Michele Fitzpatrick, CEO of eviivo, argues that the tip of commission-based Google resort adverts will disproportionately affect unbiased lodges.

The sunsetting of Google Resort Advertisements’ commission-based mannequin, introduced final yr, takes impact in February 2025. And it’s a serious blow to unbiased lodges. For years, the fee mannequin was a lifeline for small and medium-sized hospitality companies. It offered a cost-efficient, low-risk, and hassle-free method to market lodging without having deep experience in digital promoting. 

However above all, it levelled the enjoying discipline, guaranteeing unbiased lodges appeared alongside main On-line Journey Businesses (OTAs) like Reserving.com, Airbnb, and Expedia.

Now, that benefit is gone, and unbiased lodges are paying the worth.

Google’s commission-based adverts mannequin was easy: lodges solely paid after they secured a reserving, avoiding upfront prices and complicated advert administration. It gave small lodges visibility with out the burden of monitoring Google Analytics, managing key phrase bids, or hiring costly digital companies. For smaller hoteliers who’re consistently on their toes working their properties–not digital advert campaigns–this technique was a game-changer.

By eradicating it, Google is successfully pushing small lodges right into a high-stakes, pay-per-click (PPC) system that calls for technical know-how and upfront funding with no assure of return. Worse, the unbiased lodges that when held prime positions on Google Resort Advertisements and Google Maps now discover themselves buried beneath big-spending OTAs and main chains.

Increased prices, decrease visibility for unbiased lodges

We have now seen how the shift from a performance-based to a pay-to-play mannequin is already hurting small and medium-sized companies.

A year-on-year evaluation of 1,000 lodges in eviivo’s ecosystem that transitioned from Google’s fee mannequin to PPC promoting reveals the stark affect. As lodges had been ranked decrease, absolutely the variety of impressions dropped by six per cent, leading to a drop of 9 per cent of their impression share. Clicks fell by 32 per cent, leading to a 28 per cent drop in conversion charges.

Moreover, lodges’ share of direct bookings decreased by six per cent whereas OTA reliance grew by 4 per cent and the variety of “free bookings” by way of Google Resort Advertisements remained flat at round 0.5 per cent of whole bookings.

With out assured placement, lodges now have to outbid OTAs and enormous chains simply to be seen. Nonetheless few unbiased companies can afford the escalating PPC prices, nor have they got the experience to compete successfully. It’s the identical tune once more: bigger manufacturers with deep pockets dominate the bidding wars, driving smaller operators additional down the outcomes web page.

DMA was purported to curb Large Tech however it’s backfiring on small companies

Google’s determination to finish its fee mannequin wasn’t made in a vacuum. It was a response to the EU’s Digital Markets Act (DMA), enforced in March 2024, and the UK’s Digital Markets, Competitors, and Customers Act (DMCCA), launched by the final Conservative authorities, efficient January 2025. These legal guidelines had been designed to curb the ability of digital “gatekeepers” like Google, Amazon, and Reserving.com by guaranteeing truthful competitors, clear digital advertising and marketing practices and defending shopper rights.

But, the end result has been the other for unbiased lodges. By pushing them right into a riskier, costlier digital promoting mannequin, Google has successfully strengthened the dominance of the very OTAs and journey giants the laws aimed to rein in.

There is no such thing as a dispute that OTAs present actual worth. They make investments billions in advertising and marketing and drive bookings for lodges, the place many profit from their promotional and loyalty program. Nonetheless, their dominance additionally comes at a value: increased commissions, diminished model recognition for lodges, and fewer direct bookings.

Beforehand, Google’s fee mannequin supplied an alternate—permitting lodges to take care of direct relationships with visitors whereas benefiting from visibility on Google. Now, with that possibility gone, small lodges are left with two dangerous selections: compete in a PPC bidding struggle they will’t afford, or settle for better OTA dependence and lose management over pricing and visitor relationships.

Google’s fee mannequin equalised the sport by providing smaller lodges visibility with no huge advert price range. By eliminating it, Google has shifted its priorities, aligning extra carefully with advertisers who depend on high-bid PPC methods. 

A future stacked in opposition to unbiased lodges?

Hospitality is a middle-market business, powered by unbiased operators who don’t have time to micromanage advert spend and outbid tech giants. Google’s commission-based mannequin gave them a combating likelihood. Now, with its removing, the steadiness has shifted decisively towards massive manufacturers.

There are nonetheless some methods lodges can increase direct bookings with out overspending on Google Advertisements:

• Web sites should be straightforward to search out and e-book on, with robust website positioning, quick loading occasions, and a mobile-friendly design. With AI instruments like ChatGPT and “Operator” reshaping journey search and reserving, lodges should guarantee their websites are AI agent-friendly.

• Partaking social media and influencer partnerships appeal to natural site visitors, utilizing direct-booking perks like free breakfast or late checkout, driving electronic mail advertising and marketing, loyalty packages, and retargeting adverts, all assist seize high-intent travellers, whereas native partnerships can even drive priceless referrals. 

For lodges, this isn’t nearly tweaking advertising and marketing ways. It’s about staying aggressive in an business the place massive gamers dominate digital actual property. Unbiased lodges want a good shot at visibility, which begins with taking management of their direct reserving technique. Focused, cost-effective digital ways at the moment are extra essential than ever to construct stronger visitor relationships and scale back reliance on third-party platforms.