Google Playing with Hotel Price Ads…Again

14 04 2011

Google is, again, testing hotel prices in the search results. This first surfaced back in June/July of 2010. Google began to include prices in Google Maps/Local search results for hotels. I thought this was cool and interesting back then, but my how my mind has changed since this feature has resurfaced.

So Google tested this feature for a few months, then it disappeared. Well, now they are back again, as was noted in this Search Engine Land article written by Matt McGee. This time, instead of the hotel prices residing just in Google Maps, the pricing is being included in the “7 Pack”, “O Pack” and the OneBox. as seen in the following images (taken from the same Search Engine Land Article).

This is groovy for consumers seeking to find the best hotel prices quickly, without having to visit the multitude of OTAs (Online Travel Agencies) in their initial searches. At first thought, I assumed the OTAs wouldn’t be very happy, but this actually gives several OTAs a nice boost in visibility. I see Expedia, Travelocity, Hotels.com and Priceline popping up the most. A user just simply needs to click on the price and you are whisked away to that hotel’s “profile” page on that particular site. OK, that’s great from a consumer/OTA perspective, but what I’m concerned about is the affect this feature will have on each hotelier if this feature actually moves out of beta and is rolled out.

This feature could potentially cost hoteliers a lot of money. Each hotel that sells rooms through an OTA has to pay a significant “commission” on every room/night booked. These can range from 10%, all the way up to 20%. This is a big chunk of change for hotels to give up. Now, the argument could made that without the OTAs these hotels wouldn’t reach full capacity (marketing themselves), and maybe that’s true, but if the large majority of consumers are purchasing rooms via OTAs, and not direct through the hotel’s website, the hotelier is dropping a lot of cash (and usually at discounted rates) which affects bottom lines and revenue. When searching for hotel rooms the user would generally click through to the hotel’s website from the search results (talking specifically about the local search results), but with this new feature Google is directing users from the search results directly to the OTAs if they click on the price dropdown. The hotelier’s website is included in the dropdowns, but it does not include price, and it’s always listed at the bottom.

If this feature does roll out, I think there are going to be many, many upset hoteliers as they’ll be dishing out lots of cash to the likes of Expedia, Hotels.com, etc. I didn’t even touch on those hotels that don’t participate with the OTAs because it is just too expensive for them. What does this mean for them? If a price dropdown isn’t next to their name, will that hurt credibility and reduce clicks to their sites? I guess we’ll see, but I don’t like this feature if I’m a hotelier.

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