There’s been a lot of press this week about Google’s Promoted Hotels program—and with good reason. The experimental new ad format signals a more aggressive push into the distribution space from Google, which previously was tip-toeing around the sidelines.
I won’t get into all the nitty gritty here, but I encourage you to read my own news coverage that was published today.
In a nutshell, Promoted Hotels allows parties to bid for the right to be the sole booking link in an ad that appears atop Hotel Finder search results.
If I bid high enough for Hotel X in downtown Cleveland, and you search for “hotels in Cleveland,” for example, you might see Hotel X as the first entry in your search results. Click the hotel to get more info, and my booking channel will be the only way you’re able to book.
But the new program, which is tied into Google’s beta Hotel Price Ads, represents something bigger. Whereas before booking availability and price via Hotel Finder were largely hidden, now Google’s going to start hitting you over the head with it.
When you search for a hotel in the standard Google search bar, you’ll see Hotel Finder search results atop your organic results. The info also is making its way into Google Maps and the recently revamped Google+ Local.
In short, Hotel Price Ads is seeping its way throughout the Google empire and into the lives of countless consumers throughout the globe. (The platform processed 4.7 billion (!!!) searches during 2011.)
But before I go further, let’s establish a clear distinction here: Google is not—I repeat, NOT—looking to position itself as the next online-travel agency.
For one, the OTAs are big clients of Google, spending millions, if not billions, in ad spend and PPC on the search engine each year. Google getting into the OTA game would be like a hotelier trying to book roomnights at his own hotel to compete with guests. It’s just plain stupid.
For another, Google is making too much money with referrals. Consumers don’t book there; they just use Google to find the best places to book. It’s incredible, really, to step back and analyze how the company has been able to wedge itself between consumers and OTAs. (I can hear the angry chorus of hoteliers now: “Now you know how WE feel, OTAs!!!”) As long as Google keeps making money in the referral game, there’s no reason to shift strategies.
Max Starkov, who I spoke to for my article, summed it up, however bluntly, as such: “(The online-travel agency business) is a business for commoners, if you will. Google is above that.”
But let’s forget about OTAs for a moment. Hotel Price Ads and Promoted Hotels aren’t some dark new evil, looming in outer space like a nearly finished Death Star. They provide hoteliers with yet another opportunity to reach guests, which, when used tactfully, could be a very good thing.
Well, let me offer one slight revision to that last sentence: “They provide (major hotel companies/chains) with yet another opportunity to reach guests.”
And there’s the rub. Google was bred of the democratic spirit that defined the early days of the Web, at a time when the Internet was a fair playing field in which every competitor, big or small, could speak up and have their voices heard.
But the rules have shifted as money and ecommerce have entered the fray. While the likes of Marriott International and InterContinental Hotels Group and Hilton Worldwide and the other big boys and gals have the coffers and marketing savvy to use Google’s ever-evolving platforms, John Q. Hotelier, owner of one or two roadside properties in Everytown, USA, gets left behind.
Will his properties be listed? Eventually. (Right now the still-experimental-after-a-year-of-testing Hotel Finder only partners with the major chains, OTAs and other big players.) But they’ll never receive the kind of placement and prominence as their competition.
Is that Google’s fault? Not really. They, like you, dear reader, are out to make money. And by “promoting” their assets, they’re going to start making it hand over fist.
Now on to the usual goodies …
Stat of the week
9.3%: Year-over-year corporate rate increase in North America during April—a new record—according to Pegasus Solutions. The previous record of 7.1% was set in February.
Quote of the week
“An outright sale of (Gaylord) would be the best option … Our preferred No. 1 option would have been for it to be sold as one.”
—Amit Kapoor, equity analyst for Gabelli & Company, responding to the sale of the Gaylord brand and management company to Marriott International, as reported in “Analysts view Gaylord deal as positive.” Gabelli & Company is an affiliate of major Gaylord investor Mario Gabelli.
Not surprising to hear this sentiment from a rep at Gabelli, which had been rattling Gaylord’s cage in the buildup to the announcement of the proposed deal. Led by investor Mario Gabelli, the group had been very vocal about the lack of value reflected in Gaylord’s share price and was advocating for the removal of Gaylord’s poison pill plan, which would allow the company to be taken over by another group.
Reading between the lines in the above quote, it seems Gabelli isn’t exactly thrilled with the proposed transaction. Will that dissatisfaction show up when it comes time for the shareholder to vote and approve the deal? I’m not a betting man, but it wouldn’t shock me if it did.
Comment of the week
“The (value) you get from impartial mystery shopping can turn your whole business around - if you are willing to listen. You also get what you pay for,dont tryr (sic) and drive a hard bargain with mystery shopping or the results will be worse than useless. Pay for quality, its (sic) worth it.”
—Commenter Anon responding to HotelNewsNow.com columnist’s Patrick O’Bryan assessment of mystery shopping in “Mystery shopping uncovers guest satisfaction.”
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