Digital Markets Act Alters Google Search Dynamics, Harming Hotel Industry

The Digital Markets Act (DMA), initially intended to promote fair competition in the online marketplace, has brought unexpected consequences for hotels. Rather than leveling the playing field, Google’s response to the DMA has resulted in a sharp decline in organic traffic to hotel websites, while paid traffic has surged. Hotels are now facing higher direct distribution costs, making it more expensive to attract bookings.

The DMA was introduced by the European Commission to reduce the dominance of major tech companies like Google, Apple, Facebook, and Amazon, aiming to provide businesses, including hotels, with better control over their online visibility. However, recent changes to Google’s hotel search pages—such as pushing organic results lower and increasing the prominence of Online Travel Agencies (OTAs) and metasearch platforms—have had the opposite effect.

Hotels in Europe are now more reliant on paid ads, which has driven up costs and reduced the share of direct bookings. Organic traffic has fallen by 20%, and free booking links revenue has dropped by 32%, making it harder for hotels to compete without significant ad spend.

While it’s unclear whether these changes are permanent or part of ongoing testing, the situation has resulted in higher visibility for OTAs and greater ad revenue for Google, leaving hotels with fewer organic opportunities and higher marketing expenses.

To counter these trends, hoteliers are advised to closely monitor their website traffic, adjust marketing strategies, and invest more in paid advertising. Partnering with digital marketing experts and staying flexible will be crucial as the industry navigates these evolving regulations.

In a further development, Booking.com has been added to the DMA’s list of “gatekeepers,” signaling even more potential changes in hotel distribution that could impact hotels across Europe.