- Expedia becomes Official Travel Partner of the Champions League for next three seasons
- The deal will be used as a platform for the Expedia and Hotels.com brands
- Expedia thought to be paying between €25m and €30m per season for the rights
Uefa’s deal last month with online travel company Expedia for the rights to the Uefa Champions League has completed the governing body’s main sponsorship deals for the next three-year cycle, 2018-19 to 2020-21.
Expedia becomes the Official Travel Partner to the Uefa Champions League in a deal thought to be worth between €25m ($28.75m) and €30m per season. The online travel booking company will use the property to promote its Expedia and Hotels.com brands, its two biggest consumer-facing brands.
Mark Okerstrom, president and chief executive of the Expedia Group, told Sports Sponsorship Insider that the Champions League was an attractive property because it “stirs such emotion and passion from fans” and its cumulative global annual audience of 3.6 billion “offers fabulous reach for Hotels.com and Brand Expedia”.
The deal followed several months of negotiation and was announced the same day it came into effect, for the Uefa Super Cup final between Real Madrid and Atlético Madrid in Tallinn, Estonia, on August 15.
Digtal exploitation was “a huge part” of the deal, Okerstrom said, however he also mentioned it was too early to provide details of planned activations and the company’s digital strategy. “We will certainly be making full use of the rights we have licensed, whether it’s stadium exposure, television slots, image and content, and hospitality tickets. We’ll also create a big buzz through our social channels and we’re working with Uefa as we speak on how else we can collaborate with the broader Champions League opportunities and portfolio of brands.”
Assessing whether the company was fulfilling its strategic objectives with the investment was a process that would evolve with time, he said. “It’s early days for us but we are absolutely looking to grow customer awareness of Hotels.com and Brand Expedia to drive more market share gains and more direct revenues. Our first goal for the Champions League is to appeal to travelling football fans of all ages, genders and backgrounds. It’s that simple. But I expect we will refine our approach over time as we build out our campaign strategies,” he said.
The company is still evaluating how best to rotate inventory around the two brands. “As normal, we test and learn. It will start out with a single brand shown per game, but we will also look at rotating between the two brands in the way that PepsiCo does with Pepsi and Lays. We want to make sure that whatever rotation we apply maximises the overall value for Expedia Group.”
The competition has a global footprint, but in terms of activation Expedia will be more focused on reaching European audiences. “We are most excited about the strong and near fanatical following that the Champions League has in Europe,” Okerstrom said.
It is thought that Expedia faced no competition for the deal from within the online travel sector for the slot. However, Uefa was talking to at least one airline – thought to be Turkish Airlines – and several technology companies.
Expedia was advised on the deal by the Octagon agency, which has been retained to handle implementation and campaign development. The Team Marketing agency brokered the deal on behalf of Uefa.
Growth continues for Uefa
Expedia becomes Uefa’s ninth and final main partner for the new cycle, following deals with: Adidas, Gazprom, Heineken, Mastercard, Nissan, Pepsico, Sony Playstation, and Banco Santander.
Uefa will earn about €430m per season across the cycle. This represents an increase of just over 25 per cent from the €340m per season it earned from Champions League sponsorship in the 2015-2018 cycle. Total revenues for the competition, including media rights, increased by about 35 per cent.
Guy-Laurent Epstein, marketing director of Uefa Events, told Sports Sponsorship Insider this week: “We are extremely proud to have finalised the sponsorship sales for the Uefa Champions League 18-21 cycle, lining up a series of premium brands. We have renewed and further strengthened the relationship with most of our incumbent partners and we are happy to welcome the Expedia group to the partner family. This group of partners clearly showcases the importance and strength of the Uefa Champions League brand and its appeal to partners.”
Some experts had expected Uefa to struggle to continue its growth trajectory for Champions League sponsorship revenues, due to it doing more exclusive deals with pay-television operators in Europe’s major markets. Yet the uplift is greater this time than last time around. Sponsorship income in the 2015-16 to 2017-18 cycle rose about 15 per cent on that of the 2012-13 to 2014-15 cycle, which brought in just under €300m per season.
Epstein said that the uplift in revenues was “a clear endorsement from the market of the marketing and digital directions Uefa has taken over recent years”. He added that Uefa was “placing more and more importance on building integrated promotional plans for and with the partners and providing personalised fan and sponsor experiences based on insight and data”.
Expedia Group v Booking Holdings
Travel and tourism is one of the world’s largest economic sectors and is growing at about four per cent per year. According to the World Travel & Tourism Council, in 2017 the sector accounted for 10.4 per cent of global GDP and 9.9 per cent of jobs globally. The total contribution of the sector to global GDP was $8.27trn.
Online sales represent the fastest-growing segment of the industry and are expected to account for over 40 per cent of total revenues by 2020. The online segment of the market is experiencing strong competition, with established specialists such as Booking Holdings, Expedia and Lastminute.com facing competition from social media platforms and search operators such as Tripadvisor, Airbnb, Facebook and Google.
According to the Travel Tech Media website, the top 10 specialist online travel booking companies (excluding digital and social operators) generated $31.8bn of revenue in 2017 and two players – Booking Holdings and Expedia Group – together accounted for 75 per cent of that revenue.
As competition in the online segment heats up, the main players are increasing investments in marketing. According to advertising industry publication AdAge, Expedia spent $1.6bn on advertising in the US alone in 2016, up 17 per cent on 2015. Booking Holdings spent $415.3m, up 83 per cent on 2015.
The Expedia deal is the second major sponsorship deal Uefa has signed with a holiday booking brand, following the October 2017 deal with Booking.com covering the 2020 European Championship, the Nations League and the European Qualifiers properties. The deal is thought to be worth between €55m and €60m.
One sponsorship expert said that brands like Expedia and Booking Holdings would be able to evaluate the effectiveness of the sponsorships more quickly than some of Uefa’s other partners. “Being digital native brands, they will be able to understand the effectiveness of this kind of deal more quickly than some other brands. A company that is heavily based on using data will see the needle moving quickly. If you are an FMCG [fast-moving consumer goods] brand, and you have to prove that you are moving product as a direct consequence of the sponsorship, that’s a complicated process to go through. It takes longer to identify the ROI.”
The Expedia Group has invested in football before, but never on the scale of its Champions League deal.
In 2012, Expedia agreed a deal with Professional Game Match Officials in England for its logo to appear on the sleeve of referees in the Premier League, the Football League, the FA Cup and the League Cup. In 2016, Hotels.com became the Official Lodging Partner of Major League Soccer franchise FC Dallas. In June this year, Hotels.com became the Accommodation Partner of Premier League team Tottenham Hotspur, in a deal which gives the brand visibility on the club’s LED boards, in-stadium screen, and across its digital channels.
Okserstrom, a passionate supporter of Premier League club Arsenal, said that travel and football were “natural partners”, because there is always an away team and Expedia’s research shows that travel for sport is a huge activity.
The attraction to football properties was also driven by “something deeper”, he said. “At Expedia Group we believe travel brings the world together. And football is the same. It’s such a powerful combination for us.”
He added: “Europe has so many amazing destinations to visit and Europeans have travel in their DNA. So as the world’s travel platform – we simply must ensure that our brands are known and loved by Europeans everywhere. And we were excited that Uefa wanted to find a digital partner like Expedia Group to complement the other sponsors. Expedia Group and the Champions League is simply a partnership that was made to be.”