Today, we’re talking about: The complicated relationship metasearch engines have with OTAs and your book direct strategy.

OTAs and Metasearch Engines are two very different things.
Not quite sure the difference between an OTA and a metasearch engine? That’s okay. It’s actually pretty confusing. Over the next two minutes, we’re going to simplify that relationship, and then—if you stick around—we’ll take another two minutes to complicate it again.

Meet your OTAs.
The OTAs are numerous: Expedia, Booking.com, Hotels.com are few of the well-known OTAs. We all know travelers use them to compare hotels and book. No news here. When a traveler books through an OTA, the hotel pays a percentage of the booking. On average, it’s about 20%.

The misunderstood metasearch engines.
In contrast, the metasearch engines are these: Tripadvisor, Trivago, Kayak, Orbitz and, of course, Google. (There are more, but those are the main ones.) A metasearch engine’s function is to aggregate and display hotel rates. That’s it. Note: No actual booking is done on the metasearch engine. The rates you see displayed are ads. (Hence: Metasearch advertising.) Metasearch engines make their money when a traveler clicks on one of the rates. (i.e. ads)

And where do metasearch engines get their rates from?
The OTAs, of course! The OTAs (Expedia, Bookings.com, etc…) pay the metasearch engines to display your hotel’s rate, hoping a traveler clicks on that rate and books through Expedia. To combat that, hotels—like you—pay metasearch engines to display your book direct rate right next to the OTA’s rate, creating competition. Hotels are hoping travelers click on their book-direct rate so they don’t have to pay the OTA commission.

What’s that look like?
It looks like this.

In the above example, Google is the metasearch engine. Now look who the advertisers are: Hotels.com, Expedia, Priceline, Booking.com. All of them—OTAs. The OTAs are a hotel’s primary competition on metasearch.

Historically, metasearch engines don’t care if a traveler books direct or through an OTA, because they make their money on the ad click. Metasearch engines essentially act as middle men.

Here’s where it gets complicated.
The reason it’s getting more and more confusing for hoteliers is because the metasearch engines have started to advertise on competing metasearch engines. (not a good thing!) It’s not uncommon to see Tripadvisor (a metasearch engine) pay to advertise on Google (a competing metasearch engine) like this:

Do you see it? That’s Google’s metasearch result above. And look who’s advertising—Tripadvisor!

What’s that mean?
Tripadvisor is competing against the very same hotels and the very same OTAs who are paying them to advertise on Tripadvisor, creating additional hotel competition (not to mention confusion) on metasearch engines.

Why the heck would Tripadvisor (a metasearch engine) advertise on another metasearch engine?
Tripadvisor does this to generate more traffic to Tripadvisor. That’s it. If they can bring users away from Google and back to Tripadvisor, that means more clicks on the Tripadvisor metasearch ads that the hotels and OTAs are paying them to place. After all, the clicks are what make them money.

Sound familiar?
It’s the same way OTAs have leveraged Google all along, to compete with hotels for their own brand traffic. Now, it’s being done by the metasearch engines.

Why is this happening?
In short, Google’s winning the metasearch wars. More travelers (sometimes unintentionally) use Google’s metasearch engines than almost all of the other metasearch engines combined. Because Google is Google, they prioritize Google’s metasearch results over organic search results. So in order for those other metasearch engines (like Tripadvisor) to compete, they need to creatively leverage Google just like everybody else.

Who loses?
Two parties lose in this scenario. The customers lose, because the customer experience starts to get clunky. Instead of a traveler going to a place where they can book (direct or OTA), they go to a place where they have to use yet another metasearch engine i.e. Tripadvisor, essentially starting the whole process over again.

The hotel loses too, because now they have more competition, cpc costs go up, and hoteliers feel pressured to advertise on more and more metasearch engines to protect their brand name.

Tambourine uses technology and creativity to increase revenue for hotels and destinations worldwide. The firm, now in its 36th year, is located in Fort Lauderdale, Carlsbad and Bogota. Visit Tambourine to learn more about our new line of segment based hospitality solutions.

www.tambourine.com