Remember… I’m not a blogger, a marketer, or a web guy. I am a hotel ops guy, and I’m just trying to produce content at my leisure, as best I can.  So with that out of the way, there’s 2 things I am worried and confused about, and I hate being alone on an island, or in a silo, with no one to kick ideas off of. If life is too busy, feel free to ignore. nb: I’ve been advised to omit any identifiable info on hotels or people, so apologies these screenshots are so heavily, and poorly, edited).
 
The first one is just unethical, but the 2nd one feels like a gigantic scandal a reporter should grapple with.  Maybe I am wrong, and independent voices aren’t allowed to ask questions or speak truth to those in power.

 

 
1) OTA COUPONS SUBSIDIZING RATE

 

 
This is not something endemic of Orbitz. Everyone is doing it, and we’ve had an indication that it is less about hurting the hotels directly, and more of an attempt to compete with Expedia. The collateral damage and shrapnel is quite painful, however.  This image is difficult to see. A guest screenshot it and sent it to us, while standing at the desk. It’s not important that it is perfectly clear, but note the green colored line with a “-” in it? That’s a coupon discount on our published rate.

 

It’s likely too small to view, but no concern… I will explain it.  However, I am not sure I will properly relate this, but here we go!

 

 
At this hotel, on this night, our rate is $277.  On Orbitz, we have parity, and then Orbitz offers a coupon, likely paid by marketing expenses, that gives a discount on our rate and lowers it beyond what we can offer.  The guest, standing at our front desk, was going to book it on Orbitz, because we couldn’t offer that rate.  We always take the direct booking vs letting them book on OTAs, and we pride ourselves in intelligent customer service that is aware how dumb it is, and lazy, to say “you must book on the website you see that rate on, because we can’t offer that rate”. It’s taken a lot of training, but we always take the rate direct.  Initially we were just confused.  
 

 

We understand the traveler had orbitz “obucks” points, and those are loyalty, so that’s not our concern.  But knowing how bad it is to let them book on OTAs, we decided to take it direct, and booked her at a $241 rate to match Orbitz. 

 

 
My question: *How could you possible compete with that tactic?*

 

 
The guest thinks they’ve got a lower rate, but they’ve really got the real rate that is being undermined by Orbitz’s unfair marketing spend.

 

 
It reminds me of how Uber does business….  A taxi ride is $10, so Uber uses marketing dollars to subsidize their drive for the passenger, meaning the passenger pays $5, and then Uber uses marketing spend to pay the driver another $5 to cover that subsidized rate.

 

 
Other than begging to opt out of coupon usage, what tactics will let you compete with this behaviour?  It feels wildly unfair.

 

2) GOOGLE IS A BRICK AND MORTAR TRAVEL AGENCY?? 

 

This has been a year long saga, and I can’t get anyone to address it.  This is wildly anti-competitive behavior, and it has irked me constantly.

 

 
In trying to start meta-search at one of our hotels that is not listed on any OTAs, we noticed the below.  It was a little “book with the hotel” tag, that we had not listed.  At this first wine country hotel, it led to an extranet reservation system within google organic search, where you could go through and book wholly in their program.  I was wondering how they did this, so I dug around and found this, in the process of figuring out how they interrupt a guest’s booking process:

 

 

 
So, I thought… might as well book the reservation to dig further into who is getting credit for this booking, because even though it looks / seems direct, it is not.  This interrupted and siphoned a direct reservation from our website into Google’s booking system.  I booked the reservation, and here is the information on my confirmation.  See screenshot of the rez.

 

 

 
Please note the agent “name”, Iata, and email on the bottom right.  Here it is again: 

 

 

 
So in organic search, someone types the brand name of the hotel to book direct. Instead, Google’s anti-competitive behavior confused a guest, and siphons our reservation into their booking platform so they can get a “free’ and relatively unethical 10% commission.  What’s more, they are using an IATA number as if they were some brick and mortar travel agency, when it’s just Google HQ, and all technological and likely not a real human.  That hurts the hotel, it hurts real travel agents, and it enriches Google.

 

 
But there’s more!

 

 
We were starting meta-search at another property, and the same icon popped up with an “official site” tag. We didn’t place that listing, nor did we authorize it.  We had no idea who was doing it.  This time, when you click through, it wasn’t their HPA internal Google booking form, but the actual hotel website.  First, see the brand name search, and the red circle that says “OFFICIAL SITE”. Technically that is true, but the “real” official site is on the left, in organic search.  Google Travel has taken about 50% of the real estate on the right side of the screen, with more friendly looking action button, etc.

 

 

 
Now, when you click that link, and enter the website,  you need to look at the tracking information on that URL. NO NORMAL HUMAN DOES THAT. I do.  When I send links to friends, I take all the tracking information off and cut and paste a clean link, because that’s how thoughtful I am. =)

 

 
So, I observed the URL after jumping off organic search into Google’s “reservation system”, and I found an IATA number callback.

 

See red circle below…

 

 

 
 
The number is #05631194.  Guess who it belongs to!??! I looked it up, the answer is by the green checkmark in the middle of the image.

