Google Hotel Ads vs OTA Ads: Where Should Your Budget Go?

Most independent hotels in Thailand are paying to advertise their own rooms twice over, and only one of those payments is working in their favour. The first is the commission they hand to OTAs on every booking those platforms bring in. The second is the marketing budget the OTAs then spend bidding on the hotel’s own name and audience, which the hotel funds indirectly through that same commission. After twenty years working in hotel distribution and paid media, I’ve come to see this as one of the most quietly self-defeating patterns in the industry.

The question I’m asked constantly is some version of “where should my advertising money go?” Usually the real question underneath it is whether the hotel should keep feeding the OTAs or start investing in capturing bookings directly. It’s a good question, and the honest answer requires understanding what each channel actually costs and what it actually buys. Let me lay it out properly.

What “OTA Ads” Really Means for Your Margin

When people talk about OTA advertising, they usually mean two related things. There’s the standard commission, 15 to 25% of every booking the OTA delivers, and then there are the paid placement programmes, where you pay the OTA extra to rank higher within its own results. Both come out of the same pocket, and both share a fundamental characteristic: you’re renting visibility on someone else’s platform, and the guest who books belongs to them, not to you.

That last point matters more than the commission rate. When a guest books through an OTA, you don’t get their email, you don’t own the relationship, and you have little realistic chance of winning their next stay directly. You’ve paid a high acquisition cost for a one-time transaction and a guest you’ll likely have to pay to acquire all over again next time. The OTA, meanwhile, has added that guest to a database it will market to for years. You’re not just paying commission, you’re paying to build your competitor’s customer list.

None of this means OTAs are worthless. They earn their place for base occupancy in low season, for reaching markets you can’t reach directly, and for the billboard effect, where a guest discovers you on an OTA and then books direct. The mistake isn’t using OTAs. It’s depending on them as your primary marketing channel when a better-value alternative exists.

What Google Hotel Ads Actually Is

Google Hotel Ads is a metasearch product, which means it shows your room rates directly in Google’s hotel search and map results, alongside the OTA rates for the same property. A guest comparing options sees your direct rate sitting right next to Booking.com and Agoda, and if your rate is competitive, they can click straight through to book with you directly.

The significance is that this is high-intent traffic at the moment of decision. The guest is actively comparing prices for your specific hotel and is ready to book. You’re not paying to create demand, you’re paying to capture demand that already exists and steer it to your direct channel instead of an OTA. That’s a fundamentally more efficient use of money than broad awareness advertising, and the numbers reflect it. Metasearch placements of this kind are among the strongest converters available to a hotel, typically delivering a return on ad spend well above what awareness-led channels achieve.

This is also where the OTA’s own model becomes your opportunity. The OTAs spend heavily on metasearch to capture guests searching for your hotel. When you show up there with a competitive direct rate, you’re competing for your own guest at the point of purchase, and you keep both the margin and the guest relationship.

The Numbers That Actually Matter

Let me put some figures around this, because the comparison becomes obvious once you do.

An OTA booking costs you 15 to 25% of the booking value in commission, every time, regardless of how well the booking performs for you. Across our active hotel clients, paid media generates direct bookings at an average cost of around 6% of booking value, with a blended return on ad spend of roughly 16.7 times across all paid channels. Metasearch specifically, the category Google Hotel Ads sits in, tends to perform at the stronger end of that range because the intent is so high.

Set those side by side. A direct booking captured through well-run paid media costs you a fraction of what the same booking costs through an OTA, and it comes with the guest’s data and the chance to win their next stay directly. The OTA booking costs three to four times as much in acquisition and leaves you with nothing to build on. The maths isn’t close. This is exactly why our standard approach prioritises capturing existing high-intent demand directly before spending a single baht on broad awareness, because the bottom of the funnel is where the cheapest, highest-converting bookings live.

So Where Should the Budget Go?

Here’s my honest answer, and it’s not “abandon OTAs tomorrow,” because that would be irresponsible advice for a property that currently depends on them.

The shift should be deliberate and sequenced. Start by making sure your direct channel can actually convert the demand you’d be sending it, which means a fast website, a competitive direct rate, and rate parity intact so you’re never more expensive on your own site than on an OTA. Then capture the highest-intent demand directly: brand search, where guests are typing your hotel’s name, and metasearch through Google Hotel Ads, where they’re comparing your rates at the point of decision. These are the cheapest, highest-converting bookings available, and every one you capture directly is a booking you’re no longer paying an OTA 15 to 25% to deliver.

Once that high-intent layer is working and profitable, you can expand outward into broader prospecting to build new demand. But the order matters enormously. Most hotels do it backwards, spending on broad awareness while the cheap, ready-to-book demand leaks straight to the OTAs. Get the sequence right and the same budget produces far more direct revenue.

The role of OTAs in this picture shrinks from primary channel to strategic tool. You keep them for low-season base occupancy, for markets you genuinely can’t reach directly, and for the discovery they generate. You stop letting them be the default that quietly absorbs the bulk of your margin.

The Goal Isn’t Cheaper Ads, It’s a Better Channel Mix

It’s worth being clear about what success actually looks like, because it’s not simply “spend less on advertising.” The goal is to move the balance of your bookings towards channels you own and away from channels you rent. Across our portfolio, that shift takes the average property from around 13% direct booking share to over 30% within twelve months, which is more than double the revenue staying with the property rather than going to a platform. That’s the prize, and Google Hotel Ads is one of the most efficient tools for reaching it, precisely because it intercepts guests at the moment they’re choosing where to book.

At The Percentage Company, we manage the full acquisition funnel for hotel clients, brand search, metasearch, and paid media, with one consistent goal: capture demand directly at the lowest possible cost, protect your rate advantage, and reduce the share of your revenue going to OTA commission. If you suspect too much of your marketing money is quietly funding the OTAs rather than your own growth, we’d be glad to look at your channel mix and show you where the better return is.