Google’s direct hotel booking strategy: keeping it all in the family

Google’s direct hotel booking strategy: keeping it all in the family

The internet has almost come full circle.

It seems like a strange concept now but back when America Online ruled the internet superhighway (as it was inevitably called), it offer a so-called “walled garden” of selected content on the internet.

Since then, the idea that the internet could be contained in some way has been thoroughly put to rest.

Or has it?

Take a look at what Facebook and Twitter have been doing with video. Rather than people sharing links to YouTube clips, they now have the necessary functionality to run video natively and it has had a huge impact. One recent prediction says that Facebook will soon overtake YouTube in terms of the number of video views. Try and imagine that a couple of years ago.

TripAdvisor is another big name that is trying all it can to keep people within its own network.  It has a double-pronged strategy on this. It has been acquiring businesses like mad, adding companies like TripBod, La Fourchette and Viator to offer the full traveller journey within its own confines.

In 2014, TripAdvisor changed its hotel business model, moving from a lead generation site to a metasearch model. Adding to that, it also now offers something called Instant Booking, where hotels can offer their inventory directly to users of the site, meaning they can book without going elsewhere.  Hotels pay one of two levels of commission – 12% to get a quarter of all Book on TripAdvisor user views and 15% to get half. The strength of TripAdvisor in the trip planning process means that large hotel groups have started to join the programme, with Marriott and Hyatt now both bookable in this way.

Google-Hotel-Finder-WTM-LondonNow it is Google’s turn. The search giant launched its dedicated hotel search tool Hotel Finder in 2011 and in 2014 licensed booking software from metasearch startup Room 77 which suggested that it was planning a move into fulfilment as well as search.

The company has this month upgraded its hotel finder with a new map search and is also crowdsourcing hotel information a la TripAdvisor via its mobile users. At the same time, it also started rolling out direct booking with a number of independent hotels.

The move – not confirmed by Google – follows an announcement earlier this month by distribution giant Sabre. On July 8 it announced the launch of a beta test of Google Hotel Ads Commission Program which enables hotels to offer their best available retail rates searchable and make them bookable without leaving the Google search page.

Sabre Hospitality Solutions President Alex Alt said at the time, “Our ability to be the first CRS provider to offer the Google Hotel Ads Commission Program shows the influence of the Sabre brand in the industry as well as our commitment to deliver new and valuable opportunities to our hotel customers…Because Sabre has already completed the necessary technology integration with Google and Sabre’s SynXis Central Reservation has access to the hotels’ commissionable retail rates, Sabre hotel customers can participate in the program without any investment or development on their part.

Hotels only pay commission on confirmed bookings made this way as compared with the cost-per-click model previously offered by Google.

TripAdvisor and Google’s native hotel booking initiatives come as the online travel agencies are becoming more consolidated and more powerful, entrenching high commission rates.

As a result, the flowers in the walled garden are starting to look and smell very attractive.

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Mark Frary is co-founder of Travel Perspective, a social and digital consultancy working with travel companies and tourism organisations to create successful marketing campaigns He is an author and writer specialising in travel, social media and technology. He writes regularly for The Times and has written for many other publications including the Evening Standard, the Independent on Sunday, the Daily Express, Food & Travel, ABTA magazine, the easyJet magazine and Teletext.  Mark also gives expert advice to leisure and business travel companies on their social media and communications strategies and is the co-founder of Social Travel Market, an annual conference on the use of social media in travel at World Travel Market. He is the author of seven books including The Origins of the Universe for Dummies and is currently working on a biography of the ski pioneer Erna Low. Mark lives in Ampthill in Bedfordshire, UK with his wife and three children.

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