AI Cuts Acquisitions Costs 19% Amidst Soaring Media Spend, According to Cendyn Hotel Digital Marketing Performance Index
AI in Google’s PMTG alleviates the marketing budget burden quadrupling bookings and revenue as media spend bites with 20 - 40% YoY budget increase
Cendyn, a global integrated hotel technology and services company, has found hotel customer acquisition costs (CAC) are down 19% year-on-year (YoY) 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 4x across all regions, according to the Cendyn Hotel Digital Marketing Performance Index 2025 released yesterday (16/09/25). Drawing on aggregated data from the Cendyn Digital Marketing Platform (DMP), the Performance Index identified a 262% surge in conversion rate (CVR) and improved cost efficiency due to the intelligent application of AI with guest data to find high-value audiences.
The report also highlights soaring media costs, which rose sharply year-over-year (YoY), increasing by 20% to 40% across digital platforms. Cendyn discovered that Google Hotel Ads (GHA) cost-per-click (CPC) rates rose 14%, reducing click volume despite continued advertiser demand. Cendyn relates the sharp rise in media spend to intensified competition, increased bidding pressure from online travel agencies (OTAs), evolving regulations, and macroeconomic headwinds.
Overall, the first half of 2025 has uncovered a number of critical 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 warns that without investing in AI and utilizing visibility opportunities within PMTG, hotels will see digital marketing ROI significantly deplete, having a profound impact on bookings and revenue.
Luke Markesky, SVP, Global eCommerce, at 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 delivers actionable intelligence by evaluating adoption trends, cost dynamics, and performance metrics across major digital hotel advertising channels. Designed to help hospitality marketers make informed decisions, the report empowers hoteliers to utilize AI in order to optimize spend, preserve visibility, and capture demand in an increasingly crowded market.
The Cendyn Hotel Digital Marketing Performance Index 2025 is available now, download to read the full findings and analysis.
