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Google rolled out new experiment – Hotel Finder. It seems just a matter of time they will push it as a full featured product and integrate into main search. Google did their homework and they know how big travel market is. Let’s take a look at the features and numbers .

The Size of Travel Market

European Travel market was worth 65 billion EUR in 2009. This research is available from Centre for Regional and Tourism research from Denmark (read it, it is an excellent research).

According to this research, hotel bookings are 18,6% of the overall market size, making it an industry worth 12.09 billion EUR only in Europe!!!

With average growth rate of 10% a year, this industry would be worth around 90 billion EUR in 2013-2014.

The size of overall travel market (worldwide) reached 693 billion EUR in 2010 (research available here).

No wonder Google wants a piece of that game .

The Google Experiment

Let’s take a look at the anatomy of Google Hotel Finder.

Homepage is rather clean. Google+ style. It seems there’s a new direction on design and usage of JavaScript.

Key elements of search bar:

• Location
• Map with "Edit shape" function that is automatically reloading results
• Price slider
• Hotel class
• User rating

The results show:

• Hotel name
• Description
• Number of stars
• User rating
• Price
• Add to shortlist (which is not working as far as I can see it)
• You can see the comparison of price with other hotels in that range

Once you click on the details you see:

• Big pictures
• More pictures in a nice slider
• 2 reviews
• Call to action to see more reviews (integrate with Google+?)
• Address
• Telephone
• Book now with selection of booking providers
  • Booking.com
  • HotelClub.com
  • Travelocity
  • Getaroom
  • Easytobook
  • Hotels.com
  • Priceline
  • Hotel Official page (somewhere)

Once I clicked on the ad, there is an interesting thing I found. Google is a thin affiliate

• Booking.com - aid=329791
• EasyToBook - amu=280823386
• GetARoom - utm_campaign=Affiliate

This is where it becomes interesting… How will the experiment, once it leaves the experiment phase influence SERPs? Some of the wild guesses:

• Google will split test to see how much money they will earn from forcing affiliate links vs putting Google Ads (on large scale, Booking.com gives somewhere around 6% of total fee, I bet Google can get a better deal)
• Affiliate links will "pollute" Google Maps
• It will be extremely hard to get clicks from organic listings
• Hotel owners will get another "commissioner" that will drain their revenue source
• Competing in Google AdWords will be even more complex

Why is Google "thin affiliate"

• No clear added user value
  • Additional click stream, users will probably need more clicks to get to booking page
  • No additional filters on hotel properties
  • No preference on Hotels official page – this doesn’t even exist here
• Compare Booking.com hotel detail page and Googles and you will notice the difference
• Google wants a piece of the game that will soon be worth more than 1000 billion USD
• Google is exploiting their market share on expense of other players in the value chain, minimizing chances of other affiliates, travel agencies and direct hotel owners
• When you see this site – is it any innovative? Or just exploiting the niche?

Not to be so negative about it (and maybe afraid)

• Great design and UI
• Price comparison
• User reviews

In my book, that’s not enough.

Prepare for inevitable – how to do your hotel marketing when Google controls your click-stream

Google will probably pollute the SERPs trying to maximize their revenue stream, which will leave you with less traffic on the following terms:

• Hotel(s) + City terms
• Hotel(s) + comparison terms (compare, review, testimonial etc)
• Hotel(s) + price terms (price, check prices, book now etc)
• Hotel name

AdWords would be extremely pricy due to increased click downstream to Google properties (hotel finder and maps). Let’s take a look at current state in US (exported through SEM Rush):

• New York Hotels
  • volume – 18.100
  • CPC – $3.58
  • Competition – 0.95
• Las Vegas Hotels
  • volume – 90.500
  • CPC – $5.75
  • Competition – 0.98
• Los Angeles Hotels
  • volume – 6.600
  • CPC – $3.50
  • Competition – 0.96
• Miami Hotels
  • volume – 12.100
  • CPC – $3.79
  • Competition – 0.93

So what to do when CPC on these terms hits $7+? What to do when whole SERP is polluted with Google properties (see picture).

Quick to do list how to fight this:

• Onsite optimization
  • Create a website for each and every hotel
  • Choose the right platform so your website would be lightning fast – every conversion will count.
  • Optimize onsite elements (Title, description, H1-Hn, maps, images…)
  • Split test and make your visitors convert. Grab them while you still can
• Offsite optimization
  • Get massive amount of links from any source you can
  • Interlink your hotels and your official company page
  • Get listed anywhere on any organization (local travel board, industry-specific pages)
  • Don’t chase lousy directory links
  • Create promotions and launch PR campaigns
  • Feature every celebrity that steps a foot in your hotel
  • Place listings into Google Maps and Local
• Social optimization
  • Design smart social networking strategy
  • Setup social accounts for every hotel
  • Cross promote everything you do
  • Ask for reviews anywhere and everywhere, they will count (even integrate ones from Google, Tripadvisor and Booking.com into your own site)
  • Engage and run promotions on any travel site you can
• AdWords
  • Split test your campaigns
  • Devise smart AdWords campaigns that target different stages of sales pipeline (see our AdWords Guide and Quality Score Improvement Guide)
  • Do remarketing campaigns to capture users who have left. People often compare different hotels prior to purchase
  • Target different countries. Research shows that in US, people target only US and one speaking country. CPC is much lower in rest of the world.
• CRM
  • Capture each and every email you can
  • Setup a good strategy on both email and CRM (excellent, I would dare to say the best guide on smart email campaigns and E-CRM can be found here)

Conclusion

With Google entering hotel affiliate arena, it will become much harder to capture a piece of SERP realestate, especially for traditional travel agencies and affiliates. Google will unlikely go fast into this niche, but once they do, it will be a hard time capturing clicks. AdWords will become more expensive to run. To battle this, agencies, affiliates and hotels will have to accept the new rules set up by Google. Follow the steps described above and you may provide enough value to keep the top positions and still get leads. Once you have them, you will have to convert them even better than before.