Search party - Google’s ‘Destinations’

Google’s recently released ‘Destinations’ platform provides users with a new way to plan their holidays all in one well-designed, user-friendly place. While the search giant’s latest move into the travel space may prove a boon for consumers, it has also provoked considerable debate among industry commentators over what it will mean for hotel operators, OTAs and metasearch sites. Does the arrival of Google on the scene constitute yet another player to reduce direct bookings and squeeze rates, or an opportunity to negotiate a better deal for the industry as a whole?

Created in response to the increase in travel-related questions the search engine has received on mobile over the past year, Destinations brings together all the information consumers might need to plan a trip in one place. When a user searches for a specific state, country or continent along with the word ‘destination’ or ‘vacation’ on their mobile device, Google displays a selection of options within that general location, including videos, reviews, descriptions and photos, as well as a list of curated itineraries and ideal dates to travel. Once a user has decided on a destination to visit, they can then go to the ‘Plan a Trip’ tab, where flight and hotel pricing are available for comparison, and a booking can be made either on the hotel’s or airline’s website, or through an OTA.

Paul Mulcahy, senior vice-president commercial at Mövenpick Hotels & Resorts, sees it as the search giant’s most significant foray into the travel sector yet. “The way Destinations on Google combines the dreaming and inspiration phase of planning with price and, ultimately, conversion could transform the often painful process of booking a holiday, thereby making it a real threat for OTAs,” he says.

“Destinations is a very clever way for Google to keep users on their network by ordering multiple layers of content across the booking journey and then driving prospective bookers to monetised Google products, such as Google Flights, the Google Hotel search and Google Hotel Price Ads.”

Putting paid to SEO

The very fact that Google ultimately aims to drive users to its paid products, though, means OTAs are unlikely to lose out through the launch of Destinations, according to Douglas Quinby, vice-president of research at travel market research company Phocuswright.

“I believe that, ultimately, OTAs will figure out a way to benefit, because their primary business is to market the idea of travel, and they have armies of very smart people managing their bidding in different search marketplaces,” he says. “What we’ve seen time and time again – whether it’s new search products or metasearch advertising tools – is that it’s the OTAs that figure out most quickly how to optimise, outbid and earn top placement.”

Quinby also takes Google at its word that it is not looking to slowly become an OTA – largely because the margins are much better in digital advertising.

“As soon as you start doing things like processing credit cards and setting up call centres, that’s an entirely new business,” he says. “Plus, companies like Expedia and the Priceline Group are among Google’s biggest advertisers; they don’t want to go in and directly compete with them. Google is not looking at the transaction opportunity; I think they’re looking at the downstream advertising revenue opportunity and thinking, ‘That’s an area for us to grow’.”

The impact of this, of course, will be that driving organic traffic is set to become even more difficult for metasearch sites like TripAdvisor and Yelp, as well as hotel operators. “It’s putting much more pressure on hotels as it’s pushing SEO [search engine optimised] results further down the page,” explains Cara Callaghan, digital marketing team lead at hotel booking engine and digital marketing provider Avvio. “Our hotels have noticed a drop in their SEO traffic over the past three to six months because of changes Google has made. All Destinations does is push those results further down the page and push hotels into paying.

“If it works well, it could potentially be a lower cost of booking to them than what they’re paying to the OTAs and other metasearch sites. Across the metasearch channels, we’ve found Google high-performance application to be the lowest-cost channel in terms of cost per action. Nonetheless, Google is dominating and deciding how things should go, and from our point of view, costs are rising all the time for pay-per-click advertising, and more budget has to go into these channels to hold your own.”

Touch base

To truly benefit from Google’s newest travel-planning tool, hoteliers need to see Destinations as an opportunity, according to Megan Harr, manager of copy and SEO at hotel internet marketing and strategy consulting firm HeBS.

“Overall, the product aims to improve user experience when searching for travel by curating all of the requested information in one place. Then, once that information is found, actual bookings will take place through another partner,” she notes. “Taking advantage of these capabilities offers the opportunity to enhance the travel search and booking experience,” she says.

There are several ways hoteliers can maximise the opportunity presented by Destinations, not least by ensuring their Google business listings are up to date. “Destinations is a very content-rich product and relies heavily on other Google products [such as Google My Business, Google Hotel Price Ads and YouTube],” says Mulcahy, “so it is imperative that we maintain Google’s listings of our hotels and ensure that we have the appropriate SEO and metasearch advertising strategy to take advantage.

“It is also important to remember that the Destinations product is still fairly new and will most probably be subject to many changes going forward, including further monetisation of placements, which are mainly organic at the moment.”

Guest reviews also play an important part in determining a hotel’s ranking on Destinations. “More than ever, it is paramount for hotels to delight guests and make sure they have the best experience possible,” Mulcahy continues.

“Actively managing reviews online is also important, along with encouraging guests to give feedback to ensure response rates grow.”

Content strategies will also need to evolve to keep up, according to Callaghan. “One thing hotels could do is ask guests for their itinerary while they’re staying at the hotel,” she suggests. “These could then be featured on their websites, giving hotels a way to get in front of potential bookers in Destinations’ ‘Itinerary’ section.”

Last, but certainly not least, making sure that hotel websites are optimised for mobile will be key to maximising direct traffic through the Destinations platform. As Mulcahy emphasises: “The launch of this mobile-first product is a strong signal that Google recognises the ever growing importance of mobile for the travel industry. It provides an important wake-up call to all hotels to improve their entire mobile presence.”

Indeed, the spur for Destinations’ development was that travel-related searches on mobile devices increased 50% in 2015. Alongside that, mobile devices also accounted for almost half of Google Flights queries and more than 60% of destination information queries.

However, there is still some hesitance among consumers when it comes to making their final booking on a mobile device, which may limit how fast the product grows initially. “What we’re seeing is a lot of window shopping on mobile and then going back to the desktop to do a more comprehensive search on a bigger screen,” Quinby notes.

“But I think as travellers become more comfortable with mobile, that will shift. In three to five years, it’s going to represent the majority of online travel bookings.” 

Query results

In the main, commentators are holding off on making judgements on Destinations until the product has become more established. At present, there are just too many unanswered questions surrounding how it will ultimately look and function.

How aggressively will Google insert the Destinations product into the mobile experience for its users, for instance? How easy and natural will it be for users to acclimatise and begin preferentially using it rather than simply staying within the traditional Google experience on the web or the company’s existing apps? How will users respond? Will consumers make that shift and spend time on Google engaging in the way they do on TripAdvisor? Is Google trying to solve a problem that doesn’t need fixing?

These are just a few of the questions that come to mind for Quinby, before one even considers whether the platform will actually affect the status quo in any way. “Whenever Google launches a new product, there’s always industry hysteria, but it’s important to remember that most of their new launches have not had earth-shattering results,” he reminds us.

And Quinby isn’t alone in his hesitance to predict how Destinations will impact the travel sector. “We never really know with Google because it has a tendency to roll out these applications, and then they disappear or, years later, come back in another format – especially when it comes to search results for hotel and travel-related queries,” Harr agrees.

If Destinations does take off, the consensus is that it will make the travel-planning process unquestionably easier and more efficient for consumers, whether this currently feels necessary or not, and while the impact on hoteliers may not be quite so straightforward, those that embrace the new tool will have an opportunity to drive bookings at a lower cost than they would pay to either other metasearch players or OTAs. That, at least, should be reason for cautious optimism.