Impact of new DMA legislation: Future of Google + hotels in Europe

The European Commission’s Digital Markets Act (DMA) has made many headlines since it came into force. And its impact on hotel marketing is being discussed in all corners of the world. But how is it affecting hotels in reality? And what do hotels need to do to protect their visibility and revenue?

The European Commission’s Digital Markets Act (DMA) is aimed at breaking the dominance of digital giants in multiple fields by enforcing new rules designed to promote fair competition and foster innovation.

To make things fair, the DMA has a set of criteria to identify what it calls “gatekeepers”. Gatekeepers are large digital platforms that provide core services, such as search engines. They are designated gatekeepers if they meet certain criteria outlined by the DMA. This can include having a significant impact on the European Economic Area by being in a strong intermediary position that links a large user base with a number of businesses, financial turnover, and being entrenched in the market.

Gatekeepers are obliged to follow certain rules, and there are hefty fines and penalties if they don’t. For example, gatekeepers must allow their business users to promote their services and complete contracts with customers outside of the gatekeeper’s platform. Services and products offered by the gatekeeper itself cannot be treated more favorably in ranking than similar services or products offered by third parties.

The DMA currently identifies 24 core platform services as Gatekeepers, with Google a key player, alongside online travel agency (OTA), Booking.com, designated in May 2024.

What the DMA changes mean for your Google strategy

Google is used in 90% of searches. Therefore, many hotels rely on Google marketing for visibility and to drive demand with guests, and hoteliers are particularly interested in the impact the DMA is having on Google.

Google has been a gatekeeper since the DMA was enacted in 2023 and has made several key changes to hotel-related search result pages for those in the European Union.

New ‘Places sites’ block prioritizes OTAs and third party reference channels 
Google has created a new ‘Places sites’ section, where it displays the results of organic SEO content from OTAs and metasearch channels. Unlike CPC (Cost Per Click) models, these listings are displayed for free, with their positioning determined dynamically by search algorithms, similar to classic SEO. This section appears higher on the results page than Google Maps, reducing the visibility of the Google Hotels metasearch tool.

Google Maps is not clickable
As well as now appearing lower down the results page, Google Maps on search results is no longer interactive with direct clickable links to hotels when accessed from within the European Economic Area. This means that users have to open a separate window or tab for Google Maps, and search for hotels. In this scenario, the results are clickable. This is now the only way for users to be able to expand business information and see reviews from multiple sources.

Free direct booking links are less prominent
With the reorganization of the top section of Google search results, there are fewer Google Free Booking Links (FBL). Some hotels have said this has negatively impacted them, and Google has stated that hotel operators, airlines, and small retailers have reported that FBL clicks are down as much as 30% since implementing the compliance changes.

More Property Promotion Ad (PPA) opportunities
PPAs are the adverts that appear at the very top of Google search results for generic keyword searches. For example, when a user searches for ‘hotels Paris’, a row of images and links for specific hotels appears – these are the PPAs. Before the DMA, there were only two positions here reserved for Google Maps and Google Travel. Now, this has increased tenfold with 25 placements for individual hotels available, providing more paid opportunities for hotels to be visible at the top of search results.

What is the impact on hotels?

There are many opinions about DMA and the impact it is having on hotels.

In particular, there is some concern that it is taking direct business away from hotels. Some are saying the reduction of FBL and unclickable maps mean the opportunities to drive traffic and engagement have reduced. Some also feel the increased prominence of OTAs in Google listings means hotels will be forced to work more with OTAs – at a time when hotels are striving to improve direct bookings and reduce the large OTA commissions.

