Expedia Group (EXPE -0.16%) is taking an axe to one of its major expenses. On Thursday, the company's high-profile chairman Barry Diller said in an interview with CNBC Thursday that the online travel agency (OTA) would likely cut its advertising budget by a minimum of 80% in 2020.

"[W]e spend $5 billion a year on advertising," Diller said. "We won't spend $1 billion on advertising probably this year."

Despite its considerable size, Expedia is in constant competition with rival large and small OTAs. As a result, it devotes much capital to advertising. The general selling and marketing category is by far the largest line item in the "costs and expenses" section of its profit and loss statement. 

All told, in 2019 it devoted more than $6.1 billion to these activities, 6% higher than the 2018 tally. This helped it grow total revenue by 7.5% to slightly over $12 billion.

An empty airport waiting area, with a single plane taking off in the background.

Image source: Getty Images.

However, as a major player in a sector that has been hit particularly hard by stay-at-home mandates to limit the spread of the coronavirus, Expedia's proximate future is bleak. Last month the company withdrew its 2020 guidance for profitability, and suspended all stock buybacks.

Meanwhile, a clutch of analysts downgraded their recommendations and price targets on its stock. Notable among these was influential investment bank Goldman Sachs, which unhesitatingly downshifted its recommendation to sell from the previous neutral.

Diller's comments on CNBC didn't seem to reassure investors. Expedia's shares closed down by almost 3.9% on Thursday, in contrast to the gains enjoyed by many consumer goods stocks and the wider equities market.