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More Commoditization as Google Joins the Fray

publication date: Sep 4, 2012
author/source: LMA





Have you had the time to check out Google Hotel Finder yet? If not, I suggest you go there right now (http://www.google.com/hotelfinder). Still in beta, this new software platform is bound to be a powerhouse of change in the next two years once it’s fully operational. But not all of its changes promise to be good for hotel brands.


Google Hotel Finder is fast and sleek. Harnessing the power of Google’s search engine, Google Maps and any other web tools operated by this industry leader, the system makes it very easy for people to find hotels in a given location. The simplicity and universality of the map-overlaid, quick-click design makes it near impossible for Hotel Finder not to catch on.


As with Adwords and the core functionality of Google’s paid search listings, this system chooses its top search results based on advertisement bids plus quality scores, with organic results popping up below. This forces hotels to bid against online travel agencies for position at the top, but in a way, Hotel Finder is also working for hotels by pitting the OTAs against one another.


More Commoditization as Google Joins the Fray


What I foresee, if this catches on, is escalation. As OTAs continually try to out-compete each other, it’ll become something akin to a rising price war. It’ll push out the little guys – the independents and small brands – from ever reaching top rank, but also make things harder for everyone else, leaving Google to cash in on it all.


On the plus side, Hotel Finder provides a quick link to a searched hotel’s main site. This is in contrast to the OTAs, where the in-page engine compels you to book through them. With Hotel Finder, the system more adequately lets consumers decide for themselves whether to go for the cheapest option or first see what a brand is all about prior to completing a reservation.


Overall though, Google Hotel Finder will either play out as a tepid or slightly harmful development for hotels. The simplistic design makes choosing the cheapest option the most intuitive. As branding is typically based on non-monetary aspects, this may not be what you want to see. Furthermore, with the standard Google-esque colors and layout, there’s no room to convey each hotel’s sense of style like what one would see when visiting a hotel’s website.


For instance, how do you tell from Hotel Finder’s design whether a luxury property is going for classic charm or ultramodern elegance? There are the description, thumbnails and reviews. But even then, you want your brand’s qualities to be apparent right from the start and not embedded in some 12-point-font text portrayal. The system does not allow for any such design input.


With no emphasis on branding narrative and differentiation, the system becomes yet another cause for hotel commoditization. That is, hotels on Google Hotel Finder are all reduced to the same format, stifling individuality and relegating differentiation to location and small picture inserts. With all properties appearing as similar to the eye, it’s a subtle compulsion towards price as most important rather than features. This is especially true when your product has a lower name awareness than some of the major chains.


In the end, Google Hotel Finder might not gather the level of attention it’s seeking because it doesn’t follow the most common mental pathway for how travelers book their trips. You have to think of the order of priorities – typically: flight, then hotel, then car rental. Most people plan first and foremost around what airline flights are available. Only then do they complete the hotel reservation.


Hotel Finder wishes to circumnavigate this fundamental three-step cascade by treating the hotel reservation as an independent procedure. However, major OTAs are wise to this psychological tendency and most deal in hotels and in flights. I don’t see a consumer switching from his or her OTA-of-choice for Google Hotel Finder because OTAs satisfy the other two-thirds of the puzzle – including the ‘add-on’ of car rentals.


This is the same cascade of events that has plagued hotel websites. Once you book a flight through an OTA, they switch you right into a property reservation engine. It’s all too easy to stay with them. If Google Hotel Finder is to truly succeed in outstripping the OTAs, it has to incorporate both flights and car rentals. Maybe hotels can learn from this as well and integrate flight and car rental suggestions into their own websites (or at least provide outbound links)?


Regardless of how I feel about this new product, it’s Google-operated, so it’s pretty hard to refuse, and they probably have more resources than anyone else to throw towards its maturation as a useful tool. Either way, it’s a hot topic to follow as it might just work to hoteliers’ advantage in quashing the stranglehold of the OTAs. Or, perhaps in ten years, hotels will have won the battle against the OTAs, but lost the war against Google.


(Published in HOTELSMag on June 13, 2012)


Jun 19 | Posted by LMA

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