opportunity to engage with potential travelers directly and build brand loyalty. AI, meanwhile, promises to enhance personalization, improve search relevance, and streamline the booking process.
Frequently Asked Questions
Q: What is an OTA?
A: An Online Travel Agency (OTA) is a website or platform that sells travel products, such as flights, hotels, and rental cars, directly to consumers.
Q: Why are OTAs investing in TikTok?
A: TikTok offers a large and engaged audience, particularly among younger travelers, providing a valuable platform for reaching potential customers.
Q: How is AI changing travel booking?
A: AI is being used to personalize search results, recommend relevant travel options, and automate the booking process, making it more efficient for travelers.
Q: What is generative AI?
A: Generative AI refers to artificial intelligence systems capable of producing new content, such as text, images, or code, in response to prompts.
Q: What is Trip.Planner?
A: Trip.Planner is an AI-powered travel planning tool launched by Trip.com Group designed to assist users in creating personalized travel itineraries.
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