OTA v/s Meta Search: The Battle Gets Bloodier

By Michael McCartan Managing Director Europe, the Middle East, and Africa, Duetto | August 24, 2014

Let’s start with meta-search – the new rising star. According to PhoCusWright, 54% of Chinese, 36% of American and 35% of British travelers use meta-search engines to compare rates. Kayak, which was founded in 2004, took four years to process 1 billion queries, but processed 1.6 billion queries in 2013 alone. This number is expected to triple by 2019. Qunar, a Chinese meta-search channel, processed 3 billion queries for flight and hotel rates in 2013 (Source: http://www.tnooz.com/article/Planning-to-step-into-China-as-a-travel-metasearch-brand-be-ready-for-the-grind). No wonder that meta-search has attracted billions of dollars of investment in the last few years and is being hailed as the hottest thing in travel.

Until recently, savvy customers checked close to 22 sites to ensure they got the best price for their accommodation needs. Further, more than 60% of them began their searches on one device and finished on another (Source: Google Study http://ssl.gstatic.com/think/docs/the-new-multi-screen-world-study_research-studies.pdf). Meta-search is liberating travellers from this wild goose chase and information overload. Through strategic alliances with key channels, meta-search players are adopting semantic search, and ensuring near accurate customized price comparisons based on user preferences in an easy-on-the-eye display.

For hotels, knowing their guests and their online purchasing behavior has been of paramount importance for targeted campaigns which lead to improved booking conversions. According to a recent study by TripAdvisor, 50% of their respondents agreed that hotel price comparison or meta-search saves time and helps to find the right price for their preferred hotel. According to the same survey, hotel guests read between 6 to 12 reviews before booking. This is a global trend cutting across regions and a clear indication that user generated content (UGC) is having a greater influence over traditional marketing material. Meta-search channels, which place aggregated rates next to millions of hotel reviews, significantly reduce the number of steps and sites a consumer needs to visit prior to making a booking. The tremendous growth of this platform can be attributed to the value proposition these sites offer to the travel consumers – not only do they provide real-time availability and rate data, and enable price comparison – these sites are one-stop solution for travelers to research and consequently book their hotel stay.

Meta-Search vs. OTAs

In 2011, Google entered the hospitality business with the launch of Google Hotel Finder which allowed users to search for hotels based on name, location, property type and chain. Using its multiple platforms like Google Carousel, Google+, Google Local and Google Maps, Google offers property owners and OTAs the opportunity to attract the attention of potential guests at every stage of their booking journey. Working on the same premise as the Adwords model, it allows Google Hotel Price Ads (HPA) users the option to place their property on Google’s different platforms, and charged on a cost-per-click basis. To compete with the search-engine giant, meta-search channels already in the market have had to offer an improved search experience, and they have taken the challenge head on.

Two years later, TripAdvisor followed the same model while also cross referencing with review types. With the arrival of TripConnect, independent hoteliers and B&B owners got a chance to compete in a market that was previously only available to OTA’s and large hotel brands. TripConnect has now gone one step further, and has announced the release of a mobile booking platform for independent hoteliers at end of this year, dramatically improving the connectivity level of 65,000 hotels that signed up to the service last year. Google’s recent integration with Room 77 also encourages smaller hotels to bid for their own inventory along with Online Travel Agents (OTAs). This signals the intent of the search giant to play a much larger role in the hotel booking space, but also gives both OTAs and hotels level playing field to attract traffic to their website. In theory at least but is this the case in practice?

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Social Media: Engagement is Key

There are currently 2.3 billion active users of social media networks and savvy hotel operators have incorporated social media into their marketing mix. There are a few Goliath channels on which one must have a presence (Facebook & Twitter) but there are also several newer upstart channels (Instagram, Snapchat &WeChat, for example) that merit consideration. With its 1.86 billion users, Facebook is a dominant platform where operators can drive brand awareness, facilitate bookings, offer incentives and collect sought-after reviews. Twitter's 284 million users generate 500 million tweets per day, and operators can use its platform for lead generation, building loyalty, and guest interaction. Instagram was originally a small photo-sharing site but it has blown up into a massive photo and video channel. The site can be used to post photos of the hotel property, as well as creating Instagram Stories - personal videos that disappear from the channel after 24 hours. In this regard, Instagram and Snapchat are now in direct competition. WeChat is a Chinese company whose aim is to be the App for Everything - instant messaging, social media, shopping and payment services - all in a single platform. In addition to these channels, blogging continues to be a popular method to establish leadership, enhance reputations, and engage with customers in a direct and personal way. The key to effective use of all social media is to find out where your customers are and then, to the fullest extent possible, engage with them on a personal level. This engagement is what creates a personal connection and sustains brand loyalty. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.