Yesterday Bloomberg reported that Google and Room 77 have come to terms on an agreement licensing hotel-booking software. The deal reportedly nets Google one of the Room 77 cofounders and an undisclosed number of its engineers. What might this mean for Hotel Finder and Hotel Price Ads?
There appears to be a significant amount of overlap between the current advertisers and inventory sources. Importantly however, Room 77 has inventory from a number of suppliers that are missing from Google’s advertiser set today. A licensing deal might give Google immediate access to many or all of these advertisers, which would benefit both the user experience and advertising revenues.
Two of Room 77’s core value propositions are its room level data and insights and the Room Concierge service. The latter service leverages proprietary data about rooms to provide guests with the best value possible on their booking. This data set includes values like “square footage, bed type, distance from elevator and whether [a room is] adjoining or not,” and would be a valuable complement to Hotel Finder’s current advanced search features.
In addition to these data points Room 77 can provide maps and room view technology, which simulates views from a room using Google Earth. Google has already exposed 360-degree tours of pilot hotels in Hotel Finder with its “See inside” functionality. It’s not hard to imagine all of this technology coming together, giving Google users unprecedented pre-booking research tools.
The room level data is also helpfully abstracted on Room 77’s site. Users can scan quick insights about which rooms are the best with tips that cover room size, which floors and rooms are the quietest or offer the best views, and floor plans for specific kinds of rooms. The lack of content is one of the biggest weaknesses of the Hotel Finder user experience today.
Today Room 77 gives users the ability to expose and filter by special AAA, Senior, Government, and Military rates. Integration of this data could enhance the utility of Hotel Finder for potential guests. It could also provide a framework that enables different classes of rates to be made available to certain users, functionality which some have argued could disrupt the space.
Room 77 may also be able to provide some higher quality data than other sources. Tnooz quotes Room 77 CEO Drew Patterson as saying “we index more sources for availability. We are the only one going to tens of thousands of hotels to make sure availability is real.” While it’s hard to imagine that Room 77 out-crawls Google, it’s possible Room 77’s solution has some unique value that Google can’t quickly replicate.
Perhaps the most impactful (and controversial?) functionality that could be licensed from Room 77 is the direct booking interface. Room 77 already has the connectivity required to handle bookings directly, something that Google only offers today on mobile devices for a small number advertisers through its Wallet integration. Integration with Room 77 could give immediate access to a large number of brands and allow Google users to book directly if they so chose.
What kind of license deal comes with engineers and a co-founder? An acquisition or a divestiture. But what kind of acquisition leaves the the brand, the patents, the ownership, the consumer facing front end?
Google has not historically been great when it comes to supporting the end user. Are they leaving Room 77 intact for that, so that they can focus on being a conduit without setting themselves up to be distracted by service before they’re ready?
Maybe the clearest thing right now: this is going to be interesting to watch. History has proven that this approach drives Google value; Product Listing Ads were a huge win for Google. Hotel Price Ads will have the same impact… this looks to be the next step along that path and opens up a lot of options for Google that is worth the attention of advertisers.