Nathan Gawlik's experience includes being a General Manager of a Hampton Inn and other front line roles such as a Banquet Captain, Front Desk Agent, Housekeeper, Catering Event Manager, and Director of Sales.
You might think that the only difference between Google Ads and Google Hotels Ads is in the name or category of ads, but it's much more than that. Placement, cost, and distribution among other factors all offer significant elements that add value to hotels in their marketing strategy.
If you are seeking a basic and simplified understanding of Google Hotel Ads, such as how much they cost and how to use them, this article provides an easy-to-understand breakdown.
What are Google Hotel Ads?
Google Hotel Ads provide your hotel's availability and rates when people search the name of your property.
In addition, your property will show up in location-based Google searches and maps, with Google Assistant helping guests to make reservations.
Google Hotel Ads were created solely by Google to help hotels compete with Online Travel Agencies such a Booking.com, Expedia, TripAdvisor and more. These ads also help hotels and other hospitality businesses save on the often hefty commission of 15 to 20% they have to pay to OTAs by encouraging direct bookings.
Google allows properties to bid for preferential placement in Google Hotel Search through Google Hotel Ads. Any hospitality property such as bed and breakfasts and hotels can create a listing that will show up in relevant searches, which will allow guests to book directly on your business' website.
How do Google Hotel Ads work?
If your customer knows your business, they'll likely find you by Googling and seeing your business in the knowledge panel, the visual for Google My Business; Google My Business is a tool to promote your business on Google when someone searches for your property.
Part of that knowledge panel is Google Hotel Ads, which lists the prices and availability of your rooms.
If someone pays for an advertisement, their property's pricing will be listed under "Ads - Compare Prices," though customers can click on "View more rates" to see what other online travel agencies (like Expedia or Orbitz) or your business website are offering.
What businesses can use Google Hotel Ads?
Google Hotel Ads are for any accommodation providers, like hotels, motels and bed & breakfasts that want to get more direct bookings.
To activate Google Hotel Ads, the following criteria must be met:
You must use a booking engine from one of Google's approved partners or have your own property management software.
Google Hotel Ads are not a good fit for vacation rentals though. To find out more information about who is eligible for Google Hotel Ads, be sure to reference Google's Hotel Onboarding Guide. At the moment, vacation rentals are not eligible for Google My Business since they have their own unique process.
Additional basic guidelines for Google Business Accounts can be found at this Google support article.
What are the benefits and advantages of Google Hotel Ads?
According to Google Travel, Google Hotel Ads can help you:
Increase direct traffic to your website
If customers search for your business directly on Google, they'll see your business listing on the right hand side of their screen. You can pay for your business' website to appear on the initial Google listing under "Ads - Compare Prices," so your guests can find your business easier. For more information see the video below.
Understand the buyer's journey
When someone books with an OTA, you won't have access to how the guest got that decision, such as what buttons they clicked to get there or what pages they looked at before making a decision to stay with you. Google Hotel Ads gives you access to the necessary analytics to see what led a buyer to your business (part of Google Analytics).
You can also see what part of your website caused a buyer to leave your website and decide to go with another hospitality business in the area. Then you can adjust your marketing plan to match your customers' needs.
Easily provide the information your guest is looking for
Since they're right by Google My Business, Google Hotel Ads give guests access to some of the important information they're looking for when they're trying to find a place to stay, such as amenities, reviews, cost of the booking, what kind of business you have and more. This means your guest is more likely to stay with you and make a purchasing decision since they've already vetted the other businesses that don't match what they're looking for.
Also, this makes the searching process easier for guests since they can narrow down their search faster. The video below shows how La Quinta has increased their bookings with Google Hotel Ads:
What is the limitation of Google Hotel Ads?
The drawback of a Google Hotel Ad is that these types of ads are not used as frequently for initial travel discovery. Most larger hotel chains use Google Hotel Ads because they can use it to fill their rooms with last minute bookings by showing up on the Google map section with a location search. For example, "hotels near chicago airport".
In other cases, the Google Hotels Ads section will only show if a searcher Googles your specific hotel property. In general, Google Hotel Ads are best used to save you commission fees from OTAs (Expedia or Booking.com) competing for the same guest.
What is the cost of Google Hotel Ads?
Google Hotel Ads typically uses a competitive commission structure. You can choose between two price structures: Cost Per Click or Cost Per Acquisition.
CPA or a pay per stay model allows property owners to only pay a commission when the guest completes their stay with the property. You will get charged a commission or percentage of the income you received for someone booking a room with you. An example of this would be: 10% on a $150 room is a total CPA of $15.00.
Of course, your commision will fluctuate with your rate. That is why setting a max budget so you're not overspending is important. Google recommends using the percentage option because this option tailors the amount you are willing to pay to the revenue being booked.
