Wednesday, 28 November 2018

Is Google the dominant player in hotel search?

Google is eating up more and more of the pie when it comes to hotel metasearch says new research

A new white paper from EyeforTravel and Fornova finds that Google has picked up plenty of fans in the hotel industry, with it leading the pack for hotel presence on the platform.

Fornova monitors 8,000 hotels across a number of metasearch sites, making regular searches to monitor the space. Fornova's monitoring across Q2 2018 found that when it came to direct ads from hotels on monitored sites, Google scored highest with 80% of searches featuring a direct bid, compared to 43% for HotelsCombined, 30% for Trivago, and just an 8% presence of direct hotel bids on TripAdvisor. It seems that Google has captured substantial market share, and offers a strong value proposition for hotels, as other sites appear to be dominated by OTA bids.

This added competition and is putting pressure on the results of other metasearch sites. Jafar Alam, Senior Product Manager for Fornova, expects more hoteliers will turn to Google Hotel Ads as they look to expand their meta presence because “TripAdvisor and trivago have run into financial difficulties and haven’t been making it work commercially.”

trivago has had the toughest year so far and is in the midst of adjusting its strategy. The company saw its value plummet across the middle of the year as revenue growth turned negative, reversing exceptional growth in 2017. Diminished growth has been put down to a stronger competitive environment and a pull-back in spending from some of its biggest spenders, including Booking Holdings’ brands. This has forced trivago to announce a shift away from its hefty marketing budget and instead to focus on profitability.

TripAdvisor is also having a mixed year. Whilst its stock value was up from the start of 2018 at the time of writing, results from the hotel sector across the year have been less than positive. It reported in its second quarter results that revenues derived from hotels declined by 4%. This fits into a longer-term picture of struggling to raise revenues from the hotel sector, which is especially concerning for the brand given how powerful it is for the discovery and research of accommodation by consumers.
The best performer out of this big three appeared to be the metasearch brands of Booking Holdings, which reported in its second quarter earnings call that revenues from meta and OpenTable grew 34% in Q2.

Fornova CEO Dori Stein theorized that the meta sites struggling to meet financial projections are victims of Google’s advantage as holders of what he called the most sought-after real estate in the Western World. “TripAdvisor and Trivago’s share prices aren’t doing that well and they’re spending more and more on advertising so that they can reach more consumers,” he noted. “But it’s coming at tremendous costs while Google is increasing the number of consumers exposed to their metasearch engine with no real additional costs. No one said it’s a fair world.”

Google is sitting on its laurels, however. After upping its game earlier this year by improving its mobile hotel search experience with enhanced booking capabilities, price filtering, amenity details and automated comparisons, Google, more recently bettered its hotel ads platform. In July, the search engine announced that later this year, hotel ads will become part of the Google Ads platform with a new campaign type. The change will allow management of hotel campaigns in a single platform, alongside advertisers’ other Google campaigns. A new Hotel Center, rolled out at the same time, aims to simplify the management of hotel price feeds and the company appeared to be experimenting with putting Hotel Ads above its usual top-listed paid ads in mid-2018. 

Therefore, other meta players need beware that the Google juggernaut is making inroads into this critical market and will need to fight hard to capture the critical hotel marketing spend and become less reliant on other online travel agents.

For more on how metasearch is shaping the digital accommodation market, download the free white paper now.

This white paper, made in conjunction with Fornova, gives real-world data on hotel, wholesaler and OTA bidding strategies, alongside consumer behaviours, and meta success metrics. Use these to understand the channel, the competitive landscape and build a winning strategy!

Learn the following from this white paper:
  • The state of the metasearch market.
  • Market penetration rates among consumers and hotels.
  • Consumer behaviours on metasearch.
  • OTA bidding strategies.
  • Techniques to succeed on metasearch.
  • The outlook for meta.