July 5, 2022

Google eliminates fees for hotel booking links

Table of Contents Data sourcesCapturing demandTest results Google is making a major change to the…

Google eliminates fees for hotel booking links

Google is making a major change to the way it manages hotel
booking links – adding an organic list that enables hotels, online travel
agencies and other booking sites to get visibility for free, provides more extensive
booking options for consumers and potentially makes Google an even more competitive player in
the metasearch space. 

Prior to this change, hotel booking links in Google.com/travel were paid ads, ranked by the traditional advertiser bidding model.

Beginning today (March 9), when a traveler searches for accommodations
in a specific destination and then clicks on a particular hotel, within the
booking module – which appears on the “overview tab” – there will be two new
organic slots, in addition to up to four ad slots. Clicking on the “prices” tab
will display those same (up to four) ads plus an unlimited number of organic, free
booking links from all “eligible partners.”

Google says any hotel or travel company is eligible to
participate via its Hotel Center account.

Google vice president of product management for travel,
Richard Holden, acknowledges one challenge with providing an organic list of
links is ensuring the pricing information is accurate. To address this, Holden
says Google will use a similar combination of technological and operational
solutions that it has been using for several years to ensure rates displayed in
paid ads are valid.

“There
is a little more complexity to this given that when you have somebody who is
paying for a product, an advertising product, there is an incentive to make
sure that that data is correct. So you may hear some nervousness in the
industry about ‘Is it harder to police this in an organic space?’ I think that
that’s valid. It is harder to police and this is what we’ve been spending time
over the last couple of quarters working on this product to make sure we have
the tools and processes in place to monitor that,” Holden says.

“But
it’s totally, 100{d54a1665abf9e9c0a672e4d38f9dfbddcef0b06673b320158dd31c640423e2e5} in our interest to get that [pricing] correct because the
last thing we want is a user to say Google is playing a bait and switch on us.
That’s a terrible user experience.”

Along with price accuracy, Google says the ranking of free,
organic links will be based on an algorithm that considers things such as
prices, click-through rates and landing page experience but “commercial relationships,
advertising and payment to Google are not considered at all.”

Users cannot change the display order of the entries but
will be able to filter to show only those that offer free cancellation. They
can also choose to view rates as per night, with or without taxes and fees, or
per stay.

Data
sources

Booking
links will continue to be based on feeds from partners, including hotels,
online travel agencies and integration partners including SiteMinder and
Cloudbeds.

“SiteMinder’s
long-standing partnership with Google has been critical in helping hotels
expand their online presence to drive bookings, and this latest evolution in
Google’s offering only empowers hoteliers further,” says Dai Williams, chief growth
officer at SiteMinder.

“By
lowering the barriers to entry, hoteliers are able to not only grow their
direct bookings and revenue, but also have more control over their guests’
online booking experience, each and every time.”

Holden says some
integration partners are also working with Google to update and simplify its
pricing standards. In the future, Google also plans to create web interfaces to
enable hotels to directly provide rate and availability data to its platform.

“Over
time, we’ll continue building this open platform, so that all partners will
have even more opportunities to highlight their information and help people
book a flight, find a place to stay, or explore a new destination,” he says in
a blog post.

Capturing demand

The change comes as Holden says the company is “optimistic
about the road ahead” for travel and wants to position itself to provide the
information consumers will be seeking as they begin to think about future
trips. 

“We’ve gotten great participation across the industry with
those [hotel] ads but there’s no doubt we don’t have full representation of all
prices and availability information for our users with that approach,” Holden
says.

“We are about trying to create comprehensive user experiences
and giving users the most information to make them confident in the decisions
that they make, so we’ve been looking at how can we improve the product, how
can we make users feel that they have the full range of information that exists
out there. And we felt that organic links would be the way to do that.” 

Google made a comparable change in January 2020 when it
eliminated fees for referral links on Google Flights. That changed triggered speculation
of a “bloodbath
among metasearch players with high dependency on flight revenue.”

With this change giving consumers a view of prices and
booking links for more partners, it is yet to be seen if there will be a
similar reaction to this update and if it will spur a jump in prices for the four
advertising spots, which will continue to display at the top of the page. 

Says Holden: “You could envision with more players, more
auction pressure potentially over time, but… some partners may manage a mix
of relying on the advertising as they have but supplementing through the
organic links. So you could see that as a ‘release valve’ in some ways from
paying… So it could go different directions depending on the market and
depending on the partner. 

“The bottom line is… the motivation behind this is a
user-relevance motivation. The motivation is about trying to make sure we have
the most comprehensive information for users. This isn’t about an ad
optimization effort.”

Holden also acknowledges Google is giving up some
advertising revenue in the new model but says the goal of better user engagement
will drive benefits long-term.

“We want people to continue to come back because they get
the best results, they trust it because it’s objective, and so they get a good
experience. If that happens over time that’s positive from a partner
perspective. And if we have more queries over time, more partner engagement, that
can lead to effective monetization as well too,” he says. 

Test results

Since late last year, Google has been testing this new
format for hotel booking links with some of its partners, and Holden says there
has been increased traffic and engagement for both individual hotels and online
travel agencies in those experiments. 

But he acknowledges the change does create another element for
travel marketers to manage. 

“I think it can increase some complexity… [and] may cause
some nervousness and wait and see perspective, but I can say from experiment
data we’re seeing benefits across the board,” he says. 

“Overall
it’s a great change from a user perspective, and it’s a good change from
ecosystem perspective and a completeness and comprehensive perspective. I’m hoping
– and I believe having looked at some of the data thus far – that this will be
well received over time and will perform well.”