Google has a history of shaking up whatever industry it enters, so hoteliers have watched with interest in recent weeks as the tech behemoth launched a beta version of its Hotel Finder search tool, which allows for location-based searching by zip code or neighborhood and quick pricing comparisons. For now, users do not actually book through Google and are routed to other websites when they make their selection.
At the same time, the travel industry awaits the impact on airline bookings following Google's acquisition of ITA Software.
Central reservation system supplier Trust International--whose client list includes Taj Hotels, NH Hotels, Iberostar Hotels, Ramada Worldwide and Leading Hotels of the World--is an early partner in Google's hotel venture. Earlier this year, it began supplying rates and availability to Google and more recently signed to participate in Hotel Finder.
I recently spoke with Trust International managing director Richard Wiegmann about the partnership and how he sees the hotel booking landscape changing as Google becomes more deeply established in the space.
What benefits have you seen from your relationship with Google?
Since February of this year, we have had the opportunity and option for hotels that we are hosting on our system to bring real-time availability and hotel rates to Google Maps. We have a good 2,500 hotels on it, which is a little less than half of our portfolio, and that is across the world. When we spoke to customers, they would like to get a lot of experience on how this works, whether it's in the United States, Europe, the United Kingdom or the Middle East. There also are markets that are very mobile-driven, such as Korea and Japan, so we selected customers in all of these regions first and rolled the product out to them. We gained a lot of experience and traction by that. A good six to eight weeks into the project, we started preparing the interfaces. We were working on the availability to get ready for Google Hotel Finder, which was put into beta about two weeks ago. We immediately set up all the hotels who wanted to be on Hotel Finder as well, which as we know is continental U.S.-only at the moment. As we know, Google had the exciting news of the mobility of Motorola that they just bought. It was very important that we could sell not only availability and rates but also proper content, in terms of pictures, videos and property content in general on the product, and that's what we're doing. Pickup is very good, and by the end of the year we should be adding a good 5,500 properties, and we are always watching out what's going to come next on the Google side.
With Google now in the hotel-booking space, will we see any major changes with the other players?
In terms of booking at the moment, it's a more qualified leap. Has Google changed our way of buying, our way of online behavior? The clear answer is yes. If I just move that down to the hotel part or the hotel industry, it will not only be Google but also other players, such as Bing Travel. The online search sites will play a bigger role in travel selection going forward than they're doing today. This changes the game not just for the hotels, but there is a new way to distribute, so it clearly changes the way OTAs have to adapt, the way metasearches have to adapt, the way CRS companies like us have to adapt and the way GDSs have to adapt--all the way down to travel agents. It will change the behavior of searching and qualifying a property to book.
How does this trickle down to travel buyers?
For them it's probably a good thing, because travel managers have a pretty good look on what the traveler is allowed to do and is not. We have a lot of frequent travelers, and they know exactly what to do, including myself. We're in the hotel business, so we stay with our customers, but when it comes to air, car, rail and all these other things, the travel managers are in a better position because the travelers don't really have the choice. They've found this great deal on Google, and unless the travel policies allow that, and if you find something better than the corporate rate at the same hotel, it brings up two questions: Why shouldn't I book it, and why don't they get this rate as a big corporate customer?
What does it mean for presentation of hotel booking information?
There's very different forms of emotion in selecting one property over another. There are different ways of doing this with a new product. If it helps the corporate sector find a better property with a better location or conference rooms or whatever, that's a completely new level. It's probably a lot better than what the websites of the hotels themselves are providing in terms of services. If you read customer reviews, it becomes a very efficient tool.
As hotel booking evolves, what should buyers expect from a hotel contracting perspective?
I just watched the full RFP process, with all these rates going back and forth and coming into our system and flowing out again. It's a very good process and works well, but there's a lot of back and forth for a rate of $140, and suddenly there's $110 [available]. Whatever that includes or excludes is a separate story, whatever is the allotment or availability of rooms is a separate story, but the visibility into such rates should bring a travel manager or an organization that buys a lot of travel into a pretty good position. I talk to frequent travelers in my company, and their favorite topic is what hotel they stayed at, what the experience was or what Delta did to you lately. Then we conjure up whether we booked a rate and found something three times cheaper on such and such channel. What's going to happen is that at the big companies like IBM and Siemens, their travelers will start talking about that as well, and it puts pressure on the trade as well as the travel manager. How smart will the corporate travel manager be to include something like the Google search for hotels? They probably can reduce travel spend with that as well and put out a different position in negotiating with hotel providers.
Let's see what the upcoming months are going to bring, and what it's going to mean for the metasearches. Does this replace the metasearch? What does ITA integration mean on Google? What does it mean for the GDSs? For the corporate business that often has rebate programs, with certain amounts going back to the corporate travel agency or corporation, what does it mean to them? Certainly, there is great visibility on pricing through channels that are cheaper. It can really change the world, but you have to change your business model with those things. Twenty years ago, somebody said, "It's all going to go away anyway; everybody's going to book directly," but it grew in a different way and at a different pace. Five years ago, somebody told me that GDSs were going to go away. They will not. They will change. They have to change their business models, but they will not go away. Some sort of GDS will always stay over as an aggregator, but they have to change their business model, and it's the same way on the corporate side.