Google drops market share on direct hotel bookings

European Union’s Digital Markets Act is playing a part

Search engine giant, Google, has lost 1 percentage point of its market share in direct hotel bookings, a study has revealed.

Mirai, the provider of technology and operations support to help hotels sell in the direct channel, has unveiled new findings on the impact of the European Union’s Digital Markets Act (DMA) on the direct sale of hotel reservations within the EU compared with non-EU markets. 

According to the data, Google Hotels’ share of direct hotel bookings has fallen sharply from 13.4% to 8.9% within the EU as a result of the DMA, a 4.5 percentage points decrease.

The study, which spanned eight months and more than 3,000 hotels, showed that while overall Google has only lost 1% of the market share of hotel direct bookings, it has gained share in both organic and paid, possibly increasing distribution costs for hoteliers. 

Mirai’s latest analysis reveals that the DMA has led to Google suffering an overall 1% decline in its market share of all direct hotel bookings within the EU, marking a significant shift in how users interact with hotels via Google platforms. 

Nonetheless, Google managed to recapture 82% of that loss through other Google placements such as Google Ads and organic search where it saw a 1.5 and 2 percentage points increase in the overall share of direct bookings for hotels within the EU.

Meanwhile, outside of Europe, the research showed a different trend. Although Google Hotel Ads experienced a slight decrease, its starting point was higher (16.8%) and the decline less (down 1.1 percentage point to 15.7%), meaning it remains a vital source of direct bookings. 

At the same time paid traffic surged by 20%, now accounting for 12.7% of total bookings, though this was offset by a decline in organic traffic, leading to increased distribution costs for hotels in these regions as well.

The DMA’s long-term effects are still unfolding. With Booking.com now required to comply with the new regulations, including the recent removal of the parity clause in EU markets, significant changes in the distribution landscape are anticipated in the coming months.