Here is an interesting quandary - if online travel agencies claim to bring incremental business, why do they advertise on hotel brand names?
In fact, shouldn’t they focus on destination searches instead? It seems the larger chains have convinced the OTAs to refrain from this practice.
However, to independent hotels or hotel management groups, they are not showing much consideration. This SEM hijacking or brand keyword robbery needs to stop.
Consumers search for a hotel name, primarily because of a recommendation from a friend or a review they read online - sometimes because of offline advertising by the hotel itself.
By bidding on a hotel’s name in the search engines, OTAs intent is to convert this direct client into an OTA client for that hotel or worse, re-direct them to another hotel.
It seems Marriott and Hilton have successfully managed to clean up the advertising on their trademark, according to a recent study done by HEBS, Max Starkov informed me last week.
"When searching Marriott Hotel + destination you will not see Priceline, Expedia, Orbitz or any other large OTA. The same goes for Hilton." he says.
These chains appear to have convinced Expedia and other leading OTAs to focus on bringing in incremental revenue.
However if we dig a bit deeper, we see that the affiliate websites of these distributors are still advertising on the chain's brands.
So, clearly there is still work to be done to clean up SEM Hijacking, as Starkov calls it.
But the OTAs aren’t really paying consideration to their promise to generate incremental bookings when it comes to independent hotels.
They blatantly advertise on brand keywords on Google, Yahoo and Bing. Therefore, how can they allow their own sales pitch to hotels to become so obviously hollow? Surely they should stick to their promise!
It almost looks like the OTAs are becoming just like the flawed franchise model with which hotels have become so disgruntled over the last decade. This game is so old - sign up more hotels so we can use their clients to steer business to other hotels.
In the case of running offline advertising, hotels run the risk of paying twice for the same client. Firstly for the newspaper add and secondly an OTA commission on top.
Here an example of advertising on independent hotels by an OTA:
What are search engines like Google, Yahoo and Bing doing to help protect the brand and trademark of independent hotels?
Not much, as they are generating large revenues from the advertising of course. Instead of a lengthy appeal option, they should provide a flag system through Google Places, allowing businesses to mark unauthorized advertising to be deleted.
The OTAs aren’t the only ones at fault. Hoteliers have to take a good look in the mirror, and take responsibility for their own actions.
In the end they have allowed this to happen, by signing distributor contracts without sufficient understanding of the landscape and market dynamics out there.
We are now getting to the constructive part of this issue. As a solution, hotels should include clauses in their contracts with OTAs to prevent such brand hijacking practices. It is a very important step in controlling distribution costs and production.
For the various independent hotels we have in our own management portfolio, for example, we have opened the discussion with the OTA on this topic.
Initially we were getting some of the standard, evasive answers.
OTAs will always try to justify this practice. A funny explanation is that they are able to bring bookings from countries such as China which we can’t reach with existing hotel marketing efforts. They have websites in local languages, etc.
This excuse is easily overthrown by explaining that it can be done through natural SEO, and not SEM keyword bidding.
Once the OTA sees you know what you are talking about as a hotelier, they usually shift gears.
We informed all our distributors that we will only work with partners that respect the brand and trademarks of our hotels. Clauses and addendums were added to the contracts outlining in which we want to work together with them and their affiliate websites, creating a win-win situation.
We have gotten a very positive response from many, including Booking.com, Lastminute.com, HotelBeds and Transhotel.
One OTA stands out though in its response. Expedia across Europe has basically stated, that they do not work this way with independent hotels.
Having discussed this matter with teams in different countries, the message in essence is that they are not capable of controlling keyword bidding by their various points of sales, especially not for independent hotels.
We have an easy solution for this, simply don’t advertise on hotel brand names, and be a partner as you yourself advertise to hoteliers.
Last week I came across an article, titled The Benefits of Using OTA, in which Melissa Maher, VP of global strategic accounts and industry relations at Expedia, stated: "Why wouldn’t you use an online travel agent?"
"My pitch would be: why exclude them, because there are significant revenue opportunities?”
It seems she is answering her own question here. Hotels are looking for a benefit in working with OTA, a win-win situation in their relationship with distributors. The claim to bring incremental business in sales to hotels, but the actions appear to contradict this.
TripAdvisor, Expedia’s sister company, also perhaps seems unwilling to respect hotel trademarks in this sense. It is simply not willing to cooperate with independent hotels when this issue is raised.
It is time OTAs accept that hotels have woken up, and it is time for change. If they do not stop such advertising on hotel brand names and trademarks, they perhaps stand to lose their product.
As the economic outlook improves, hotels will gain the upper hand in this partnership and look for alternatives. Hotels will find out that direct distribution through effective internet marketing is less costly and new supplier-friendly OTAs will emerge and challenge the status quo.
In the end the hotels have the rooms, which are the real key to this distribution market, and the power of negotiation.
Compare it to an Egyptian or Tunisian revolution. Desperately clinging on to power will only lead to a downfall of the regime. The days of SEM Hijacking or brand keyword robbery are numbered...