Conventional wisdom says that using search to plan and book travel is old-fashioned. Consumers now start their trip research elsewhere, such as on Facebook or Apple TV, or they may book via a reviews website like TripAdvisor or a metasearch site like Skyscanner – among other alternative sources of inspiration and listings.
But Google would like you to know that, in the US, it has seen hotel-related searches increase by about 25%, when comparing July 2016 versus July 2015 data.
The company is hoping to monetize more of that search volume. In the past week, it made an incremental, but telling, update. It has refreshed its Hotel Ads website to let hotel managers filter by their preferred language and pricing model (such as its one-year-old commission model) to reach the partners that fit their criteria more efficiently.
That change is minor, but recent hotel conferences and forums have been awhirl with rumors of hotels experimenting with Google’s channel. When hotels opt for the commission model, they can delay paying the cost of the booking until after a guest has stayed at their property. That’s a more congenial model for many hotels than, say, spending on ad campaigns that may or may not result in bookings.
It’s not clear to what extent Google may be cannibalizing its old AdWords and pay-per-click business with its new product, or if it is stealing sharing from online travel agencies and metasearch brands that are among its biggest advertisers.
But the company does believe its commission-based, direct booking approach will be increasingly popular with hoteliers and consumers. For context, consider what analyst Robert Cole says in his recent report for Tnooz on hotel rate parity and the fate of third-party distribution:
“Hoteliers will rarely admit that they love to pay commissions. Commissions eliminate the risk of committing marketing funds to programs that may not be successful.
“With the fragmentation of hotel ownership, management and distribution, equitably budgeting expenses across multiple parties operating under different business models can be a challenge.
“Even the most successful marketing campaigns exhibiting stratospheric Return on Ad Spend (ROAS, or gross revenue generated per dollar spent on advertising) may have difficulty securing incremental funding commissions, but, are nevertheless easy, as they are only paid on consumed business.
“The only risk is that the travel sellers may not produce sufficient volume, but that remains a better alternative to expending marketing funds, only to fall short as well.”
A few of the Google Hotel Ads Integration Partners worldwide – namely, Mirai, Seekda and WIHP – agreed to come forward with case studies for a press/marketing push by the search giant.
Seekda says that one of its clients, Superbude Hostel and Hotel in Hamburg, Germany, is seeing an average of 13% conversion rate with the ads.
Digital agency WIHP says that its client Hotel Atmospheres, a boutique hotel in Paris, France, “is seeing an average return-on-ad-spend of 4,700%.”
Mirai says that its client Hotel Àmbit Barcelona finds that Google Hotel Ads “contribute up to 10% of the hotel’s overall website sales.
One final reason for hoteliers to find Google’s product appealing is that it drives more direct bookings – thus dodging the middlemen like online travel agencies. The ad product gives a hotel a chance to re-market to guests for repeat business because the hotels capture.