BERLIN—The evolution of hotel room distribution is a hot topic at the International Hotel Investment Forum, and representatives from Google are making a splash with their presence.
Google began offering hotel rates and availability through its Google Maps feature last month and more hoteliers are realizing its potential by the day. Nigel Huddleston, formerly with Deloitte and now industry head of travel for Google, told HotelNewsNow.com he is at the conference to expand Google’s relationships with C-level hoteliers.
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A screen shot of Google Maps showing hotels around Berlin.
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“We’re not in the business of exclusivity,” he said. “The more people who sign up, the better.”
Currently, travelers who use Google to search any particular location can see rates and availability from hotels in that area. Still in its trial stages, the rates are primarily provided by online travel agents, such as Priceline and Expedia, and Booking.com and Agoda in international markets. The goal, Huddleston confirmed, is to get hotel brands and central reservations systems providers to contribute room rates as well.
“It’s natural to do a trial with a limited number of partners,” Huddleston said. “The intention is that if anyone wants to be available on Google they can be. We don’t wish to exclude anyone.”
Huddleston hinted that two-way conversations are taking place with all of the major brands, although he would offer no details on a pricing model. A Pegasus Solutions executive, who confirmed to HotelNewsNow.com last week that they are working on a distribution platform with Google, said Google is operating on a pay-per-click platform where partners pay anytime users click from Google Maps to a booking engine. It has been suggested among sources that Google will evolve into a per-booking fee where booking engines will pay a commission based upon the total revenue generated.
“Nothing is locked down,” Huddleston said. “It’s still in the early stages and based upon the feedback we receive from customers and users, we’ll evolve the business model.”
Questions remain
Questions surrounding Google’s foray into hotel search remain plentiful. Mainly, will travelers who have been loyal to either hotel brand websites or OTAs now begin using Google for travel searches? Will Google obtain enough rate and availability information that it can become relevant?
Huddleston pointed to Google’s pending acquisition of ITA Software—a one-stop shop for flight availability—to prove how serious the company is about the concept.
“We definitely want Google to be the place to go for everything related to travel,” he said. “We’ll do everything we can do to enhance that.”
Hoteliers also must wonder what Google can do to help drive bookings to their own channels rather than through OTAs, where hotels have to pay significant commissions. Currently, hotel brand websites that are not providing real-time information to Google are listed at the bottom of a list with no price.
“To know the hotel brand will appear in the same place each time is probably important,” Huddleston said.
Another distribution factor hoteliers must weigh is the increasing popularity of travel-related searches conducted on a mobile device. Huddleston said Google is in a position to measure the source of searches depending on device and that the mobile platform continues to increase. In December 2010, 34% of Google users who conducted hotel-related searches did so from a mobile device, mostly because they were away on holiday from their normal work desktop, he said. Traditionally that figure is in the teens and creeping up near 20%.
“It’s just a matter of time before 50% of people are conducting searches from their phone,” Huddleston said.
He said more customers are searching for hotel rooms via their phone and either clicking through to call the hotel or booking directly from their phone.
“The whole thing about Google Maps and how we can build on a user’s experience, what’s around them—not only hotels but tourists sites—we have only seen the tip of the iceberg with the potential for Google Maps,” he said.
