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Google works with hotels to hurt travel competition

wsj.com

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Re: Google works with hotels to hurt travel competition

#31

Post by tomohawk »

BoiledCabbage wrote: post #17
phsource wrote: post #6

This seems to be a sour grapes article representing the grudges of online travel agencies (OTAs) against Google. This quote really caught my attention: "OTAs earn a roughly 20% commission from hotels for each reservation they book, which covers their cost of marketing, inventory acquisition, customer support and payment processing." 20% is a ton! Later in the editorial, the writers complain about how Google takes "a…

This to me still seems like a net loss. old: OTA makes a $20 commission on a $100 rate through them new 1: Google makes an ~$20 commission on a $140 room rate (15%) through Hotel new 2: Google makes a $17 commission on the $117 room the OTA now has to sell it. Or the OTA tries to still sell at ~$100 and only makes a $3-$5 commission. And this lovely quote: > Google also requires OTAs to give its webcrawlers access to…

It actually is illegal if Google is a monopoly in some sense and using that monopoly as leverage in other areas.

Once a company has a monopoly, the rules change.

Re: Google works with hotels to hurt travel competition

#32

Post by bkor »

electic wrote: post #9

Question to anyone here who is familiar with this industry. Would one be able to save even more by just going to a wholesaler? I mean, with the right know how, can someone just buy from a wholesaler directly?

As OTAs charge about 15-20% you should be able to get a better rate from the hotel directly. This could be via their website (recent development) or by just calling them (annoying). Further, the lowest rate at an OTA might be non-refundable while the hotel rate could be flexible.

Source for suggesting to call: Often mentioned by front desk staff at https://www.reddit.com/r/TalesFromTheFrontDesk/

Re: Google works with hotels to hurt travel competition

#33

Post by jakecopp »

dmode wrote: post #25
dragonwriter wrote: post #19

Earlier quoted context omitted.

> This seems to be a sour grapes article representing the grudges of online travel agencies (OTAs) against Google. Superficially, but more deeply it's part of the propaganda war the WSJs corporate parent has been carrying out against Google on all fronts for quite a long time, which is in part partisan/ideological, and in part business over similar issues in publishing.

Can you elaborate on the WSJ's agenda against Google ?

News Corp owns WSJ, and a lot of other newspapers and media brands. News Corp's competition is not other publishers, it is Facebook and Google.

Re: Google works with hotels to hurt travel competition

#34

Post by denzil_correa »

dmode wrote: post #25
dragonwriter wrote: post #19

Earlier quoted context omitted.

> This seems to be a sour grapes article representing the grudges of online travel agencies (OTAs) against Google. Superficially, but more deeply it's part of the propaganda war the WSJs corporate parent has been carrying out against Google on all fronts for quite a long time, which is in part partisan/ideological, and in part business over similar issues in publishing.

Can you elaborate on the WSJ's agenda against Google ?

The owner of WSJ is News Corp whose executive co-chairman is Rupert Murdoch. Murdoch's views about Google are well known, Example : https://www.forbes.com/2009/04/03/rupert-murdoch-google-busi...

Re: Google works with hotels to hurt travel competition

#35

Post by rplnt »

phsource wrote: post #6

This seems to be a sour grapes article representing the grudges of online travel agencies (OTAs) against Google. This quote really caught my attention: "OTAs earn a roughly 20% commission from hotels for each reservation they book, which covers their cost of marketing, inventory acquisition, customer support and payment processing." 20% is a ton! Later in the editorial, the writers complain about how Google takes "a…

I was actually surprised (some) online booking agencies actually vet the locations they sell. So there is significant cost to scouting and vetting the hotels, i.e. to protect the customer. They also offer some various guarantees which have to be factored into the commission.

I'm fairly certain Google skips all of this, so I would say their profit is effectively (much) higher.

What sucks about the former approach is that booking portals make sort of an exclusive deal, where the price they advertise (with their cut) is as low as a direct sell.

Re: Google works with hotels to hurt travel competition

#36

Post by bkor »

lowpro wrote: post #21
electic wrote: post #9

Question to anyone here who is familiar with this industry. Would one be able to save even more by just going to a wholesaler? I mean, with the right know how, can someone just buy from a wholesaler directly?

