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Rethinking metasearch- a new way to increase direct bookings?

26 March 2015
26 Mar 2015 -
JADE'S-COMPUTER

For the rapidly growing world of travel metasearch, 2015 is forecast to be a “year of disruption.” The evolution is well underway, especially in the highly profitable hotel industry, where the lines continue to blur between metasearch and online travel agencies (OTAs).

Many of the major metasearch sites, including Kayak and Hipmunk, now offer facilitated booking through OTA partners, allowing consumers to book hotels directly without ever leaving the site. Conversely, some OTAs such as Orbitz and LastMinute.com are beginning to integrate metasearch into their own sites, showing competitor rates underneath their own hotel listings and earning a referral fee for any traffic sent to those sites.

Where does this leave the hotels?

These changes have left hotels wondering whether the value proposition of participating in traditional metasearch is diminishing. As facilitated bookings become more common, hoteliers wonder if they will still be able to drive traffic to their own websites.

The costs are also increasing. It has become increasingly difficult for many hotels to outbid OTAs for metasearch placement. Even hotels that can afford CPC costs sometimes find themselves competing against OTAs that play unfairly and break rate parity rules by undercutting the hotel’s advertised rate.

Turning the tables against traditional metasearch

Some hotels have found innovative new opportunities to capitalise on metasearch. New technology tools have enabled hotels to bring metasearch directly onto their websites, pulling the rates of OTAs and displaying them alongside the hotel’s own rates as a way of ensuring consumers that their prices are truly the best available.

Capitol Hill Hotel, a boutique property in Washington D.C., recently implemented metasearch into its booking engine. As travellers complete searches, the booking engine not only displays real-time rates from major OTAs, but also automatically price matches with a discount whenever rates are lower elsewhere.

Within its first month of implementation, Capitol Hill Hotel saw already healthy conversion rates increase by an additional 20 percent, with price matches from the metasearch tool accounting for 10 percent of their direct bookings.

Sameer Mehra, Chief Revenue Officer for Hersha Hospitality Management, which manages Capitol Hill Hotel, says the results have even more significance when you consider the multiplier effect of increasing direct reservations. “Every booking that we capture directly instead of selling through a third party is more profitable,” he says. “This improves our bottom line considerably.”

Other hotels using this feature, such as Park Central Hotel New York and Mayfair Hotel and Spa in Miami, are seeing similar success. By reporting price discrepancies as they occur in availability searches, metasearch and price matching within the booking engine not only entices the consumer to book, but also allows hotels to better manage rate parity among their distribution channels.

Healthy competition again between hotels and OTAs

Metasearch sites, which in their early days appealed to hotels as a hybrid marketing/distribution channel to bring in traffic to their own websites, has in recent years tipped the scales in favor of the OTAs, who continue to capture an increasing percentage of reservations while charging extremely high commissions. Consolidation between OTAs and metasearch sites has only made the playing field more uneven.

Price comparison shopping is not going away anytime soon. But all things equal in price, many travellers would likely book direct with the hotel for a number of reasons: loyalty programs, flexibility in cancellation policies, and a higher likelihood for upgrades. By rethinking metasearch as a conversion tool, hotels can once again use it to compete fairly with the OTAs.

Source: Skift with their sponsorship partner, Travel Tripper.