As hotels look
for ways to capture new bookings while minimizing expenses, Google is offering a
new ad pricing product that provides low-risk visibility in its Google Hotel Ads
Since April, Google
has made its “pay-per-stay” (formerly Google Hotel Ads Commission Program)
available to all Google Hotel Ads partners globally, expanding from a small
pilot that had operated for a few years.
choosing this option only pay Google for their ad after the guest stay has
occurred. If a traveler books and then cancels, the commission is not due.
clear as the COVID crisis unfolded was that cancellations especially were a
major factor. Helping share risk with our partners and helping our partners
manage cancellation risk - that motivated us to prioritize and scale up this
program and accelerate it,” says Michael Trauttmansdorff,
Google’s group product manager for travel ads.
“Google will succeed
if our partners are successful and if our users are served well by the product
that we offer. Ultimately if we can manage that risk, we think it is a
reasonable step to take.”
says a large number of its hotel partners, of all sizes and in regions around
the world, have begun using the pay-per-stay option as a way to participate in
Google marketing while managing the uncertainty that still exists in most regions
about consumer travel patterns.
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In the near
future, Google will also roll out a more prominent way for hotels to share
their cancellation options.
“We see really
heightened interest in from travelers is around understanding the flexibility and
terms attached to booking a particular rate,” Trauttmansdorff says.
“What we are prioritizing
and rolling out in coming weeks is a much more consistent display of what the cancellation
policy is for any given rate and filtering capabilities so travelers who really
prioritize flexibility and refundability can identify which hotels, which
prices really satisfy their needs.”
Pablo Delgado, CEO of hotel direct sales
consultancy Mirai, says the new pay-per-stay option gives “the industry what it
wanted and did not find in any other meta: an easy, convenient and risk-free
way of being in a fast-growing metas such as Hotel Ads.”
In a blog post,
Delgado says the new commission pricing option, in tandem with Google’s
Property Promotion Ads format that makes hotels visible to users at the top of
the funnel – when searching simply by destination or concept - “change the rules of the game” for hotel
“The chance to run campaigns to attract ‘new demand’ with a
commissionable model, be it per stay or per conversion, is nothing short of
revolutionary,” Delgado says, offering the following reasons:
- It guarantees a certain profit,
which had been impossible so far because of the reign of the cost-per-click
- It is
good for your cash flow (using the Commission per Stay) model, a crucial point
for many hotels, especially seasonal ones.
- It solves traditional budgeting
problems that arose from the use of CPC campaigns. The more you sell with a
guaranteed profit, the better.
- It is a perfect match for hotels’
commission-per-stay philosophy, so you do not need permission from your sales
manager or finance manager to kick off campaigns. For most hotels, a commission
is a commercialization expense and a CPC is a marketing expense (this idea is
wrong, but it happens quite often).
While Google has expanded the
pay-per-stay option globally in direct response to the impact of COVID-19, Trauttmansdorff
says he expects it to remain “a standard part of our hotel ads product for the