How does Google Hotel Ads’ commission program work?

How does Google Hotel Ads’ commission program work?

For hoteliers, metasearch engines play a major role in increasing their direct bookings. In the fiercely competitive hospitality industry, hoteliers face the constant challenge of attracting and securing bookings amidst a sea of OTAs (Online Travel Agencies) and hotel booking platforms.

In such a landscape, metasearch engines have emerged as an invaluable channel for hoteliers, offering unique opportunities to increase direct bookings, enhance visibility, and optimize revenue management strategies. 

Understanding the importance of metasearch for hoteliers is crucial in today’s digital age, where a strong online presence can make a significant difference in a hotel’s success. Embracing metasearch as a key component of their digital marketing and distribution strategy is crucial for hoteliers who aim to thrive and flourish in the dynamic and evolving hospitality landscape.

Google Hotel Ads is the most used metasearch by travelers who search for a hotel. Apart from the commonly used cost-per-click bidding method, it also offers a commission-based bidding model. Let’s dive into what it is, how it works and what are the benefits for your hotel. We will also detail all the basics about Google Hotel Ads so everyone is on the page.

What is Google Hotel Ads?

Google Hotel Ads (GHA) is a metasearch or price comparison site that allows hotels and accommodation providers to showcase their properties and attract potential guests through targeted advertising. It is designed to help travelers find and book accommodations directly from Google Search results, Google Maps, or Google Hotels.

With Google Hotel Ads, you can display your hotel rates, availability, and other relevant information to users who are searching for a hotel. The ads appear prominently in the Google My Business of your hotel to capture the attention of potential guests. It provides a user-friendly experience for travelers to research, compare, and book accommodations while allowing hotels to drive direct bookings and increase their online visibility.

By leveraging this advertising channel, you can drive more direct sales, and reach a highly qualified audience.

How does the commission-based model work on Google Hotel Ads?

Setup & Display

First, to advertise your hotel prices on Google Hotel Ads, you have to partner with a certified integration partner, to connect your inventory and rates to Google Hotel Ads. They will assist you in setting up the necessary API connections. 

Then you need to provide your property’s inventory and rates to the integration partner, who then communicates this information to Google: this step involves configuring your rates, room types, availability, and any restrictions or special conditions. Often the integration partners will connect directly to your current CRS or iBE systems to get all the necessary data.

Regarding your ads display, when users search for hotel-related queries on Google Search or Google Maps, relevant hotel ads are displayed alongside organic search results on the SERP (search engine result page). Your ads appear under the “Compare the prices section” in the Google Business Profile of your hotel. 

Your rates also appear in Google Hotel Immersive, in the price section. Users access Google Immersive where they can view detailed information about the hotel, when they click on the “Book a room” button in your GBP (Google Business Profile)

If the user chooses to click on your official website link, they are directed to your hotel’s booking engine to complete their direct reservation.

Commission model explained

Hotels participating in Google Hotel Ads may pay for ad placements using different bidding models, including cost-per-click (CPC) or commission-based models. In the commission-based model, hotels can pay a commission to Google for each completed booking generated through the ads..

You decide on the commission structure you are willing to pay to Google for each completed booking generated through Google Hotel Ads. The commission is a percentage of the total booking value. Configure the settings with your metasearch partner to indicate that you want to participate in the commission program and specify the commission percentage.

Two types of commission bidding methods

Commission per acquisition (CPA) model, hotels are charged a fixed commission for each completed booking on the official website booking engine coming from Google Hotel Ads campaigns. The commission is due on the purchase date. 

The commission is calculated on the amount of the reservation when it has actually taken place. It allows you to manage your campaigns in a more simple and automated way while accessing a certain level of detail. The metasearch system will optimize the bids and guarantee the cost of distribution of your campaigns.

Commission per stay (CPS) model, the commission is calculated based on the total value of the guest’s stay. The commission percentage is decided by the hotel.

You manage your campaigns in the same way as CPA, but the commission is due after your guest stay, it is net of cancellations and no-shows, which further guarantees your distribution cost, and return on ad spend (ROAS).

Finally, note that commission rates vary depending on the metasearch and the markets in which you sell your establishment. However, to achieve your goals, you can combine your bidding methods by market and/or metasearch.

What is the right commission rate to choose?

There is no right commission rate applicable to every hotel because it depends on the property, the objectives, the market, etc. It is up to you to determine what is the commission rate you are willing to pay according to your visibility, activity, and your digital selling goals. 

There is no official minimum commission rate on Google Hotel Ads but you have to bid to appear on metasearch. Indeed, Google determines your hotel’s position in the listing according to your commission: an e-CPC is calculated based on the number of clicks divided by the number of conversions and the commission amount.  This e-CPC is correlated to a quality score and competes with OTAs. All of this will determine your hotel’s position in Google Hotel Ads per market.

The benefits of commission-based models

One of the primary advantages of the commission-based model is the ability for hoteliers to compete on an equal footing with larger players in the industry. This levels the playing field, allowing smaller or independent hotels to showcase their unique offerings and stand out among competitors.

Additionally, the commission-based model incentivizes metasearch engines to actively promote and market participating hotels, as their revenue is directly tied to successful bookings.

Metasearch engines invest in various advertising channels and optimization strategies to drive traffic to their platforms, increasing the visibility of hotels listed within their search results. This expanded exposure can result in a higher volume of direct bookings, reducing reliance on third-party booking platforms and saving hoteliers on distribution costs.

What about Google Free Booking Links?

