A new normal or, like someone else said, a new not normal?
Because all the changes and challenges the pandemic has forced all of us into, do not necessarily mean a different way of dealing with these challenges, by the operators of the Hotel Industry.
Lately, for example, a lot of emphasis has been given to the fact that Booking is closing many of their global offices and the obvious consequences for those workers who, 6 months ago, had probably one of the most secure job on earth.
This is just to highlight, once again, how things have evolved in a matter of a bunch of weeks and months.
But have things changed too, in the way these OTAs have been running their business from an operational standpoint?
Differently put, did the OTAs change the way they sell our hotels?
In 2 single words: Marketing and Distribution.
To answer this question, I’ve conducted a quick test in the last days. Two main points were under my radar:
✅ Paid Campaigns (PPC) on Google Ads => are the OTAs still fighting (and winning) the hotel + destination war? And are they still bidding using brand names as keywords and in their copy (e.g. hotel Palace Milan) ?
✅ Cut-my-margin game => are the OTAs still playing the game of cutting off hotels’ rates by reducing their own margins, so that they show up being cheaper than other channels?
Why should you know about this?
For the very simple reason that if you are running ads on Google, or considering revamping old campaigns or starting from scratch, you might be aware of whom you are competing with, what they are doing and the logic behind their marketing.
Tools & Resources.
No brainer. The tools and resources I’ve used for my tests:
- VPN* (to connect to different countries, simulating therefore the hotel search as if I was in that country).
- Clearing cookies in my browser (not a tool, but just a way of removing any trace of previous presence)
- Time. As said, results may be different in time, even during the same day, so I needed to make multiple checks spread over a few days.
*A VPN is not necessarily a must when searching on Google, in fact, by changing the settings you can tell Google to show you the results, as if you were in that country. However, a VPN becomes extremely useful when visiting the websites of many OTAs, whose content, hotel ranking and pricing may change based on your current location when making a search.
Ready? Let’s go.
Google Ads: Search Campaigns. Yes, but…
You might think that you can simply go to Google, enter the keyword hotel + destination and you see whether the OTAs come up as a result of a pay-per-click paid campaign (Google Search).
However, there are multiple factors that make such a test a non reliable one, for example:
- the frequency of the ad may change over time, so if you don’t see it now, it doesn’t mean you won’t see it later, or tomorrow.
- the country where the search is made from.
- the specific destination where the hotel is located.
The results: on a general level, mainly Booking and Agoda are running paid ads bidding for generic hotel-related keywords like the most classic hotel + destination.
Barely Trivago. Never Tripdavisor. Never Expedia.
However, also when it comes to Booking bidding for hotel + destination keywords, there are many BUTs to be considered.
First, the bid is not the same all over the world. There are essentially 2 conditions that may determine the ad showing up or not:
- What country the search is coming from
- What is the destination used in the keyword hotel + destination.
For example, a search made from Singapore, for hotels in Singapore:
As opposed to the same search for hotels in Singapore, but coming from Thailand, where I currently and physically am:
In this last case, there is apparently no one bidding as all results displayed are organically pulled up by the Google SERP.
Make sense. At this point in time borders in Singapore are still closed, which prevents people from abroad to go to Singapore.
Clearly I might be looking for hotels in Singapore for the upcoming months, but still, there are no specific dates about the reopening, thus bidding for the keyword hotel + destination for people coming from abroad may still be too high of a risk.
Disclaimer: I have said this already, but it’s important to understand, results differ many times over time. What I am showing you here is, let’s say, the most probable scenario of how the OTAs have been bidding on Google Search.
Now, let’s see what happens if we move to Europe, for example, London.
Search from London for hotels in London.
And now, the same search for hotels in London, but coming from Thailand:
You see, the results are quite similar, no matter where the search comes from. As a matter of fact, from Thailand I could jump on a plane today and get to sleep in a hotel in London by tomorrow night.
However, it’s interesting enough that for searches coming from abroad (and I’ve made quite some) the presence of Booking is not so strong, to the point that local and independent group of hotels are showing up before BO.
