There was a time, not long ago, when the typical booking process involved, chronologically: 1. Google – 2. OTA
NB: This is an article from Hotelchamp
More in detail, people first relied on Google to make a very generic search, like “hotel London”. Google returned a whole bunch of hotel results, with the #1 option in the search results always being occupied by an OTA site. That used to be the perfect scenario for Google, considering the huge daily budgets allocated by these OTAs to rank on top. However, such a big opportunity also posed a hidden danger for Google: in fact, people got accustomed to landing on the same OTA sites, to the point that soon many travellers started relying on these OTAs directly when searching for hotels, bypassing the initial search on Google.
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80% of Google’s main revenue streams, across all industries, has always been Ads, and such dwindling revenues from a single (and juicy) industry like the Hotellerie could not be accepted.
The solution? Google becoming a direct active player in the Hotel Distribution. Exactly what has happened in recent years and months.
Why Google Hotel Ads is now the Metasearch and even more than that…
So what is Google Hotel Ads?
GHA is a Metasearch engine, just like Tripadvisor, Kayak, Trivago and Hotelscombined that aggregates hotel rates coming from different sources, so that users searching for a particular hotel can compare and choose what the best deal is for their upcoming trip. GHA though is more than just a Metasearch engine, or a rate aggregator, for the very simple fact that… it’s Google. In fact, Google Hotel Ads is just a part of an entire travel ecosystem that Google has become, through which potential travellers can plan and execute their travel bookings.
Consequently, Google Hotel Ads has naturally become the Metasearch rather than one among many and, most importantly, it simply works. Ever since 2019, before and even more so during and after Covid, Google Hotel Ads is by far the fastest-growing metasearch engine across all regions. No surprise! Thus, as a hotelier, participating in Google Hotel Ads should be a must.
How does it work? (Revenue models)
GHA is just a new way of doing advertising. Yet, it’s still advertising, so basically you pay to be visible. So how can you pay?
Following are the most important revenue models you can choose from:
- Pay-per-conversion: You pay only when a traveller books your hotel.
- Pay-per-stay: You pay when a traveller completes a stay. This option was introduced by Google after Covid to help hoteliers deal with a very difficult and uncertain situation.
- Cost per click (fixed or per cent): You pay when a traveller clicks on your ad, regardless of whether you’ll get the booking.
Now, you might be wondering: “why should I choose a CPC model when I can play safe and just pay when I get the booking or, even better, when the guest actually stays at my hotel?” The doubt is legitimate and sensible, so is its answer: there’s in fact a simple equation that you always need to keep in mind when playing the Google Hotel Ads game: the safest the revenue model for you, the least profitable for Google.
Put the other way around: the more you are willing to take risks by adopting a CPC model, the more likely Google will be pushing your hotel by making it more and more visible, with potentially way greater returns.
The pay-per-stay model was introduced by Google just after the pandemic started in the first half of 2020, to support hotels in a very difficult moment, but likely this model is going to disappear any time soon and because of the reason above, you can’t expect miracles in terms of results.
That said, let’s see what steps you need to follow to run your campaigns.