Fuel Hotel Marketing Podcast: Episode 135 – Google Is Going To Destroy Us All (Starting With The OTAs)
All the way back in episode 47, we asked the question ”Is Google Becoming An OTA?”. Also, in episode 99, we discussed the fact that “Google Is Building A Hotel Marketing Demogorgon”. The scary thing is that this push by Google to get deeper into the value chain of hospitality doesn’t look like it’s slowing down anytime soon and it’s also happening in every major industry. In this episode, we look at some of the things that Google has been working on over the past 5 years and how joining the dots paints a potentially devastating picture for many businesses – starting with the OTAs.
You can also enjoy the full article at fueltravel.com/blog/5-things-every-small-hotelier-needs-to-be-doing-to-compete-today/.
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Stat of The Week
- Google represents 94% of all internet searches. In fact, Youtube has more searches than Yahoo and Bing combined. – source: snapshot.
- SimilarWeb data shows that Google travel vertical search products (Hotels + Flights) received 674 million visits in the U.S. in 2019. To put that figure into perspective, that is practically as much traffic as Expedia.com and Booking.com combined received.
What has Google been up to?
- Google is Getting Smarter
- Google is getting more discerning
- Beneficial Purpose
- Links are losing their value
- Google is becoming Zero-click
- 50.3% of searches are now zero-click
- Of the clicks that do occur, 14% go to another Google site
- Google is going vertical
- Look at the SERP for Flights, Weather, and Restaurants, the experience is fulfilling more intent than ever before.
- There are multiple cases where Google has decimated businesses:
- Merriam Webster has seen a dramatic increase in exposure but a massive decrease in website visitors.
- Genius.com caught Google scaping their lyrics content without appropriate citations.
- Google entered the jobs market and now receives 5x more clicks to the Google tools than all of the paid ads receive for job-related searches
Why is Google doing all this?
Ultimately, because they want Google Assistant to dominate, which is why they are preparing for a voice-first world and why they are getting further into the value chain.
What does this mean for the OTAs?
- Booking.com CEO came out and said that they were actively trying to drive more direct traffic to combat Google
- Expedia fired its CEO and CFO because the board didn’t agree with their strategy on how to deal with Google
- TripAdvisor just laid-off 200 employees and blamed Google
- Wall Street has a strong opinion and stock prices are significantly lower than they were a year ago.
So what are OTAs going to do?
- Get further down the value chain of travel. See Booking Holding’s CityBook App as an example.
- Cut operating costs to maintain profitability
- Try to invest more in brand advertising such as TV.
- Use legal channels to stop Google in their tracks. 30 businesses, including Expedia and Tripadvisor recently filed a letter of complaint with the EU alleging abuse by Google related to how they favor their own assets in the vacation rental SERP.
What does this mean for the big hotel brands?
In the short term, this could be a good thing because the pressure on the OTAs may reduce the cost to the suppliers. In addition, hotels will likely invest more in Google programs such as GHA and Google Ads, which will lead to more direct bookings.
Long term, this could be really dangerous, because the hotels will become more and more dependent on Google. This monopoly isn’t healthy for the industry.
The chains are reacting in the same way as the OTAs. Major investments in brand assets and increased investment in brand advertising, as evidenced by the flags increasing TV budget by 34% in 2019 and Hilton’s announcement of a content partnership with BuzzFeed’s BringMe,
What can independent hotels do about this?
In the short-term, you need to play along with Google, you don’t have a choice
- Maximize your GHA spend
- Optimize your Google My Business listing
- Get more sophisticated with your ad words strategy
- Take advantage of zero-click opportunities
In the long-term, imaging a world where Google doesn’t exist
- Diversify your traffic sources
- Other Search engines and directories
- CVB/DMO/Chamber/Portal Sites
- Social Media/Influencers/Niche sites
- Media & Publications
- Audit your online profiles across the entire web
Hotels also have 3 secret weapons that Google cannot defend against. This is where your focus should be in 2020.
- Guest Interactions – Invest in your direct touch-points
- Booking Engine
- Mobile App
- Direct Mail
- Call Center
- Content – including Images, Videos & Audio
- Guest Data – Leverage your unique data and invest in CR
- Create a “Golden Record” of each guest
- Personalize the conversation
- Develop a 1:1 communication strategy
- Don’t limit yourself to one channel
- Use your data to improve your advertising
- Guest Experience – Be an innkeeper
- Create a guest-centric culture
- Hire the right people
- Provide constant and rigorous training
- Invest in the property
- Be remarkable
In The Newsaroos:
Between Jan. 1 and Feb. 11, research firm, Kantar, analyzed over 1,600 lodging-related Google search keywords like “las vegas hotels” and “nyc hotels” across desktop and mobile. Of the searched keywords, more than 75% of all ad clicks belonged to online travel agencies (OTAs) and metasearch engines, sites that often operate as the middlemen between hotels with vacant rooms and consumers looking for a deal.