The watchword for this year remains uncertainty.
But one thing is certain: Google has taken online travel agencies’ place as the single most important sales-and-marketing channel for most hotels. Unfortunately, Google’s importance creates a level of dependence that hotel commercial teams and owners would do well to minimize.
For many hotels, Google now represents 40%-50% of website traffic and as much as 70% of direct web revenues. OTAs also rely on Google for a fair share of traffic. Every time someone searches for hotels in your area and chooses to book on a third-party website, Google deserves at least some of the credit for that sale. When you consider its role in driving traffic to your site, OTA business and metasearch, Google likely accounts for something approaching a third of the total revenues your hotel receives — if not more.
In theory, that’s a good thing. I mean, the returns on paid search and metasearch are generally strong and, in practice, are usually managed entirely as a share of revenue. In other words, you only pay for business you receive.
At the same time, though, Google faces many serious — potentially existential — risks to its business that are already sharply reshaping the search landscape. These risks — and, in particular, Google’s response — have the potential to impact your business as well.
First, the U.S. Department of Justice has filed an antitrust lawsuit against Google. This suit alleges that the search giant’s power in online advertising represents an illegal monopoly that Google has used to harm competition. The DOJ’s suggested remedy? Completely break up Google’s ad business.
At the same time, the emergence of consumer-facing AI-powered tools like ChatGPT and “the new Bing” from Microsoft have upended long-standing views of what your customers’ search experiences should look like. You can’t look anywhere without mention of ChatGPT, a feat all the more remarkable given that it was only launched in late November. Not wanting to be left behind in the rush to bring large language models to the masses, Google announced its Bard “experimental conversational AI service” in early February. I’ve spent a fair bit of time using Bing Chat, and its capabilities, despite demonstrating some obvious growing pains, are impressive.
In short, we’ve seen more innovation around online search in the past four months than in the past four years.
The outcomes in each of these areas are difficult, if not impossible, to predict. I’m actually reasonably bullish on Google’s prospects in both areas. The antitrust case is likely to drag on for years and, given the proposed remedies, Google can’t afford to lose. Faced with the threat of being broken into pieces, Google will undoubtedly fight for as long as it takes to reach a settlement favorable to its long-term interests. And, with no disrespect intended to Microsoft and Bing, they haven’t found a way to bump Google from its throne despite decades of experience in the search market; cool technology alone does not equal a successful product. Microsoft and Bing could win. But I’ll believe they’ve succeeded this time when, y’know, they succeed.
There are, essentially, only two ways these threats to Google’s dominance end, though:
- Google loses to its competitors in the marketplace, the courtroom, or both.
- Google beats back that competition.
In either case, we’re looking at a radically different world than the one we’ve lived in for the past few years, one with a very different Google — a very different search experience — at its core. Whether Google represents 10% of your business, 20%, 30% or more, it’s worth asking how prepared you are to endure a bumpy ride as the market and courts figure out the new normal. It’s worth asking how you can continue to grow your business regardless of what happens to Google, Bing or whatever’s next.
How can you do that?
For starters, you must continue to build direct connections with your customers. You must also tell a compelling story about your brand’s values and why guests want to look for you by name. You must diversify your marketing efforts to include more social, more email, more community. And you must continue to improve your customer experience and offer something your guests will look forward to sharing with their friends, family, fans and followers. You must enlist your guests in the creation and curation of a positive brand story on your behalf. The best way to win — whether on search or any other channel — is to encourage guests to look for you by name.
The best part of these exercises is that you can increase your revenues, lower your costs to acquire guests and reap the long-term benefits of these efforts even if the DOJ and Bing and ChatGPT and the rest fall by the wayside, leaving Google to maintain its dominant market position.
I don’t know how this story ends. Google could win in the courts and the marketplace, ensuring further dominance for years to come. The company could stumble in either arena and lose its crown to one or more rivals, splintering the market and forcing you to scramble to recover lost traffic and revenue. The point is, no one knows. But if you build direct relationships with your customers, if you engage with them on social and email and messaging, if you enlist them into a community in support of your brand and your values, you’ll be in a great position no matter what happens with Google. And on that, you can be certain.
Tim Peter is the founder and president of Tim Peter & Associates.
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