Looking to drive results for your business? Click here to learn more.
Let’s talk distribution for a minute. Yeah, I know, distribution is one of the least sexy aspects of the hotel industry. It’s also one of the most important, especially for hotel owners and independent hotel operators. Hotel owners, operators, and brands looking for ways to reduce costs and increase profitability need to continue thinking about how they’re going to acquire guests in a cost-effective manner. Also, hotel marketing and distribution are joined at the hip. And the whole topic is about about to get much, much more interesting.
Why? What’s going on here?
In a word, it’s Google. Google is what’s going on here.
The Beast That Scares the 800-lb. Gorillas in Hotel Marketing and Distribution
Google isn’t the 800-lb. gorilla of the hotel industry. No, Google is a much larger and more ferocious beast that has all the industry’s 800-lb. gorillas running for cover. Google is stealing mindshare — and potential margins — from OTA’s and other intermediaries every single day. No less an observer than Expedia CEO Mark Okerstrom plainly stated that Google represents his company’s biggest competitor. In his words, “The internet has been littered with the bodies of companies put out of business by Google.” Okerstrom’s job is to make sure Expedia isn’t one of them.
Okerstrom is right. It’s no secret guests increasingly use Google as the first stop in their decision-making journey. And with recent integrations of Google’s artificial intelligence-powered, travel booking capable Assistant into Google Maps on Android and iPhones alike, expect even greater use of the search giant when guests plan their stay. There are over 3 million searches on Google every minute, with more than half of those on mobile and roughly 20% of those using voice. That’s at least 300,000 voices searches every minute, many of them targeted towards travel. Everyone’s scrambling for share, further driving up the cost of acquiring guests.
For example, Expedia, Booking.com, and others — OK, Expedia and Booking’s subsidiary brands and metasearch channels — recognize this shift, spending more on marketing and advertising with Google to drive more traffic to their direct channels. That’s a switch, huh? But it’s a fact. To drive traffic to its sites, Booking.com paid Google in Q3 alone last year somewhere in the neighborhood of $1 billion.
Nice neighborhood, eh?
At the same time, as Google increases the amount of metasearch and paid inventory in its search results page, it’s also driving up costs for individual hotel owners and operators. Worse, without solid connectivity solutions — which far too many independent hotels lack — hotels can be shut out of Google’s latest product offerings and miss out on direct revenue opportunities altogether.
How to Deal With Google’s Domination of Hotel Marketing and Distribution
So how can you ensure you earn your rightful place at the table and gain booking share without significantly increasing your cost of guest acquisition? Here’s how:
- Develop a comprehensive distribution strategy that includes both search and metasearch. Search is a distribution channel. And the search landscape gets more and more challenging every day. SEO, paid search, voice search, metasearch, AI, schemas, and whatever else Google rolls out next can’t be considered in isolation. Each plays a role in driving guests towards your direct booking channels and in delivering flow-through — positive or negative — towards your bottom line. Similar thinking should shape your OTA agreements. Do your internal team, website development firm, and marketing agency understand how to best make these work together to deliver the lowest total cost of distribution for your property? This is critical question that your property must get right. Otherwise, you risk continuing to fund OTA’s bidding against you in search, driving up the costs of your hotel marketing and distribution, and further risking your property’s distinct value proposition.
- Offer destination content to gain guests earlier in their decision-making journey. Data shows that guests who start their research on OTA’s book on OTA’s. I strongly suspect the same will be true for Google before long, most likely in the form of metasearch and partnerships. Already, Google displays a remarkable number of paid listings and metasearch results before getting to organic results. This is a huge problem for hotel marketers. Why? Well, to put it bluntly, guests who don’t come to your website never get the chance to book direct. It’s critical you use content about your destination to move deeper into the long tail of search, getting guests to your site early in the journey and for terms that aren’t flooded with paid/metasearch offerings already. Google’s AI-driven search results place significant value on quality content. Give them — and your guests — something worth finding.
- Focus on increasing conversion rates on direct channels. Here’s a simple truth: It’s always going to cost you something to get guests to contact you. You’d damn well better make sure they convert when they do. It doesn’t matter whether guests come to your website or call your reservations line; every lost opportunity increases your cost. Take a close look at where your reservations come from, how effective your direct channels are at turning interest into action, and how to improve those results to get the best return on your spend.
- Ensure your connectivity options support Google — and potential future competitors. Do your direct channels appear in Google’s metasearch results today? Or does your property only appear via intermediaries? The latter is a clear sign you’re paying more for reservations than you should — likely much more. Make sure your team is working towards placing your property’s direct channels front and center in metasearch on Google, as well as on other metasearch partners who offer the opportunity to challenge Google in the future. Or accept the fact that you’re always going to pay more for bookings than you should. But that doesn’t seem like a good long-term plan to me.
Distribution funnels through a limited number of chokepoints and gatekeepers. And, at least for the foreseeable future, the number of gatekeepers continues to shrink towards just one: Google. If Expedia worries about Google eating its lunch, you might want to given the search giant some thought too. And then you want to put those thoughts into action.
Google may be the beast that 800-lb. gorillas fear. That doesn’t mean it should scare you. Individual property owners and operators may not be 800-lb. gorillas. But unlike the big guys, they can run through the jungle much faster. Think about your hotel marketing and distribution strategically and you’ll be able to outrun the big guys for a long time to come.
Past Insights from Tim Peter Thinks
If you’re looking to learn even more about how changing customer behavior will shape your marketing going forward, be sure an register to receive a special report I’ve produced in conjunction with hotel marketing firm Vizergy, “Digital Hotel Marketing in a Multiscreen World.” While it’s targeted specifically at hotel and resort marketers, the lessons apply to just about any business. You can get your free copy of the report here.
You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:
Finally, you might enjoy some of these past posts from Thinks to help you build your e-commerce strategy and your digital success:
- Great Marketing Technology Won’t Save You From a Bad Hotel Marketing Strategy
- Content is Still the King
- The Digital Strategy Myth
- Why Mobile Payments Will Rule
- The Big Myth About Hotel Metasearch
- Mobile is So Much Bigger Than You Think (Thinks Out Loud Episode 140)
- It’s Not “Mobile First.” It’s “Customer First.”
A version of this article originally appeared on Hotel News Now as "The Distribution Trend You Care About Most in 2019"