With Google's entry into the hotel metasearch game, we are experiencing a new trend in the sector: metasearch positioning.
Perhaps it is time to stop and think about the interests behind this trend, who benefits from it, and whether or not it is good for hotels. Are we in a sweet dream, or on the verge of a horror movie?
Let us pause for a moment to analyse the penetration strategy being used by TripAdvisor, Trivago and Google itself. These new entrants present themselves as fare comparators, i.e. OTA trackers, charging commission for affiliate links or cost-per-click (CPC).
The initial approach is to take advantage of the low cost of TV campaigns - compared to the cost per click in AdWords - to get traffic that is then redirected to the real booking centres in exchange for a profit.
However, we are seeing how these meta-search engines are rapidly turning into real OTAs, charging commission per booking, thus making a higher profit on the traffic obtained.
So far, so good, except for two problems:
- Booking.com is still king, as it receives immense traffic from its huge investment in AdWords.
- Competition from hotels on their own websites is fierce, as they have resources, both technological and online marketing, that are getting closer and closer to the level of the best OTAs.
That is, the strategy of the new OTAs cannot be to go head-on against Booking.com, so they are trying a strategy that would give them a very clear competitive advantage over traditional OTAs, publishing prices directly from the hotels, with this they achieve 3 objectives:
- Better price for the final customer, competitive advantage against Booking.com.
- Avoid losing traffic and bookings made on the hotel's website.
- Saving the investment in AdWords that means competing with Booking.com and the hotels themselves for the keyword of the hotel's name, the keyword with the highest conversion.
Why would hotels want to participate in a business that attacks so directly at the waterline of their direct sales?
Low commissions: what's behind that door?
There now seems to be a consensus to take advantage of these new channels, with lower commissions, so booking engines are rushing to integrate their APIs with these new platforms.
However, we are entering into a very dangerous game, we must not forget that we are handing over direct sales to a third party.
It is possible that, in a few years, when these platforms become dominant in the sector, it will be very difficult to turn back, as the pressure on hoteliers to fill hotels will be very great.
The question we should be asking is: who benefits from the entry of these new operators? Or, in other words, who is promoting their establishment?
The answer is to be found in the new "business" that metasearch engines are creating, giving agencies and consultancy firms the opportunity to offer metasearch engine positioning services, connection with booking engines, and perhaps also a share of the commission for the engine.
In this film, who is the bad guy?
It is worrying to see how the most important agencies in the sector are more interested in exploiting this new source of resources than in improving direct sales technology and online marketing services for the hotel's website.
It is logical that this business is of interest to agencies with outdated technology, who are getting fewer and fewer bookings on their clients' websites, and whose core business is consultancy and services. Therefore, it is necessary to listen carefully to the messages we receive from these sources.
In other words, we are in a time of change where some may be tempted to be driven more by their own interests than by those of their clients, the hotels.
For our part, at WPH - CloudHotelier we are already working on integrations with Goolge and Trivago, in order to take advantage of the low commissions, and thus help to reduce Booking.com's share of power.
However, we maintain our firm commitment to the hotel's website, to preserve its independence and its ability to work directly and without intermediaries with its own customers.
The hotel website, with its booking engine, will always be at the heart of our commitment to our customers. We believe that it has never been easier to work directly with customers than in today's hyper-connected world, and hotels cannot afford to miss the opportunity.
We believe that constantly investing in better technology and better products is the only path to success for our customers, and therefore for everyone.
