Google Travel Suite: The Emerging 1,000-pound Gorilla in Travel

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October 01, 2011
Sales & Marketing
Carol Verret - carol@carolverret.com

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It’s hard not to like Google.  It has great logos that change and sometimes are animated.  Google takes risks on new products and if they don’t fly, they just move on and apply the knowledge from that experiment’s mistakes to new products. Anyone remember Google’s first foray into the social media space that went bust?  But that was then and now a return with Google+. Chrome isn’t the hottest product ever but still the company keeps trying!  

A few years ago, Google quietly entered the travel space.  First came the destination search which was one of the top searches on Google and still is.  The PPC revenue from hotels and travel suppliers probably also got the giant’s attention. That might be when it was decided that maybe this travel thing was worth pursuing.

 The first incarnation of Google Maps was relatively straight forward until rates were shown in real time.   Then came the evolution of Google Places – a platform for every hotel that featured copy from hotels, reviews, photos and again, rates in real time.  As with most Google products, Google Places continues to evolve. Suddenly the awareness sets in that Google is now a distribution channel.

Google Hotel Finder is likely to become a game changer in the distribution arena.  While it is still in the experimental stage it is a fun tool for consumers and will challenge hotels to position themselves. But if you think that Google Hotel Finder is a game changer now, wait until Google has fully integrated ITA, a provider that offers airline booking and fare comparisons that Google purchased last year. Recently a technology person asked me, what one technology innovation will be the next big thing in travel. I answered with one word: Google.

 “Google has seen that the average online travel shopper visits 22 sites across nine or more sessions prior to making a reservation. While that seems extraordinary, given the amount of media directed at consumers, is it any wonder they struggle with their purchase decision?” (HotelMarketing.com,  6/28/11)

Is it any wonder that Google wants to be there when the consumer makes that reservation? Every platform in the Google Travel suite has implications for how consumers locate and book hotels so we will go through each one and delineate how they all contribute to the consumer’s hotel selection and travel experience.

Google  Maps.  Google Maps was a shock but hotels became comfortable with it rather quickly.  The issue that hotels don’t like is that every OTA is listed prior to their brand or property website and the rates displayed may not include the best available rate (BAR) from the site.  As of August, the rates from the hotel’s website have been eliminated. 

Google explains this development by explaining that the rates from the OTAs are easy – Google spiders can do their own searches. It is very difficult to do the same for an individual hotel’s website. However, they indicate that they are investigating the situation and may allow hotels to get their rates on the site, but it may be at a price.  

Google Places.  Google Places used to be a very robust platform where hotels could post tons of pictures, copy and reviews from every review site on the planet, including TripAdvisor, which saved the customer from leaving the page and going to TripAdvisor.  As of August, Google has now made the decision that the only reviews to be displayed are those from Google – every other review site, including TripAdvisor, is gone.  There is a link at the bottom that provides a line of copy with links to other review sites. Expedia, which owns TripAdvisor, is not very happy about the situation and neither are many hotels that have worked very hard to establish a good online reputation on the review site and whose customers aren’t necessarily used to leaving reviews on Google. Is this Google’s bid to topple TripAdvisor from the top spot in the review space?

Google Hotel Finder.  This one is a tool that many consumers will find easy to use.  After the destination is selected, there are some parameters to narrow the search including star rating, rate range, best rate the hotel has offered and even a percentage discount. Google Hotel Finder can probably discuss itself best.  “Google Hotel Finder is a new experimental product that makes it easier to compare and book hotels that are found across the Web." (www.google.com/hotelfinder)

The excerpt continues, "Our goal is to have a comprehensive and accurate set of hotels and we do not charge for inclusion in the results. If you believe a hotel is missing, please let us know by using the send feedback link located in the upper right corner of the Hotel Finder site. Although we cannot individually add hotels at this time, this will help us find ways to improve.”
Here is the thing that’s unclear: While hotels don’t pay for inclusion, we still don’t know what happens if a customer clicks on the hotel and does or doesn’t book.  In other words, how does Google get paid?   There are some who have indicated that it will be a pay-per-click model versus a commission-based model which would be directly competitive with the OTAs who are some of Google’s best revenue generators.

Hotel News Now reported the following on Aug. 24, “Both Hotel Price Ads and Hotel Finder operate on a pay-per-click basis. The pricing structure is percentage based, calculated by multiplying the room rate and the length of stay (i.e., the total value of the itinerary). For example, if a user enters into the Google widget that he or she wants to stay two nights at a hotel that costs US$100, the room supplier that receives the click-through is charged a percentage on US$200 – regardless of whether that user ultimately books a hotel room.” (Hotel News Now, 8/24/11)

In addition, it may be that you can bid your way to the top. “The lowest rate is displayed at the top, which Sandy Riach (VP of IT and product development for Trust International) said counteracts rate parity practices.” While rates, lowest to highest, determine which suppliers appear at the top of the list. And what happens when two suppliers offer the same rate? Hotels will be able to bid for that top spot. 

Once Google made changes to both Places and Hotel Finder, the next question for hotels became how to maximize their presence, move themselves up the list and the budget for pay per clicks. It is a safe assumption that this new tool, Hotel Finder, will find great acceptance by customers struggling with long travel searches because of all the options it offers. It may shorten that decision-making cycle considerably.

Google Flight Finder.  Everyone knew this was coming when Google purchased ITA, the software used by airlines. In its announcement, Google blogged, “How cool would it be if you could type ‘flights to somewhere sunny for under $500 in May’ into Google and get not just a set of links but also flight times, fares and a link to sites where you can actually buy tickets quickly and easily? Well, that’s exactly why we announced our intention to buy ITA Software, a Cambridge, Mass.-based company that specializes in organizing airline data." The U.S. Department of Justice approved its acquisition request in April. (Google Search Blog, April 2011)

It is ironic if one looks at the ITA.com site,  ITA lists Bing and Kayak as clients. Google has committed to keeping all of ITA’s contracts with its clients intact just in case it is accused of monopolizing travel search. While the justice department approved the merger, the dominance of Google in travel search will continue to grow.

Several paragraphs ago it was discussed how many different sites Google indicated that a traveler searches prior to making a reservation. Now all of those sites can be Google sites. On the one hand Google makes travel search easier and potentially more fun, on the other hand making it less necessary to visit other aggregator or search sites.

Local Search.  First Google gets you to your destination with Flight Finder, helps you locate a hotel through Hotel Finder, gives you details and real-time rates for hotels on Google Maps and Google Places, and now when you want to go to dinner, Google has that covered too.

In September, Google announced the purchase of Zagat, a reviewer of almost everything from restaurants to hotels. Could this be the reason that Google has all but eliminated the reviews of other review sites, most notably TripAdvisor, from Google Places?

Google executive Marissa Mayer wrote in a blog post that Zagat will become a cornerstone of Google’s local services. This poses a serious threat to OpenTable and Yelp who have been big in the restaurant and local search categories.  It is unclear whether one will be able to make a reservation at a restaurant directly from the local review. 

Kayak, Bing Travel, OpenTable and Yelp should be very afraid. Maybe Yelp should have accepted Google’s offer of acquisition back in 2009.  Timing is everything!

Carol Verret and Associates Consulting and Training offers services in the areas of sales, revenue management and customer service. She can be reached at (303) 618-4065 or by email at carol@carolverret.com.

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