The Bidding War Nobody Started
Hotel marketers recognise the pattern. Brand cost per click rises. Impression share - the percentage of eligible impressions you capture - drifts down. The working assumption is that OTAs are bidding more aggressively. That remains partly true, but it is no longer the whole story.
In many markets, competing hotels located a few hundred metres away are now entering your brand auctions - not because a person chose to target your name, but because an algorithm inferred that your brand traffic can convert for them.
No policy was broken. The system behaved as designed. That is precisely why it matters.
How competition worked under traditional Search
In standard Search campaigns, participation is explicit. To appear on a competitor’s brand term, someone must add that term as a keyword. It is a deliberate action that can be challenged or reviewed.
Everyone sees the same map of intent. The competition is intentional and traceable to human choice.
What Performance Max changes
Performance Max starts from an objective, not a keyword list. Advertisers provide assets, landing pages, conversion history, audience signals and location, then set a goal such as maximise bookings.
Google’s systems decide which queries to enter, which users to reach, which channels to use and what to bid.
The governing question is not did the advertiser choose this keyword - it is would showing this ad to this user likely produce a booking. That gap is where your brand traffic lives.
A simple scenario
Hotel A runs a traditional brand campaign and receives 10,000 branded searches a month.
Nearby Hotels B and C run only Performance Max.
A user searches Hotel A. Google knows the user is shopping for accommodation, that B and C are close by, and that some users who start with Hotel A ultimately book Hotel B or C. If the predicted value clears the threshold, B and C enter Hotel A’s brand auction.
No one at Hotel B typed target Hotel A. The system decided to participate.
Would Hotel B know
Historically, not easily. Performance Max launched with limited transparency.
Since Google introduced full search terms reporting for Performance Max in 2025, competitor brand queries and attributed conversions are visible - but only if someone looks. Agencies focused on headline ROAS or CPA can miss the composition entirely.
Today, opacity is optional. If it persists, it is a process gap, not a platform limitation.
What this means for Hotel A
Your brand search volume is fixed. Performance Max cannot create more demand for your name.
What changes is who enters the auction. Five years ago, your brand term might attract you, Booking.com and Expedia. After broad Performance Max adoption, the same 10,000 searches can draw you, both OTAs and several neighbouring hotels whose campaigns have independently learned that your brand queries sometimes convert for them.
More qualified participants against the same demand increases total impressions and can lift clearing prices. Your CPC is set by the auction - who shows up, how their systems bid and what value they predict - not by your bid alone.
On budget size and the feedback loop
A large competitor budget does not raise your CPC by itself. It does keep their campaign present all month. If Google believes your brand searchers sometimes book Hotel B, a well-funded Hotel B will be in those auctions on the 3rd and the 28th.
The feedback loop matters. If Hotel B skims a small share of your brand traffic and even 2 percent converts, the model gains confidence, enters more of your auctions and bids more assertively. The campaign teaches itself that your brand is profitable - without human review.
Why both sides miss it
The Performance Max advertiser sees more bookings at an acceptable CPA.
The brand defender sees higher CPC and lower impression share.
Neither dashboard states you are being matched against each other more often.
The evidence exists. Hotel B’s search terms report will list Hotel A’s queries. Hotel A’s Auction Insights will show Hotel B’s domain in brand auctions, though not the campaign type that brought them there.
A practical caveat about intent
Google seeks to satisfy intent. Not all branded searches signal the same thing. Searches like Hotel A official website are navigational and are less likely to invite rivals. Softer variants like Hotel A can be treated as comparative - that is the opening the system exploits. One or two competitors doing this occasionally is noise. Dozens of hotels with automated campaigns make it a structural cost.
About measurement quality
AI optimisation is only as good as the conversion signals it receives. Google’s tracking has natural blind spots, which are bridged with modelled conversions. That adds uncertainty.
If a model learns from partially inferred events, it can optimise confidently in slightly wrong directions. The risk compounds when the platform that spends the budget also grades the results.
How Internet Affected approaches this
At Internet Affected, we prioritise verified, observable signals. It is why we built Veribooking the way we did - to send Google Ads a verified booking as the conversion signal. This ensures optimisation is anchored to real, completed reservations rather than modelled outcomes.
This is not a case against Performance Max. It is a case for controlling the signals that teach the algorithm and the numbers you pay against - and for making those controls an explicit part of your strategy.
On simplicity - and why oversight matters
Performance Max is easy to launch. It is not inherently easy to run well. It bundles Search, Shopping, Display, YouTube, Gmail, Discover and Maps into one budget and one top-line metric.
Blended ROAS or CPA can mask composition. Search and Shopping may deliver strong returns while Display and YouTube absorb spend at low yield. For independent hotels with modest budgets, spreading €8,000 across seven channels risks funding activity everywhere and results nowhere.
Channel-level reporting added in 2025 helps you separate signal from noise - but turning those insights into exclusions, asset decisions and budget structure is specialist work.
Key takeaways
Under Performance Max, we don’t bid on competitors is not a policy. It is an assumption - and without brand exclusions or negatives, it is probably false.
Your brand search volume is fixed. Auction participation is not. More eligible advertisers against the same demand raises total impressions and can push CPC up.
The feedback loop is the mechanism to respect. A small conversion rate on your brand traffic is enough to teach a competitor’s campaign to keep entering - and escalating.
Since 2025, transparency exists. Search terms and Auction Insights show both sides. If your partner only watches ROAS, they have chosen not to look or lack the capacity to do this work effectively.
Whether you are the hotel drifting into others’ brand auctions or the one being drifted into, assign ownership. Make the decision deliberately, document it and review it - the same way you would manage any channel that can quietly reprice itself.
If you would like an independent review of your brand auctions, Performance Max composition and conversion signal quality, Internet Affected can help your hotel, reach out to our team of experts.
Get in touch and let us help your hotel.
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.
How Performance Max quietly places hotels into each other's brand auctions - and why it goes unnoticed