Show a hotel owner a $2 cost per click and the reaction is often a wince. Two dollars for someone to look? Most of them won't even book.
Fair enough, but expensive compared with what? Every hotel on a booking site is already paying for bookings, every day, without wincing. It's called commission, and it comes off the top of every reservation the booking site sends. That's the number a click has to beat. Not zero, and not a gut feeling about what advertising should cost. This chapter puts the two side by side and turns them into a budget.
Every Room You Sell Through a Booking Site Already Has an Ad Cost Called Commission
No major booking site publishes its commission rate. What exists are estimates from people who sell to hotels: one booking-engine company's guide puts Expedia's standard rate at 18%, others put the range anywhere from 15% to 30%, and Skift Research estimated in 2018 that independent hotels paid Expedia 15% to 30% while big brands paid about 10% to 15%. Booking.com's own partner help pages explain that commission applies to "the room rate as well as any additional fees you charge," and to charged no-shows and cancellations too, with visibility programs adding more on top.
Your contract has your real number. For this chapter we'll use 18%, a figure in the middle of the published range, and a stay built from real averages. CoStar puts the US average daily rate for August 2026 at $161.78, so a two-night stay comes to $324. At 18%, the booking site keeps $58.
That $58 is an advertising cost. It doesn't show up on the marketing budget, because it's taken before the money reaches you, but it buys exactly what Google Ads buys: someone finding the hotel and booking it. Once you see it that way, the question stops being "is $2 a lot for a click?" and becomes "does a Google booking cost less than $58?"
A $2 Click Becomes a $133 Booking When 1.5% of Clicks Book
A click price on its own tells you nothing. It only means something once you follow it all the way to a guest in a bed, and that takes a short chain of numbers, multiplied in order:
- Cost per click. Keyword Planner prices the top of the page for "hotels in new orleans," a city search in our example market, somewhere between $1.04 and $3.07. Call it $2.
- Booking rate. The share of clicks that book. One hotel marketing agency puts the usual range for searches that don't name the hotel at 0.8% to 2.5%. Take 1.5%.
- Cost per booking. $2 divided by 1.5% is $133. That's what Google charged you, on average, for each booking from that search.
- Stays after cancellations. Not every booking turns into a stay. One booking-software company's 2025 data put the global cancellation rate at 19%. Count only the stays and the cost per stay climbs past $160.
- Value of the stay. Two nights at the national average is $324.
- Repeat stays. Whatever that guest books again, later, without a click.
Now run the same chain for a search that names your hotel. Those clicks tend to cost less and book far more often. Sojern, which sells hotel advertising, uses a 5% booking rate in its own planning example. At a $1.50 click and 5%, a booking costs $30.
The numbers are illustrative, because your clicks, booking rates and room rates are your own. The shape is the point. The same budget buys bookings at wildly different prices depending on what the traveler typed.
Bookings From Your Hotel's Name Pay for Themselves. City Searches Have to Beat the Commission.
Put the two results next to the commission. A booking from your own name, at $30, costs about half of what the booking site would have taken on that two-night stay. A booking from a city search, at $133, costs more than double. On a one-night stay the gap gets worse: the commission drops to $29, and even the name search only breaks even.
That's not an argument against city searches. It's an argument about order. Your name is where Google bookings are cheapest, which is why this guide puts it first and gives it the bigger share of the early budget. One agency that specializes in hotels suggests starting at roughly 80% of spend on the brand campaign and 20% on everything else, then moving toward an even split once the non-brand campaigns prove they can book. That's their opinion, not a law, but the math above explains why it's a sensible place to start.
City searches earn their place in specific situations:
- Longer and pricier stays. A five-night booking at a higher rate carries a commission big enough to make a $133 booking look fine.
- Event weekends, when rates jump and every booking is worth more.
- Tight matching. A search for a neighborhood or a kind of hotel, sent to a page about exactly that, books better than a generic city search sent to the home page. Chapter 4 builds those pages and ad groups.
- Guests who come back, covered below.
One honest caveat. Not every booking a booking site sends would have come to you directly otherwise; some travelers find you there first. Researchers have argued for years about how big that effect is, and Chapter 15 goes through the evidence. It doesn't change the order of operations here: the cheapest booking you can buy is still the one from someone already typing your name.
