A couple of months ago we unveiled Google Hotel Ads by Odysys as our newest advertising service to beat OTAs in search results and get more direct bookings. As soon as we announced this new advertising service, we were met with a wave of questions. How does Google Hotel Ads work? Will my booking engine work with this service? Is this program available outside of the US? And most importantly, does it work? After a couple months of data gathering, careful analysis, and watching direct bookings on the whole rise, we can not only say that Google Hotel Ads work, but we can show you the data behind it.
What are Google Hotel Ads?
Google Hotel Ads by Odysys is a new advertising service designed to help you take back your direct bookings from the OTAs. This service allows you to drive bookings straight from Google with real-time rates, availability and an “Official site” label. Head to our FAQ page to learn more about Google Hotel Ads by Odysys and how they can help you get on the path to a commission-free future.
Over the last couple of months, we have been micro analyzing the properties that have implemented Google Hotel Ads to their marketing mix to see what kind of click-through rate, cost per reservation, and ROI a property could expect from this service. Now that we have a statistically significant group of properties using Google Hotel Ads for a statistically significant period of time, we decided to share our findings.
The first question we had was what is the Click Through Rate (CTR) for Google Hotel Ads. The CTR measures clicks over impressions, or what percentage of people actually click on the ad and enter your booking engine. Across all users, we found an incredible CTR of 65%. This tells us one very important thing: When people have a clear choice to book direct, they will. The biggest thing stopping people from choosing to book direct is the absence of a clear choice to actually book with the property.
After users click into the booking engine, the question is how many actually convert into a reservation? Depending on the booking engine, we have seen conversion rates hover around 3-5% with some instances at 6% or higher. This means that the average cost per booking through Google Hotel Ads is around 10%. Compared to the industry average of 18% for bookings through OTAs, the Google Hotel Ads helps you and your property move toward a commission-free future.
Across the board, we have found that Google Hotel Ads by Odysys works for properties of all sizes, from smaller B&Bs with only a few rooms to larger hotels with 10+ rooms. The performance metrics are proportionally steady across different property types, sizes, and prices making this the ideal addition to any innkeeper’s marketing mix.
Google Hotel Ads offers more opportunities to get direct bookings right out of Google results. In addition to the increased revenue from direct bookings, there are other benefits to direct bookings vs OTA bookings.
- You own the guest experience. When a guest decides to book with you instead of an OTA, you get to own the guest experience from the very beginning. You become the point of contact for guest communications and customer service instead of an Expedia employee. You know how confusing it can be for some guests when they book through Expedia and then contact you to make a change – that’s a crappy experience for the guest that reflects on you even though it isn’t your fault.
- Upsells & Add on Packages. One of the best advantages of booking directly is the option to add packages or specials into the guest’s cart. When booking through an OTA, your guest won’t know about your romance package or the great tour you offer exclusively to your guests. These packages improve the guest experience and add additional revenue to your pocket. If you want to learn more about upselling packages read our blog post Make Extra Money By Selling Experience Packages.
- Guest Communications. After a guest books directly with you, they often get a confirmation email, a pre-stay email, and then their email is saved with you to use for a post-stay email and newsletter communications. Think about all of that added value as you can use the confirmation and pre-stay email to upsell packages and connect with your guests before their arrival and you can use the post-stay email to ask for reviews which helps you all around.
- Opt-ins and Repeat Guests. When guests book through OTAs you don’t get access to their email and ultimately lose touch with your guest. When guests book with you, you have their email address and can opt them in to receive your email newsletter. You can then use these newsletters to market your property and destination and ultimately encourage repeat guests. To maximize your email newsletter marketing strategy read our blog post Why Email Newsletters are the Missing Ingredient to Your Marketing
Advice for Success:
Give Your Campaign the Proper Budget
Under-funded campaigns make for missed opportunities and throttled campaigns. We see that properties that are adequately funded are able to bid the most for the top spot, and display for every available date while hotel ad campaigns with lower budgets are often throttled by Google. With lower budgets, some properties run out of funds before the end of the month and/or the number of times the ads are displayed is so low, that they are missing out on key opportunities to take back their bookings from the OTAs. One of the most enticing parts of Google Hotel Ads is that you only have to pay when someone clicks on the ad and they only see your ad when you have availability for the traveler’s search dates. The Odysys professional services team will work with you to determine the appropriate budget for your property.
Performance Varies by Booking Engine
We analyzed the data by size of the property, the price per room, and several other factors and found that one variable was instrumental in the success of the Google Hotel Ads. Your choice of booking engine directly affects your conversion rate and ultimately your cost per reservation. Some booking engines have a low conversion rate, and therefore a higher cost per reservation. Lower converting booking engines that convert around 2-3% of users tend to cost up to 25% per reservation while higher converting booking engines convert 5-6% of users and cost up to 10% per reservation. We saw some booking engines with cost per reservation as low as 8.5% of a reservation.
As to why this is?
Some booking engines simply work better than others. Think of the ease of use of your booking engine. Can a guest get the whole picture of your property simply from your booking engine? Do you have high-quality pictures of your property on your booking engine paired with detailed descriptions of your rooms with amenities clearly stated? How many pages or clicks does a user have to endure before the reservation is complete? These factors that make it easier or more difficult for users to complete a reservation will not only effect the success of Google Hotel Ads, but other direct booking channels like organic search, email marketing, social media, and more.
At Odysys we strive to provide products and services that provide trackable metrics to maximize your return-on-investment. We are proud to offer a game-changing service like Google Hotel Ads that allows you to directly compete with OTAs to gain back your direct bookings. With a click-through-rate of 65%, cost per reservation of 10%, and return on investment of 10x, Google Hotel Ads by Odysys is the essential advertising service to take your property to the next level.