Online Travel Agencies’ complaints about Google are sounding very similar to the complains that travel suppliers (hotels and airlines) have expressed towards OTAs in the past.
A few years ago, Dara Khosrowshahi (then Expedia CEO and current CEO of Uber) offered the following advice to hoteliers:
You guys all criticize me for how much I charge you for guests to come to your hotel. I think you’re looking at it wrong. Look at us as the cheapest source of referrals that you could imagine. If they come through me, you pay me once, and if they come back to me again and again, shame on you. You should make them a loyal customer — Dara Khosrowshahi, CEO of Expedia
This same type of argument could be used by Google today vis a vis OTAs. OTAs should listen to Dara’s advice and apply it to themselves as they deal with the challenges of growing in a Google-centric world.
Blaming Google
In the last few weeks, there have been spirited discussions on the impact Google had in OTA and metasearch quarterly results. I wrote last week in The Selective Scapegoating of Google that whenever results fall below Wall Street expectations, online travel executives often point to Google as the culprit. And when results are good, success is often explained as a natural consequence of optimal strategies and superb execution.
Let’s look at some recent comments:
Tripadvisor
Google has gotten more aggressive. We believe our most significant challenge remains Google pushing its own hotel products in search results and siphoning off quality traffic that would otherwise find TripAdvisor via free links and generate high margin revenue in our hotel click-based auction — Tripadvisor CEO Stephen Kaufer, Earnings transcript, November 7th.
Expedia
The quarter did not play out as planned…Expedia saw incremental weakness in SEO volumes and a related shift to high-cost marketing channels — Expedia CEO Mark Okerstrom. November 7th. Earnings.
Changes in Google’s algorithm had reduced visibility of organic results, resulting in a heavier reliance on paid advertising, and that moving to paid links presented a sizable headwind for the company — Expedia CFO Alan Pickerill. Earnings.
eDreams
Google acts like a vortex, sucking up all the online traffic….If we are not able to find a solution to this problem then there is the possibility of breaking up Google….Competition authorities may use this measure…There is no place for private monopolies in the long term — Guillaume Teissonnière, eDreams Odigeo General Counsel, Nov 20th, Phocuswright
The main problem that online travel companies have with Google is that they’re getting fewer free lunches
Travel companies (like TripAdvisor) that were the most successful in SEO seem to be the ones that now are hurting the most since their business model was based on a set of assumptions (such as Google being a long term provider of free traffic) and economics that are no longer valid. Conversely, companies (like Booking) that thrived and built a solid business in a paid search environment, are less affected today, as they continue to profitably acquire traffic from Google. Business as usual for them.
