Understanding the Value Proposition of Paid and Free Google Hotels

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It’s nothing new that Google Hotels has become the most relevant metasearch player, with nearly 85% share in 2022.

NB: This is an article from mirai, one of our Expert Partners

Most hotels can see this in their own figures. There are a number of reasons for this success: new placements for Google Hotels in search results and maps, the first metasearch to add a commission program participation model for hotels, and many new features for users that reduce friction in their search and booking experience.

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However, one of the most disruptive features launched recently by Google was free booking links, in March 2021. Suddenly, hotels had a new and free place to display their direct rates. What’s more, in most cases, the direct entry occupies the first position within the organic results, increasing the visibility of the direct channel in a highly visible and free placement. We should be cautious though, because Google has never officially stated that this first position is reserved for the direct channel, so it could change at any time. On initial inspection, many hotels that did not participate in Hotel Ads also appeared. As a result, customers can easily find direct rates for many hotels worldwide by simply searching in Google.

Increasing contribution of Google Hotels to direct bookings

Before we start, let’s review some important dates to better understand the numbers we’ll see below:

March 2021. Google launches free booking links worldwide, but only on the Google Travel page, not on maps and search results.

March 2022. Google extends the reach of free booking links to maps and search results.

To understand how the contribution of Google Hotels (both paid and free) has evolved over time, we split our set of hotels in two: those that have had active campaigns for the past few years, and those that have never had paid campaigns and only appear with free booking links.

Hotels with paid campaigns (and free booking links)

We selected more than 650 hotels that have had active paid campaigns in Google Hotel Ads for, at least, the last four years. For these hotels, the contribution from Google Hotels increased and generated more bookings each year, with the sole exception of 2020 due to the pandemic.

–  Bookings from paid campaigns increased by 4% in 2022, accounting for 82% of bookings.

–  Bookings exclusively from free booking links grew 154%, accounting for the other 18% of all Google Hotels bookings in 2022.

–  2022 ended with 15% more total bookings than 2021, and 63% more than 2019. Despite some potential cannibalization between free and paid links, the sum of the two is growing, and that’s what matters to hotels.

Hotels participating in Google Hotels only with free booking links

We analyzed more than 250 hotels that have never had any paid campaigns on Hotel Ads. Therefore, the entire Google Hotels’ contribution comes from free booking links. We see a strong increase of 213% in 2022, very much in line with the growth of hotels participating in campaigns. This impressive growth is the result of Google expanding free booking links to search and maps in March 2022.

Read rest of the article at mirai

The post Understanding the Value Proposition of Paid and Free Google Hotels appeared first on Revenue Hub.

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