Online accommodation powerhouse HotelClub, with annual gross bookings of more than $500m, has dramatically cut its marketing reliance on paid search.

Managing Director Chloe Lim told Travel Today: "The paid search stream provides the least amount of revenue for us. In the early part of 2002 it represented 50%. It's very dangerous for a company to rely solely on paid search."

Other companies are also finding the cost of paid search – marketing through the likes of Google – uneconomic. Some big travel operators are paying Google more than $2m a year. 

Rising costs mean the focus is shifting to Search Engine Optimisation to gain high organic rankings or other traffic generating methods such as affiliate marketing.

Last month car hire site Oodles cut its $40,000 monthly Google spend by 40% and is now focussing more on affiliate marketing.

Managing Director Steve Sherlock told Travel Today: "We have a 30% conversion rate from visits direct to our site and only 7.5% though Google. Google visitors are also not repeat users."

Sherlock said Google advertising had been generating 50% of traffic.

www.traveltrends.biz/ttn445-high-price-for-reliance-on-paid-search