Details about Google Places Hotel booking feature, first widely seen in November, are starting to leak out. Google has been somewhat reticent to make meaningful public comments and provide significant details about it. This Places feature allows users to select a booking date, click through from the Places Page and immediately begin the booking process.
It was reported yesterday at Travolution.co.uk, in an apparent press release, that Worldhotels was now offering the Google feature to its affiliate hotels:
Independent hotels can now post information including room rates on Google Maps and Google Places using Worldhotels.
The hotel group is the first of its kind to allow independent hotels to display their real time rates and availability on Google Maps and Places.
This pay-per-click ad model is connected with the groups booking engine. The first hotel to test the new pricing display option is the Worldhotels property Georgian Terrace in Atlanta, USA.
Worldhotels is a company that provides a marketing umbrella that allows independent hotels to maintain their uniqueness but take advantage of back room processes that benefit from scale like booking, rewards programs, negotiating better rates with online booking companies and now obviously, access to Google’s Pay Per Click hotel booking test.
Rather than give up between 25 and 50% of their booking fees to the online travel sites, independent hotels can join a group like Worldhotel for a very small percentage of each booking while additionally taking advantage of other programs like frequent visitor benefits that the affiliate organizer has to offer.
In the case of Google Places, the hotel noted in the press release, is offering a Petite Single Room for their discounted rate of $116 (the same room is $199 through their site) which is exactly the same as the Expedia/Travelocity price. The cost to the hotel is likely the 2% affiliate booking fee plus their AdWords cost vs the 15-25% that they would normally be paying to the online travel site. Thus they could be paying somewhere on the order of $4.50 for the booking versus $31 via the current system. This model, while still in its infancy, is likely to put pressure on the margins of the online travel booking sites.
Google has noted that they are also “exploring ways to allow individual hoteliers to easily share updated pricing / availability” which would mean that even hotels not in a franchise or otherwise affiliated would likewise be able to take advantage of the savings in such a system.
It will be interesting to discover how Google is pricing the pay per click ads in this model. What are the current costs of PPC for hotels in major markets?