The Commission You Already Pay Sets the Highest Bid a Click Deserves
The chain also runs backward, and backward is more useful. If you know what a booking is worth paying for, you can work out the most a click is worth paying for.
The rule is one line: break-even click price = the cost you're willing to pay per booking × the booking rate. Use the commission as the cost per booking you'd accept. At $58 and a 1.5% booking rate, a click is worth $0.87. At 5%, it's worth $2.91. Anything below those prices beats the booking site; anything above loses to it.
Two things fall out of that grid. First, short stays leave very little room: at one night and an ordinary booking rate, almost no paid click beats the commission. Second, the booking rate matters as much as the stay length, which is why so much of this guide is about raising it with tighter keywords, better pages and better ads.
There's a second way to say the same thing, and Google will ask for it later. An 18% commission means the booking site costs you $18 for every $100 of room revenue, which is the same as earning about $5.60 back for every advertising dollar. In Google's terms, that's a return on ad spend of about 5.6x. Chapter 7 switches Exploration over to bidding on booking value, and 5.6x makes a sensible first target. (Isolation, in our vocabulary, is the opening campaign: exact match, bids set by hand. Exploration follows later, a broad-match campaign seeded with Isolation's proven keywords.)
A Direct Booker Can Hear From You Again. Booking.com's Contract Bars Marketing to Its Guests.
The first booking isn't the whole value of a guest. Some come back, and some send friends. The question is whether they come back to you or to the booking site.
Booking.com's contract with hotels says a property may not use the guest contact details Booking.com provides "to send unsolicited electronic communications." A guest who booked through the booking site can be a lovely guest, and you still can't add them to your email list on that basis. A guest who booked on your own site, with your own booking engine, is a different story: you have their details, and with permission, you can invite them back.
How much more often do direct guests return? We found one data set, and it's worth reading carefully. Bookboost, which sells guest-messaging software, reported from 2.2 million guests at European hotel groups that guests who booked direct came back at 5.1%, compared with 1.3% for guests who booked through a booking site.
That's one vendor, in Europe, with software to sell. We found no neutral US figure. So don't borrow theirs. Pull your own from your property management system: what share of last year's direct guests booked again, and what were those second stays worth? Add that to the first booking's value and you have a guest's lifetime value, which is what a first booking is really buying. Good reviews and word of mouth sit on top of it; they're harder to count, and they're real.
Weddings, meetings and group blocks have value of their own, counted separately, as Chapter 1 set up. Don't fold a ballroom's revenue into a room booking's worth.
Your Ad Budget Isn't Leftover Money. It's Bookings Needed Times Cost per Booking.
It's tempting to set a Google budget by asking what you can spare. Run it the other way. Decide how many direct bookings you want from Google each month, multiply by what each one costs, and that's the budget.
Sojern's published planning example shows the arithmetic: a property that wants 30 direct bookings a month, with a $450 average booking and a 5% booking rate, needs about 600 clicks. Multiply those clicks by your cost per click and you have a monthly figure.
Do it campaign by campaign, starting with your name:
- The brand campaign is capped by how many people search your name. Fund it to cover nearly all of them first.
- Isolation's city, neighborhood and hotel-type searches get what's left, at bids you set below the break-even prices from the grid above.
- Weddings and meetings, if you advertise them, get their own line, judged on inquiries rather than bookings.
Two practical notes. Google treats a campaign budget as a daily average and may spend up to twice that amount on a busy day, balancing out over the month, so don't set a daily budget you couldn't live with doubled once in a while. And the booking rate on calls depends on whoever answers the reservations line. A call that rings out is a booking you paid for and didn't get.
Next: Google Rewards the Hotel Ad That Matches the Search
You now have the numbers that decide what a click is worth to your hotel. Chapter 4 is about getting more out of every click: how Google ranks ads, why an ad and page built around one neighborhood or one kind of stay beats a general one, and what that does to your booking rate.
The tracking that makes these numbers real is in Chapter 1, and the order of searches to buy is in Chapter 2. The hotel guide's home page lists every chapter in order.
When we take on a hotel's Google Ads, this math comes first, built on the property's real commission, real room rates and real repeat guests. Running it yourself? Find last month's booking-site commission on your statements, divide it by the number of stays, and write that cost per booking at the top of your Google Ads plan.
