Can hotels use metasearch to compete against OTAs?

5 Tips to Keep Your ‘Google My Business’ Page Fresh
February 20, 2015
Top 10 SEO Tools You Should Be Using In 2015
March 13, 2015
Show all

Can hotels use metasearch to compete against OTAs?

After several years of growth punctuated by major acquisitions, mergers, partnerships, and product launches, travel metasearch looks set to evolve rapidly in 2015 as the line with OTAs continues to blur.

NB: This is an analysis by Gautam Lulla, President, Travel Tripper.

Many of the traditional metasearch sites have now begun to roll out facilitated booking for hotels. Kayak (through Booking.com) and Hipmunk (through Orbitz) allow guests to book directly on the site after a user completes a search, with the reservation itself managed by the sites’ respective affiliates.

TripAdvisor has taken a slightly different approach with its Instant Booking platform, which allows guests to book directly with the hotel on the property’s TripAdvisor profile page.

GA-Travel-Tripper-image2

As metasearch begins to offer booking, traditional OTAs are also beginning to offer metasearch, integrating real-time rates from competitor sites underneath some of their hotel listings. The OTAs earn a cost-per-click (CPC) referral fee for any traffic sent to its competitors.

It’s a way to monetize so-called “low value” travelers—people who browse using an OTA but are likely to book elsewhere.

GA-Travel-Tripper-image21

As metasearch becomes more ubiquitous in the hotel booking process, its original purpose—helping consumers to find the lowest price—has become diluted. Most metasearch sites are caught up in a bidding competition with major OTA players for referral links, and the hotels themselves simply don’t have the means to compete against mammoth marketing budgets.

Furthermore, strict rate parity rules prevent hotels from effectively competing with OTAs on metasearch, as they cannot publicly offer a lower price on those sites. The recent consolidation of major players in the industry—especially Expedia’s purchase of Travelocity and Orbitz—will further put pressure on hotels to maintain rate parity or risk jeopardizing their placement on OTA sites.

TripAdvisor offers an alternative to the CPC model via Instant Booking, which encourages independent and boutique properties to engage in a “Pay for Stay” commission model. But the hotel pays a 15-20% fee for each completed reservation booked via TripAdvisor.  The hotel remains the merchant of record, allowing the property to manage any changes or cancellations directly.

Some hotels, however, are starting to turn the tables on metasearch. Shire Hotels, located in the UK, recently implemented a booking engine that displays its own metasearch, pulling rates from Expedia, Booking.com, Hotels.com, and Late Rooms whenever a potential guest runs a search. In the case that the price is lower elsewhere, Shire displays a phone number for visitors to call so they can receive a rate match.

GA-Travel-Tripper-image3

Capitol Hill Hotel in Washington D.C. has gone even one step further. The 153-room property added a new feature to its booking engine that not only displays real-time rates from competitor OTAs but also automatically price matches with a discount whenever rates are lower elsewhere.

GA-Travel-Tripper-image4

Though seemingly counter intuitive, the use of metasearch on a hotel’s own website brings an extra layer of price transparency to the consumer that instills confidence and encourages booking. According to Shire Hotels’ e-commerce marketing manager, Sam Wilson, conversion has increased since the implementation of this feature.

For Capitol Hill Hotel, the implementation of metasearch along with an automated price match on their booking engine was highly successful—the feature accounted for 10% of their direct booking business in its first month of implementation (January 2015) and increased already healthy conversion rates by an additional 20%.

Though metasearch has made it possible for consumers to scour hundreds of booking sites for the best price, many travelers prefer booking direct with the hotel for the flexibility in cancellation policies and the promise of better service and perks, but only if the price is comparable and the booking process easy and effortless.

Bringing metasearch into their booking engine gives hotels a better chance to capture the many guests as they comparison shop. It’s time for hotels to rethink metasearch not just as a marketing/distribution channel, but also as a conversion tool that can help them to better compete against the OTAs.

NB: This is an analysis by Gautam Lulla, President, Travel Tripper.

Comments are closed.