Google Hotel Ads: The Opportunity for Hotels
Google has taken the hotel industry by storm in order to grow its advertising revenue and gain market share. Google Hotel Ads is a new way for Google to penetrate the hotel distribution vertical. We will also look at what marketing and revenue management opportunities are available.
GHA Hotel Finder
Google’s metasearch engine was very different in the summer of 2011. You might remember, for instance, that the ads appeared in a yellow Google paid search box just below the organic search results and above them. When clicking on the ads, users were taken to a dedicated URL, google. En/hotel finder, a page providing information, reviews, and photos principally taken from Google My Business property listings. Initially, the only published rates came from third-party advertising (such as OTAs), and official websites could be accessed via a link to brand.com. This was similar to TripAdvisor.com’s Business advantage.
In retrospect, the system seemed clunky, at least from a user’s perspective. Flash forward a decade, and Google is dominating the metasearch market with an estimated percentage between 64% and 80%. How did we arrive at this point?
Google Travel: A Little History
It’s worth mentioning the acquisition of Where 2 Technologies and the subsequent launch of Google Maps in 2004-5; the introduction (dubbed by Search Engine Land as the “most radical change” to SERP) of Universal Search in 2007; the launch of Google Places (later renamed Google My Business) in 2009; the acquisition of ITA Software and the rebranding into Google Flights in 2011; the release of Trips, an intelligent travel assistant app that was later discontinued in 2016. It’s important to mention the following: the acquisition of Where 2 Technologies in 2004-5 and the subsequent launch of Google Maps; the introduction of Universal Search (dubbed “the most radical change” in SERP by Search Engine Land) in 2007; Google Places launch (later renamed Google My Business), in 2009; the purchase of ITA Software in 2011 and the rebranding as Google Flights; and the release, later discontinued intelligent travel assistant app Trips in 2016. These features paved the way for Google’s OTA, Google Travel (google.com/travel), which was launched in 2019.
Google Hotel Ads: Evolution
Google has also been improving its hotel advertising system, and this improvement has accelerated in the past couple of years. These are just some of the notable additions that Big G has made to its platform for hotel advertising:
April 2021: The Program Pay-per Stay became available for all Google Hotel Ads Partners globally. Advertisers could now pay Google only after a guest stays instead of per click or transaction. In the event of a cancellation, Google will not receive any commission. Michael Trauttmansdorff said that the COVID crisis made it clear that cancellations were a big factor. We prioritized and accelerated the “Pay-per-Stay” program to help our partners manage cancellation risks. It does not stop advertisers from returning to the CPC model when and if the market recovers and stabilizes. Meta I/O and other metasearch advertising platforms give advertisers the option to choose between CPC and PPS for certain needs, increasing ROAs.
March 20, 2021: Introduction to Free Booking Links (FBLs).. This update allows accommodation providers to appear in Google Ads without having to bid on the platform. The free booking links are located below the “featured” (paid) choices in the tab “all options,” which is similar to the SERP. A study by Mirai on “Google free booking links: time for the numbers in 2021” showed that these links have a share of around 17% in clicks and 11% in revenue. PhocusWire also published similar results ( 10 %).
July 20, 2021:Launch the Check-In-Date multiplier. GHA offers its advertisers the same ability as Google Ads to apply bid adjustments to their campaigns. There are many multipliers, including those based on the length of stay, the check-in day, the booking window, the location, the device, or even the remarketing list. Google Hotel Ads has been particularly attractive to revenue managers over the past few years because of all the bid opportunities. Revenue managers also welcome the latest multiplier, as it allows them to adjust their bids for specific dates depending on factors such as the events taking place in the region, the pace of pickup, occupancy rate, etc.
It’s too early to tell if this feature will continue, and here at XOTELS, we couldn’t find a single ad that had an image extension. Regardless, it’s fascinating to see Google’s “trial-and-error” approach to promoting its travel products. This has happened before with Google Hotel Ads. In 2018, Google, for example, tested the Room Booking Module (RBM). Extensively. Google’s Hotel Ads were able to include room photos thanks to this feature. Book On Google was also a success. According to the official support blog, BoG “allows users to book and pay with partners directly through Google without being redirected.” BoG’s benefits are a “simple experience for the user, convenience and convenience” and easier conversions. This shows the willingness of Google to innovate in the travel industry.
Why is GHA important now?
Direct Booking has been gaining momentum since the pandemic. It’s not a mystery. “The website direct channel,” a study published by D-EDGE, stated that it “surpassed Booking in Asia (41%), and is second-largest for Europe (32 %)”. siteMinder also comes to similar conclusions. They talk about a market increase of up to 300% (Top Booking Channels Global, 2020). The majority of vendors are in agreement on the key drivers for this historic shift in distribution. The publication mentioned above identifies five main factors that we at XOTELS tend to agree on:
“More information about COVID on hotel websites than OTAs,
The disparity in rates favoring direct channels is most evident on metasearch engines.
Increased domestic/local travel without the need for air transport.
“The lower volume of bookings gives preference to frequent travellers who are better informed about the benefits of booking directly.”
It’s no surprise that the conversion rate of properties advertising on GHA is increasing, even if they are using a discount rate. The competitiveness of rates compared to other distribution channels is also a factor in ranking on FBLs. In fact, according to a study conducted by Mirai, “FBLs gave an extra boost to the hotel direct channels, with an increase from 0.84% to 4.32 % in direct sales,” even for properties that did not actively participate in the GHA bidding game. To maintain control of distribution, it is important to make use of all distribution tools, including Google Hotel Ads.
Don’t wait, as the OTAs are preparing to gain market share or penetrate your hotel business even more. Can get a glimpse of how they intend to achieve this by reading a recent Mirai article titled “What Booking.com did to gain market shares while we were in lockdown.” They have just recently launched Flash Sales Promotions. They are not alone. Expedia launched extranet options that were activated by default to reduce your rate parity.