AUSTIN, Texas—Cendyn shared a report in which it found that hotel customer acquisition costs are down 19 percent year-on-year as a result of utilizing AI in Google’s Performance Max for travel goals (PMTG).
A newer channel in Cendyn’s analysis set, PMTG, increased hotel bookings and revenue by more than 4 times across all regions, according to the Cendyn Hotel Digital Marketing Performance Index 2025. Drawing on aggregated data from the Cendyn Digital Marketing Platform, the Performance Index identified a 262 percent surge in conversion rate and improved cost efficiency due to the intelligent application of AI with guest data to find high-value audiences.
The report also highlighted soaring media costs, which rose sharply year-over-year, increasing by 20 percent to 40 percent across digital platforms. Cendyn discovered that Google Hotel Ads cost-per-click rates rose 14 percent, reducing click volume despite continued advertiser demand. Cendyn related the sharp rise in media spend to intensified competition, increased bidding pressure from online travel agencies (OTAs), evolving regulations, and macroeconomic headwinds.
Industry Trends
Overall, the first half of 2025 uncovered a number of industry trends directly impacting hotel visibility, booking performance, and marketing budgets. Assessing performance across Google’s digital marketing products for January-June 2025 versus the same period in 2024, the report warned that without investing in AI and utilizing visibility opportunities within PMTG, hotels would see digital marketing ROI significantly deplete, having a profound impact on bookings and revenue.
Luke Markesky, senior vice president, global eCommerce, Cendyn, said, “With advertising costs rising faster than many budgets, hotels must continue to evaluate and evolve their digital strategies to strategically employ AI to make a real impact to gain the right visibility to drive high-value bookings. Through this report, hotels gain insights to understand the impact of increased competition, regulatory changes, and evolving traveler behavior on digital marketing performance, while navigating the opportunities of AI. Hotels that invest strategically and utilize valuable guest data can sustain growth, capture market share, and emerge as leaders in a competitive, privacy-conscious, and increasingly AI-driven advertising environment.”
The Cendyn Hotel Digital Marketing Performance Index evaluated adoption trends, cost dynamics, and performance metrics across major digital hotel advertising channels. The report was meant to empower hoteliers to utilize AI in order to optimize spend, preserve visibility, and capture demand in an increasingly crowded market.
