INTERNATIONAL REPORT—A new Google Maps feature that aggregates real-time hotel rates and availability has passed a seven-week beta test and has gone live, and at least one Central Reservation System provider is on a global road show informing hotel clients of their appearance on the new distribution channel.
Distribution experts still are hypothesizing about what kind of effect the search-engine giant will have on where travelers book hotel rooms, but some say the program should be embraced by hoteliers who don’t want to lose bookings to online travel agencies. Brands have taken notice and are discussing whether to alter their distribution strategies.
Google’s newest feature, implemented earlier this month, adds average price and availability to hotel search results in Google Maps, which appears above organic search results. Next to the individual hotel’s average price, users can click a dropdown arrow to view a small box listing several different places users can book that hotel and the different prices at each respective site.
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“Only Google knows how many people actually click on the dropdown menu, but they did a pilot program. It cost Google money—real money—programming time, development time,” said Max Starkov, chief e-business strategist at Hospitality eBusiness Strategies. “And after the pilot program, they have decided to offer it to major brands. Obviously Google has seen traffic. Obviously they have seen real revenue.”
Messages seeking comment from Google were not returned.
Google first connected with OTAs, such as Expedia, Priceline, Travelocity and Hotels.com, to introduce their application programming interface that would allow for real-time sharing of rates and availability. Now they’re in the process of contacting CRS providers and major brands to offer the same access.
CRS, brands on board
Richard Wiegmann, managing director of Trust International, which offers distribution functionality for 6,500 hotels globally, including Taj Hotels Resorts and Palaces in Mumbai, Rotana Hotels in Abu Dhabi, and Leading Hotels of the World in New York, said his company was the first CRS to offer rates and availability to Google. Trust and Google agreed to keep the program under wraps while they experimented with a beta program, and on 14 February they pushed it live and went public with the announcement.
“I’m doing the world tour at the moment,” said Wiegmann, who spoke via phone from Mumbai. “Obviously the feedback is immense. I haven’t had a single customer yet that said, ‘I don’t want this.’ We’re thrilled.”
Pegasus Solutions is working with Google as well. The developer of the RezView CRS products and provider of the hotel industry’s dominant “switch” that routes hotel availability to the GDS is trying to determine the best approach to communicate rates and availability, said Dave Sjolander, VP of product management distribution services for Pegasus.
“We have our own CRS, but then we also have the switch, so we could also provide data to Google for our non-CRS customers,” he said. “We’ve talked to a couple of our CRS customers about participating in the program. We prefer not to make a big splash about things until it’s available.”
Starkov suggested Google is reaching out to the major brands and smaller CRS providers to offer Google’s application program interface platform to them as well. He predicted Google is operating on “some type of schedule” by which smaller players will have access over time.
“We reached out to Google and raised our hands,” said Gautam Lulla, COO of Travel Tripper, a 2-year-old hotel reservations system.
Distribution managers from both La Quinta Inns and Suites and Wyndham Hotel Group said they are testing programs to offer rate and availability to Google.
“We have implemented a test with a small percentage of our properties to deliver rates and availability to Google and will evaluate in the future whether or not we expand this distribution to all hotels in our system,” said Gareth Gaston, Wyndham Hotel Group senior VP of global eC-commerce. “At this time, we have not altered our distribution strategy in response to Google’s introduction of rates and availability, but we continue to monitor its potential impact and may make changes accordingly in the future.”
Ted Schweitzer, VP of e-commerce for La Quinta Inns and Suites, said La Quinta’s conversations with Google are constant as Google continually offers new options.
“Through testing, we learn what is effective and what isn’t and then optimize as necessary to drive revenue for our hotels,” he said. “We do testing with Google all of the time, and yes, we have tested specifically in the maps section.”
Pricing, growth models
Pegasus’ Sjolander was able to offer some insight into Google’s pricing and growth strategies. Currently, rates and availability appear from
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David Sjolander, Pegasus Solutions
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mostly OTAs with direct links to hotel websites appearing at the bottom of a list with no pricing information. Moving forward, as they are communicated, the idea is to have rates from the direct hotel sites as well.
“The way I see it, this gives the availability to hotels to capture bookings that might have gone to the OTA,” he said.
OTAs and hotels who list their availability in Google Maps adopt a pay-per-click pricing model. Anytime a user clicks the link, Google collects a fee (sources say anywhere from 50 cents to US$2). If the user books a hotel room, a larger fee is collected based on the amount paid. Sjolander said Google plans to eventually evolve that into a cost-per-action model where fees are only collected if the user ends up booking a room.
“At some point, will only two options appear and only the highest bidders show up?” Sjolander questioned.
It’s unclear how much traffic is generated by the links within Google Maps, because sources say Google is not ready to share that information. But they are sure it’s significant.
“You want to participate in this because it will capture a lot of usage,” Sjolander said. “If you’re not there, the business is going to the OTAs.”
“I believe Google has the ability to change buying behaviors. They’ve done it in other industries, and now they’re focusing on the travel and hotel side,” Trust’s Wiegmann said. “It is a very powerful company that moves very fast and is very successful.”
