Google AI Overviews squeeze clicks; travel, hospitality brands rethink search & spend

Google’s expanding AI Overviews are quietly redrawing the travel discovery funnel, with early signals showing fewer clicks flowing to hotel websites and online travel platforms as search results increasingly summarise destination research and “best places to stay” queries directly on the results page.

Searches that once led users through multiple hotel websites or travel platforms, such as “best places to stay in Goa”, “hotels near Mumbai airport” or “where to stay in Paris for families”, are now increasingly answered directly on the search results page through AI-generated summaries. These overviews bundle recommendations, neighbourhood insights and shortlists of stays into a single snapshot, reducing the need for users to click through multiple links and altering how travel brands capture attention at the top and middle of the funnel.

Industry executives say this shift is beginning to soften organic discovery, long the backbone of hotel and OTA traffic, as users get what they need without leaving Google. While AI Overviews still cite sources, click-through rates are under pressure, particularly for mid-funnel searches where travellers are comparing stays rather than finalising bookings.

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Rising costs, shrinking organic visibility

In the Indian hospitality market, the impact is being felt sharply. Experts point to aggressive bidding by online travel agencies (OTAs) as a key pressure point, with brands having to spend 20–30% more year-on-year just to maintain the same revenue levels. The challenge is further compounded during the October–November–December festive quarter, traditionally the most competitive period, when heightened travel demand pushes CPCs and CPAs even higher.

Rubeena Singh, MD India – NP Digital, highlighted that AI Overviews are directly squeezing organic visibility. She added, “AI Overviews have squeezed organic visibility. To make up for that, paid marketing has increased which naturally pushes up digital marketing costs.” 

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Singh said travel and hospitality brands are responding by reworking their search fundamentals. The focus is shifting to authority-led content that strengthens E-E-A-T and captures more dependable mid-to-bottom funnel traffic, sharper local and direct discovery through hyperlocal guides and programmatic pages, and tighter paid search execution built around high-intent queries, negative keyword discipline and demand-led bidding to protect ROAS amid rising CPCs. 

At NPDI, she said the emphasis is on a unified search strategy that reduces dependence on volatile SERPs by anchoring brands in high-intent, bottom-funnel organic keywords, keeping performance and bookings stable even as visibility fluctuates, with paid media structured to support this approach.

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The shift is already visible across hospitality and travel brands.

For Novotel, part of the Accor group, the rollout of AI Overviews has led to a noticeable rise in search and performance marketing costs, prompting a rethink on budget allocation and ROI benchmarks. The brand said sustaining visibility and conversions now requires tighter audience targeting, stronger creatives and more frequent optimisation to maintain efficiency.

“To maintain visibility, our efforts are centred on strengthening owned and organic assets. This encompasses enhancing website content, improving SEO performance, and deepening engagement across direct brand platforms,” said Kunal Shanker, General Manager, Novotel Mumbai Juhu Beach. The brand said it is increasing investment in mid-funnel engagement through social content, video storytelling and targeted remarketing to stay connected with high-intent travellers as paid visibility becomes more competitive.

Echoing this view, Sunitha Natarajan, Director – Digital Strategy, Social Panga, said brands are beginning to treat AI Overviews as a structural change rather than a tactical disruption. She said, “We are treating AI overview as the new “toll booth” on generic discovery, so the strategic shift isn’t just about spend more on Google but it's more of a move from keyword dependence to memory dependence.”

According to Natarajan, this demands a clear reset in priorities. She said travel and hospitality brands need to focus on building stronger branded search demand, creating design-led content and experiences that AI can easily reference, and using paid media selectively to close the loop through retargeting and loyalty funnels, ensuring every rupee spent amplifies the brand story.

She added that the core issue goes beyond cost inflation. The real shift, she argued, is that the same budgets are now buying fewer meaningful discovery moments. This structural reset is driving sustained double-digit inflation in CPCs and CPAs for non-branded, high-intent travel queries, pushing brands away from chasing cheap clicks and towards deeper intent, profit-led bidding and creatives that drive bookable experiences.

Budget reallocation

As AI-driven search compresses organic discovery, travel brands are reallocating budgets to protect demand capture. Marketing spends are shifting away from broad upper-funnel visibility towards high-intent performance channels, mid-funnel engagement and retention-led tactics, with a sharper focus on ROI. The emphasis is increasingly on fewer, more effective touchpoints, ensuring budgets are deployed where they can directly influence consideration and bookings rather than dilute impact across fragmented discovery moments.

“In response to rising keyword costs, we have started recalibrating our channel mix to maintain performance efficiency and mitigate overdependence on search,” said Shanker. He added that  rather than relying exclusively on high‑intent search terms, they are diversifying into complementary, cost‑effective channels. This includes a greater focus on social media platforms, metasearch optimisation, influencer partnerships, and strategic collaborations that help drive direct traffic. The objective is to sustain brand visibility and demand generation while maintaining cost balance across channels.

Singh added that rising cost pressures are forcing brands to diversify media spends instead of merely absorbing inflation, with budgets increasingly shifting to social platforms to create demand, alongside a sharper focus on direct channels such as loyalty programmes.

“To simply put, the new measure of success would ideally be valued by not just the CPA but the lifetime value and repeat business driven by creating an ecosystem with a great mix of both traditional and modern channels,” she added. 

Natarajan, meanwhile, cautioned brands against doubling down indiscriminately on Google ads. “My suggestion would be to trim spend on generic keywords and reinvest in branded search and remarketing, redirect your google budget into demand creation channels like videos, creators, communities that drive into these direct and branded searches and lastly leverage the platform to grow your first part data.”

What is emerging, executives suggest, is a more fundamental reset of how travel brands approach growth in an AI-led search environment. As Google inserts itself deeper into the discovery journey, brands are being pushed to buy back control through stronger brand recall, direct relationships and demand creation outside search. In this new landscape, efficiency will hinge less on winning auctions and more on building ecosystems that can sustain intent, loyalty and repeat bookings even as traditional discovery routes continue to narrow.