Search Engines vs. Comparison Websites in the Hotel Industry

 


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Search engines such as Google are failing on 2 fronts:

1. They are failing users because they struggle to deliver high quality search results for people looking to purchase goods and services.

2. They are failing businesses because the pay-per-click advertising model is outdated; as a consequence a large part of a company's advertising budget is wasted.

A new generation of comparison websites are emerging that give users a level of sophistication to searches for goods and services. They also use the pay-per-sale advertising model which improves efficiency for businesses.

I will use the hotel industry to demonstrate these claims.

BUSINESS-RELATED AND INFORMATION SEARCHES

Google searches can be categorised into two types; information searches and business-related searches.

Information searches

Information searches don’t normally end in a sale. They will have very few or no sponsored links in the search results. The results obtained are of a good quality and the user will usually find what they want within the first few sites viewed. This aspect of Google will not change. Google will always be excellent for information searches.

Business-related searches

Business-related searches are ones that usually end with a sale. They will have a large number of sponsored links in the results. The user can be overwhelmed by the number of relevant sites returned and spend a long time viewing each site to see which one has the cheapest prices. The results may be distorted by unscrupulous webmasters who have used underhand tricks to manipulate their site to the top of the list.

ADWORDS AND SEARCH ENGINE OPTIMISATION (SEO)

There are 2 ways in which a commercial website owner can get their web pages into the Google search results. The first is by bidding for “search keywords” in Google Adwords and appearing as a “sponsored link”. The second is by performing search engine optimisation (SEO) on the website and hope that this will improve your position in the general search results.

Adwords

Adwords use the pay-per-click advertising model. Adwords can be an expensive way to market a website. Many companies will bid on the same “search keywords” pushing up the price. The company that bids the highest price will appear as the top sponsored link. The next highest bidder will appear as the second sponsored link, and so on.

The pay-per-click model is far from perfect. There is “click fraud” where automated website software generate bogus clicks to run up large advertising bills. Just because a user clicks through it doesn’t mean that they make a purchase. Quite often the click to sale ratio can be as low as 2-5%.

SEO

SEO can also be expensive. It takes time and requires specialised knowledge that does not come cheap when contracted in. SEO, when performed to the maximum requires that every word and every link on a page be analysed and positioned correctly. A large part of SEO is also in the effort in acquiring inbound links; links from other sites to your own. To obtain high quality links from high quality sites takes a huge amount of time if done properly.

EXAMPLE: HOTEL INDUSTRY

Taking the hotel booking industry as an example we can show the ineffectiveness of Google. If you are looking to book a hotel in Paris then you may type “Paris Hotels” into Google to see what websites are available. Users now know that they have a wide choice of sites when booking hotels and the rates can vary enormously between the hotel booking companies.

The sponsored links returned with this search seem to offer the user a good choice of reputable hotel booking companies. What the user probably doesn’t know or care is that the cost to the booking company from just clicking on one of these sponsored links is as much as £3.00 per click. Bearing in mind that a company may have between 20-50 clicks to get a single sale, this is a significant cost to the company. This cost has to be recouped by charging a significantly higher price. By booking a hotel through a sponsored link the user will be paying more for the hotel room than is necessary.

The normal search results will probably contain at least 1000 sites that will allow online booking of hotels in Paris. All these sites will be attempting to reach the no. 1 position. Many of the sites in the top 10 of the results would have spent considerable time, effort, and money on SEO. This cost also has to be recovered by charging a higher price. For a user to get a room at a competitive rate they will have to check dozens of separate websites.

THE FAILINGS OF GOOGLE

In summary, both the sponsored links and normal search results are unsatisfactory to the user when performing business-related searches.

The fundamental problem of Google is that it uses a single search box (containing multiple keywords) to perform its searches. There is no context, meaning or structure with these search keywords when searching the millions of websites. Google’s search algorithm works fine when processing information searches but fails on the more complex nature of business-related searches.

The websites that will eventually replace Google will have sophisticated search input pages. They will have many dropdown and text input search boxes that will be specific to the industry the user is searching in. These sophisticated search input pages will return better quality search results to the user.

Google will not be replaced by a few sites but thousands of different sites all providing specific business-related search information for specific business needs. Comparison sites will play a major part.

COMPARISON WEBSITES

Comparison websites offer an alternative to Google where the industry is very competitive and there are a large amount of homogeneous products. Comparison websites allow users to compare prices from many different companies without having to “trawl” through each site individually. They work like a specialised search engine; you enter your search input parameters, perform the search, and then click through to the website that gives you best price.

It seems that there will not just be a few comparison sites dominating the market. The trend is to make a comparison site very specific to an industry so that it can deliver better quality information to the user.

An example of such a specialised site would be a hotels comparison website that compares hotel rates from many different booking companies. The search input page would allow the user to enter a destination, arrival date, duration, room type, and even a hotel name (if the user has a specific hotel in mind). The hotel search results would show live rates that would be aggregated on hotel name so the user could see the “spread” of prices for each hotel.

A common myth about comparison websites is that they must be more expensive than going directly to the company. This is not true. The prices displayed are the same as if you had gone directly to the websites and searched them manually yourself. They deliver information on what the user wants with no bias and at no extra cost. The end result of comparison websites is that competition is increased and prices are driven down.

THE WAY FORWARD

It seems that the traditional search engine has its days numbered for business searches; especially for homogeneous products. The new generation of comparison sites are not only better for the customer in obtaining information but because they are pay-for-sale they work much better for the businesses too.

Liam Lyon runs the site http://www.hotelScomparison.com
Save time and money on your next hotel booking.

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