Google's Hotel Finder has Made Everyone Pay Attention
By Larry Rulison, Times Union, Albany, N.Y.McClatchy-Tribune Regional News
May 24, 2012--SARATOGA SPRINGS -- Local hoteliers heard Wednesday what they have long known -- that online travel sites like Expedia and Hotwire have been eating their lunch for years and keeping their margins razor thin.
But hospitality author and consultant Cindy Estis Green told a meeting of the New York State Hospitality & Tourism Association that a new player is getting ready to once again change how hotel rooms are sold online.
Google quietly launched a new search site called Google Hotel Finder last July.
"Google Hotel Finder made everyone pay attention," Estis Green told a group of about 20 local hotel executives, including Tobias Milde, the new owner of the historic Adelphi Hotel in downtown Saratoga Springs. "They're still calling it an experiment."
But Estis Green said Google Hotel Finder could dramatically alter the landscape. She said that online travel agencies like Expedia already take roughly 25 percent in fees from the $10.4 billion spent on hotel rooms booked through their sites.
Google is using a slightly different model, Estis Green said. Google, she said, has set up a search engine for hotels that links directly to the hotel's booking engine.
Google earns a fee when consumers enter in their desired room and length of stay on the hotel's site -- even if they don't actually book the room. The fee Google earns is 0.2 percent of the potential cost of the stay. That means on a $600 potential hotel bill, Google earns $1.20. That's might not sound like a lot, but considering the size and scale of Google, it could end up making the search engine a lot of money.
She claims that in some cases some hotel owners have tried to set up robots to automatically click through to the sites of rival hotels through Google Hotel Finder in an attempt to gouge the competition. She said that Google has assured her that protections have been put into place to prevent such abuses.
"It's a commission model," Estis Green said. "The implications for it are somewhat frightening. The most frightened are the (online travel agencies). They're getting a run for their money."
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