Many cash-strapped independent hoteliers have been relatively laid back and allowed Booking.com to bid on their trademarked names and are even handing over their digital marketing and website creation to Booking.com’s BookingSuite division. Given their resource constraints, that’s not likely to change in any meaningful way anytime soon.
Few things can be more frustrating for a hotel brand, including independent properties, than when they see a major online travel agency such as Booking.com or Expedia outbid them in Google AdWords on the hotels’ own trademarked brand names.
But it is a huge business for the online travel agencies — and could entail a substantial hit for the hotel brands in lost business or higher distribution costs, according to a blog post by Spain-based Mirai, which focuses on enabling hotels to boost their direct bookings.
In fact, Mirai estimates that 15 percent of Booking.com’s sales come from bookings gained by using hotel brands’ trademarked names in Google AdWords.
Some 15 percent of Booking.com parent the Priceline Group’s 2015 total revenue would amount to around $1.3 billion. Lodging-only Booking.com generates the vast majority of the Group’s revenue so it would be safe to say that bidding on brands’ keywords in Google generates hundreds of millions of dollars in annual revenue for Booking.com and is a key component in its marketing and revenue strategies as it bids annually on trillions of keywords.
Expedia and other online travel companies likewise bid on hotels’ trademarked names but weren’t the focus of this particular study.
As you can see in the following screenshot, a Booking.com sponsored result in Google for The Standard High Line NY appears in the top position — above the hotel’s own ad.
“If that approximate 15% of sales (or your hotel’s estimated %) that come via your hotel’s adverts did not come through Booking.com but rather from your own website, how much would you save on intermediation costs?,” Mirai asks. “That amount would directly go to the GOP (Gross Operating Profit) on your results account.”
Mirai concedes that the revenue that Booking.com derives by bidding on hotel names varies widely by property and might actually range from 5 percent to 35 percent.
Mirai came up with its estimate by analyzing bookings of 22 of its hotel customers from January to March 2016. It calculated the number of bookings processed by each hotel’s website, how many were generated by Google AdWords, and the number of bookings that Booking.com did for that property.
Crunching information from Google AdWords, Mirai estimated that for these 22 hotels, the Booking.com’s AdWords sponsored results using the hotel brands’ names showed up 80 percent of the time at an average position of 1.4 while the hotels’ own brand advertisements appeared only 52.5 percent of the time at an average position of 2.4.
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