 

 
Hello Google.

 

 

 
 
 

At the first property, when I talked to Google over their GDS@ email regarding the reservation I made, they said their IATA was #05-5 6029 5. And the one for Wine Country Inn is #05631194????

 

 
Do you really think Google only has two IATA numbers?

 

 
The real issue?  ****I searched the brand name of the hotels as search terms****. 

 

 
That means, for both hotels, I was looking for the website, and google sidetracks guests into their own system or IATA to scrape an extra 10% onto the cost of the reservation, even though the guest is obviously seeking the hotel website to book direct. 

 

 
It seems scandalously anti-competitive to me, and I wonder if you have thought about this, or delved into how to extricate ourselves from being exploited like this?

 

 
How can we educate guests to book direct, and when they attempt it, are skillfully hijacked into not booking direct.

 

HELP TALK ME OFF THE LEDGE. Please explain this to me.

 

Is there anyone to talk to, regarding these behaviours?

 

 
If not, is there anything we can do to compete against what seem to be anti-competitive behaviours, short of a class action antitrust lawsuit? Because I am game. (joke with truth in it).

 

I am so frustrated with this.  And I know I am no one, but no one is talking about it. These are an 85 room and 29 room hotel respectively, both independent, both boutique. 

 

 
Is this like that Joe Rogan joke about being powerless with no recourse? He challenges the audience about how smart they think they are, and if they believe they are smart simply because they are using technology that other smart people made.  He elucidates the point by saying, “If you’re so smart, what do you do when the power goes out?  I’ll tell you what I do. I sit down, and I wait.”

 

 
Is that all we can do? Just sit in the dark and have no way to resolve what is obviously unethical business practices?  How can we compete with major companies training guests to be confused, when they aren’t even aware they are being manipulated and tricked?  We spend so much time and energy in revenue management, and trying to educate guests to book direct, and huge companies silently manipulate the game, and change it whenever we get a leg up.  Help!  At least tell me I am not crazy.  Actually, I prefer you telling me I am right. Something is wrong, and I would love to see it addressed.  Short of it being resolved, I would like to see an industry wide discussion about it.
 

 

Thanks for listening.
 

About Michael

3 Responses to “REVENUE MANAGERS: Please consider this anti-competitive behavior, and explain how independent hotels can battle it.”

  1. Jeremy Gremillion

    Hi Michael,

    Digital marketing has always been a slippery slope and as you highlight above, it can be a full time job just monitoring what’s out there. Having worked for an OTA as well as big and small hotel management companies, I would say when it comes to online share, technology is KING. The OTA’s have a much larger budget and utilize shopping tools and bots to auto-adjust strategy based upon a series of algorithms. It would take multiple people working around the clock to compete with this technology and by the time you’ve addressed the issue with an OTA the data is most likely obsolete. With this being said, you can still find WINS! You’ve already mastered step 1!

    BE THE SQUEAKY WHEEL!
    Set aside some time (a reasonable amount) to check parity on your OTA’s. Sign up for all marketing opportunities so you can monitor what your OTA partners are sending to your mutual customers. Any time you find something bring this to your market managers attention. And REPEAT! It really does make a difference.

    CREATE A REPUTATION
    If you create a reputation for being a stickler then your market manager will opt you out of certain things. This is sometimes an option for market managers when the OTA lauches a new marketing initiative. They will remove more savvy partners from certain initiatives if they don’t want to deal with the “headache”

    COME TO AN AGREEMENT
    Lastly, you can negotiate SEO and certain marketing restrictions with the OTA’s and have this included in your contract. This helps some but not everyone is able to get the OTA’s to agree to include this in a contract and it typically comes at a cost. Meaning you would agree to additional terms that of course benefit the OTA partner. You’re more likely to see success here if you leverage a corporate contract involving the power of multiple hotels. Even with these addendum’s in place you will still find violations.

    You’ll see much more success than your competitors if you follow this approach. Is it a 100% resolution? No, but it’s really about finding the most impactful way to compete with these aggressive SEO/Marketing budgets without breaking the bank.

    Jeremy

  2. Dumitru Brinzan

    Michael, you are not alone in this.
    Last month (September 2018) Acorn held a 2-hour online seminar which I was lucky enough to listen to a few days later.
    In it they have demonstrated how the hospitality industry is the only industry in Google that is taken advantage of so aggressively. Case in point: if you search for any type of business, usually you will see full contact information in their Maps listing, including the website. Not the case for hotels.

    Electricians get links to their websites. Car dealerships. Furniture stores. You name it. A hotel or a B&B? Nope, you are not allowed.

    Then if you follow Rand Fishkin and read his post from a few days ago about the constant decrease of referral traffic from all major players (search engines and social media platforms), then the future for hotel traffic is bleak.

    You are not alone!

  3. Michael

    This is phenomenal… not just commiserating, but solutions. Huzzah! =) Also, it reminds me that Russia has a converse saying to the squeaky wheel… “The nail sticking out gets the hammer”. LOL Glad we’re still America. This is great advice. Thank you.

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