Winning Back the Customer: How a Boutique Hotel Chain Cut OTA Commissions by 40% with a Direct Booking PPC Strategy
Client: a collection of boutique hotels located in prime tourist destinations in Portugal.
Project Duration: 9months (Ongoing)
Services: Google Ads (Search, Hotel Ads, Display), Meta Ads
Project Duration: 9months (Ongoing)
Services: Google Ads (Search, Hotel Ads, Display), Meta Ads
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Executive Summary
The hotel chain was trapped in a cycle of dependency on Online Travel Agencies (OTAs) like Booking.com and Expedia. While these platforms provided volume, they charged commissions of 15-25%, eroding profitability and preventing the hotel from owning the customer relationship. We developed a multi-layered PPC strategy focused on intercepting users at the final stage of their journey and showcasing the superior value of booking direct. This approach shifted the booking source, cutting OTA commission costs by 40% and increasing direct, more profitable revenue by 70%.
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The Challenge: the OTA stranglehold
- Profit Margin Erosion: high OTA commissions were the single largest marketing expense. For every €100 in revenue from an OTA, up to €25 was immediately lost, forcing the hotel to work harder for less profit.
- Brand Hijacking & Cannibalization: OTAs were aggressively bidding on the hotel's own brand name. This meant a guest who searched for our client hotels would often click an OTA ad, forcing the hotel to pay a hefty commission for a customer who was already theirs.
- No Customer Ownership: when a booking is made via an OTA, the hotel receives minimal guest data. This makes crucial pre-arrival communication, upselling ancillary services (like spa treatments or dinner reservations), and future loyalty marketing nearly impossible. The OTA, not the hotel, owns the customer.
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The Solution: a Profit-First, Direct Booking Strategy
Our strategy was never to outspend the OTAs—a futile effort. Instead, we focused on being smarter, more targeted, and more persuasive at the critical moments of the booking journey.
- Brand Defence: create an impenetrable "digital fortress" around the hotel's brand names to capture all brand-aware search traffic at the lowest possible cost, effectively plugging the biggest profit leak.
- Value Proposition Offense: aggressively use ad copy, extensions, and landing pages to relentlessly communicate the exclusive, tangible benefits of booking direct (e.g., best price guarantee, complimentary breakfast, potential room upgrade, flexible cancellation).
- The Ever-Present Reminder (Smart Retargeting): build segmented audiences of users who visited the site (from any source) and bring them back with compelling, personalized direct booking offers across the Google Display Network and Meta platforms (Facebook & Instagram).
- Winning the Price Comparison (Google Hotel Ads): ensure the official website's direct rate was prominently and competitively displayed within Google's powerful travel search interface, intercepting users at the final point of comparison.
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Our Process: a Detailed Breakdown of Precision & Persuasion
Phase 1: Conversion Tracking & Analytics Foundation
Before spending a single euro, we ensured every metric could be tracked. We implemented Enhanced Ecommerce tracking via Google Tag Manager, connecting the booking engine to Google Analytics. This allowed us to measure not just the number of bookings, but total booking value, average order value, and ROAS.
Phase 2: Building the Brand Fortress (Search Ads)
We created a highly structured set of Brand Defence campaigns. Every hotel within the chain ran its own campaign, using Single Keyword Ad Groups (SKAGs) for all possible name variations. Using exact match keywords and an exhaustive list of negative keywords, we achieved 95%+ impression share on branded searches at an extremely low Cost-Per-Click.
Phase 3: The Value Offensive (Ad Copy & Extensions)
We crafted ad copy that went beyond "Official Site." A/B tests consistently proved that ads highlighting specific, tangible perks performed best.
Phase 4: The Retargeting Funnel (Display & Meta)
We built several key audiences for retargeting:
Phase 5: Dominating the Final Click (Google Hotel Ads)
We worked with their booking engine provider to ensure a clean, real-time price feed into Google Hotel Ads. We managed bids to ensure the "Official Site" link was always visible and, whenever possible, displayed the most competitive rate or a special callout highlighting a direct-booking perk.
Before spending a single euro, we ensured every metric could be tracked. We implemented Enhanced Ecommerce tracking via Google Tag Manager, connecting the booking engine to Google Analytics. This allowed us to measure not just the number of bookings, but total booking value, average order value, and ROAS.
Phase 2: Building the Brand Fortress (Search Ads)
We created a highly structured set of Brand Defence campaigns. Every hotel within the chain ran its own campaign, using Single Keyword Ad Groups (SKAGs) for all possible name variations. Using exact match keywords and an exhaustive list of negative keywords, we achieved 95%+ impression share on branded searches at an extremely low Cost-Per-Click.
Phase 3: The Value Offensive (Ad Copy & Extensions)
We crafted ad copy that went beyond "Official Site." A/B tests consistently proved that ads highlighting specific, tangible perks performed best.
- Winning Ad Copy: "Book Direct for a Free Welcome Drink & Best Rate Guaranteed."
- Sitelink Extensions: we used these to highlight key pages: "Our Rooms," "Special Offers," "Photo Gallery," and a powerful "Why Book Direct?" page.
- Promotion & Callout Extensions: we used these to dynamically display time-sensitive offers ("15% Off Autumn Stays") and evergreen benefits ("Free WiFi," "Flexible Cancellation").
Phase 4: The Retargeting Funnel (Display & Meta)
We built several key audiences for retargeting:
- All Website Visitors (30 Days): a broad audience for general brand reinforcement ads.
- Booking Engine Abandoners (7 Days): a high-intent audience that received more direct, urgent ads like "Complete Your Booking & Get a Free Breakfast."
- Past Guests (via Customer Match): an audience for loyalty offers and "welcome back" promotions.
