Google officially ended commission-based bidding for hotel ads as of February 20, 2025. Google did it largely influenced by stricter privacy rules and the decline of third-party cookies.
NB: This is an article from Mews
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As data privacy laws get tighter, platforms like Google are focusing more on first-party data instead of tracking users through third-party cookies.
How the new bidding model works (upfront payments)
Under the new model, hotels pay for ad engagement as costs accrue, either through the Cost Per Click (CPC) model, where they pay per click received, or the Target Return on Ad Spend (tROAS) model, where bidding is optimized to meet a revenue goal. The payment structure typically follows a threshold-based system – hotels are billed once their ad spend reaches a set limit or at the end of a billing cycle.
This means hotels must allocate budgets proactively, as they need to pay upfront for clicks and impressions, regardless of whether those clicks turn into bookings. Here’s what this brings:
- Hotels face a higher financial risk because ad spend is incurred before any revenue is realized.
- Without the safety net of commission-based pricing, hotels need to optimize their ad campaigns carefully to have a positive ROI.
What this new setup means for you is that you’ll need to be more strategic and data-driven to stay ahead, and it also shows how important first-party data has become.
Change can be uncomfortable, but it’s also an opportunity to adapt and grow. More often than not, it’s just about adjusting your approach. To stay competitive and boost revenue, rethink how you attract guests.
How well do you know your guests? Does the data you’ve collected help provide a stellar guest experience? In hospitality, everything starts and ends with guests. And this is where prioritizing first-party data and direct bookings can give you an advantage.
Take a guest-first approach
The best hotels prioritize their guests, but to do that, you need to understand them. That’s where data helps. With third-party data becoming less reliable, it’s time to focus on first-party data – information you gather directly from guests, including booking history, preferences, and spending habits.
To collect and utilize this data, you need a robust, integrated hospitality system. First-party data like this gives you a complete view of your guests, from what they spend to how they book and their lifetime value (LTV). You get to know your guests better and can adjust your offerings to match their needs.
Now, let’s talk about the power of direct bookings.
Prioritize direct bookings
With commission-based bidding gone, you’re likely feeling the push to focus more on direct bookings. The great thing about this shift is that by investing in a direct booking engine, you can cut back on your reliance on online travel agencies (OTAs) and keep more of the revenue from each booking. With an intuitive and modern booking engine, guests can book directly on your site, leaving out the third parties and those hefty commission fees.
