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: Getting Personal

There Social media platforms have revolutionized the hotel industry. Popular sites such as Facebook, Twitter, Pinterest, Instagram, Snapchat, YouTube and Tumblr now account for 2.3 billion active users, and this phenomenon has forever transformed how businesses interact with consumers. Given that social media allows for two-way communication between businesses and consumers, the emphasis of any marketing strategy must be to positively and personally engage the customer, and there are innumerable ways to accomplish that goal. One popular strategy is to encourage hotel guests to create their own personal content - typically videos and photos -which can be shared via their personal social media networks, reaching a sizeable audience. In addition, geo-locational tags and brand hashtags can be embedded in such posts which allow them to be found via metadata searches, substantially enlarging their scope. Influencer marketing is another prevalent social media strategy. Some hotels are paying popular social media stars and bloggers to endorse their brand on social media platforms. These kinds of endorsements generally elicit a strong response because the influencers are perceived as being trustworthy by their followers, and because an influencer's followers are likely to share similar psychographic and demographic traits. Travel review sites have also become vitally important in reputation management. Travelers consistently use social media to express pleasure or frustration about their guest experiences, so it is essential that every review be attended to personally. Assuming the responsibility to address and correct customer service concerns quickly is a way to mitigate complaints and to build brand loyalty. Plus, whether reviews are favorable or unfavorable, they are a vital source of information to managers about a hotel's operational performance.  The February Hotel Business Review will document what some hotels are doing to effectively incorporate social media strategies into their businesses.