February 5, 2020
Google Ads, Vacation Rentals, & Change
If there is one certainty in the online travel space, it is that it’s constantly changing, evolving and becoming more challenging for independent property owners and managers. One of the biggest game-changing happenings in 2019 was Google entering the alternative accommodations space with Google Travel.
Google Travel is much more than just another channel for vacation rental property managers. It will continue to cause the further convergence of organic search engine strategies, PPC advertising, channel distribution management, and revenue management more than any other new opportunity in the alternative accommodations space in the last decade!
In the last half of 2019, Google began working with a handful of developers and software providers to create a seamless reservation experience for customers seeking to book a vacation rental. The search giant has been slow to move into the alternative accommodations sphere partially due to the fragmentation within the industry (for example the four largest property managers in the country control only 1% of the inventory) and because vacation rentals are not easily categorized.
Traditionally, the vacation rental market has been dominated by five major players; TripAdvisor, Booking.com, Airbnb, HomeAway, and Expedia. Google’s arrival has been much anticipated by the industry, and now vacation rentals are integrated into the Hotel Search function with inventory coming up along with hotels on SERPs and Google Maps.
When searching “Destin vacation rentals,” “Florida vacation rentals,” or “United States vacation rentals,” Google Travel ads often pop up first or they at least dominate a significant portion of the first page in addition to the usual paid search ads. Only a few organic listings show up. Property managers who once ranked well and relied on organic traffic have likely experienced a decrease in organic website traffic over the last year.
So, What’s Next?
Right now, while rental inventory is being shown next to hotels, property managers can’t access guests directly via Google Search or Maps, but only by working with a “Google-preferred” software partner. So, what’s next for Google Travel? Future developments may potentially impact direct bookings, the guest experience, customer ownership, and even the current system!
A recent Expedia study found that 69% of travelers begin their information gathering on search engines when planning a vacation. This is more than all other sources including family, friends, OTAs, and travel brand websites. It’s hard to believe that Google will not become the dominant player in the alternative accommodations space.
One potential challenge is the ownership of a reservation. Currently, when a customer search returns a potential rental and the guest clicks the link, the customer is directed away from Google to either the OTA or directly to the property manager to be processed.
But how will the sales process change if the guest could book directly on Google? This is coming soon. This is a natural progression and will improve customer experience. Customers will be able to take their entire vacation buying journey from inspiration, to search, comparison, and buying without leaving Google. According to Google, this model will also increase booking conversion rates.
With Book on Google, Google in effect becomes an intermediary to facilitate bookings instead of simply a gatepost for information. However, Google isn’t an OTA either as it never becomes the merchant of record. Payment is still made via the property manager or OTA and they remain the merchant of record. Once the booking is made on Google, all the details are passed to the supplier and its sale processed, job done!
What About Other More Established Players?
Large OTAs like Expedia and Booking.com spend billions annually on Google advertising making it unlikely that Google will launch a full-blown “Book on Google” model. However, with its focus on search, Google Travel as it currently stands comes as no surprise, but suddenly building a customer service resource-intensive OTA-type model seems unlikely.
The large OTAs are growing at double-digit rates, but they still only represent a fraction of the total travel industry. Google will continue to help them with a top search layer that will also benefit the user experience. Property managers looking to build their brands, capture leads, and up-sell should remain cautious on relying solely on Google in the coming year to facilitate the entire buyer’s journey.
Until it becomes apparent which business model Google will adapt, it’s important to continue to spread the risk among channels and maximize the visibility of your brand. This is especially true for properties and managers with established brands and fully optimized websites that cover and nurture the entire customer experience.
Right now, the only real way to gain traction on Google Travel is through third-party vendors like Airbnb, Expedia, and Booking.com or channel managers like Rentals United with 15,000 units or more, the minimum required to run these ads.
Also, if you don’t currently have someone on your team who understands Google Ads, find someone hungry enough to dig in and learn. Google Ads provides excellent free training options.
In the future, the ownership of the reservation will be a major factor. Ideally, both Google and the supplier, OTA or property manager, will share ownership of the guest. Google controls all the preference and booking information and the supplier will be handed over all the reservation details including contact information. This will allow the development of customer loyalty programs and a superior guest experience by property managers.