Thoughts from our CEO on Marketing Budgets
How much should you spend on marketing?
We spent just over 16.5% of our revenue on marketing in 2024, delivering nearly 110% revenue growth.
I talk to about 15 travel companies every week and here's the data for this market.
Running the numbers across our 55+ travel clients:
- Companies maintaining or growing slightly: 5-7% of revenue
- Companies targeting growth of 20-30% annually: 7-10% of revenue
- Companies targeting growth of 50-100% annually: 10-15% of revenue
- Companies in aggressive growth mode: 15-20% of revenue
(This assumes $1M+ annual revenue. Early-stage companies often need higher percentages.)
🤔 "But Brennen, OTAs spend way more!" Exactly. That's why they're eating your lunch.
The real problem?
Most travel companies treat marketing like an expense instead of an investment. Check your unit economics: If you spend $100 to get a $1,000 booking And your gross margin is 35% You've turned $100 into $350 to run your business. 𝗦𝗵𝗼𝘄 𝗺𝗲 𝗮𝗻𝗼𝘁𝗵𝗲𝗿 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝘄𝗶𝘁𝗵 𝘁𝗵𝗮𝘁 𝗿𝗲𝘁𝘂𝗿𝗻.
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