Almost 10 years ago, Google made an important acquisition of ITA – a travel software company. And, many didn’t think much of it. ITA created many reservations systems which were used by large travel sites and big airlines like Hotwire, Orbitz, and Kayak. It took Google almost a whole decade of development.
The company launched various solutions like Google Flights and Google Trips, and this year, Google Hotels has finally seen the light of day. Google Hotels brings tools and features like Booking.com, Expedia, and Kayak. So, what is so special about this you ask?
Well, even though there are many other similar services available, this is Google we are talking about and Google doesn’t play around. Furthermore, they’ve used their wide influence and technologies to add some great functionalities to Google Hotels.
What “Google Hotels” brings to the table?
Google Hotels has a simple interface similar to Google Flights. This means that anyone who uses it for the first time can find their way around it easily. When a user filters the search by location, he or she will instantly get results which will also show locations of hotels through Google Maps integration.
Google Hotels will also highlight results which are currently offering deals and discounts by looking at their past regular prices. From these results, Google Hotels takes users to the hotel’s website or to some of the OTA websites where they can book a stay. This opens the opportunity for hoteliers to handle bookings directly through their hotel channel manager.
Google Hotels gives consumers the option to compare prices directly through a hotel website and through OTAs. Even though Google Hotels is a new platform, it offers several filters with the promise of many new ones:
- By price
- By guest rating
- By amenities
- By hotel class
OTAs might lose a lot of traffic
The first major effect Google Hotels is probably going to have is the amount of traffic that OTA sites are getting. After all, given the fact that Google’s platform allows users to visit the hotel site directly or choose the OTA site (if available), the majority of users will probably want to go directly to hotels.
This means that OTA websites will have much less traffic which will impact their whole business model. Less traffic means lower margins for bookings and less revenue from ads. Google is taking advantage of its search, which is usually the first step to search hotels. Here, Google will use its power to highlight Google Hotel’s listing first and later provide OTA’s. This is where OTA will lose out.
More people will contact hotels directly
Less traffic on OTA sites, of course, means that more people will be booking their stay directly at hotel websites. Some portion of online consumers will of course always go to hotel websites directly when searching through Google Hotels as they will likely want to avoid the middleman.
The number of consumers that decide to do this is not known but it’s certain that this will be one of the consequences. Additionally, given the fact that Google Hotels offers users the ability to compare prices from OTA websites and hotel sites, it is evident that OTAs will lose a lot of bookings.
Google overnight will become one of the biggest metasearch engines for hotels, something that Trivago and Kayak have been trying to accomplish for years.
With new hotel software solutions that are becoming more sophisticated, hoteliers will be able to take care of this surge of bookings with ease.
OTAs might be forced to change their monetization methods
A lot of online travel agency websites make money by taking a certain percentage from each booking. In some cases, hotels decide to keep regular prices even on OTA sites and sacrifice a portion of their profits. In other cases, they have higher prices for guests booking through OTAs so that they can preserve their profit margins.
No matter what strategy hotels decide to use, these booking percentages are the main source of revenue for OTAs. However, if Google Hotels takes a lot of traffic from OTAs and decreases the overall number of bookings, hotels are likely to withdraw from their sites. This means that OTAs will need to increase their marketing budgets, as well as spend more money on Google to get better listings.
OTAs might lose a lot of hotel listings
The fact that the hospitality industry is overcrowded and that there are many hotels competing for customers online, it has become extremely difficult for official hotel websites to rank high and get organic searches. This is why the game has been revolving around hotel ads for some time now. This is the only way for hotels to get bookings directly from their site.
But now, with Google Hotels, chances are that all of these listings will also include paid ads that go through Google searches. This will bring even more opportunities for hotels to get direct traffic to their booking systems and skip the middleman.
This is a major change in the hospitality industry. Marketing will bring a lot of good things to hotels as they will be less dependent on OTAs. However, online travel agencies will have to adjust their offers and make efforts to retain the vast number of hotels on their listings.
This new platform will make it easier for consumers to search and book hotels and this simply means that OTAs and their services will be bringing less value.
About The Author
Deepak Chauhan
Deepak Chauhan is responsible for marketing and positioning of “mycloud” platform and is a veteran in the hotel software industry with over 25 years’ experience giving him a strong understanding of the product requirements in the industry. He has very rare mix of working in operations of various hotels and chains for over 10 years and then co-founding a software product and service company, servicing 5 star hotels and chains for 14 years.
Deepak has led the development and marketing of cloud based hospitality systems to meet the specific, business objectives of small and mid-size properties across the globe and has worked closely with a diverse group of hoteliers and hotel technology vendors.
