The High-Stakes Battle for Travel Marketing & Vrbo's Loyalty Program Shakeup

The High-Stakes Battle for Travel Marketing & Vrbo’s Loyalty Program Shakeup

The travel industry is witnessing a fierce competition among online travel agencies (OTAs), with major players investing billions to capture travelers’ attention. Meanwhile, Vrbo is making a critical change to its One Key loyalty program, which could have significant implications for both travelers and property managers. Here’s what you need to know.

The Marketing War: Travel Giants Go All In

Recent financial reports from Airbnb, Booking Holdings, Expedia Group, and Trip.com Group reveal a combined $17.8 billion investment in marketing in 2024, marking a $1 billion increase from 2023. This aggressive spending reflects the intense battle for travelers as OTAs compete against direct bookings and emerging AI-driven travel platforms.

Here’s how the biggest players are positioning themselves:

• Booking Holdings (Booking.com, Priceline) led the charge, spending $7.3 billion—31% of its total revenue. The company is shifting its focus from Google Ads to AI-powered marketing and social media strategies to stay ahead.
• Expedia Group followed closely with $6.8 billion in marketing spend, a 12% increase from 2023. The company is prioritizing AI-powered search visibility and deepening partnerships with social media giants like Meta to refine traveler targeting.
• Airbnb took a different approach, investing $2.1 billion in brand-driven marketing rather than short-term conversion campaigns. Its strategy focuses on keeping Airbnb top-of-mind for travelers seeking unique stays.
• Trip.com Group increased its marketing spend by 29% to $1.6 billion as it aggressively expands its global presence, particularly in key markets outside of China.

These numbers highlight a major shift—OTAs are no longer just competing against one another. They’re up against AI-powered travel planning tools, influencer-driven bookings, and social media discovery trends. The industry is moving beyond traditional Google Ads, investing heavily in AI-driven personalization, social media partnerships, and loyalty incentives to secure customer retention.

Vrbo’s One Key Fix: A Game Changer for Travelers and Property Managers

While travel giants battle for visibility, Vrbo is making a key adjustment to its One Key loyalty program that could reshape how travelers redeem rewards on vacation rentals.

Currently, One Key Rewards can be earned on Vrbo but not redeemed on most vacation rentals due to how property managers handle payments. Unlike hotels, where the OTA processes transactions directly, vacation rental payments often go through individual property managers. This restriction has made it difficult for travelers to use their One Key Cash when booking rentals.

To solve this issue, Vrbo is introducing an optional program allowing property managers to opt into Vrbo’s payment system, making the platform the merchant of record. This means travelers will now have the ability to use their One Key Cash on more Vrbo properties, bringing Vrbo closer to parity with Airbnb and traditional hotels.

However, this change comes with both benefits and challenges for property managers:

✅ Potential Benefits for Hosts & Managers:

• Increased visibility and bookings from travelers looking to redeem loyalty rewards.
• Reduced chargeback risks and simplified payment processing.
• Enhanced guest trust, as loyalty programs encourage repeat customers.

⚠️ Potential Challenges:

• Property managers lose control over payments, refunds, and guest disputes when Vrbo becomes the merchant of record.
• Refund and cancellation policies may be influenced by Vrbo’s terms rather than the host’s preferences.
• Larger property managers who prefer direct control over finances may hesitate to opt in.

For smaller hosts, this program could be a valuable tool to attract bookings without the burden of handling payments. However, larger operators may weigh the benefits against the loss of flexibility.

Final Thoughts

The competition among OTAs is evolving rapidly, with AI, social media, and loyalty programs playing a larger role in travel marketing than ever before. As platforms refine their strategies, property managers need to stay informed on changes that could impact their booking potential and control over operations.

Vrbo’s One Key update marks a significant shift in how loyalty programs interact with vacation rentals, making it crucial for property managers to assess whether opting in aligns with their business goals. Meanwhile, travel brands continue to invest in AI-driven marketing and partnerships, signaling a new era in how travelers search, book, and engage with accommodations.

For hosts and property managers, the key takeaway is simple: Stay adaptable, monitor industry changes, and leverage new opportunities to maintain a competitive edge.

If you need help boosting your direct bookings, visit Boostly’s website for expert insights and strategies. And as always—book direct.