Google’s Promoted Hotels opens the bidding war

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Google’s Promoted Hotels opens the bidding war
08 June 2012 : By Patrick Mayock
News Editor-International
GLOBAL REPORT—An experimental new ad format on Google’s Hotel Finder search tool could have far-reaching impacts in the online distribution space.Earlier this week, Google introduced its Promoted Hotels tool, which allows advertisers—online-travel agencies, hotels or other booking providers—to bid on particular properties and have them featured at the top of Hotel Finder’s search results. A maximum of two Promoted Hotels can show up at a time.

When users click on a Promoted Hotel listing, which is offset from organic search results by a shaded background similar to other advertisements in Google’s search results, the winning bidder appears as the only available booking channel.  

A recent search for hotels in New York for a two-night stay in mid-June, for example, revealed an ad for the New York Marriott Marquis that, when clicked, reveals in a red box as the only booking channel offered.

That same red box in search results—when there is no paid position—is typically a more generic “Book” drop-down menu featuring multiple booking channels, ordered from least to most expensive, that sometimes includes the hotel’s property-direct website.


There also are incidents where certain OTAs are paying for priority placement in the red booking drop-down menu in organic search results.

The Google Hotel Finder listing for the Amalfi Hotel Chicago is not labeled an ad, and yet earlier this week received preference over other OTAs, other news outlets have reported. In most searches, the red booking icon will say “Book” with a drop-down list of choices. However, in this case, the red box specifically said “Book at,” with the price listed; to see the other booking channels, users would have had to click the “More” drop-down button, listed to the right of the red box.

These changes in Hotel Finder do not mark Google’s foray into the OTA business, said Max Starkov, president and CEO at Hospitality eBusiness Strategies. Google only refers consumers to booking platforms; the search-engine giant doesn’t actually conduct bookings itself, and it will likely stay that way.

“When Google was created, they had two things in mind: relevancy of the information and user experience,” he said. “When we talk about hotels searches, think about what people want to see. They want to see availability, they want to see price, they want to see location. Without the Google Hotel Finder, Google was not able to serve in the search-engine results two of the three main search criteria people use when they search hotel (i.e. availability and price).
“That’s why Google created the Hotel Finder—not to compete with the OTAs,” he said.Starkov said Google will refrain from getting into the bookings game. The company has the potential to generate more revenue from referrals than from bookings commissions, he said.
Max Starkov
Hospitality eBusiness Strategies

Hotel Price Ads
Executives from Google declined interviews, but a company representative said Google Hotel Finder is still only experimental.

“These experiments tend to run for years and years. I think they’re sticking with this one,” said George Michie, CEO of RKG, a marketing firm that specializes in paid search.

Promoted Hotels is an extension of Google’s Hotel Price Ads program, in beta, which impacts search results on Google Maps as well as normal search results, the company’s representative said. Google is working with a limited number of OTAs, hotel brands and other booking providers with access to large amounts of room inventory; the companies provide Google with price and availability data for display across Google products.

For Hotel Price Ads, Google only partners with hotel brands, OTAs, large reservation systems and hotels that are part of major chains, according to the representative. The program is not open to every hotelier.

Hotel Price Ads is akin, in many respects, to AdWords, in that hotel ads appear in search results via a combination of bid and quality score as those which are most likely to be relevant for the user. Bidding pricing is based on a cost-per-click basis, the representative said.

But Hotel Price Ads is far less intuitive than Google’s AdWords program, Starkov said. “It’s a very complex functionality,” he said, adding Hospitality eBusiness Strategies had to create a custom tool to manage the real-time rate and availability connectivity between its hotel clients and Google.

And yet even with those efforts, Hotel Finder and Hotel Price Ads are still “very glitchy” and have “a lot of bugs,” Starkov said. But again, the program is still “experimental.”


A win or loss for hotels?
The introduction of Hotel Price Ads has even broader implications, as it coincides with more aggressive strides from Google across its suite of products.

Whereas rate and availability information via Hotel Finder was largely hidden previously, it will now appear atop organic search results in a normal Google search. The data will also make its way to maps and Google+ Local (formerly Google Places).

Starkov said that infiltration of information could potentially hurt hoteliers. Information on a hotel’s Google Place page, for example, formerly was proprietary and controlled by the hotel itself, he said.

“An OTA could not extend a tentacle onto this page except with AdWords,” he said.

With the rollout of Hotel Price Ads, however, OTAs can play a prominent role everywhere a hotel appears through Google’s suite of products, whether that be on local pages, organic search results, maps or Hotel Finder, Starkov said. When users search for a hotel, they now will likely encounter booking opportunities via the highest bidder, which often will be an OTA.

The news isn’t all good for OTAs, however. Because it lists real-time pricing and availability information, Hotel Finder takes some clout away from meta-search engines, sources said.

Whereas users might have visited Kayak or Expedia to search generally for hotels in New York (regardless of whether they also booked on those platforms), for example, those same users can now get all the information they need from Hotel Finder.

“It’s really in some ways a shot across the bow of the online-travel agencies. In Google’s mind, giving people results in their search that lead them to search somewhere else (such as Expedia or Kayak) doesn’t make sense. They should just stay on Google and get to what they want right there,” Michie said.

On the plus side for hoteliers, both Starkov and Michie said Hotel Price Ads afford them the same opportunity to bid for a presence across various channels.

Indeed, Promoted Hotels often are sponsored by the hoteliers themselves. One such ad for an InterContinental Hotel in Manhattan, for example, might feature as the sponsored booking channel a link to IHG’s central reservations system.

“Being able to play in the ad space to get yourself more prominence, maybe it’s not such a bad thing,” Michie said.

Media contacts at several major hotel chains and OTAs declined to comment on this story, explaining they are still testing and experimenting with Hotel Price Ads, Promoted Hotels and Hotel Finder. 

Post from Hotels News 


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