Travel Marketing Costs Surge
Share
Sam Parr and Shaan Puri discuss the challenges and risks of the travel industry, particularly focusing on the competitive nature of performance marketing in travel deals.
Key Points:
-
Travel Industry Competition:
- Performance marketing in travel is described as "cutthroat"
- Compared to highly competitive legal terms like "mesothelioma lawsuit" in difficulty
- Travel industry marketing costs are seen as prohibitively expensive
-
Market Conditions:
- Travel industry has recovered and is bigger than 2019 (pre-pandemic) levels
- People are spending more on average room rates
- Volume of travel has increased
-
Marketing Challenges:
- Facebook/Instagram marketing costs started at $10-12 CPA
- Had to pivot to alternative platforms:
- Reddit and Pinterest brought costs down to $2-3
- YouTube identified as major growth opportunity
-
Investment Perspective:
- Sam Parr: "I'm out" - cites industry difficulties as main reason
- Not interested in the specific company but views entire travel industry as too challenging
- Believes success in travel industry requires exceptional differentiation
-
Risk Assessment:
- Industry difficulty seen as a structural problem
- Marketing costs make profitability challenging
- Need for unique advantage to overcome industry challenges
Sam Parr
Host of MFM and fitness influencer
Sam Parr is a serial entrepreneur and business media pioneer.
In 2016, he founded The Hustle, a business news media company that started in his kitchen with just $12 and grew to eight figures in revenue.
Sam led the charge in making newsletters popular when few believed in their potential.
After four successful years, he sold The Hustle to HubSpot, a publicly traded company. Now operating as HubSpot Media, The Hustle reaches 3 million readers daily, employs a team of nearly 100, and has been the launchpad for dozens of its staff to found their own media companies and newsletters.
Sam remains the host of the popular business podcast, My First Million, and continues to start and sell companies. He also co-founded Hampton, a highly vetted community for entrepreneurs, founders, and CEOs, and teaches people to write better through his platform, Copy That.