CPA (Cost per Acquisition)
CPA (Cost per Acquisition) is the marketing cost incurred to generate one booking (or one new customer). It is the most useful single metric for comparing the efficiency of different acquisition channels because it normalizes everything to a per-booking basis.
Formula
CPA = Total Marketing Spend / Number of Bookings
Why it matters
CPA lets a hotel directly compare channels that are priced differently:
- OTA commission — effectively a CPA expressed as a percentage of the booking
- Metasearch CPC — converts to a CPA via clicks × conversion rate
- Search engine ads — same conversion math
- Email and CRM — typically the lowest CPA channel
- Loyalty program acquisition — measured against lifetime value, not just first booking
Example comparison
- Booking.com — 18% commission on a $400 booking = $72 CPA
- Google Hotel Ads — $1.50 CPC × (1 / 3% conversion) = $50 CPA
- Brand email to past guests — campaign cost / bookings = often $5–$15 CPA
This kind of side-by-side view is what drives modern channel-mix decisions. The cheapest CPA channels (loyalty, email, retargeting) get priority; the most expensive channels are scaled only when their incremental volume is genuinely incremental.
CPA vs ROAS
- CPA — what you pay per booking
- ROAS (Return on Ad Spend) — revenue earned per dollar of ad spend
Together they describe efficiency: a low CPA at a high ROAS is the goal.