Choice Hotels International has become the first of the global operators to add Book on Google to its distribution.
The move came as Fattal listed a number of properties on Airbnb, as the options to sell rooms online continued to broaden.
Choice Hotels International’s customers can now complete a reservation online on Google using their saved Google credentials. Unlike booking a hotel room through other third-party sites, the Book on Google reservation is handled by Choice Hotels. Customers can pay through Google by entering their credit card information or saving it and using Google Pay, although the search engine is not the merchant of record.
The guest receives a confirmation from Choice Hotels allowing them to manage reservations directly with the hotel and they can earn loyalty points by adding their Choice Privileges membership number once they receive their confirmation.
Pat Pacious, president & CEO, told analysts on the group’s earnings call: “Choice made booking a hotel room directly at our hotel-branded properties easier than ever by enabling Book on Google. This is a win-win for guests and owners alike.
“Travellers can now complete a reservation on Google using their saved Google credentials. Book on Google is also best for our owners, who will reap many of the benefits of booking direct, like lower commission rates than other third-party sites. It also enables us to own our customer data. Additionally, this feature makes it easier for guests to book seamlessly online and helps to minimise drop-off, which means better conversions and more bookings.”
In September Google launched a tool indicating the cheapest time to book flights and hotels, using historical prices.
Richard Holden, VP, product management, travel, Google said: “Six out of 10 US travellers expect travel companies to give them information tailored to them based on their preferences or past behaviour.”
“While it may seem early, many people have already started planning trips for the upcoming holiday season. To help you save money and confidently book holiday travel, we’re sharing holiday price trends, tips and a few new tools from Google Flights and Hotel Search. Hotel room rates can also fluctuate, especially when rooms are selling out fast for holidays like New Year’s Eve. We’r
At Fattal Hotels, the company is listing two apartment buildings on Airbnb in Tel Aviv. David Fattal told the local press: “We’re looking at the changes going on in the hotel and hosting sector all over the world. The world is changing in front of our eyes. My duty to my company, my investors, and myself requires me to examine the changes taking place and act accordingly.”
Fattal said that the company would consider extending the service to Jerusalem and Eilat and the overseas. He added: “Airbnb is a generic term for renting apartments; actually, it’s only a marketing channel. The trend shows us that the guest wants a local experience that goes beyond a room and a bed. With all due modesty, we aren’t the first to enter this sector; large international chains have penetrated the service apartment sector in the past two years all over the world. Hyatt, for example has the Hyatt House brand. The goal is to give the customer the same local experience he looked for with some kind of quality wrapping. When a guest comes to a Hyatt apartment, he knows that it’s not like an Airbnb apartment that’s not in such good shape and has maintenance problems. When it’s a hotel chain, there’s a commitment to quality.”
According to HVS, in 2016 Tel Aviv had more than 10,000 listings in the city, more than the number of hotel rooms at the time, which was at over 7,500.
The city is home to a number of technology companies and, in October last year, Booking announced a new innovation lab in the city. Gillian Tans, the company’s CEO, said: “We are opening a new innovation centre in one of the most tech-forward markets in the world. More than 980,000 Internet users rated Tel Aviv as the ‘world’s second-most innovative city,’ according to a Wall Street Journal poll. As Tel Aviv enters its second golden age of startups, the world has taken note of the city’s opportunity. It is becoming increasingly recognised in the tech industry that Tel Aviv has become home to some of the best talent and innovation when it comes to artificial intelligence applications.”
HA Perspective [by Katherine Doggrell]: Last week we saw Marriott International president & CEO Arne Sorenson fire a warning shot over the bows of Expedia Group by talking about the importance of profitability per booking as opposed to room sales at any cost. The company has changed its revenue management system in North America, at a small cost to revpar, but bonus for profitability.
The horses for courses approach is one which has also occurred to Choice Hotels International and Fattal. For Choice, the move acknowledges that the way people search for rooms is using Google and not so much on direct websites (something which will only grow should voice gain traction), although we wonder how many people will go back after the booking and add in their loyalty number – a test beckons for the programme. For Google, the slide towards OTA is getting steeper.
Fattal is simply using the dominant booking engine for the region, which, in Tel Aviv, is Airbnb. Whether it then pursues this in less Airbnb-centric areas remains to be seen, but it is at least getting a nice cheap listing.
The options open to hotel companies to sell their rooms have never been greater, but many don’t experiment. As evidence grows from those who do, more owners may start asking questions.
Additional comment [by Andrew Sangster]: Google has, by some estimates, the biggest business in travel, valued at something like USD100bn. It has created this by being everybody’s friend while selling them advertising to compete against each other.
The analogy with the sellers of mining equipment during the gold rush is often used: while the prospectors sometimes struck it rich, the owners of the store selling them equipment always came away a winner.
But Google has a problem. Prospectors are getting fed up buying more and more equipment and are looking at doing things differently. The big online travel agents are working hard to drive consumers directly to their websites rather than via Google first (a “browse direct” strategy if you wish).
Airbnb is succeeding in doing this from a standing start and is already one of the most visited sites in travel. People are going there without Airbnb having to pay billions of dollars to Google on performance marketing.
Both the big Western OTAs, Expedia and Booking, have already stated they wish to reduce their dependence on Google but it is a drug they are finding hard to kick. Google is worried that its biggest drug users are looking to buy less and is actively courting a new cohort of users.
In the short-term at least, this is good news for hotel companies like Choice as they have cheaper ways to sell rooms. And Fattal’s move is another opportunity for hoteliers to trim distribution costs.
But the real issue is not how much it costs to sell rooms but how much can be made selling them. Last week, as mentioned in Katherine’s comment, Marriott was clear that profitability is the key number. This is a long overdue shift away from revpar as the metric of choice but brings with it challenges for hotel brand companies too.
Brand companies have to show owners that profitability is higher even with brand fees. For the biggest brands this is mostly going to be the case. For smaller or weaker brands this will be less obvious. Further pressure and consolidation beckons.
In the meantime, hoteliers need to keep an eye on Google. The search giant has the power to crush the OTAs and consolidate the space into a monopoly it controls. Right now, that makes little sense as it is getting paid without having to do the work. When that changes, it will be a force to be reckoned with.