The future of Google + Hotels in Europe

The European Commission’s Digital Markets Act (DMA) has made many headlines since it came into force. Its impact on hotel marketing is being discussed in all corners of the world. But how does it impact real-life hotels? What steps do hotels need to take to protect their visibility and revenue?

European Commission’s Digital Markets Act (DMA) It aims to break the dominance of digital giants in multiple areas by enforcing new rules aimed at promoting fair competition and fostering innovation.

To be fair, the DMA has a set of criteria for identifying so-called “janitor”. Gatekeepers are large digital platforms that provide core services such as search engines. They are designated as gatekeepers if they meet certain criteria set out by the DMA. This may include integrating large user bases by being in a powerful intermediary position Connect with numerous businesses, financial turnarounds and establish a presence in the market to have a significant impact on the EEA.

Gatekeepers are obliged to follow certain rules rulefailure to do so will result in significant fines and penalties. For example, a gatekeeper must allow its business users to promote their services and complete contracts with customers outside of the gatekeeper’s platform. Services and products provided by the Gatekeeper itself cannot be treated more favorably in rankings than similar services or products provided by third parties.

The DMA currently identifies 24 core platform services as “gatekeepers”, of which Google is a key player, along with online travel agencies (OTAs) and Booking.com (designated in May 2024).

What DMA changes mean for your Google strategy

Google is Used in 90% of searches. As a result, many hotels rely on Google Marketing to increase awareness and drive guest demand, and hoteliers are particularly interested in the impact of DMA on Google.

Since the DMA was enacted in 2023, Google has been the gatekeeper and made several major changes to hotel-related search results pages within the EU.

New “Location Sites” block prioritizes OTA and third-party reference channels
Google has created a new “Place Websites” section that displays results for organic SEO content from OTA and metasearch channels. Unlike the CPC (cost per click) model, these listings are displayed for free and their position is determined dynamically by the search algorithm, similar to classic SEO. This section appears higher on the results page than Google Maps, reducing the visibility of the Google Hotels metasearch tool.

What impact will it have on hotels?

There are many opinions about DMA and its impact on hotels.

In particular, there were concerns it would take away direct business from hotels. Some say the reduction in FBL and non-clickable maps means fewer opportunities to increase traffic and engagement. Some also believe that the growing prominence of OTAs in Google listings means hotels will be forced to work more with OTAs at a time when they are trying to improve direct bookings and cut out large OTA commissions.

In reality, however, this is not the impact we have witnessed so far. At Cendyn, we’ve been closely monitoring the impact of Google’s changes on the way hotel search works. We also analyzed data from some of the hotels we partner with on Google Ads. In particular, we compared the April to August 2024 (Five months after Google implemented DMA changes) Same period in 2023 (Before DMA was implemented). Therefore, we make the following observations:

Universal hotel search is still in the “dream” stage
People use Google Search to do a general hotel search, such as “Paris hotels,” and are then shown relevant page results from OTAs and travel guides. This isn’t a search term people use when they’re getting ready to book – they’re in the dreaming and researching stage. At this point, travelers are identifying hotel names that may be of interest to them. Therefore, we do not believe that any changes Google makes to comply with the DMA will impact hotels’ revenue opportunities at this time. Once travelers find a hotel they’re interested in (e.g. through blogs, Google Maps or OTA research), they return to Google to conduct a more specific search using the hotel name. This is where Google Hotel Ads really comes into play. So while the user journey has changed, the end result has not.

Property Promotional Advertising (PPA) works better
We found that PPA saw a significant 235% increase in clicks when users searched for generic hotel terms (such as “Paris hotel”). The PPA takes the user directly to the hotel’s website. It is worth noting that when users search for such general words, they are still in the dreaming stage, so the conversion rate is low, but the visibility of individual hotels is high. In fact, since the launch of DMA, we’ve also seen a 30% drop in cost-per-click (CPC) due to less competition for more available ad space. We found that many hotels are willing to invest more in PPAs because the performance gains are so high.

Specific searches for hotel names are driving better results for Google Hotel Ads (GHA)
When users search for a specific hotel name (brand keyword), they are closer to being ready to book. This is where any change in Google search results matters most to hotels. We observed a 35% drop in clicks for the FBL campaign. While some hotels are clearly affected by having fewer organic opportunities available higher up the listing page, from an advertising perspective we are seeing better results for hotels. GHA’s overall click growth rate was 3%.

Will there be more changes at Google due to DMA?

Implementation of the DMA is an ongoing process, and a deeper understanding of what gatekeepers like Google can and cannot do under the legislation is creating new questions all the time.

in the most recent statementGoogle shared that some comparison sites believe that Google is still not fully compliant with the DMA. In response, Google conducted a test to remove some hotel advertising features from controversial Google search listings. This includes a map showing the hotel’s location and the hotel results below it. Instead, there is a separate list of website links without any additional features. Just like recently Shared by Googlethe test showed decreased user satisfaction, longer search times, and a significant drop in traffic to hotels, while traffic to intermediary websites remained stable. We are now awaiting next steps.

We believe that any further changes made to appease the DMA’s ruling in favor of third-party sales channels will harm the interests of independent hotels. Optimizing search to compete with other brands and OTAs to drive more direct bookings will become more difficult and ultimately lead to increased acquisition costs.

Therefore, hotels need to keep up with any emerging trends so that they can adopt new strategies to deal with them.

What Hotels Should Do: Key Points

Our analysis shows that hotels have ample opportunity to thrive in the current post-Google DMA landscape. Here are the key points:

• The changes to DMA have made it harder for organic results to surface, but if you have a strong marketing strategy that incorporates metasearch and Google ads, along with other activities that drive guest engagement and loyalty, you’ll still be successful in driving direct traffic and bookings.
• DMA is affecting generic keywords, but branded keywords that lead to conversions are largely unaffected. Take some time to understand the difference between a general dream-stage search (e.g. “hotel in Paris”) and a booking-stage specific search (e.g. actual hotel name) and analyze the results you see in Google for both cases.
• DMA does not currently affect how Google Ads appear, so take advantage of this. As a hotel, your highest chance of conversion is through branded (specific hotel name) searches through Google Hotel Ads.
• Make PPAs part of your strategy – Since the DMA, these ads have become even more prominent and our hotel clients are seeing exceptional results.

At Cendyn, we’re here to help you understand DMA and all of its current and future impacts to improve Google’s return on ad spend (ROAS). As hotel marketing technology experts, we are able to clearly advise clients on how to respond to change. With the right support, platform and guidance, hotels will not be affected by the DMA ruling, and there are still opportunities if you have the right strategy in place.