When Google attempts to break into a new commercial marketplace, it rarely dips its toe in the water, so, as you might expect, their growing expansion into hotel booking has caused quite a stir within the industry.

According to Tnooz, the company recently rolled out instant booking, which lets travelers book directly on Google without leaving the site. The largest hotel chain in Europe, AccorHotels, has already jumped onboard and the implication is that other chains will follow suit.

Greg Sterling tries out Book on Google.

Google has also recently changed the interface of Google Hotel Finder, causing further speculation since dropping its hotel carousel in favor of a “3 pack.”

As the company’s move into travel booking shifts up a gear, eyes are fixed on what they’ll do next, and questions are being asked about what this might mean for hotels. Here are some of the potential pros and cons for hotels to consider.

The Pros

Crucially, Google’s instant booking feature is still counted as a direct booking, just likeTripAdvisor’s TripConnect Instant Booking.

This means the hotel will remain the merchant of record for the sale, leaving them in control of pre-arrival marketing and customer relationship management (CRM). As well as being able to handle valuable cross-selling opportunities, hotels will still get to build all-important personal relationships with guests.

In addition, it’s likely that Google’s commission fee will be considerably less than the OTAs. Arguably, a new competitor entering the marketplace could help drive down these rates and challenge the dominance of the industry’s major players.

It’s also worth reflecting on the fact that Google understands the travel research process better than most. Their detailed consumer insight could be of great benefit, as could their ability to handle mobile transactions and mobile research better than most hotels.

Given the fact 27% of consumers will leave a site if it isn’t mobile-optimized, hotels without a mobile-friendly site could see a boost in bookings from Google.

The Cons

There are, of course, a few potential downsides to consider.

Google makes billions off PPC from companies like Booking.com and Expedia Inc., and there’s little indication they intend to give up this profitable revenue stream. Even with Book with Google in play, the majority of the “Book” buttons on Hotel Finder belong to the OTA duopoly, and it’s unlikely that smaller hotels will get an edge.

Their continued expansion into booking could lead to a bidding war between hotels to reach the top of Google Hotel Finder, making it extremely tough for small properties to compete.

But perhaps more concerning is the fact that Google Now can alert users when the price of their hotel reservation drops, encouraging customers to rebook at the lower price.

This move seems to be in direct conflict with Google’s aim to collect commissions off bookings, but if it does come to fruition, hotels could end up taking a big hit on revenue.

The potential silver lining to this is that if a guest feels they’ve got themselves a deal, they may be more receptive to a hotel’s attempts to upsell on ancillary products and services.

For now, these changes clearly present a number of opportunities and challenges. While the impact on hoteliers remains to be seen, Google’s attempts to dominate the hotel booking industry looks set to gather momentum.

Original article

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