Paid ads can seem like a fast track to filling up your hotel’s rooms. You set up some Google Ads, launch a few campaigns, and the bookings will start rolling in, right? But for many hotels, it doesn’t work out that way. Instead, they find themselves pouring money into advertising without seeing the return they expected. So, what’s really going on? Why aren’t those euros translating into more heads on pillows?
In this post, we’re going to uncover the hidden costs behind paid advertising for hotels, explain why your return on ad spend (ROAS) may be underwhelming, and explore the importance of attribution and transparency in your marketing strategy.
1. Overpaying for Clicks: Bidding on the Wrong Keywords
One of the most common traps hotels fall into is overspending on expensive, highly competitive keywords. Everyone wants their hotel to show up at the top of a search like “luxury hotel in New York,” but guess what? So does every other luxury hotel in New York. These keywords are pricey, and if you’re paying top dollar for clicks but not seeing conversions, your return on ad spend will sink fast.
The Hidden Cost: You’re paying for high-cost clicks that don’t convert into bookings.
How to Fix It:
- Target long-tail keywords: Focus on more specific search terms, like “luxury boutique hotel near Westminster Abby.” These may have lower search volumes but attract users who are closer to making a booking decision.
- Use smart bidding strategies: Google Ads offers automated bidding tools that optimize your bids for conversions, not just clicks. This can help reduce wasted spend on irrelevant clicks and improve ROAS.
- Regularly review and optimize: Don’t set it and forget it. Continually monitor keyword performance and adjust based on what’s driving actual bookings, not just traffic.
2. Lack of Attribution Clarity: The Importance of Knowing What Drives Bookings
Attribution in advertising is crucial for understanding which parts of your marketing efforts are truly driving bookings. However, many hotels struggle to get clear visibility into which clicks, campaigns, or channels are delivering results. Without proper attribution tracking, you might be allocating too much budget to tactics that aren’t contributing to conversions—or worse, missing out on opportunities to grow.
The Hidden Cost: If you’re unclear on where your bookings are coming from, you’re likely misallocating ad spend, overemphasizing certain channels, or underestimating others.
How to Fix It:
- Implement multi-touch attribution models: Instead of crediting just the last click before a booking, use an attribution model that takes into account the various touchpoints that led to a conversion. This will give you a clearer picture of which channels are actually driving value.
- Demand full transparency: Ensure your agency or marketing team is providing comprehensive reports that break down ROAS by channel, keyword, and audience segment. This way, you can identify where your spend is most effective.
- Balance new acquisition and remarketing: While remarketing is important, make sure you’re investing enough in prospecting campaigns to bring in new guests. It’s about finding the right mix of retaining past visitors and attracting fresh prospects.
3. Seasonal Trends: Spending When You Don’t Need To
Here’s something that often gets overlooked—seasonality. Every hotel has its high and low seasons, but if your paid ads strategy isn’t adapting to these fluctuations, you could be wasting a significant chunk of your budget. Running full-force ads during low-demand periods or not capitalizing during peak seasons can lead to poor ROAS.
The Hidden Cost: You’re paying for ads that aren’t aligned with traveler demand, resulting in wasted spend when bookings are slow.
How to Fix It:
- Adjust ad spend based on seasonality: Analyze your booking patterns and allocate more budget during peak travel seasons. Scale back during slower months, or run promotions to attract off-season guests.
- Use time-based ad scheduling: With Google Ads, you can schedule your ads to show during specific times of the day or week when your audience is more likely to convert. For example, if you notice more bookings come through in the evenings or on weekends, adjust your ad schedule accordingly.
4. High Competition: Outspending Doesn’t Always Mean Outperforming
The hotel industry is fiercely competitive, especially in major cities or popular tourist destinations. If you’re competing against big chains or other well-known properties, you might find yourself in bidding wars for the most desirable keywords. The result? You end up paying higher cost-per-click (CPC) prices without necessarily seeing better results.
The Hidden Cost: You’re overspending to compete for keywords that might not even yield high returns, especially if your competition has bigger budgets to throw around.
How to Fix It:
- Look for niche opportunities: Instead of going head-to-head with competitors on broad terms like “best hotels in [city],” try bidding on more niche keywords that highlight your unique offerings, like “pet-friendly hotel with spa in [neighbourhood].”
- Use audience layering: Google Ads lets you combine demographic, interest, and behaviour data with your keyword targeting. This way, you can focus your spending on users who are more likely to convert rather than trying to outbid competitors across the board.
Final Thoughts: Get Smart with Your Ad Spend
Paid ads can be an excellent tool for driving bookings, but they’re not a magic solution. To get the best return on your investment, you need to be strategic, adaptable, and—above all—transparent about where your money is going. Prioritize proper attribution tracking to understand the full customer journey and make informed decisions about how to allocate your budget effectively.
We’re offering a free marketing audit to help you refine your strategy and get the most out of your marketing budget. We’ll take a deep dive into your current efforts and identify opportunities for growth tailored to your needs.
Book your free marketing audit here.