I don't know about hotels since airbnb is almost always cheaper, but with flying you will almost always find cheaper flights going directly to the airline or using something like The Matrix [1] than using kayak, expedia etc. These companies used to be cheaper than going directly with an airline, but since they were so easy to use everyone uses them now and they charge high margins for that convenience, so the positio…

> I don't know about hotels since airbnb is almost always cheaper

AirBNB is super annoying. You have to agree to meet at a certain time. You have to hope they accept your booking. While booking you cannot sort by price, etc. AirBNB informs about demand causing prices to go up in popular periods. Then for most places you basically have to put in writing if you could pretty please rent the place. This while on any hotel you're accepted as long as the credit card check goes through.

I often book by first searching via Booking.com, then trying to book directly or searching for best rate.

I don't travel too often, but AirBNB being cheapest is not my experience. Maybe cheapest no matter the quality and convenience? A shared room is not the same as a hotel for instance. I don't want to feel bad about coming back at e.g. 3am. In a hotel that's pretty much fine. With AirBNB I stick to renting out the whole apartment and for those the prices are slightly above hotels prices (these apartments are often tiny btw).

Re: Google works with hotels to hurt travel competition

#37

Post by pimmen »

mcny wrote: post #24
dragonwriter wrote: post #19

Earlier quoted context omitted.

> This seems to be a sour grapes article representing the grudges of online travel agencies (OTAs) against Google. Superficially, but more deeply it's part of the propaganda war the WSJs corporate parent has been carrying out against Google on all fronts for quite a long time, which is in part partisan/ideological, and in part business over similar issues in publishing.

I still don't get why we can't talk about banning "fake news" like wall street journal on hn. These are clearly hit pieces and as my parent mentioned, part of a coordinated effort to undermine Google. They did the same thing with YouTube. Everyone is worse off because of wsj.

You absolutely can bring it up. Now, here's the issue though; "fake" implies that they fabricated or exaggerated stuff, not just skewed the coverage. If you can provide solid evidence that the WSJ fabricated this news piece you could probably get this link off of HN.

Re: Google works with hotels to hurt travel competition

#38

Post by jpalomaki »

rplnt wrote: post #35
phsource wrote: post #6

This seems to be a sour grapes article representing the grudges of online travel agencies (OTAs) against Google. This quote really caught my attention: "OTAs earn a roughly 20% commission from hotels for each reservation they book, which covers their cost of marketing, inventory acquisition, customer support and payment processing." 20% is a ton! Later in the editorial, the writers complain about how Google takes "a…

I was actually surprised (some) online booking agencies actually vet the locations they sell. So there is significant cost to scouting and vetting the hotels, i.e. to protect the customer. They also offer some various guarantees which have to be factored into the commission. I'm fairly certain Google skips all of this, so I would say their profit is effectively (much) higher. What sucks about the former approach is t…

What I find interesting is that I've seen cases where you don't even find a matching price from the hotels own booking system.

I understand they can't go lower than booking site due to contracts, but it would make sense to offer at least similar rates in order to attract direct bookings.

Re: Google works with hotels to hurt travel competition

#39

Post by thesumofall »

bkor wrote: post #30
thesumofall wrote: post #16

This article is largely incomprehensible and seems strongly biased. Having said that, I don’t quite see how consumers are being hurt. The issue only seems to be with very targeted search queries such as “Hilton Houston” where Expedia, etc. ageeed voluntarily not to show ads and smaller ones are allegedly somehow blocked by Google. But: if one searches for such a specific term, a customer will almost always be harmed…

> Most hotel chains guarantee the lowest rates on their websites To be clear: My response is not about OTA vs Google. It's OTA vs hotel. Various OTAs used to have clauses in their contracts prohibiting this. See e.g. https://www.lexology.com/library/detail.aspx?g=ad48f831-75c3... . They made them switch terms. Before that it was pretty much impossible for a hotel to offer a lower rate through their website. Consumers…

This is certainly correct except some little semantics: they were prohibited to publish lower rates but could absolutely publish the lowest rate on their website (basically the same as for the OTA with the highest leverage). By bundling in benefits such as points, hotels are also stretching those clauses to their limits.

Edit: ... and let me say: I’m absolutely in favor of the ruling you cited

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