Cooling competition in Google Hotels is a short-term positive for large OTAs, but agentic AI travel search may reshape the top of the funnel

Overview

This report is Bernstein’s annual deep-dive analysis of Google Hotels, focusing on top-of-funnel traffic, sponsored placements, price competition, and brand strategy in online travel. The report argues that DMA-related changes and adjustments to Google’s search pages have made Google Hotels harder for consumers to reach, weakening organic listings and free direct-booking links while increasing exposure for sponsored results and large platforms. In the short term, these changes reduce competition in the traditional search environment and are relatively beneficial for large OTAs; however, Google Hotels itself is becoming less important, and Google may launch an Agentic AI travel booking tool within weeks, potentially changing traffic entry points and competitive rules again in the future.

Core views

The core views are: first, organic listings in Google Hotels matter less, and paying for sponsorship is increasingly necessary to gain traffic; second, booking options in the U.S. are down 49% from 2023, and Europe has also continued to decline, with competition shifting from rising in 2020-2023 to falling in 2024-2026; third, even with fewer options, price competition remains intense, as smaller OTAs offer the lowest price in 77% of cases in the U.S. and 58% in Europe; fourth, direct hotel options appear less frequently, but the remaining direct channels are buying sponsored placements more actively, indicating stronger revenue management and marketing capabilities among major hotel brands; fifth, Google’s Agentic AI travel products may further marginalize traditional hotel search entry points.

Analysis framework

The report uses Bernstein’s proprietary Google Hotels scrape analysis: it first searches hotels in specific countries or U.S. states and scrapes the results, then records for each hotel the number of booking options, the source of the lowest price, whether the listing is sponsored, the display rank, and whether a direct-booking option exists. These metrics are used to compare the competitive landscape across the U.S. and Europe, major OTA brands, metasearch channels, and direct hotel channels.

Methodology notes

• Channel competition analysisGoogle Hotels top-of-funnel scrape analysis

  Measures distribution competition through the prices, brands, rankings, sponsorship status, and direct-booking availability visible to consumers on Google Hotels.

  The sample covers hotel search results across U.S. states and major European countries. The methodology section in the report discloses a sample of about 19,000 hotels, including about 12,600 in the U.S. and about 6,000 in Europe, and compares it with the same sample from 2023, 2024, and 2025.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Booking Holdings Inc / US.BKNG

  Large OTA beneficiary and key comparison subject

  Strengths

  Booking.com remains strong in inventory coverage and sponsored-placement performance, and the report believes large platforms that can pay to acquire traffic have an advantage in the current Google Hotels environment.

  Weaknesses

  Priceline and Agoda have lost sponsored share in the U.S., and coverage in Europe has also declined, while smaller OTAs and direct channels continue to pressure pricing.

  Comparison

  Relative to EXPE, BKNG remains stronger in inventory coverage; relative to direct channels, BKNG’s price competitiveness has improved in the U.S., but in Europe direct channels are reported to be 2.2% cheaper than BKNG.

  Risks

  Agentic AI travel search could change traffic entry points; low-price competition from smaller OTAs and stronger sponsorship from direct channels could compress its advantage.

• Expedia Group Inc / US.EXPE

  Large OTA beneficiary and sponsored-placement competitor

  Strengths

  Expedia’s core brand in the U.S., together with Booking’s core brand, jointly dominates sponsored placements, while Expedia.com and Hotels.com have increased sponsorship share in Europe for consecutive years, totaling about 37%.

  Weaknesses

  The report says EXPE’s improvement in brand inventory coverage is less evident than BKNG’s, and it still faces price competition from smaller OTAs.

  Comparison

  EXPE is more aggressive in sponsorship strategy in Europe and shares core sponsored placements with BKNG in the U.S.; however, its overall coverage remains weaker than BKNG’s brand portfolio.

  Risks

  Greater price transparency, AI-driven search restructuring, and stronger spending by direct channels could reduce the return on paid customer acquisition.

• Alphabet Inc / US.GOOGL

  Traffic gateway and platform rule-setter

  Strengths

  Google still controls the hotel search entry point, sponsored placements, and future AI agent-based travel products, and can reshape industry distribution through page design and advertising products.

  Weaknesses

  The report believes Google Hotels itself is harder to access, has fewer features, and is becoming less important, potentially moving toward obsolescence.

  Comparison

  Compared with OTAs, GOOGL is not a traditional hotel distributor but an upstream traffic and advertising platform; its DMA-related changes are benefiting large OTAs in the short term.

  Risks

  DMA regulation, migration in user search behavior, and uncertainty around the rollout of AI products could affect the commercial value of Google Hotels.

