TDS Europe 2015

May 2015, London

Metasearch vs OTAs: collision course or room for both?

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With hotels and consumers seeing real benefits from the metasearch channel, what does it mean for the OTAs? Pamela Whitby takes a look

With metasearch players edging closer to the transaction,  and OTAs integrating meta into their offerings, what does the future hold.

Freedom of choice can be a wonderful thing but faced with countless travel websites consumers, more often than not in search of the best deal, can be left feeling confused.

For travel brands operating in a multi-channel, multi-device world, where consumer behavior is changing faster than technology can keep up, it’s even more challenging.

Matteo Cellini, head of search at Expedia-owned metasearch online travel agency Venere, says: “If anything, attribution is getting much tougher and unless you really understand who is seeing what, you are probably making the wrong business decisions.”

Given that estimated conversion rates for travel e-commerce sites can range from between 2% and 7%, there is clearly room for improvement. What is also clear is that nobody has the answers yet, but there are some things that all travel brands should be thinking about now.

Google & Amazon: understand the beasts and learn

The launch of a different layout of Google’s hotel ad units in the US means that four years after launching Hotel Finder, the search giant has finally found a way to bring hotel metasearch into Google.com search results, and in just two clicks.

Cellini says: “Google makes a lot of money from metasearch and OTA advertising so I’m not sure how this battle will be fought, but it seems clear Google is intent on understanding user demand in the bid to secure a greater share of the pie.”

Like it or not, Google is not a force to be ignored.

Richard Harris, chief executive of Intent Media, a technology firm that helps OTAs, such as lastminute.com, Orbitz and CheapTickets, to deliver a metasearch experience for their hotel shoppers, says: “With its mainline into commercial user intent, Google is an incredibly useful presence in the world.”

Like Google, Amazon shows us that there is more than just the transaction – there’s also providing options and letting consumers discover what they can buy and where they can buy it. The result is that today consumers treat Amazon like a search engine. And when it comes to vertical product searches, today Amazon leads Google.

Harris believes that, like Amazon in the retail space, online travel players are “well-positioned because they possess a richer understanding of travel shoppers’ intent, from class of service to whether the kids are coming along.”

So there are lessons that the travel industry can learn from Google and Amazon.

It’s quite simple: show your customer as much relevant product as possible, including prices from your competitors (who you charge for the privilege). The result: if you’re a price leader or add value in some way then you may well secure the transaction. If not, there’s some media revenue to be had instead.

Importantly, your customers may even trust you more and return to book with you next time.

Displaying the prices is working for Shire Hotels, a forward thinking small UK-based chain. By showing visitors to its direct channel the prices of its rooms on other sites, it has seen conversions up 98% since launching the programme late last year.

Metasearch: is it dead?

What is clear is that neither OTAs nor hotels can afford to ignore the rise of metasearch.

Having said that, with OTAs starting to display competitive pricing and many metas moving in the other direction and getting closer to the booking should we be asking:  is pure metasearch dying?

Certainly the flurry of mergers and acquisitions (Priceline and Kayak; Expedia and Trivago; and Room77 with Google) in the sector all point to consolidation, convergence and more competition.

Harris, for one, believes that in six to 18 months the two worlds will be ‘irreversibly blurred’ and a hybrid between metasearch and the transaction engine will emerge.

But not everybody agrees that the two worlds are on course for collision.

Hugo Burge, chief executive of metasearch engine Momondo says: “We are very strong believers in the value of metasearch and don’t believe that its powerful principles should be compromised. It is precisely the wide coverage and trust that metasearch gives that makes it so successful. It should not be muddled with advertising opportunities for travel sellers,” he says.

Skyscanner is another and its director of hotels, Nikhil Gupta says: “We have no ambitions to become an OTA and feel there is most definitely a place for both OTAs and meta within consumer travel.”

Indeed, Google’s work with Hotel Finder, proves that metasearch is certainly not dead. So should players such as Skyscanner and Momondo be threatened by Google’s recent moves with Hotel Finder?

Of course, when a player with Google’s clout makes a significant move, the industry has to take note but, says Gupta: “We believe that with our global travel experience and the quality of search options we provide for consumers, there is plenty of opportunity for specialists such as Skyscanner to continue to do well.”

Worth noting is that Skyscanner’s mission – and it isn’t alone in this – is to continue its transition from flights-only to a broader travel offer, and to diversify its position with B2B as well as consumer options.

Over the past 18 months, it has added hotels and car rental to its successful flight search offering and is, according to Gupta, seeing growth rates of more than 100% and repeat searches of more than 50%.

One of the reasons for the success of the metasearch channel is choice. Interestingly though, while Skyscanner will show all relevant results, including deals from its OTAs partners, it finds that more often than not customers want to book direct with the hotel. That’s good news for not only hotel chains but also metasearch.

Romain Roulleau, senior vice president e-Commerce and digital at the Accor Group, for one, says metasearch is a “very important channel” and one it wants to do more with.

The developing relationship between hotel direct and metasearch also means that OTAs need to re-examine their approach to meta. Ignoring each other is not the answer.

In May the biggest names in travel from Skyscanner to Accor, Thomas Cook and booking.com will roll into London Town for TDS Europe (May 6-7) where we’ll talking more about the future of distribution and other key topics affecting online travel today

Intent Media was interviewed here as part of our sponsored content programme 

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