Which, again, make sense. Eventually BO wants to be ranked on top for people for proximity tourists and searches which are likely to be staying at a hotel in London, rather than someone like me coming from Thailand.
Weird thing is the Ad of Booking in the last screenshot, coming from Thailand. The ad is in Thai. Because yes, I’m in Thailand, but if I spoke Thai I would browse in Thai. These are those kind of automation that have no sense.
Also Expedia, when I visit their site from Thailand, even if I digit the domain expedia.com or expedia.it, I get redirected to their Thai domain extension expedia.co.th in which everything is in Thai.
Non sense… but I have to say that it seems they have half-fixed it now 🙂
“But Thailand is far away and people from there are not much likely to stay at a hotel in London, what about a closer country?”
So, what about France?
Seriously, better than this I can’t prove. For this last search I applied what follows:
✅ Searched a hotel in London;
✅ Searched from France, meaning I connected to a VPN in France;
✅ Searched on Google.fr (not on Google.com, as I did before);
✅ Changed the Region settings on Google.fr to France (quite useless though, because already connected to a VPN in France, but anyway…); also, by changing the region settings to France, I was automatically logged out from my Google account; this would prevent past searched I might have made using my account to be revamped.
✅ Cleared all possible cookies (also quite useless, but anyway…)
To a certain extent, these results are quite interesting, and I’ll explain why in the conclusion below.
But now, let’s see with a less generic and more specific keyword that includes the brand name.
In other words, how are the OTAs interfering now with the brand protection campaigns hotels might want to be running?
For this test, let’s go back to Singapore:
And same search, but from Thailand:
Have you noticed?
As opposed to the more generic keyword hotel + destination, this time Booking is there with their Ad even if I’m searching from Thailand (still questionable the effectiveness of showing me the ad in Thai, but that’s another story).
Another make sense. In fact, whilst a generic search may be simply too generic, someone using the hotel brand name to search on Google is someone who is likely close to the booking moment, even though the arrival may be so far in the future.
And that’s the kind of leads Booking wants.
So far, only Booking and Agoda are competing with hotels’ brand protection campaigns.
In only one tentative (out of 100, more or less) I’ve found Expedia bidding using the hotel name as a keyword.
Conclusion on Google Search
It’s the same old, same old, but in a way smaller scale, which opens up to potential opportunities for hotels.
Take the London example, where I entered a very generic hotel london keyword, searching from Thailand or France.
Before the pandemic, not a single search that include the work hotel was uncovered by some OTAs.
And this is quite interesting. In fact, whilst competing with the OTAs to win a prospect who is in his planning mode may not be the best possible fight to fight, not having their competition in the dreaming phase may turn into a winning strategy for the hotels.
When using such a generic keyword like hotel london, users may still be dreaming about going to and visiting London, they might have not decided yet where specifically (which hotel), maybe they don’t even know for how long they will stay.
The list of unanswered questions and doubts in the dreaming prospect is endless, therefore trying to sell something with a bunch of Book-Now messages all over the website may not be the best move.
Instead, having them visiting the website is already a micro-conversion that, if used well, can turn a lead into a prospect and a prospect into a customer over time. For example by using retargeting strategies which, by the way, will anyway be more cost-effective, efficient and appealing that any MetaSearch Engine campaigns.
The OTAs are not pushing much on ads now and for valid reasons, clearly. But also when it comes to brand-protection campaigns, the competition of the OTAs may be way beatable now than it used to be a few months ago.
The most relevant difference I’ve been seeing is about Expedia, with their current little presence on Google Search, so little to be almost invisible.
To me personally, this doesn’t sound like big news as the Priceline holding have been winning the Search war for years now. And I don’t see the pandemic as a good opportunity for EX to replace BO, considering the struggles all OTAs have been going through.
EX’ concealed weapon is in the wholesale rates. The recent agreement Expedia-Marriott for which EX is now Marriott’s exclusive provider of wholesale rates for travel agents is just an anticipation of what the main revenue stream for EX will be coming from.
