Why Hotel Paid Campaigns Consistently Underperform
The ambition is universal across the hotel industry: drive more business direct and reduce reliance on OTA commissions. GMs, Revenue Managers and Marketing Teams all share it. Yet for the majority of properties, paid campaign performance remains stubbornly below where it should be.
A significant factor is the way these campaigns are managed. Over the past decade, many booking engine partners have expanded from providing software into offering a full suite of digital services – paid channel management, social media, SEO. For hotels without dedicated in-house digital resource, bundling these services with an existing partner feels like a practical decision.
The reality is that this model of managed service almost always underperforms. This post looks at why, and makes the case for a more specialised approach.
The consequences of underperformance are not abstract. When campaigns fail to compete, OTAs capture guests who should have booked direct. The packages and offers that hotel teams invest time creating never reach their intended audience. The sales team loses the opportunity to upsell before arrival, because the first point of contact with the guest happens at reception – not before.
The Measurement Problem: From Certainty to Guesswork
Before examining service models, it is important to understand a more fundamental shift: digital advertising itself has become significantly harder to measure.
The tipping point came in 2017, when Apple launched Intelligent Tracking Protection (ITP). The clean reporting line between an advertising click and a completed booking began to break down almost immediately. GDPR followed, browser privacy features tightened, and VPN adoption grew. The message from consumers was clear: tracking without consent was no longer acceptable.
The impact on campaign management was severe. The click-to-conversion trail that had once worked reliably became full of gaps. Ad networks responded by plugging those gaps with mathematical models and AI-based attribution – in practical terms, a form of estimation.
Consider what this means at hotel level: a campaign generates 100 bookings, but only 60 carry a solid, verifiable data trail. The remaining 40 are attributed on the basis of probability models. For any property relying on standard, out-of-the-box tracking configurations, this is the reality of its reporting.
The consequences compound quickly. Decisions are made on skewed data. Every ad network claims credit for the same conversion. Adding up the revenue figures across all channels will typically produce a number higher than what the booking system actually shows.
What hotels should be seeing is a clean audit trail where every click maps directly to a reservation.
When that direct correlation between ad spend and actual bookings exists, every decision is grounded in fact. The data signals fed back to the ad networks become reliable, and that is when genuine improvements in performance begin.
Hotels Can Compete with OTAs – Just Not on Rate
OTAs have the best tracking technology in the industry, and the commissions they charge guarantee that investment continues. No hotel will outpace them on technology. They remain important distribution partners.
However, their scale is also their vulnerability.
Competing on room-only rate is a losing proposition – the OTA combination of loyalty programmes and aggressive pricing makes it untenable. Where hotels can win is on everything else: unique packages, curated experiences, direct guest relationships. With responsive, specialist campaign management, these offers can be surfaced in the same advertising channels the OTAs use, closing business at a fraction of the acquisition cost.
The reason is structural. OTAs manage hundreds of thousands of properties through maximum automation. Adjusting their systems to respond to what a single property is doing would be disproportionate to the return. But for that individual hotel, it represents bookings at a 5% channel cost instead of 18–26%.
The Ad Networks Are Aligned with Hotels
A dynamic that many hoteliers overlook is the friction between OTAs and the advertising networks themselves. OTAs generate significant ad revenue, but the networks recognise that greater hotel participation in ad auctions would generate more.
The evidence is visible in brand campaigns. Google provides hotels with a pricing advantage over OTAs in brand search auctions – an OTA must spend more to outbid a property on its own name. The platform is actively creating conditions for hotels to close guests at a lower cost.
This is not a new development. During COVID-19, Google reduced its commission model for Hotel Ads to a level that undercut OTA fees. While that pricing reset after the crisis, the strategic direction was clear: the networks prefer to work with brands directly. Hotels that invest in their brand presence are rewarded for doing so.
Why the Current Service Model Falls Short
Many booking engine partners introduced paid campaign management as an add-on rather than building the infrastructure required to manage campaigns at the level hotels need. Managing hundreds of properties within a single portfolio effectively is not realistic. Every hotel operates differently, with distinct key markets and guest segments developed over years.