However, in reality – this isn’t the impact we have witnessed so far. At Cendyn, we have been closely monitoring the impact of Google’s changes on the way hotel search works. We have also analyzed data from a subset of the hotels we work with on Google advertising. In particular, we compared data from April to August 2024 (the five months after DMA changes were implemented by Google) to the same period in 2023 (before DMA was implemented). As such, we have made the following observations:

Generic hotel searches are at the ‘dreaming’ stage
People are using Google Search for generic hotel searches, e.g. ‘hotels Paris’, and they are subsequently shown relevant page results of OTAs and travel guides. This is not a search term people use when they are ready to book – they are at the dreaming and researching stage. At this point, travelers are identifying the names of hotels they might be interested in. Therefore, we believe any changes Google has made to comply with the DMA do not impact revenue opportunities for hotels at this point. Once travelers find a hotel of interest (either through blog, Google Maps, or OTA research for example) they go back to Google for a more specific search using the name of the hotel. This is where Google Ads for hotels can really kick in. So while the journey for users has changed, the end result has not.

Property Promotion Ads (PPAs) are performing better
We saw an extraordinary 235% increase in the number of click-throughs for PPAs when a user searches for a generic hotel term, such as ‘hotels Paris’. PPAs take a user straight to a hotel’s website. It’s worth noting that when a user searches for a generic term like this, they are still at the dreaming stage, so the conversion rate is low, but the visibility for individual hotels is very high. In fact, we’ve also seen the cost per click (CPC) decrease by up to 30% since the DMA came in, driven by less intense competition for more available ad space. We’ve found many hotels are willing to invest more in PPAs due to the very high performance gains.

Specific searches for hotel names are driving better results for Google Hotel Ads (GHA)
When a user searches for a specific hotel name (branded keywords), they are closer to being ready to book. This is where any changes to Google search results matter most to hotels. We have observed a 35% drop in clicks for FBL campaigns. While some hotels are clearly impacted by the fewer organic opportunities available higher on the listings page, from an advertising perspective, we have seen better results for hotels. GHAs have experienced a 3% growth rate overall in clicks.

Will there be more changes on Google due to DMA?

The implementation of DMA is an ongoing process, and a deeper understanding of what gatekeepers such as Google can and can’t do under the legislation is creating new questions all the time.

In a recent statement, Google shared that some comparison sites feel that Google is still not fully complying with the DMA. In response to this, Google ran a test to remove some hotel ad features from Google search listings that are being contested. This included the map that shows where hotels are and the hotel results underneath it. Instead, there was a list of individual links to websites without any additional features. As recently shared by Google, this test showed reduced user satisfaction, longer search times, and a significant traffic drop for hotels, while traffic to intermediary sites remained flat. We are now waiting to hear what the next steps will be.

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

As such, hotels will need to stay on top of any emerging developments in order to respond with new strategies.

What hotels should do: key takeaways

Our analysis shows there is ample opportunity for hotels to thrive in the current post-DMA context on Google. Here are the key takeaways:

• The DMA changes make it harder for organic results to surface, but if you have a robust marketing strategy incorporating metasearch and Google advertising, alongside other activities that drive guest engagement and loyalty, you will still succeed in driving direct traffic and bookings.
• The DMA is affecting generic keywords, but branded keywords – which lead to conversion – are largely unaffected. Take some time to understand the difference between dreaming stage generic searches (e.g. ‘hotels Paris’) and booking stage-specific searches (e.g. an actual hotel name), and analyze the results you are seeing for both scenarios in Google.
• The DMA does not affect how Google Ads are displayed at the moment, so make the most of this. As a hotel, your highest chance of conversion is through branded (specific hotel name) searches through Google’s Hotel Ads.
• Make PPA a part of your strategy – these adverts have become more prominent since the DMA, and our hotel clients are seeing extraordinary results with this.

At Cendyn, we’re here to help you navigate through the DMA and all its current and future impacts, driving ROAS across Google. As hospitality marketing technology specialists, we’re able to clearly advise our customers how changes can be dealt with. With the right support, platform, and guidance, hotels shouldn’t be affected by the DMA ruling, and there are still plenty of opportunities if you have the right strategy in place.