Behind the scenes, there may be abundant reasons that Booking Holdings and Airbnb, for that matter, won't be dabbling in Google's vacation rentals business for the time being. Perhaps they are seeking to boost direct traffic or are unhappy with the economics and user experience. Expedia may be positioned to take some advantage.
Whether it’s in Singapore, Bangkok, Nairobi or Paris, Booking Holdings’ Agoda brand has been actively listing vacation rentals in the one-stop shop Google Travel, but Agoda is in the process of removing its listings, Skift has learned.
Booking Holdings’ flagship brand, Booking.com, had not been participating in Google’s vacation rental business, but Singapore-based Agoda has been listing its properties there for at least six months.
But three days after Google announced the introduction of a new vacation rental feature that directs users from Google Search to its Google Travel page, and a day after Skift published an article debating whether holdout Airbnb should participate in Google vacation rentals, a Booking Holdings spokesperson said Agoda is in the process of withdrawing, and its listings should be gone shortly.
The spokesperson noted that Booking.com hadn’t been participating in Google vacation rentals, and characterized Agoda’s presence there as a test.
Google declined to comment for this story.
In a research note sent Tuesday, Justin Patterson of Raymond James said Expedia Group would be the “biggest beneficiary” near-term from Google’s vacation rental business as Expedia brands on desktop had 67 percent share of listings in cities outside the United States, and a 74 percent share in U.S. cities.
To be clear, there are two ways that online travel agencies or short-term rental operators use Google for paid marketing. One is to advertise in Google Search, where a user would click on a link and then navigate to the online travel agency, or operator’s website to complete a booking.
The other way is to participate in Google’s travel page. Consumers can select a link on one of the listings in a four-pack stack of properties in Google Search, and navigate to vacation rentals in the Google travel page, where they will see a listing from Expedia.com, Vrbo, TripAdvisor, Hotels.com, Vacasa, Red Awning — or until now, Agoda — for that property.
In the example shown, Agoda’s has the top and bottom listing in the Google feature showing vacation rentals in Bangkok.
But Agoda’s listings in Google’s travel feature will soon be history.
That means none of Booking Holdings’ brands, including Booking.com or Agoda, will be participating in Google’s vacation rental business for now.
Airbnb and Booking Don’t Want to Play
Airbnb is a holdout, as well, as either these big players can’t come to terms with Google on a deal, or perhaps they fear giving Google too much power in its new business, short-term rentals.
Booking Holdings didn’t immediately comment on why Agoda is withdrawing from Google Trips or the reasons behind Booking.com’s absence.
But in an onstage interview at Skift Global Forum in New York City in September, Booking Holdings/Booking.com CEO Glenn Fogel, in addressing Google’s foray into vacation rentals before the introduction of the latest Google tweak, said Google always comes out with new products and he’s in favor of innovation and creativity.
“We’ve built our businesses symbiotically together and we will continue to do so for a very long time,” Fogel said of Booking’s longstanding partnership with Google. “They will continue to roll out new products, new ways to bring in customers, new ways to bring in information …”
Booking Holdings, along with Expedia Group, have been Google’s largest advertisers in travel. “And then what they do for people like us is they create opportunities for people like us to put our brand there so somebody can click on it and we can pay Google a lot of money, which we do.,” Fogel said. “Win, win, win all around because somebody comes and books or something like that.”
But Fogel emphasized that direct bookings is the company’s fastest-growing channel, and more than half of Booking.com’s overall traffic comes direct without using Google.
“The channel that brings the most new bookers for us, new customers for us, is also direct,” Fogel said. “If Google can get more people to come into Google that’s great because we can get more customers that way too,” but he added that Booking is happy to build its own direct business.
Fogel wants Booking Holdings to become an Amazon of travel.
“I assure you, nobody has recently gone to Google so then you can go to Amazon to buy some soap,” Fogel said. “No, you go to Amazon first. I want to be so good, so great that when you think of travel, you go to Booking.”
The fact that Agoda participated in Google vacation rentals and sister brand Booking.com didn’t pointed to how the business units were run somewhat independently within Booking Holdings.
Agoda CEO John Brown noted at Skift Forum Asia in May that one attractive part of the group is that Booking.com, Agoda, and Priceline can all go in different directions, and then compare notes as they test different things.
But for now all of Booking Holdings’ brands are pointing in the same direction when it comes to participating in Google’s vacation rentals feature — none will be in it.
The absence or withdrawal from Booking Holdings’ businesses in Google vacation rentals doesn’t appear to impact the active participation of Booking’s brands in the Google Hotels, which has a different business model than short-term rentals. The Google Hotels feature involves online travel agencies bidding for placement within a panapoly of competitors’ offerings, but so far Google vacation rentals just lists one online travel agency per property and Google has not monetized the feature to date.
“The Google Vacation Rentals product is far more complex than simply bidding on basic keywords for a given market,” said Eric Breon, the CEO of Vacasa, who didn’t provide much detail. Vacasa participates in Google vacation rentals.
Another source guessed that Google’s vacation rental business model would likely be “performance-based” and revolve around commissions per bookings rather than clicks.
“Our ability to distribute directly on Google provides a cost advantage over managers who need to go through an intermediary,” Breon said. “In general, this shift is good for Vacasa and the major channels. In requiring unit-level listings and highly accurate quotes, this shift will make marketing on Google more difficult for managers who don’t control their technology.”
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Photo credit: A Bangkok short-term rental that has been listed on Agoda, which is withdrawing from Google's vacation rental business. Agoda