Online booking sites still treat potential customers with disdain using manipulative marketing tactics. As airlines and hotel chains have adopted these methods, it calls into question what a world without them would really look like. Google offers a hint.
It may be a new decade, but hate-selling by the travel industry remains a consistent problem for travelers.
In 2015, Skift coined the term hate-selling to denote the anti-consumer techniques deployed by online booking sites to place pressure on users to spend money.
“The term ‘hate-selling’ came out of my frustration of juggling between horrendously designed car rental booking sites, being hit with all kinds of surcharges for booking on Avis.com, over-aggressive upsell by on airline sites (specifically Delta.com with the most passive-aggressive ‘restrictions’ overlay I have ever seen), to being bombarded with ‘buy-now-or-else’ false-sense-of-urgency prompts on online booking sites,” wrote Skift CEO Rafat Ali. “The lesson, if any, from all of this: This is what happens when you let conversion marketers run amok with customer experience. They made it a science, but forgot about being human.”
Five years later, the rise of Google as a digital travel booking site has led established players, both online travel agencies and travel providers themselves, to put even more pressure on travelers to book through their channels
There are many methods used by travel retailers to pressure consumers into buying particular products and packages. Some of the most popular involve social proof (14 users recently booked this property) and the dreaded countdown clock which pressures a user to book now or lose their access to a product.
These techniques are colloquially known to marketers as dark patterns, which manipulate the users of digital tools into making specific choices without understanding why they are making them. Misdirection and hidden pricing are two of the most common hate-selling techniques used by online travel sellers.
Here is one recent example of online booking site OneTravel using fake numbers to pressure users to book quickly.
[3/4] So what's your sophisticated pseudo-random algorithm?
Apparently, OneTravel are choosing a number between 28 and 45.
Because as you all know, based on serious psychological research, these numbers tend to make people book their flights fast #sarcasm #not42 >> pic.twitter.com/r2IrYhxr28
— Ophir Harpaz (@OphirHarpaz) October 16, 2019
Sure, fares do change and other travelers may book the hotel room or flight you’re looking at. Yet they don’t change as quickly as booking sites would like you to think, especially since airline seat assignments are almost always made after booking on third-party sites and hotels offer a variety of similar room types.
In the eyes of consumers, this phenomenon is only getting worse. Research from SimilarWeb conducted in the third quarter of 2019 found that potential customers conducting searches on desktop often visit multiple sites selling lodging products on the same day. The same research found that online booking sites are often “viewed as a research channel” for flights since travelers will often end up booking directly.
In other words, the research and booking situation is so bad that most customers have no brand loyalty at all. Likewise, an OAG analysis found that millennial frequent flyers are twice as likely as older travelers to start their flight search on Google Flights. Younger consumers have figured out the hate-selling strategy and have adjusted their habits accordingly.
Follow the Money
The reasons why online booking sites use these techniques is clear: customers have been trained to accept them and they help drive revenue in myriad ways.
Why is Expedia trying to push you into purchasing a package using these tactics when you just want a flight? Well, it’s good business; the commission they receive on a hotel booking is ten times what they likely receive on flights. Add on a car rental and day tour, and that commission earned by Expedia skyrockets.
The $150 you save by bundling is offset by the money Expedia earns on the increased commission. That $1,000 in hotel spend could earn Expedia $200 in commission payments as opposed to $6 for a $300 flight. It’s easy money.
Segmentation in the airline and hotel sector, too, contributes to increased confusion for travelers. A decade ago, travelers loathed Spirit Airlines for nickel-and-diming them on bag fees and the ability to select seats. Today, basic economy is common across the big three North American carriers and travelers are used to navigating increased complexity during the booking process.
Increased choice and complexity has been good for travelers in many ways, leading to lower prices and more flexibility. This has emphasized the importance of a quality user experience when you can’t compete on price or product as effectively.
Google The Destroyer
As Google has risen to become a travel powerhouse in recent years, a complex situation has developed between the search giant’s marketing efforts and its travel selling arm.