• Direct hotel channels

  Supplier direct-sales channels competing with OTAs

  Strengths

  The remaining direct-booking options are buying sponsored placements more actively, lifting U.S. direct sponsorship share to 9.4%, and improving price competitiveness in some markets.

  Weaknesses

  Direct-booking option availability fell sharply in 2026, to just 36% in the U.S. and 26% in Europe, while organic exposure has weakened.

  Comparison

  Direct channels have a relative pricing advantage versus BKNG in Europe, but they are weaker than large OTAs in coverage and traffic acquisition.

  Risks

  If Google continues to weaken organic listings, direct channels that do not pay for sponsorship may lose further visibility.

• Super.com and other smaller OTAs

  Low-price competitors

  Strengths

  Smaller OTAs provide the lowest price in 77% of cases in the U.S. and 58% in Europe, with Super.com specifically highlighted as a key price competitor.

  Weaknesses

  Smaller OTAs have a low share of sponsored listings, and Google may remove low-quality or unreliable booking supply.

  Comparison

  They often beat large OTAs and direct channels on price, but are weaker in brand, scale, inventory quality, and visibility.

  Risks

  If Google filters for more reliable inventory for its Agentic AI products, smaller OTAs may be further excluded.

Key data

• Sample sizeAbout 19,000 hotels; about 12,600 in the U.S. and about 6,000 in EuropeDisclosed in the methodology section; the front-page summary also mentions about 13,000 hotels, indicating a discrepancy in sample definition within the input text.
• Change in U.S. booking optionsDown 49% versus 2023The report says booking options on Google Hotels in the U.S. have fallen significantly, with competition continuing to cool from 2024 to 2026.
• Direct-booking option availability36% in the U.S., 26% in EuropeIn 2026, direct-booking availability in the U.S. fell back to pre-2021 levels, and direct availability in Europe is also low.
• Share of lowest prices from smaller OTAs77% in the U.S., 58% in EuropeDespite fewer overall options, smaller OTAs still frequently offer the lowest prices, with Super.com specifically identified as an especially aggressive price competitor.
• Concentration of U.S. sponsored placementsBooking and Expedia core brands together account for about 47%Sponsored listings on Google Hotels in the U.S. continue to be dominated by the main brands of large OTAs.
• U.S. direct sponsorship share9.4%The share of direct-booking options in sponsored listings in the U.S. continues to rise, with about 38% of hotel listings showing a sponsored direct-booking option.
• European EXPE sponsorship shareExpedia.com and Hotels.com together account for about 37%The report says EXPE’s two key brands have increased their sponsored-list share in Europe for three consecutive years.
• European direct sponsorship shareAbout 6%In 2026, Europe’s direct sponsorship share was roughly flat versus 2025 and below 2024’s 8%.

Impact & implications

The short-term investment implication is moderately positive for large OTAs, especially platforms with stronger scale, brands, and paid marketing capabilities, because Google Hotels page changes have reduced the visibility of low-ranked organic options and direct-booking links while reinforcing the importance of sponsored placements. At the same time, price competition remains present, with smaller OTAs and Super.com continuing to push prices lower, while direct channels are becoming more active in sponsored placements, which could limit margins or conversion efficiency for large OTAs. For GOOGL, Google Hotels itself may become less important than in the past, but its search entry point and future AI agent-based travel booking tools may still determine how industry traffic is allocated.

Risks

• Google’s upcoming Agentic AI travel booking products could change users’ search paths, reducing the predictive value of traditional Google Hotels analysis.
• The post-DMA page structure reinforces sponsored placements, which may raise paid marketing costs and compress OTA customer-acquisition returns.
• Smaller OTAs remain very aggressive on price, especially Super.com, which could intensify price competition.
• Although direct hotel channels appear less often, they are buying sponsored placements more actively and may win back some high-intent traffic.
• Google may remove low-quality or unreliable smaller suppliers, causing further changes in visible inventory and the competitive structure.
• The report’s sample definition in the input text shows two versions, about 13,000 and about 19,000 hotels, so the full original tables should be checked before using the data.

What to watch

• The launch timing, coverage, and whether Google’s Agentic AI travel booking products directly handle hotel bookings.
• Changes in the number of sponsored placements on Google Hotels, the visibility of organic listings, and free direct-booking links.
• Whether sponsored share and inventory coverage among BKNG’s Booking.com, Priceline, and Agoda continue to diverge.
• Whether rising sponsored share for EXPE’s Expedia.com and Hotels.com in Europe can translate into share gains.
• Whether the low-price and sponsorship strategies of smaller OTAs, especially Super.com, Vio, Dealbase, Etrip, and eDreams, persist.
• The availability, sponsorship share, and price competitiveness of direct hotel channels in the U.S. and Europe.