And even without wholesale rates, EX was the master of cutting off hotels’ rates.
Let’s see if it still is.
OTAs & Distribution: Cut-my-margin game.
The game is very simple and we all know it: those OTAs who collect the payment upon booking confirmation, are likely to reduce their own margins on the generous commissions that hotels pay to them, in order to make the final price a little bit more attractive.
Now, how was the situation before the pandemic?
In a word: a disaster.
EX, just to mention the one OTA I will never bring a bit of respect for, used to be the master at this game.
In fact, have you ever asked your EX Market Manager to turn your Expedia Collect agreements into Hotel Collect contracts, so that you could collect the payment directly from the guest at check-in or check-out, and preventing these EX from playing with your commissions?
If not, you lost a great chance to have a nice laugh about the reasons they would have given you to deny your request.
Besides, the main players of the cut-my-margin game used to be:
- Expedia
- Agoda
- Trip.com
- and a bunch of other minor FIT-players Amoma-style like CancelOn, etc.
So, what’s the situation now? Is it still the same? Or is there a glimmer of hope in this matter?
Let’s see together.
First test. Hotel in Berlin. Agoda: notice the differences. Same search, but 3 different scenarios:
- Agoda coming from Google Hotel Ads, searching from Thailand.
- Agoda direct (I simply typed agoda.com in my browser), searching from Thailand.
- Agoda direct, searching from Germany (where the hotel is located).
Agoda 1
Agoda 2
Agoda 3:
Again… same old, same old.
Now, look at the final cart. Meaning, for each of the above result, what’s the final price I would be supposed to be paying when confirming the booking.
Agoda 1:
Agoda 2:
Agoda 3:
You see? In Agoda 2 and 3, despite the original price displayed being different, the final price is the same. It’s the discount applied that is different.
How weird?
Now, this is just to showcase one of them. But, for instance, Trip.com does the same.
The very interesting thing I’ve been noticing is that it seems like Agoda and Trip.com have kind of agreed on who cuts first.
When Agoda cuts, Trip.com stays still. When Trip.com cuts, Agoda stays still.
At this point in time though, I still think this is more likely a case and not something that happens intentionally. However, I was just noticing it more often than before, so I thought of sharing.
What about EX? Have they become good guys?
Seriously. EX and good in the same sentence is like sugar and salt in the same dessert.
In fact, compare the 2:
LEFT: direct search.
RIGHT: search from Trivago.
Same hotels, same search, same dates. When coming from Trivago the EX site shows up in the local language and I have no chance to change it, but you can see all the booking details being the same.
The only thing that I can say is that whilst before the pandemic this was pretty much the daily routine on EX, now it doesn’t seem to be happening that often.
On average, I used to get into such a creative way of dealing with prices by EX like 7 times out of 10 tentatives, on average.
This time it took me a bit longer, but I guess it’s just because of the contingency of the present moment.
Just a question of time and soon everything will be back to how it used to be.
Which, again, make sense, unfortunately. Because if all the OTAs wanted a big piece of the cake before, can you image how much would they want that when the cake becomes big again?
Conclusion… with Meta.
In smaller a scale, everything that comes up to paying for being there on Google when the users make any hotel-related search is exactly the same.
Same old, same old.
To me, no news.
It is a news for those who believe the OTAs are partners of hotels, as they love to refer to when talking about hotels.
Don’t get me wrong though. I respect the OTAs (except EX, if you haven’t noticed) and I totally understand their job. Their job is to do their business, not hotels’.
In fact, the OTAs have never been the enemy.
The enemy, instead, may be those who make you believe that hotel distribution is easy, those who make you believe that can adopt simple solutions to get your distribution fixed (for example, those price comparison tools), or that it is enough for you and your hotel to be on Meta, spend some money there and KABOOOOOM!, everything’s fixed.
Too big of an argument though, in fact, in one of the next post I will be talking about that in more details.
So, Stay Tuned 🙂👋.
