Inside the shifting economics of hotel marketing

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AI is cutting costs and driving bookings — even as ad prices soar and OTAs fight harder for guests

Oct 2, 2025

Cendyn’s latest performance index reveals that hotels using AI-driven marketing, especially Google’s Performance Max for travel goals (PMTG), are cutting acquisition costs and driving higher revenue despite escalating media costs and measurement challenges. The report emphasizes that hoteliers need to invest in strong data foundations, rethink KPIs, and balance long-term strategy with agile execution to stay competitive.

Key takeaways

Lower customer acquisition costs: Hotels saw a 19% YoY drop in CAC thanks to AI-driven campaigns using Google’s PMTG.
Performance gains with AI: PMTG delivered over 4x booking and revenue growth, with a 262% surge in conversion rates across regions.
Rising marketing costs: Digital media prices increased 20–40% YoY, while Google Hotel Ads CPC climbed 14%, squeezing efficiency.
Privacy and tracking shifts: Google Consent Mode V2 reduced visibility into conversions, forcing hotels to adopt first-party data, modeled conversions, and CRM/CDP strategies.
Mobile vs. desktop: Desktop still dominates transactions (63% of bookings, 71% of revenue), while mobile drives early inspiration and engagement.
Strategic advice for hotels: Consultants urge hoteliers to budget realistically, ensure rate parity, align revenue and marketing teams, reinterpret KPIs, and work with expert partners to maximize ROI.
The bottom line: Hotels that embrace AI, first-party data, and profit-focused strategies will outpace those clinging to outdated “set and forget” digital marketing approaches.