How hotels can fight their corner if the magic of meta is waning!

With the arrival of ‘Book with Google’ and TripAdvisor’s Instant Book gaining legitimacy, hotels need to be more creative than ever in the battle to drive direct bookings. Pamela Whitby reports

Two years ago metasearch was the darling of the hotel industry. As a result of their meta marketing efforts, brands were seeing returns on investment of as much as 15 to one. Those returns are, however, increasingly being eroded as business models shift and the industry continues to consolidate.

Recently there have been two significant developments, the latest being Google’s foray into travel booking using Sabre Hospitality Solutions’ reservation system, which has 20,000 hotels signed up.

‘Book with Google’, now running in beta in North America and being piloted with several hotel partners, gives hotels the option to pay commissions to Google and Sabre for credit card transactions rather than to a third party.

So much for Google not getting into bookings.

The other game changing blow to metasearch this year was Marriott moving to sign up to TripAdvisor’s Instant Book. In a move that effectively legitimises TripAdvisor’s foray into the OTA camp, there is a question mark hanging over whether there is now any value left in its meta marketing offering. After all, if like the other big OTAs that TripAdvisor has become the game is now for it to win healthy commissions from taking the booking, why should hotels invest? Surely TripAdvisor is going to favour its own Instant Book product?

Needless to say, many hotels didn’t want to go on the record about this.

Meta: the end of the glory days?

Of course, not everybody thinks the glory days of meta are over.

“Overall, this [Google and TripAdvisor moves] is a tiny proportion of meta results, so we would say it’s far early to leap to any real conclusions,” says Pia Vemmelund, chief executive of Momondo Group, who believes that the channel will continue to grow as more and more consumers find it attractive.

While the meteoric rise of metasearch was certainly helped by less dependency on the OTAs and healthier hotel returns as a result, it’s also down to consumers growing desire for choice and transparency.  That still true, but Vemmelund also believes that meta is about so much more than price; it’s also about ‘convenience’ and ‘value’. And as consumers become savvier, transparency will become increasingly important in the battle for consumer trust.

So even if the business benefits of meta are waning, hotels know this and they know that for the moment at least, they still need to have a presence on all channels.

We want to go into areas that we have never gone into in the past because we know it drives better ROI

Chadi Farhat, Chief Revenue Officer, Morgans Hotel Group

What they shouldn’t do though is overspend, says Chadi Farhat, CRO Morgans Hotel Group, whose aim in life is “to drive direct incremental bookings with the highest ROI possible”.

One area where Morgans is making headway is with dynamic advertising and pricing. “We want to go into areas that we have never gone into in the past because we know it drives better ROI,” Farhat says. 

Today it’s critical for revenue management teams to be closely aligned with all parts of the business.  That, he says, requires creativity in both revenue management and marketing efforts and it also requires a different sort of skills set – the ability to create demand.

More tips for driving direct bookings

There are few hotels that won’t be focused on driving direct bookings and they can do this by:

  • Actively managing rates on meta channels to decide when and when not to discount, and when and when not to open a channel
  • Running pay-per-click marketing campaigns with PPC special rates
  • Sharing on-the-books data with agencies that deal in search engine marketing and search engine optimisation to combine, for example, traffic information with conversion data and what keywords are working best 
  • Understanding the impact of new disruptive players like Airbnb on the hotel business and responding accordingly
  • Delving into new areas, and largely untested areas, like dynamic pricing and dynamic ads using technologies like Criteo

Chadi Farhat, and other big names in travel, will be sharing their thoughts on the future of travel distribution at TDS North America (Oct 19 – 20)

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