How Google Exploits the Hospitality Industry for Profit


The hospitality industry is being exploited by Google for their own profit. To be clear this article is not about regular search results where thousands of pages compete in an algorithmic mash up, this is for the actual brand or name search of the business and the associated Google business listing that the hotel manages within the Google My Business product.

exploit
verb

  1. make full use of and derive benefit from (a resource).
    synonyms: utilize, make use of, put to use, use, use to good advantage, turn/put to good use, make the most of, capitalize on, benefit from, turn to account, draw on;
  2. make use of (a situation) in a way considered unfair or underhand.

And again in this instance Exploit pertains to the fact that Google denies the hospitality industry the tools provided to all other market sector business to market their businesses products and services to customers via Google My Business

Hospitality industry is defined as any Lodging based category used within the Google My Business product listing, such as: hotels, resorts, bed and breakfasts, motels etc

This industry is one of the fourth largest employers in the UK with current net profit margins a little under 5%. This revenue is typically 65% from room bookings and 25% from food and beverage.

 

Google Denies Hotels the Tools Available to Other Businesses

This is a hotels Google My Business listing, looks great, looks useful, but this is all that a hotel or other lodging industry is allowed.

 

Hotels Google Business Listing - Online Ownership

 

Business listing features denied to lodging industry categories within Google My Business that are provided to other businesses.

 

Business Listing Features Lodging Categories Other Business Categories
Name Yes Yes
Address Yes Yes
Website Yes Yes
Appointment / Booking URL No Yes
Menu / Services URL No Yes
Services / Product Menu No Yes
Business Description No (google writes this) Yes
Google Posts No Yes
Google Posts (Event) No Yes
Google Posts (Offers) No Yes
Google Posts (Products) No Yes
Photos Yes Yes
Booking Button Yes (commission paid) Yes (free)

 

65% of a hotels revenue is made from room booking (naturally) most of which is commission based ending up in Googles or an OTAs pockets.

To give you an idea of the scale, The world’s travel industry is worth more than $2.5 trillion USD and is the fastest growing sector. Expedia spent 4.3 Billion USD in advertising in 2016 this includes commission paid to Google on appearing within the hotels knowledge panels. With the Priceline Group consist of Booking.com, Priceline, Agoda, Kayak etc spending 3,5 Billion USD in 2016 again “advertising” includes the commission paid to Google for appearing within the hotels knowledge panels.

You can see why there is NO way Google wants a user to book a hotel without getting a slice.

 

Wait, What, Commission Paid on a Booking Direct!

The way the booking system works within a hotel knowledge panel is all driven via an AdWords type system, where instead of bidding on a keyword you bid via a room rate commission fee called Google Hotel Ads.

 

Google business listing hotel booking - Online Ownership

 

If a hotel wants their own booking link to appear they have to use Google Hotel Ads and set the commission fee they want to pay to Google.

Online Travel Agents (OTAs) also have to set their commission fee.

The bottom line is that either way hotels have to pay Google for a booking either direct or via the OTA. Remember that this is from a the business knowledge panel from a direct search – the user wanted this hotel.

OTA’s have become so powerful in the market place that they regularly dictate to small and independent properties the commission that they will pay not what they can allocate. Equally they have their own type of algos, the more commission you pay, the higher you appear in their own results.

 

Why are they Denied All the Other Features?

The answer to this is pretty simple.

Google denies hotels the other features because they do not want the user to click on any other button that will prevent them from earning money.

 

Google Post Features Denied to Hotels - Online Ownership

 

Google Suppresses Structured Data in KP

Google also suppresses structured data markup on events pages that have been markup up from appearing within the hotels knowledge panel, which they don’t do for other businesses.

What could an event be for a hotel?

An event could be a retreat, workshop that takes place between certain dates for a specific price. Plenty of hotel also have cinemas, theatres and different shows throughout the year within their property which are not displayed within the knowledge panel.

 

With Google removing their Don’t Be Evil clause from their code of conduct I don’t expect the hospitality industry to be getting their fair crack of the whip any time soon. If you as a user and a consumer want to play your own little part in “sticking it to the man” then take an extra five minutes and go check out the hotel direct, in almost all cases, independent and small hotels always offer a better rate when booking direct.

 

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