Last week, some hotel properties received their first booking from an IATA registered to Google.
From a company whose latest innovations are eagerly anticipated, this major event happened without the typical online chatter and hyper-dissection, seemingly catching industry insiders and resort revenue managers by surprise.
Booking on Google
As the Google-registered IATA suggests, Google is testing a means of getting the credit – and therefore the commission and booking fee – rather than delivering the customer to a third party to complete the booking and simply collecting the click-thru fee. The transaction (including payment) is taking place entirely on Google, facilitated by an integration with Sabre accessing the resort’s commissionable rates through SynXis.
By partnering with Sabre – one of the leaders in hotel CRS systems – Google is able to bypass the process of approaching hotels one-on-one to gain their buy-in as a commissionable agent; a challenge that has slowed the adoption of TripAdvisor’s Instant Booking option.
Compared to past efforts to profit off of hotel bookings, this move may be a bit more controversial, however, because it positions Google in the category of an OTA. And Google’s ownership of search would seem a conflict of interest if they are now profiting off of a hotel’s organic traffic while also controlling the search results.
Here’s how it works:
- Search for a resort on Google and the link directing to the Google booking site appears in the paid ad section of the knowledge graph. Though this does not appear to be a paid ad placement in the traditional sense in that the resort may be unaware of Google’s ability to complete the transaction, or their having listed themselves as a booking option.
- If you enter a date range within the knowledge graph, you may be directed to the travel.google.com site to complete the booking, rather than to the resort’s site.
- Or, you might be directed there by clicking on the resort’s name, which one could reasonably assume links to the actual resort. In fact, no indication is given that in clicking on the property’s name that you are choosing to book via Google.
So essentially, Google is taking a commission off of organic bookings, and doing so via a deal with the resort’s contracted booking engine provider.
How are they doing that?
Given the timing around the launch of the highly anticipated “Buy on Google” button, which expedites the purchase process for eligible consumer goods by completing the transaction through payment information stored with Google, early speculation in the tech blogs was that the hotel booking employed a similar functionality, which essentially streamlines the purchase process. The assumption was that Google would have to convince hotels to participate in the program and the transaction would take place facilitated by payment information stored with Google.
But resort bookings function differently than consumer purchases. To complete the transaction within a Google URL, Google would need access to the resort’s inventory and revenue management system.
A release from Sabre Hospitality Solutions confirmed that the Google bookings are a result of a beta test with Google, which they are referring to as the “Google Hotel Ads Commission Program.”
According to Sabre, Google is able to complete the booking without redirecting the user to a third-party site (like an OTA – or the resort’s own CRS) “Because Sabre has already completed the necessary technology integration with Google and Sabre’s SynXis Central Reservation has access to the hotels’ commissionable retail rates, Sabre hotel customers can participate in the program without any investment or development on their part.”
Well…any investment aside from the commission and the per-booking fee, which they are paying to Google.
Google has long been testing ways to enmesh themselves in the hotel booking process. Their ad platforms already give them a key role in driving hotel bookings through paid search.
And it’s no surprise Google wants a piece of the booking pie: Reservation commission is a slice of the travel pie all of the search and review giants have been hungering for – including, most recently, TripAdvisor.
It is unknown at this point when this beta test will be fully rolled out, whether it will remain exclusive with Sabre’s SynXis customers, or whether SynXis customers have the option to opt-out of the program and, in doing so, how that will impact their search results.
Google’s entrance into the crowded OTA field is a game changer. It remains to be seen who ultimately stands to benefit the most from this new development – Google, Sabre or the resorts they are booking. And conversely, who among a huge pool of players in the online travel field stands to lose. This will, no doubt, be an interesting game to watch.