Travel Apps in US Face Slowdown Despite Ad Spend

Key Takeaways:

• The online travel cohort has seen a marked deceleration in downloads and usage in the US over the last 12-15 months. Per Sensor Tower data, in 2Q24, download and MAU growth for the cohort fell 12% and 5% YoY, respectively

  • In the US, only 65% of the cohort’s downloads were organic in 2Q24, though this is up over 3 ppts YoY. Of the cohort, Expedia saw the biggest gains in the penetration of organic downloads, up nearly 9 ppts YoY in 2Q24, while Airbnb saw a decline of 5 ppts YoY over the same period. Potentially due to Airbnb’s 34% YoY decline in US ad spend in 2Q24, its brand awareness slipped leading to a fall in organic downloads, while Expedia continued to ramp up US ad spend, up 105% YoY in 2Q24

• Booking.com and Expedia’s ad spending increases in 2Q24 led to growth in resurrected users (prior users of the app), up 6% and 11% YoY, respectively, though new user growth remained weak. This suggests that the messaging (a focus on flexibility and cost) and incentives were enough to lead former customers to re-engage with the app

• OTA 2Q24 earnings will likely be weaker than in previous quarters, based on ST data, in part due to the pull forward of demand into 1Q24

  • Though Airbnb and Booking continue to see positive but decelerating traction in MAUs, the bigger issue is the faster decline in nights booked, which could weigh on the top line and profits, if increased marketing is necessary to drive traffic. Expedia, on the other hand, faces similar macro challenges but also continues to grapple with the tech platform migration at VRBO

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