Google Travel sits at the top of the funnel for many travelers. The consumer’s travel search often starts at Google when they compare prices on the site. Meanwhile, travel giants spend billions each year on search ads to get consumers to click over to their own booking site instead of Google or another competitor’s.
This tension is palpable in the sector, with Google finally agreeing to adjust its search display to de-prioritize its own flight booking and research options. Travel companies have to play ball with Google or risk losing out on direct business. Over time, though, digital advertising costs have increased as the ads have become less effective in convincing consumers to click over.
Even metasearch is now feeling pressure from regulators for deceptive practices.
What is also lost in this dynamic is the diminished role of loyalty in the digital age.
“Conversion is important because you want to make sure you get a good return on your advertising spend with Google and other advertising channels, and you will need to market yourself, no doubt about it,” said Skift Research senior research analyst Seth Borko. “Even more important is taking visits and turning them into loyal, returning customers. Loyal guests come back directly to your website or property for free. A world-class conversion rate that doesn’t create loyalty; it still leaves you locked into the hamster wheel of re-acquiring the same customers over and over again.”
You may get that booking today by manipulating the customer, but the chances of them coming back next time are slim and you’ll have to pay up again to acquire them. Even an industry-leading conversion rate may be counter-productive if you’re overpaying for marketing to bring a potential customer back to your booking site every time they travel.
Big Data, Big Problems
Asking around the industry about hate-selling, a theme cropped up again and again: the travel industry is relying on data-based solutions to conversion as opposed to building brand loyalty through a better user experience.
“The crux of this is hiring data analysts; when they look at conversion rates they say you can increase transaction volume by some amount,” said Michael McDowell, former innovation architect at Hertz who spent more than 20 years at the company. “In reality, if you treat customers nicely, you come away with a better user experience [that leads to loyalty over time].”
He chalked this phenomenon up to companies hiring “data guys as brand guys” which leads to a focus on degrading the users experience with the brand in order to generate more bookings. Even more troubling is the reality that data-focused executives will find solutions to problems that are technology-based instead of experience-based in order to justify why they are in their role to begin with.
A terrible booking experience has ramifications beyond the sale, though. It leads to travelers booking elsewhere next time, even if they’ve been coerced for an individual booking. It also erodes brand identity in a meaningful way; this has led to the commoditization of the travel experience where brand experience doesn’t extend to the research and booking process.
This is the absolute wrong move in an era where the digital experience is crucial to both brand identity and loyalty. Data is a drug with often severe side effects, namely creating a world where brands and experience don’t matter.
Low Friction, High Value
It can be instructive to look at direct booking success stories over the last decade for evidence that hate-selling is a destructive force in the sector.
Airbnb stands out as a company that created its own aesthetic and brand proposition despite being a two-sided marketplace instead of a true travel product creator.
That same SimilarWeb report mentioned above found that about 87 percent of Airbnb’s traffic was branded from July to September 2019, compared to 50 percent for competitor Vrbo and 24 percent for Booking.com. It also helps that Airbnb maintains strong control of its inventory, rarely connecting with other platforms to offer them up.
In an era where Google is causing fits for travel companies, it has never been more important to build a strong direct relationship with customers by placing a greater emphasis on a high-quality user experience. The reality that hate-selling tactics have become more deeply entrenched in travel marketing and conversion as loyalty has disappeared should be more widely noticed trend in the industry.
The status quo isn’t working for travel sellers or consumers. For things to change, booking sites and travel providers need to adopt new methods of not just attracting but retaining customers. If things don’t change, Google’s power in the sector will come to dominate the narrative of the travel industry over the next decade.
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Tags: airbnb, booking.com, expedia, google, online travel
Photo credit: Attendees watch a presentation during a Google Inc. 20th anniversary event in San Francisco, California, U.S., on Monday, Sept. 24, 2018. The search giant announced a raft of new features at an event celebrating its 20th anniversary. A Facebook-like newsfeed populated with videos and articles the company thinks an individual user would find interesting will now show up on the Google home page just below the search bar on all mobile web browsers. Photographer: David Paul Morris/Bloomberg 330139 / 330139