The other benefit that the commission per stay option presents is the bid strategy. This means that the percent commission you pay will be dependent on just how much your competition is willing to pay or bid for that same guest. This can help keep commissions marginally lower than other offerings as each provider will likely try to acquire each guest for the lowest possible cost.
For example, an OTA might be willing to pay 15% commission on a booking while you would only pay 12%; therefore, of the four ad spots in the knowledge panel, the providers with the highest commission will be featured there. Google only features four paid ads while the other spots are free booking links under "All options" or "view more rates" as illustrated in the below images.
The third benefit to choosing the Google commission strategy is that, unlike cost per click, you will only pay if a conversion happens, regardless of the number of ad clicks. This means you only pay a commission if the reservation is completed and the stay is fulfilled.
With CPC (cost per click), as the name indicates, you only pay if someone clicks on your hotel ad. Your ad will show up in the rankings and be listed in the Google knowledge bar, which is the business listing often found on the right side of the screen.
CPA (cost per acquisition) is by far the most popular option, considering the property only has to pay after they receive revenue from a guest.
However, the one you choose depends on your campaign goals. You'll need to analyze your daily budget and review your average daily rate to get an estimate of how much you can anticipate to pay Google for the stay.
Is there a free option for Google Hotel Ads?
Google announced March 9th, 2021 that a free option is available for Google Hotel Ads. Though, your property will only appear for free if you click the "View more rates" link. See an example of this down below.
There is no reason not to be participating in this new offering by Google.
According to Google, free booking links include the name of the booking partner who is selling the room, along with the room rate for the itinerary selected. Booking partners pay no fee for free booking links, and Google doesn't collect any payment for placement or user engagement with these links.
Although the potential traveler or guest has to make another click to find potential places to book, many do so. Each hotel has to evaluate their strategy, but, at the very least, hotels should enroll in this feature.
What is the difference between Google Hotel Ads and traditional Google Ads?
Previously referred to as Google Adwords, Google Ads are promotions found on Google. This is the most basic and most common form of advertising Google offers. Typically, these ads have a PPC or pay per click (also referred to as CPC or cost per click) commission structure.
The most noticeable difference between Google Ads and Google Hotel Ads is where the ad appears in search results: Google ads are listed on the left-hand side under the search bar (as seen below), while Google Hotel Ads is placed on the right in the knowledge bar.
Google Hotel Ads are more complicated than Google Ads because Google Hotel Ads use more information about your hospitality business to work — Google must have real-time information on your inventory and rates. In addition, your business must have a "Google My Business" account to display your location, images, reviews and more.
How does Google Hotel Ads compare to other Marketing Channels? (Booking.com, Expedia, TripAdvisor, etc.)
With so many different marketing tools out there, knowing your Return on Ad Spend compared to various options is important.
Consider marketing your business with online travel agencies like TripAdvisor or Booking.com for example. The typical commission you will pay with an OTA (Booking.com, Expedia, Airbnb) is anywhere between 10% to 30%, with the average being 18%.
The competitive edge that OTAs once had is now waning because of Google offering Hotel Ads. Google has now entered the ring to compete directly with the traditional marketing channels offered by OTAs. Google's move may have forced Trivago to lower their commission rates in recent years to as low as five percent.
However, OTAs shouldn't be counted out. They are still another viable channel to be found by guests seeking to travel to your area. Use OTAs as part of your multiplatform marketing strategy.
When considering what platforms to advertise on, know your numbers. Review what your current costs are and review each campaign to determine if it worth your time.
How to Set Up Google Hotel Ads for your hotel?
To set up Google Hotel Center typically requires some code and configuration. Properties managers usually need to enlist the help of a software developer to complete this task or to work with a Property Management Software provider like ResNexus, Cloudbeds and many others that integrate with Google Hotel Center.
Before deciding what PMS you want to partner with for this initiative, consider just how much of a commission fee you will pay the PMS and how much oversight you want to have on your Google Hotel Ads. Some PMS solutions will offer to run the ads for you for a marginal fee.
In theory, you could directly share your hotel's availability, rates and inventory without a PMS. However, you would have to have your own custom built software that would provide that information to Google.
For a majority of small hotels and properties, understanding the technical knowledge for Google Hotel Ads can make an independent integration nearly impossible.
If you're ready to set up Google Hotel Ads and enjoy these benefits, click here to set up Google Hotel Ads with ResNexus. Or feel free to explore other Google integration partners. In addition, you can advertise with other OTAs like Booking.com, Expedia, Airbnb, and more with ResNexus' Direct Connect.
Conclusion
Google Hotel Ads can be a cost effective way to get direct bookings.
The advantages of Google Hotel Ads include:
Increasing traffic to your website
Increasing your direct booking rate
Understanding the buyer's journey better
Providing all the information your guests need before booking with you
