Are hotels paying for demand they would have captured anyway?

New travel marketing data suggests that better timing and smarter attribution may matter more than bigger advertising budgets

Travel marketers have long wrestled with a difficult question: Are advertising campaigns generating new bookings, or simply capturing demand that already exists? A new analysis of more than $250 million in travel advertising spend suggests that many companies may be overspending during peak booking periods while underestimating the value of marketing activities that influence guests earlier in the booking journey. For hoteliers, the findings offer a timely reminder that measuring marketing effectiveness is becoming just as important as generating demand itself.

Key takeaways

• Peak demand does not always mean peak efficiency: The study found that travel companies often achieve their weakest advertising returns during their busiest booking periods because competition drives up media costs. Hotels should be cautious about automatically increasing spend simply because demand is strong.
• Shoulder periods may offer better value: Advertising during quieter booking windows can deliver significantly better returns, as customer acquisition costs are lower while traveler spending remains relatively stable. This may create opportunities for hotels to gain market share when competitors pull back.
• Guests rarely book after a single click: Travelers often research extensively across multiple websites and channels before making a reservation. Marketing campaigns that introduce a hotel to a potential guest may influence the eventual booking even if they do not receive direct credit.
• Non-brand marketing remains critical: Generic searches such as destination, experience, or travel-related keywords help attract new customers who are not yet searching for a specific hotel brand. While these campaigns often appear less efficient, they play a vital role in filling the top of the booking funnel.
• Attribution models can distort reality: Many marketing systems assign booking credit to the final branded search or direct visit, overlooking the earlier campaigns that first introduced the guest to the property. This can lead hotels to underinvest in awareness and consideration-stage marketing.
• Top performers measure differently: The strongest travel brands are not necessarily spending more. Instead, they use attribution approaches that recognize how different marketing channels work together throughout the guest journey.
• Market leaders stay visible when others retreat: The report found that high-performing travel brands often maintain advertising activity during shoulder periods and continue investing in broad category searches while competitors focus only on immediate returns.
• The real advantage may be better data: As travel demand becomes more volatile, hotels that can accurately distinguish between demand creation and demand capture will likely make more effective marketing decisions and achieve stronger returns on investment.

Source: Propellic, Travel Industry Paid Media Benchmark Report 2025

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