Today, I would like to talk about this article I found on hotelmarketing.com: "Google reaching out to major hotel brands and CRS". It deals with the new Google Maps feature added at the beginning of February, providing travelers with the average hotel rates and availability. This new service will surely have consequences on hotel room distribution strategy. Negative or positive? Let's first have a closer look at what this new feature consists in.
Since the beginning of February this year, when searching a hotel on Google Maps, you can find next to the name of the listed hotels a price followed by a blue arrow. If you click on this arrow, you will discover the prices offered for the selected hotel by the major OTAs, with a possibility to click on the OTAs' link to book online. Below, you can also have the hotel own site but no price will show up. Indeed, at the moment, Google only proposes the rates and availability for the different OTAs. Still, Google announced that it is currently working with CRS providers and the major brands, which would allow the hotels to compete more effectively with the OTAs. Below, you can have a look at what the Google Maps looks like:
Why is it so important? Even crucial? Simply because if hotels are not participating to this system, they may lose the opportunity of capturing many direct bookings at the profit of OTAs... Given the costs associated with OTAs booking, it is understandable why hotels cannot afford to keep away.
Thus, after OTAs, it is the turn of CRS providers and big hotel groups to take part of the system. Pegasus ("the developer of the RezView CRS products and provider of the hotel industry’s dominant “switch” that routes hotel availability to the GDS") is working with its hotels clients to find a way to share the rates and availability on Google Maps. Google says that eventually, bigger as smaller hospitality players will be on board.
How does it work? It willl be a PPC pricing model. OTAs and hotels who list their availability in Google Maps will pay a fee anytime a user clicks the link (sources say anywhere from 50 cents to US$2). If the user books a hotel room, a larger fee is collected based on the amount paid.
For the moment, it is still hard to know which impacts this new system will have on rooms distribution but hotels are monitoring closely the evolution. What is sure is that both hoteliers and OTAs are more or less worried...
Indeed, the question is particularly dificult for small independant hotels who do not have the same budget as the big hotel chains for these PPC and advertising system and that risk to be left behind. Moreover, if for the moment Google does not make pay the hotel for the access to direct booking, nobody can know what will happen in the future... Still, for the hoteliers, the main concern is that Google is not helping them with direct bookings for now and that competition with OTAs will remain hard, or harder...
As for OTAs, even if Google claims that it does not attend to conduct booking itself, who knows how it will evolve?
I personnally think it is a good thing Google added prices and availability to the information. Price is one key element when we are searching for an hotel so it seems logical to provide users with these data. Still, I agree that chances to benefit from the system are not equal among the hotels and independant hotels may have difficulty to compete... However, I believe that it exists other ways, and probable more efficient, to catch travelers' attention: networking and sharing on social media! Taking care of your community may be more rewarding than costly advertising campaigns.
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