Google was a constant theme during the keynotes at last week’s Buy Tourism Online event in Florence, Italy, but Lufthansa’s distribution cost charge (DCC) also made a few honorary appearances.
Del Ross, managing partner at Noctober Value Partners and a former VP-level e-commerce, distribution and sales and marketing veteran from InterContinental Hotels Group, was talking to Phocuswright founder and now “serial board director” Philip Wolf.
Lufthansa’s DCC came up when Ross was asked about the Marriott/Starwood merger announced last month. He said he expected similar deals to take place because of the “pricing power” which the combined Marriott/Starwood behemoth will have.
But he shared his experience from his time at IHG, when back in the dawn of internet time (around 2004) the hotel chain decided to remove all its inventory from Expedia and hotels.com, reminding the audience that the “hotel direct versus OTAs” argument has been around for more than a decade. He said:
“We fully expected the other big chains to follow suit. None did.”
At which point Wolf interjected, “Just like Lufthansa…”
OTA historians will note that IHG stuck to its direct guns for four years before coming to a deal with Expedia. Lufthansa’s initiative is still in its infancy, but one wonders how long it will go it alone (or how long it will be before another major global airline takes a similar decision).
Ross also shared another caveat to the pricing power argument from his time at IHG.
“We were one of Google’s biggest advertisers, maybe its eighth-biggest, and we decided to see what would happen if we just shut off all of our paid Google campaigns for three weeks. And Google didn’t even notice.”
The timeframe on this experiment wasn’t mentioned, but illustrated to the audience the scale at which Google operates.
The topline takeaway for the audience from Ross’ keynote was that Google “knows where your customers have come from because we are a life of clicks…” and that hoteliers of all sizes needed specialists to focus specifically on the customer journey.
Google itself loves a travel industry conference as much as it dislikes questions from the floor. It was represented at BTO by Fabio Galletto, head of travel, automotive and luxury for its Italian business.
Galletto’s keynote focused on mobile in the context of four “micro-moments” — a concept Google is using to segment the world. (The micro-moments are “I want to know, I want to go, I want to book, and I want to do.”)
Representatives from destinations were scribbling furiously when he talked about the “I want to do” micro-moment. One popular statistic: Google saw a 45% increase in destination-related search queries on mobile this year.
Google’s Hotel Finder and its Instant Booking products were ever-present topics across the events workshop programme. But the bigger picture stats revealed in the keynote showed that the number of clicks for Hotel Finder partners is up 260% year-on-year, giving an idea of the traction that Instant Booking is likely to achieve.