Did Google just take a monster step towards becoming an OTA?

There's been a lot of press the past couple days on Google's licensing deal with Room 77.  Some articles have been a bit bold in claiming that Google is entering the hotel booking business as an OTA. This would actually mean Google itself is transacting hotel bookings, which doesn't seem to be the case (just yet?).

There's also been a lot of hype over the big increase in Google's hotel content (photos, reviews, etc.) to make its search results resemble those of Priceline and Expedia, for example.  If I'm not mistaken though, this is part of a larger initiative to increase local business content across the board and isn't focused exclusively on hotels just for the sake of making them more bookable on Google search results.

But one thing is for sure . . . the more enhanced content Google adds, the more likely customers may begin their hotel search on Google versus the OTA sites.  And with the addition of Room 77's extensive database of hotel level information such as room views and floor plans, as well as its advanced hotel search algorithms, Google just may have made its biggest step yet in possibly becoming a full end-to-end hotel search and booking engine (and in the process eventually trumping TripAdvisor and OTAs).

I remain doubtful Google would get that low in the purchase funnel though.  My guess is they are amassing the best possible content at the hotel level in a drive to become the undisputed starting point for consumers doing a hotel search.  Over time, Google's hotel search volumes will increase, and if they can simultaneously ramp up ad spending from the non usual suspects (i.e. more hotels spending on adwords and not just the OTAs), it's plain simple math Google can squeeze billions more out of the travel vertical than it already makes today.

For now though, I can't help but wonder how Priceline and Expedia, some of Google's biggest adwords customers, feel about Google's licensing deal with Room 77 and what that might foreshadow.

At last, Priceline edges out Expedia in gross bookings and becomes the new king of online travel

Although Expedia's global websites don't yet admit defeat, Priceline has in fact surpassed Expedia in gross bookings to become "the world's largest online travel company" -- a claim Expedia has long marketed to customers and suppliers on its global websites.

In the past several days, Priceline has simply dominated the news headlines.  First came their Q3 earnings release, highlighting yet another consistently strong quarter underscored by increased market share.  Second was the public announcement that the venerable Priceline CEO, Jeffery Boyd, would step down as CEO but remain as Chairman of the Priceline board.  

(Here are seven of the biggest impacts Jeffery Boyd made on the online travel industry.)

Some news writers reacted with shock to the news surrounding Jeffery Boyd, yet the industry insider PhoCusWright suggested the leadership change had been in the works for some time.  But what actually shocked me most was the headline on Priceline overtaking Expedia in gross bookings for the first time in history.  Wow!

And when reflecting on the evolution of Priceline over the past decade, PhoCusWright was equally as surprised.  In a well written article by Douglas Quinby of PCW that portrays Priceline's come from behind surprise win . . .

The year was 2002. Once an Internet princeling, the online brand synonymous with "name your own price" had fallen out of favor. Moves into mortgages, groceries and gas proved misguided. Its share price had plummeted. In online travel, the company was effectively the fourth horse in what was quickly becoming a three-horse race among the leading online travel agencies. It was considered likely to get acquired or – worse – fizzle out.

When Jeff Boyd assumed the role of CEO in November of that year, the odds were against a resurgent Priceline. Iconic commercials starring the famed former captain of Star Trek notwithstanding, few would have expected over the next decade that the company would, on pretty much every metric that matters, become the global leader in online travel. Looking back, that was certainly one surprise.

I had a hunch that one day Priceline would surpass Expedia in gross bookings, yet upon reading this headline my jaw still managed to drop to the floor.  It was as though a consecutive Olympic gold medalist had been knocked off the top platform by an arch nemesis.  Congratulations, Priceline.

Now that Priceline has done the previously unthinkable, Jeffery Boyd will pass on the reins of CEO to his successor, Darren Huston.  And as Mr. Boyd dusts off his shoulders, he'll be watching Expedia admit defeat (at least temporarily) and remove its tagline, "The World's Largest Online Travel Company" from its global websites.

Booking.com takes over hotel bookings on New York tourism website

Powered by Booking.com

The arch nemesis of Expedia is making new friends in the USA, and one of them happens to be none other than New York City.  Booking.com has kicked off an affiliate partnership deal with nycgo.com, the city's official tourism website, to power hotel bookings in New York.

American OTAs must be feeling the sting as the Amsterdam based Booking.com increasingly stomps deeper into American home turf.  Priceline group is already on top of the leader boards in Asia and Europe, according to PhoCusWright.

It appears the NYC site was previously powered by Travelocity, and I suspect that part of the decision to switch to Booking.com was the number of localized sites it has around the world.  Currently Booking.com supports over 40 languages.  This potentially allows NYC to tap into large international markets that are more likely to visit the tourism site compared to domestic travelers already familiar with NYC.

New York is one of the most popular tourism destinations in the United States, and this new partnership may be the tipping point for additional American tourism organizations to partner with Booking.com and appeal to a more international audience.  A quick search also shows San Francisco's tourism site being powered by Booking.com.

From a supply perspective, Booking.com offers 573 properties while Expedia and Orbitz have 508 and 447 properties respectively.

Priceline jumps on the sponsored listings bandwagon and lets hotels advertise on search results

Priceline's new sponsored listings program for hotels looks pretty darn familiar.  Why?  Competitor OTAs like Expedia, Orbitz, and Travelocity have all featured pretty much the same product on their own search results pages for several years.  Just like display ads, the sponsored listings are also a complementary revenue stream to traditional OTA margins on the materialized bookings.

The sponsored listings are all auction based, pay per click campaigns that shoot hotels all the way up to the highly desired numero uno position in the search results of a particular destination.  In instances when there are pages upon pages of cookie cutter search results, it's easy for hotels buried deep into the dog pile to ascend to the top and gain maximum marketing exposure.  These sponsored hotels will get to sit in the spotlight with more or less free advertising unless someone clicks on their listing.

Since Priceline just launched their sponsored listings program last week, I would advise hotels interested in pay per click advertising to sign up ASAP and target their future lean occupancy dates.  The early adopters will enjoy low cost per click because there will be less competition bidding up the prices in the auction.  But winning isn't everything.  To improve the performance of their campaign, hotels absolutely need to ensure their rates are ultra competitive with the market and their inventory is well stocked to maximize conversion and ultimately the campaign's ROI.



As a consumer you can spot the hotels with sponsored listings because of their faded background color and typically the words "sponsored listing" near the hotel name.  In the example below of Expedia's search results for Bali, the Viceroy Bali is visibly designated as a sponsored listing and commands the #2 ranking after Mantra Nusa Dua (which is part of the Daily Deals merchandizing that trumps even sponsored listings).  Let's face it, getting to #2 in the rankings isn't too shabby when there's a whopping 874 other hotels listed beneath.