"How much should I put into Google Ads?" The answer is often a random number: €300, €1,000, "whatever you have". But an advertising budget isn't chosen on gut feeling. It's calculated from what a booking is worth to you and how much you can spend to get it.
In this article we look at how to set your hotel's Google Ads budget with a simple method, comparing it with the cost of OTAs.
The starting point: how much you can spend per booking
The right question isn't "how much to spend per month" but how much you can afford to pay for each direct booking.
A good benchmark is the cost of the same booking on a portal. If an average €400 booking costs you around €70–100 on Booking.com between commission, discounts and programmes (see how much an OTA booking really costs you), then:
- a direct booking from Google Ads costing €30–50 is a great deal;
- one costing €80 breaks even;
- one costing €150 loses money.
This number is your maximum cost per booking.
From cost per booking to budget
Your monthly budget depends on how many bookings you want and how much they cost. To estimate it you need three numbers:
- average cost per click (CPC) of your campaigns;
- website conversion rate for ad traffic;
- number of bookings you want to generate.
Example:
| Item | Value |
|---|---|
| Average cost per click | €0.80 |
| Conversion rate | 2% |
| Cost per booking | 0.80 / 0.02 = €40 |
| Target bookings per month | 20 |
| Monthly budget needed | 20 × €40 = €800 |
If a €40 cost per booking is lower than the OTA cost, the investment makes sense. If it's higher, improve the campaign or website before increasing the budget.
Note: the example values are indicative. CPC and conversion vary greatly by location, season, campaign type and website quality.
Different budgets for different campaigns
| Campaign | Typical cost | How much to invest |
|---|---|---|
| Brand (hotel name) | Generally low | Enough to cover all searches for your name |
| Google Hotel Ads / metasearch | Variable, tied to competition with OTAs | Adjust by dates and markets |
| Targeted search (events, audiences) | Medium | Concentrated in the right periods |
| Generic search "hotel [city]" | Often high | Only with solid budget and conversions |
| Remarketing | Low to medium | A small, steady share |
Concentrate your budget in time
Don't split the budget into twelve equal parts. Spend more:
- in the months when your guests book (not when they stay);
- for the periods you need to fill;
- around events in your area.
And cut back when the hotel is already full or nearly so: paying for clicks on sold-out dates is waste. See campaigns for seasonal hotels: when to start and when to cut spend.
ROAS: a quick check
ROAS (return on ad spend) is the ratio between revenue generated and spend. Example: €800 spend and €8,000 in bookings = ROAS 10 (or 1,000%). For a hotel, a ROAS that stays comfortably above the equivalent OTA commission cost is a good sign. But remember to factor in cancellations: a cancelled booking isn't revenue.
Common budget mistakes
- a small budget spread across too many campaigns: none gets enough data;
- increasing budget before checking tracking;
- switching everything off after two weeks "because it doesn't work";
- not checking the real searches that trigger your ads. See how to avoid paying for clicks from people who won't book your hotel.
Frequently asked questions
Is there a minimum budget for Google Ads?
There's no mandatory minimum, but a budget that's too low doesn't generate enough data to know what works. Better to focus a small budget on a few targeted campaigns.
How much does a click cost for a hotel?
It varies a lot: searches for the hotel name are generally cheap, while generic searches in very touristy destinations can be expensive. What matters isn't the cost per click, but the cost per booking.
Should I hand my budget to an agency?
Yes, if the agency shows you bookings and revenue, not just clicks. See your agency report shows clicks and impressions: where are the bookings?.
Want a budget based on your own numbers?
With our free marketing audit we calculate your hotel's maximum cost per booking and propose a realistic Google Ads budget, month by month.