The standard approach – grouping hotels by location, star rating, or brand – ignores the fact that each property has its own commercial DNA. The only way to manage that volume of hotels is through automation and blanket bidding rules: a strategy that may demonstrate results at portfolio level but rarely delivers for individual properties.
Effective paid campaigns require alignment with a hotel's revenue management calendar. Spend needs to flex in response to market demand – demand that can be influenced by factors as unpredictable as a local event or a nearby concert.
Portfolio-managed services also tend to rely on the inflated attribution models described above, claiming the largest possible share of revenue for the paid channel. When performance dips, there is rarely anyone diving into the detail to identify a leaked rate or an OTA offer change that is redirecting bookings. That level of analysis does not happen when a hotel is one of hundreds in a managed portfolio.
Reliable Data Drives Better Revenue Decisions
Revenue Managers need to make decisions based on a reliable data set. Attribution models built on estimation do not provide that – they lead to incremental annual gains in revenue and ADR when the opportunity for meaningful growth is available.
Understanding when specific source markets book, identifying what drives longer stays, timing promotions with precision – these are the advantages of having clean, verified data in the digital revenue mix. It is a fundamentally different capability from simply knowing that X was spent and Y revenue was returned.
Key Considerations
Competing with OTAs on room-only rate is not viable, and a segment of guests will always book through them for loyalty benefits. But hotels can create distinctive offers that attract direct bookings year-round, at a significantly lower acquisition cost.
Direct bookings give sales teams the opportunity to begin the upselling conversation before arrival – not at check-in.
Every hotel's revenue markets are individual. Campaign messaging, spend allocation and channel strategy should reflect that individuality – not operate within a one-size-fits-all portfolio model.
A tracking solution built on complete data and verifiable attribution – where every booking traces back to an advertising click – removes guesswork from revenue strategy and replaces it with evidence.
Audit Checklist: Five Questions to Ask a Campaign Provider
For hotels currently using a managed paid campaign service, these five questions will reveal whether the setup is working at property level or portfolio level.
1. How are conversions attributed?
The key distinction is whether the provider relies on platform-reported figures (Google, Meta) or reconciles campaign data against the hotel's actual booking system. If there is no reservation-level match, the numbers are modelled rather than measured.
2. How is this property's campaign strategy differentiated from other hotels in the portfolio?
If the answer involves grouping by location, star rating or brand, campaigns are being managed at portfolio level. Each property should have a strategy built around its own markets and commercial priorities.
3. How quickly can spend or messaging be adjusted when market conditions change?
A local event, a competitor rate adjustment, a new OTA promotion – each requires a rapid response. If changes take days or sit in a queue, opportunities are being lost.
4. Is there a report that reconciles ad spend to actual reservations in the PMS?
This is the clearest test of tracking quality. If campaign-reported revenue does not align with the booking system, decisions are being made on incomplete data.
5. What is the diagnostic process when performance declines?
A specialist partner will investigate: check for rate leakage, review OTA positioning, analyse demand shifts in source markets. A portfolio manager will typically move on to the next property.
How Internet Affected Works with Hotels
At Internet Affected, we work with hotels to build paid campaign strategies that are managed at the individual property level, aligned with revenue calendars, and tracked through to actual reservations. The patterns outlined in this article appear in almost every property we assess – and in our experience, they are addressable.
For hotels looking to understand where their current setup may be falling short, we offer a no-obligation review of campaign performance and tracking configuration. Often, a fresh perspective is all it takes to identify where revenue is being left on the table.
About the author
Glyn Spencer Hopkins is the owner of Internet Affected and has been working exclusively with hotels and luxury brands for over a decade.
Internet Affected provides digital revenue services tailored to the individual characters of hotels; a complete range of services designed to help them take back ownership of their hotel brand from the OTAs. Specialized marketing solutions to increase guest loyalty, food & beverage bookings, events and wedding inquiries, clearly reported in straightforward language.