- Creative assets focused on beautiful hotel imagery and a clear call-to-action to "Book Direct & Save."
Phase 5: Dominating the Final Click (Google Hotel Ads)
We worked with their booking engine provider to ensure a clean, real-time price feed into Google Hotel Ads. We managed bids to ensure the "Official Site" link was always visible and, whenever possible, displayed the most competitive rate or a special callout highlighting a direct-booking perk.
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The Results: a Fundamental Shift in Profitability
- +70% increase in direct booking revenue, which carried a significantly higher profit margin.
- -40% reduction in total commission payments to OTAs, freeing up substantial capital.
- Achieved a 12:1 ROAS for the core brand defence campaigns.
- The business mix was transformed: the primary source of bookings shifted from 60% OTA / 40% Direct to a much healthier 45% OTA / 55% Direct.
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FAQ
Can a boutique hotel really compete with the massive PPC budgets of Booking.com?
You don't compete on budget; you compete on strategy. We don't try to outbid OTAs on broad terms like "hotel in Lisbon." Instead, we focus on hyper-efficiently capturing users who already know your brand and targeting niche long-tail keywords where you can win. It's about precision, not firepower.
What is the single most important part of a direct booking PPC strategy?
Brand defence. Your first and most profitable euro is spent ensuring that when someone searches for your hotel by name, your website is the first result they see, not an OTA. This plugs the biggest leak in your marketing bucket.
Isn't it good that OTAs advertise for us?
It can provide visibility, but it's a double-edged sword. When they bid on your brand name, they are intercepting a customer that was already looking for you. Our goal is to let the OTAs do the broad discovery work on generic searches, but ensure we capture the customer for the final, direct booking once they know your name.
How do Google Hotel Ads fit into this?
They are a crucial component. Google Hotel Ads places your direct rate right alongside the OTA rates in a comparative format. A well-managed campaign ensures your direct price is the most attractive option, and it's a key tool for winning the booking at the moment of decision.
How much budget do we need to start?
The budget is determined by two factors. First, the "Brand Defence" budget is non-negotiable and is based on the volume of searches for your hotel's name. Second, the "Non-Brand" budget for acquiring new customers is flexible and based on your growth goals and target ROAS. We start by calculating the essential defence budget and then build from there.
Our booking engine is a bit outdated. Will that be a problem?
It can be. A seamless, mobile-friendly booking experience is critical for converting the traffic we send. As part of our process, we conduct a user experience audit of your booking engine. If there are significant issues, we will provide clear recommendations and can work with your web developer or booking engine provider to implement improvements. A great ad leading to a poor booking page will always result in wasted spend.
How does this strategy adapt to seasonality?
The strategy is highly adaptable. During the low season, we might shift more budget towards top-of-funnel, non-branded campaigns to generate demand. In the high season, we focus heavily on capturing high-intent and branded searches. Promotions and ad copy are updated continuously to reflect seasonal offers and booking windows.
What is the role of Facebook and Instagram ads in this?
While Google is for capturing intent, Meta platforms (Facebook/Instagram) are for creating demand and retargeting. Their primary role in this strategy is for the "Ever-Present Reminder." We use their powerful visual formats and demographic targeting to run highly effective retargeting campaigns, showing beautiful imagery of your hotel to users who have recently visited your website but haven't booked yet.
You don't compete on budget; you compete on strategy. We don't try to outbid OTAs on broad terms like "hotel in Lisbon." Instead, we focus on hyper-efficiently capturing users who already know your brand and targeting niche long-tail keywords where you can win. It's about precision, not firepower.
What is the single most important part of a direct booking PPC strategy?
Brand defence. Your first and most profitable euro is spent ensuring that when someone searches for your hotel by name, your website is the first result they see, not an OTA. This plugs the biggest leak in your marketing bucket.
Isn't it good that OTAs advertise for us?
It can provide visibility, but it's a double-edged sword. When they bid on your brand name, they are intercepting a customer that was already looking for you. Our goal is to let the OTAs do the broad discovery work on generic searches, but ensure we capture the customer for the final, direct booking once they know your name.
How do Google Hotel Ads fit into this?
They are a crucial component. Google Hotel Ads places your direct rate right alongside the OTA rates in a comparative format. A well-managed campaign ensures your direct price is the most attractive option, and it's a key tool for winning the booking at the moment of decision.
How much budget do we need to start?
The budget is determined by two factors. First, the "Brand Defence" budget is non-negotiable and is based on the volume of searches for your hotel's name. Second, the "Non-Brand" budget for acquiring new customers is flexible and based on your growth goals and target ROAS. We start by calculating the essential defence budget and then build from there.
Our booking engine is a bit outdated. Will that be a problem?
It can be. A seamless, mobile-friendly booking experience is critical for converting the traffic we send. As part of our process, we conduct a user experience audit of your booking engine. If there are significant issues, we will provide clear recommendations and can work with your web developer or booking engine provider to implement improvements. A great ad leading to a poor booking page will always result in wasted spend.
How does this strategy adapt to seasonality?
The strategy is highly adaptable. During the low season, we might shift more budget towards top-of-funnel, non-branded campaigns to generate demand. In the high season, we focus heavily on capturing high-intent and branded searches. Promotions and ad copy are updated continuously to reflect seasonal offers and booking windows.
What is the role of Facebook and Instagram ads in this?
While Google is for capturing intent, Meta platforms (Facebook/Instagram) are for creating demand and retargeting. Their primary role in this strategy is for the "Ever-Present Reminder." We use their powerful visual formats and demographic targeting to run highly effective retargeting campaigns, showing beautiful imagery of your hotel to users who have recently visited your website but haven't booked yet.
