Google already has a gigantic travel advertising business, and now the company states that its hotel-related searches jumped 25 percent year over year in July 2016.

Competitors tacitly acknowledge that Google is taking market share.

With Google’s and other competitors’ apparent gains as a backdrop, TripAdvisor CEO Stephen Kaufer’s briefly mentioned during the company’s third quarter earnings call Wednesday that “market and competitive forces at play” have impacted the company’s difficult transition toward becoming a hotel booking site. His remarks highlight how the hotel metasearch competitive climate is apparently heating up.

In classic hotel metasearch, companies such as Google, TripAdvisor, Kayak and Trivago display hotel listing from chains, independents and online travel agencies, and collect revenue from these partners when consumers click on links and navigate to the hotel or online travel agency sites for booking. Google, TripAdvisor and Kayak, meanwhile are also branching out from such lead referrals and are processing hotel bookings on their own sites for partners, which pay a commission or pay per click and handle customer service.

Google, Kayak and Trivago

In a note to investors November 9, Raymond James analyst Justin Patterson writes that TripAdvisor’s margins may be inversely impacted next year by increased marketing spend, as well as heightened competition from Kayak and Trivago.

“Our concern is that this coincides with more commentary on competition in the prepared remarks [from TripAdvisor], implying Trivago and Kayak may be contributing more pressure than in the past,” Patterson wrote.

Patterson probably should have added Google to that competitors’ list given Google’s increased traction in hotel search.

Kayak’s CEO Sees It

“Of course, Google is taking share from TripAdvisor,” Kayak CEO Stephen Hafner tells Skift. “Google sits upstream from TripAdvisor and they are intercepting more consumers into their Hotel Ads product. Trivago and Kayak are having an impact, too, as we are more aggressive in marketing than TripAdvisor.”

That relative aggressiveness in marketing may be one of the reasons that TripAdvisor’s Kaufer said yesterday that TripAdvisor would be ratcheting up its paid marketing in 2017.

Google’s Updated Website for Hoteliers

Google’s gains in hotel search come in tandem with a Google announcement today that it has updated a website that supports hoteliers looking to participate in Google’s Hotel Ads product.

Hotel Ads is Google’s hotel metasearch product. But unlike Kayak, TripAdvisor and Kayak metasearch, Google’s Hotel Ads are located right in the search engine without consumers having to navigate to a separate website.

google-hotel-ads2

Pictured above is a Google Hotel Ads unit with paid ads for the Lotte New York Palace from Booking.com and Hotwire.com.

Google’s hotel and online travel agency partners have a choice whether to compensate Google via pay-per click or commission models. Partners can pay Google when consumers click on one of the Hotel Ads links or can choose to pay a commission once the consumer completes their hotel stay. The latter payment system is similar to Booking.com’s model in some respects.

New Features and Partners

Among the new features in Google’s updated Hotel Ads website is a feature to search for and filter third-party integration partners to manage hoteliers’ campaigns. The list now includes 47 third-party integration companies, including featured partners Phobs, Wihp, Sabre, Seekda, Trust and TravelClick.

The site is geared toward independent hotels that might need the services of third-parties to handle the rigors of their Google Hotel Ads efforts.

The site now includes a search feature to ensure the third-party partner is authorized to work with Google on Hotel Ads.

Travel Search On Google Rather Than Through Google

One such Hotel Ads integration partner is Koddi, and co-founder and president Nicholas Ward says Google’s increases in hotel-search traffic indicates an important changed role for Google.

“For many years, a huge portion of travel research has touched and gone through Google,” Ward says. “I believe this growth is an indication that more travel search is starting to happen on Google instead of just going through, which seems to be in line with their goals given all of their innovation in the space.”

Ward says Google is getting more efficient in “walking users through the research process.”

“In the past year, we’ve seen them [Google] effectively guiding users from regional and destination queries to navigational and hotel-specific queries with their newer travel features,” Ward says. “Today as a user, I can search for ‘fort worth,’ and then click through to a secondary search that brings up ‘fort worth hotels,’ and then end up on a hotel-specific result set and it’s pretty seamless. This allows for a lot of growth in hotel searches even if the industry isn’t up at the same level.”

Google denies that it is becoming an online travel agency and there are ample reasons for it to stick with its hotel advertising business instead of becoming a full-fledged online travel agency such as Expedia or Priceline given the mammoth size of Google’s hotel advertising revenue.

Google already plays a key role in travel research and reports that 58 percent of leisure travelers and 68 percent of business travelers begin their travel booking and shopping in a search engine.

But, if Koddi’s Ward and others are correct, Google is certainly inserting itself even more boldly into the travel research process.

After speaking on stage at the Skift Global Forum in New York City in September, Oliver Heckmann, Google’s head of travel products, provided more insight into Google’s strategy in a backstage Skift Take Studio.