Google Free Booking Links (FBLs) are free links that show your official rate in the “All options” category on your Google Business Profile. Once set up, they allow your hotel website to be displayed on Google. Thus, depending on the dates of stay selected by travelers, you will display the best available rates. 

The Free booking links from Google Hotel Ads appear under the paid ads. When they appear, the official website always gets the first position of the free space.

By clicking on a Free booking link, the traveler will be automatically redirected to your website’s booking page, increasing your traffic. Make sure you have a fast, user-friendly website with a simple purchase path, with the room in question and rates clearly displayed.

FBLs are automatically activated when you launch classic paid Google Hotel Ads campaigns: paid GHA campaigns will bring you more direct bookings but FBLs can account for up to 40% of hotels’ direct bookings. These organic links allow all hoteliers to increase their direct income for free, including those who do not have a Google Hotel Ads connection.

Tracking & Optimization 

Google provides conversion tracking tools that allow you to measure the effectiveness of your Hotel Ads campaigns. The conversion tracking helps determine which bookings can be attributed to your Hotel Ads campaigns, enabling accurate calculation of the ROAS (Return on Ads Spend) and commission value on commissions programs. 

Regularly monitor the performance of your Google Hotel Ads campaigns, including impressions, clicks, and bookings. Continuously optimize your Google Hotel Ads campaigns to improve performance. This may involve adjusting your bidding strategy, refining your targeting locations, length of stay bidding, device, check-in day, etc. You can also implement special promotions to drive more bookings and maximize the return on investment.

At Cendyn, we provide you with a turn-key solution Digital Marketing Platform allowing you to connect, optimize, monitor, and track all your metasearch campaigns and performances. 

What are Google Hotel Ads benefits for my hotel? 

Google Hotel Ads offers several benefits to hoteliers. Here are some key advantages of using Google Hotel Ads:

  • Direct Bookings: With Google Hotel Ads, you have the opportunity to drive direct bookings. When users click on a hotel ad, they are typically directed to your hotel’s booking engine to complete the reservation. This helps hotels maintain control over the booking process and potentially reduce reliance on third-party booking platforms.
  • Targeted Reach: Google Hotel Ads allows you to target your ads to specific geographic locations, devices, dates, length of stay, etc. This targeting capability ensures that hotel ads are shown at the right time to users who are already interested in your property, increasing the effectiveness of your advertising efforts.
  • Showcase Competitive Advantages: Hotel ads on Google allow you to showcase your unique selling points, such as special offers, discounts, member rates, cancellation policies, exclusive add-ons, etc. This helps differentiate yourself from competitors and attract potential guests with compelling features.
  • Mobile Optimization: Google Hotel Ads is optimized for mobile devices, which is crucial in today’s mobile-driven world. As users increasingly use smartphones and tablets for travel research and bookings, having mobile-friendly ads ensures a seamless user experience and maximizes the chances of conversion.
  • Increased Visibility: Google is one of the most widely used search engines, and by advertising on Google Hotel Ads, you can significantly increase your hotel’s visibility to potential guests. Hotel ads appear prominently in search engine results pages, increasing the chances of attracting relevant traffic.
  • Integration with Direct Booking Systems: Hotels can integrate their direct booking systems or preferred partners with Google Hotel Ads, streamlining the booking process and ensuring accurate availability and pricing information. This integration enhances operational efficiency.

It’s important to note that the benefits of Google Hotel Ads may vary. You should assess your specific needs and goals to determine what Google Hotel Ads strategy aligns with your digital marketing objectives and budget allocation.

How to drive more direct bookings with Google Hotel Ads?

Here are some strategies and best practices to increase your direct bookings:

  1. Optimize Your Google Hotel Ads Campaign:
    • Highlight unique selling points, such as exclusive offers, amenities, or promotions.
    • Include competitive pricing information to attract price-conscious travelers.
    • Leverage ad extensions, such as callouts or structured snippets, to provide additional information and entice users.
  2. Optimize Your Hotel’s website:
    • Ensure your website is user-friendly, visually appealing, and mobile-responsive.
    • Streamline the booking process to make it quick and easy for users to complete their reservations.
    • Display clear and transparent pricing and availability information.
    • Make it easy for users to proceed with the booking by providing a seamless user experience from the ad to the booking process.
  3. Leverage Special Offers and Promotions:
    • Create exclusive offers and promotions for direct bookings, such as discounted rates, free upgrades, or value-added packages.
    • Highlight these special offers in your Google Hotel Ads to incentivize users to book directly with your hotel.
  4. Monitor and Optimize Performance:
    • Regularly analyze the performance of your Google Hotel Ads campaign.
    • Track metrics such as click-through rates (CTR), conversion rates, and return on ad spend (ROAS).
    • Use the insights gained to optimize your campaign, adjusting bids, ad placements, or targeting to improve performance.
  5. Utilize Remarketing:
    • Implement remarketing campaigns to target users who have previously shown interest in your hotel.
    • Show personalized ads to these users as they continue browsing the web, reminding them to book directly with your hotel.

Remember to regularly evaluate and adjust your strategies based on performance data and user feedback. By continually optimizing your Google Hotel Ads campaign and providing a compelling booking experience, you can increase the likelihood of driving more direct bookings to your hotel.

Conclusion

In conclusion, the commission-based model in metasearch engines has transformed the way hoteliers approach marketing and distribution strategies. The commission-based structure allows hotels to reach travelers actively searching for accommodation and only pay a commission when a booking is made.

Leveraging the data insights and optimizing revenue management strategies within the commission-based model can result in higher bookings and revenue for hoteliers. Embracing this model can lead to a more cost-effective and performance-driven approach to marketing and distribution in the competitive hospitality industry.

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