DMA Implementation Leads to 30% Drop in Google Hotel Ads Clicks and Bookings

The Digital Markets Act (DMA) implementation has led to significant changes in Google Hotel Ads, particularly affecting hotels in the European Union. Here are the key effects:

• Decrease in Traffic Volume: There has been a 30% decrease in traffic volume in EU markets affected by DMA implementation compared to those markets where DMA has not been implemented.
• Drop in Direct Bookings: The volume of direct bookings has dropped by as much as 36%, increasing hotel dependence on intermediaries and negatively impacting their profitability.
• Loss of Visibility: Hotels have lost visibility in terms of the user experience, which is evidenced by the drop in clicks to websites and direct bookings in markets affected by DMA.

Due to the DMA, Google has been required to alter its results scheme for travel searches. The changes are as follows:

• Before DMA Implementation: Google's taxonomy of results was optimized to connect supply and demand efficiently, allowing hotels participating in Google Hotel Ads to present their inventory in a clear and intuitive manner, integrated with services like Google Maps.

• After DMA Implementation: Google can no longer include its own vertical services (Google Maps, Google Flights, or Google Hotel Ads) in its search results pages (SERPs). This has resulted in a less organized, clear, and intuitive presentation of hotel offers to users in DMA markets.

Booking.com has not been designated as a gatekeeper under the DMA as of the initial assessments. The sequence of events is as follows:

• May 2023: The EU proposed the assessment of potential gatekeepers.
• July 2023: Booking.com self-excluded itself as a gatekeeper.
• September 2023: The EU confirmed the list of gatekeepers, excluding Booking.com, and began a 6-month period for the implementation of DMA regulation.
• March 2024: Booking.com notified the EU of its potential gatekeeper status, and the EU has 45 working days to ratify or not the notification.

The EU's decision on whether to designate Booking.com as a gatekeeper and impose any restrictions is pending, with a deadline for ratification or non-ratification set for 13/05/2024.

The impact of DMA on the hotel industry and user experience is multifaceted:

• Hotel Industry: Hotels have lost visibility and direct sales capacity in DMA-affected markets, leading to reduced profitability and increased dependence on intermediaries.
• User Experience: The user experience on Google's hotel search results page has become less clear and less intuitive, requiring more clicks and 'pushing' users towards purchasing through intermediaries.

The DMA's current implementation has inadvertently favored large US companies like Booking Holdings or Expedia, while potentially harming the European hotel ecosystem, particularly smaller independent chains and hotels.