Travel Industry Has Growing Concerns Over Google’s Behavior During Pandemic

The tech giant Google has once again come under lens due to it’s behavior during these tough COVID times, when the travel industry is struggling badly.

Recently, Google launched an initiative to support small medium businesses to jump start their business through advertising and enable cash flows. Well, as much good as it sounds, it’s equally disappointing at many levels. How? Read for yourself:

Each eligible customer will receive one credit up to a maximum amount of what is equivalent to $1,000 USD.

Google

I can relate to it. I can empathize what is going on in your mind after reading this. I can feel the pain you feel after going through this. 

I mean, what on earth is that? Is it even eligible to be called an ad credit? To me, and to many other veterans in the travel industry, it’s not even peanuts! You read that right! It’s a single peanut. I am sorry, may be not that either.

For travel entities who advertise on Google, are well versed with the competition they encounter, the CPA values, the ROI it generates, as well as margins on which these businesses operate. The ever soaring CPC’s have ensured that the CPA values go up by at least 40% since the last year. To acquire these bookings, daily spends runs into ranging from a couple hundred to tens of thousands of dollars.

The margins usually vary between 15% to 30% depending on the type of travel business. For Flights, it’s way lesser than these, for OTA’s. For tour & activities, a lot of workforce and operational expenses come as overhead.

The major highlight of this all is, $1000 does not even contribute to a day’s ad spend on Google, for 99% of businesses!

Now, checking ground reality on how losses piled up for all businesses dealing with travel, be it Flights, Hotels or Car Rentals.

Bookings are acquired after spending millions of dollars in a month. This is not e-commerce, mind you, where after the completed order, you ship the product and you are done. This is travel, there are seasons involved and the bookings come in for future, well of course, last minute industry stands a chance, yet, there are always cancellations attached to almost everything you buy in travel.

Who pay’s for these cancellations? Well certainly, it’s not Google! It’s the OTA’s and suppliers who have to bear the burnt. 

Most importantly, in an event of a global crisis like the a pandemic, which is going on currently, the COVID-19, we as OTA’s have to support our customers by offering them free cancellation.

Acquisition costs have been paid for, to get these bookings, to whom? To Google! 

I know of many CEO’s who doubled their marketing expenses from December 2019 to March 2019, to get many bookings as they could. The CPA’s went as high as $100 to $150 to even $500 in many cases. Now, when industry collapsed under the COVID crisis, there are absolutely no retainers! This amounts to a 100% cancellation rate, which means 100% refunds. Marketing costs and spends are the losses! 

Do you think $1000 covers it? Do you think, extending this kind of support to advertisers and alongside, pushing your agenda to gain grounds in the Travel industry by putting Google Travel on top to steal the market share of many SMB’s can go hand in hand?

Google is most certainly not the place anyone would prefer to book! In real life, a buyers journey includes searching, comparing, reading reviews, finding offers and a couple other steps. You just cannot do that through google. Also, Google will not refund you for your booking. It’s the OTA’s who will.

TL;DR – Google’s Ad Credit During the COVID times is a Joke! it’s a Sham, Really.

Some market experts have given their statements on this and here are some for you to read

“The amounts operators are receiving are disproportionate and would not even scratch the surface. We all know how competitive Google Ad campaigns are in our industry, in part because of OTAs, so the credits we are seeing would not cover a day’s worth of advertising for most of them”

Chris Torres – Director, Touring Marketing Agency

“The smallest amount was $300 and the max was $750 in ad credit dollars for our largest clients, who spent more than $200,000 in 2019. I think the industry as a whole was expecting more from Google”

Tom Kratsch – CEO, TRK Creative

What was expected out of Google? They should have taken into account how much spend was made by whom and based on the last 3 months spend, the ad credits should have rolled out. Imagine someone spending more than $2.5 million in the last 3 months, getting a $1000 ad credit. 

So first, this $1000 flat credit should go off the charts! Second, the expiry date. The travel industry is in a grim situation right now. No one knows when and how much it would take to build up the trust to travel among the masses. It is speculated, it may take about entire 2021 to get this trust build up and to have things back to normal as they were in 2019. Advertisers may want to use the ad credits later, and not just in 2020! Why put a expiry on it?

Eligibility criteria says, business must have advertised with google for 10-12 months continuously in 2019. It’s highly seasonal business, some months, you have to entirely shut down your campaigns. Who is going to take that into account?

Lastly, Google should think on entirely refunding the amount spent during Jan 2020 up till mid march, from the time lock downs and airspace closures started to happen. You may also wish to read how german startups have reacted to google’s behavior.

Hope to see things getting better soon and hopefully, Google may review this once enough voices reach them. 

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