Expedia Cuts Back on Marketing

By Martin Kelly, Editor, Travel Trends

EXPEDIA appears to have backed away from a commitment to boost its marketing budget as a percentage of revenue through 2009. The online travel conglomerate cut its marketing spend by 7% during the December quarter to US$214.7m, though Australia appears to have been spared.

Established businesses such as Expedia.com and hotels.com were hardest hit, effectively subsiding budget increases at TripAdvisor, “earlier stage Asia Pacific markets and recently acquired businesses.” This is a rapid acceleration of a trend first noted in the September quarter results – cutting back on the old stagers to feed the new arrivals.

As a result, selling and marketing as a percentage of revenue (which fell due to lower demand) during the last three months of 2008 slipped slightly to 34.6%.

Several months ago CEO Dara Khosrowshahi commented: “We expect selling and marketing spend to increase as a percentage of revenue as we invest in our higher growth and international businesses, expand our sales teams and grow our global advertising and media business.” Travel Trends: February 25, 2009

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