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05/03/2021

A Timely Step by Google to Accelerate Recovery for Hospitality

The search engine has added an organic list that allows travel suppliers more visibility for free with more extensive booking options, thus theoretically leveling the playing field for all suppliers.

Pre-pandemic vacation planning, an annual ritual in most American families around the beginning of the year, typically saw international destinations being booked 120-150 days in advance, whereas local destinations were booked anywhere between 60-90 days.

The process was a thorough one with research across dozens of websites, reading reviews, and looking for the best deal and amenities. The pre-pandemic traveler spent a considerable amount of time searching for the perfect travel plan.

However, the pandemic saw this process upended with the average booking window shortening to 15 days as well as the intent to booking journey becoming much shorter as well, making it more challenging for hotels that partner with multiple third-party distribution partners to understand which channels are best suited to drive demand. While spring travel seems to be bringing back travelers in record numbers, we need to be cognizant that at this point, we have vaccinated less than 5% of the global population. Additionally, we have not yet begun vaccinating the millennials in Asia which are critical to the global travel industry's recovery.

The challenge of understanding the new guest

We are all aware of pent-up demand, and most of the industry relies on it; however, what we are not sure of is where will this demand come from. In the last two years, a lot has changed in the way guests book their travel along with a renewed focus on safety. Geo-political shifts will create new source markets, and we already see examples of this. Israelis thronging to UAE is a first; Asian travelers preferring to travel to other countries instead of the U.S.A. is a first. This, I believe, is just the beginning of what will become the new normal for hospitality.

These developments make it harder for hotels to find the optimal channels for capturing demand and reaching potential travelers who are still in the dreaming stage of planning travel.

The enhanced role of tech-providers

In research published by Google, more than 90% of travelers using mobile devices will switch to another site or app if their needs are not being met. And 79% of mobile travelers say that when researching on their smartphones, they are looking for the most relevant information available, regardless of where it comes from.

This only points to one fact: that the traveler needs information in the easiest and fastest way possible. This, therefore, becomes a critical success criterion for small hotels to reach the right audience. While the U.S. travel market is currently performing better, Europe and Southeast Asia's challenge continues to persist, making it essential for hoteliers to access tools and sources that can drive demand with minimum effort.

The critical question becomes: What steps can tech-partners take to help independent and mid-scale chains to recover? The move by Google to provide free organic listings for hotels to accelerate bookings is a welcome and timely development. How does this help?

Google has tweaked how their search results show hotel booking links, including eliminating listing fees for hotels, online travel agencies, and other booking sites. The search engine has added an organic list that allows travel suppliers more visibility for free with more extensive booking options, thus theoretically leveling the playing field for all suppliers. It also makes Google a very competitive player in the metasearch space which is becoming more prominent as travelers look for faster ways to search and book best deals.

Along with price accuracy, the organic results would be ranked based on an algorithm that considers prices, click-through rates, and landing page experience, without much dependency on any existing paid relationships with providers.

Today, Google is increasingly becoming more relevant in travel search and featuring organic listings makes it easier for independent hotels to get new bookings without really paying any commissions. Many factors would play a critical role when influencing a traveler to click on the correct link, and therefore hotels cannot just rely on these free listings to drive bookings. Investing in tech-providers that not only connect to Google but also leverage AI for predictive analytics to help hotels understand which of the 400+ OTAs will drive demand for them will be critical to have a robust recovery strategy for the rest of 2021.

As a traveler - free organic listings would mean more options for me to choose from, competitive pricing, and an influx of unbiased reviews for me to make smarter choices. 

Why do hotels need to pay attention now?

Recent data reveals that bookings in the United States have increased by 50% between January and March 2021, and with every 10% increase in vaccinations, we see an 18% rise in bookings. This means only one thing: Travelers are already planning for Spring and Summer, where we are seeing higher ADRs than 2019 levels in some markets. As the world plans to open up in 2021, hotels' ability to get the right insight on channel productivity and connect in the shortest possible time would make the difference in recovery. RateGain is committed to helping the industry build towards this recovery by connecting with partners like Google and all key OTAs, GDSs and wholesale partners.