Let’s talk distribution for a minute. Yeah, I know, distribution is one of the least sexy aspects of the hotel industry. It’s also one of the most important, especially for hotel owners and independent hotel operators. Hotel owners, operators and brands looking for ways to reduce costs and increase profitability need to continue thinking about how they’re going to acquire guests in a cost-effective manner. And that’s about to get much, much more interesting.
Why? What’s going on here?
In a word, it’s Google. Google is what’s going on here.
Google isn’t the 800-pound gorilla of the hotel industry. No, it’s a giant, ferocious, charging beast that’s left the industry’s 800-pound gorillas scurrying for cover. Google is stealing mindshare and margins from online travel agencies and other intermediaries every single day.
No less an observer than Expedia CEO Mark Okerstrom plainly stated that Google represents his company’s biggest competitor. In his own words, “The internet has been littered with the bodies of companies put out of business by Google.” Okerstrom’s must make sure Expedia isn’t one of them.
He’s right. Guests increasingly use Google as the first stop in their decision-making journey. And with recent integrations of Google’s artificial intelligence-powered, travel booking-capable Assistant into Google Maps on Android and iPhones alike, expect even greater use of the search giant when guests plan their stay. There are millions of searches on Google every minute, with more than half of those on mobile and roughly 20% of those using voice. Everyone’s scrambling for share, further driving up the cost of acquiring guests.
Expedia and Booking.com recognize this shift, spending more on marketing and advertising to drive more guests to book with them. Booking.com spent somewhere in the neighborhood of $1 billion with Google in Q3 alone last year.
At the same time, as Google increases the amount of metasearch and paid inventory in its search results page, it’s also driving up costs for individual hotel owners and operators. Worse, without solid connectivity solutions—which many independent hotels lack—hotels can be shut out of Google’s latest product offerings and miss out on direct revenue opportunities altogether.
So how can you ensure you earn your rightful place at the table and gain booking share without significantly increasing your cost of guest acquisition? Here’s how:
