The news of Google’s changes to their Metasearch models has been shaking long-standing hotel ad strategies. As of April 2024, Google is phasing out the usage of their commission-based bidding models. This blog explores the meaning and implications of this change for hoteliers.
What is happening and why
Google announced that they are sunsetting commission-based strategies (CPA) in Google Hotel Ads (GHA). Heavily reliant on third-party cookies, commission-based strategies (or cost-per-acquisition) allowed hotels to only pay when travellers booked the hotels (commission per conversion), or when they finished their stay (commission per stay). Compared to the cost-per-click (CPC) counterpart, these strategies implied no up-front spending. This allowed hotels to maintain a low-risk approach in which they paid Google based on the performance of their campaigns.
The industry is set to transition to a future without third-party cookies. As a result, Google is moving towards long-term strategies that are less reliant on cookies.
Timeline of expected changes
- April 30, 2024: Commissions (per Stay) and Commissions (per Conversion) will not be available for new Hotel Ads campaigns.
- October 31, 2024: Ongoing commission-based Hotel Ads campaigns will become inactive.
Impact on hotels
Hoteliers need to adapt their strategies in the coming months. Those managing their own Metasearch campaigns will be required to shift their GHA strategies. Alternatives to commission-based bidding are cost-per-click campaigns, where the hotel pays when a traveller clicks on their ad.
This will likely entail upfront ad spend, instead of payment upon conversion or stay. As a result, hotels managing their own ad campaigns could face an increased risk of loss, particularly in instances like booking cancellations. However, by partnering up with Metasearch vendors like Hotelchamp, hoteliers can alleviate this risk by utilising on their expertise.
This is why vendors currently using the commission-based bidding model will need to re-analyse their strategy to adapt to Google's changes. It is a crucial time for hoteliers to request transparency from their vendors.
Hotelchamp customers will not be impacted by the changes
Based on the expertise of the Hotelchamp team, Hotelchamp Metasearch has been outperforming Google's bidding through manual cost-per-click (CPC) bids. As a result, Hotelchamp Metasearch customers will not be impacted by Google's changes and already benefit from Hotelchamp's transparent commercial setup.
Hotelchamp's conversion experts use their expertise to ensure an efficient and optimised cost-per-click (CPC) working against an ad spend budget that is pre-determined by our customers. Receiving a tailored approach, each customer's ad budget is carefully taken care of to ensure a risk-free, minimal cost and maximum ROI.
As a result of our existing Metasearch setup and our team's extensive experience with the CPC bidding model, Hotelchamp Metasearch customers do not need to take any action and will not see an impact on performance after these changes take place.
Additionally, through advanced reporting, Hotelchamp Metasearch customers now have even more control and visibility over their ad spending. Through extensive parity metrics, hoteliers can now see the extent to which their GHA is undercut by OTAs. This gives hotels a competitive edge over industry giants and a better overview of how their rates compare to those found on OTA websites.
To learn more about Hotelchamp Metasearch, get in touch with our team via live chat, or book a meeting here.
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