Meta-search engines provide consumers a time-saving solution for searching for the best deal, through aggregation of multiple hotel, flight and other travel sources into one website. Yet, this website has long moved from merely providing price comparisons, to add value through content, personalization and service, and reviews.
The Purchase Funnel
Meta-search engines are usually “top of funnel”, while OTA’s are further down the funnel. Priceline says it recognizes a trend to move up the funnel through Google search strategy, reviews and content creation, while up the funnel companies try to drive economics by moving down the funnel, e.g. TripAdvisor with Instant Booking, to monetize the traffic. Indeed, in the past, meta-search engines relied on hotel order commissions, but they are increasingly moving towards an OTA model for direct orders of hotels and services. Other monetization methods include advertising, promotion, and entering segments such as restaurants.
Top of Funnel Key Success Factors: Content: Reviews, Mobile, Video, Local Language. Data: Social media, Search, Personalized offers. Awareness: Advertising, CRM, WoM.
The Data Revolution
One of the most important trends in the meta search industry is the availability of data in the hands of Facebook, Baidu, Google, Apple, Alibaba, Amazon and others. This can enable these competitors to leverage search, mobile and other aspects. Google has entered various aspects of the online travel market, including by establishing a flight meta-search product (“Google Flights”) and a hotel meta-search business Hotel Ads that are growing rapidly, as well as its "Book on Google" reservation functionality.
The digital travel industry experiences high consolidation rates. One of the leading groups is Expedia.com, a leading full service online travel company with localized sites in 33 countries and the parent company of hotels.com, Orbitz, Expedia, Trivago, HomeAway, Egencia and Travelocity. TripAdvisor, in addition to the flagship TripAdvisor brand, manages and operates 23 other travel media brands.
In 2017, new markets, and deeper penetration into the flight meta-search business, seem to be the motivations for M&A activity. Priceline Group (owner of Kayak) in July 2017 paid about $550m of international cash to close Momondo acquisition. The company expects the acquisition to have materially accretive impact to KAYAK's results and to help KAYAK accelerate its international growth and build its scale in the meta-search channel. Ctrip, a Chinese travel company, acquired SkyScanner, to gain foothold in Europe.
Meta-search engines move from offering only hotels or flights, to offering both, and many went on to offer attractions, car rentals and other services. However, it seems that most of the traditional hotel meta-search players are yet to find success from products beyond hotels.
TripAdvisor has 2 monetization strategies for “middle of the funnel” visitors: CPM (>$100mn business) and Hotel Business Listing Subscriptions (also > $100mn). Other initiatives include a new discovery product for restaurants - TripAdvisor Ads. And so, in order to appear on the 1st page of TripAdvisor, a restaurant owner can either build a better reputation – or buy a click to the restaurant page. The company plans to do the same for hotels. In addition to offering Instant Booking, TripAdvisor has expanded into non-hotel segment offering.
Lastminute.com opened a media business called “The Travel People”, aiming to become “a publisher, rather than a brand”. The company’s OTA sites across Europe work as content hubs, around the concept of “Travel People”. Video content is a special focus for the internal hubs. While Lastminute.com will develop slightly different "personalities" in different countries through microsites, these will all tie in to the brand's main strategy. The company also acquired Hotelscan, to broaden its offering by adding more accommodation providers. Its main brand Jetcost, is primarily focused on flights.
Mobile, Bots and AI
Mobile is rising as part of the seamless digital experience. “Many, many consumers are going back and forth, back and forth.
TripAdvisor is driving conversion on mobile. In Q3 2017 “we were close to 50% growth in our revenue from phone”, said Stephen Kaufer, President and CEO.
Skyscanner has become a pioneer in the bots and conversational search space, having been among the first to launch chat bots on both Facebook’s Messenger platform and Skype, as well as on Amazon’s Alexa voice service (in 2016). Yet, companies find that, despite the buzz around AI and bots, people still want to talk to a real person. HotelTonight has automated a concierge service for its guests in major markets: HT Pro. “The pro can help you with everything from 'tell me the cool coffee shop,' to 'where do I want to go for dinner,' to 'can you just call the hotel and make sure housekeeping comes,' or 'can you get me more towels.' And it's all just a chat interface.” Skyscanner’s Cortana skill includes the ability to ask about indicative pricing on any flight route, in addition to the best time to book routes, and live flight status information. SnapTravel aims to find you a hotel based on your budget and preferences via SMS, Facebook Messenger or Slack. It uses a combination of artificial and human intelligence to search Expedia, Priceline and more than 100 other sites for the best deal, and claims to have “secret deals” of its own. The chat also enables speaking to a real human. And Google uses AI to recommend better deals for hotels and flights.
Meta Search Key Success Factors include:
- Convenience: Mobile apps, Global aggregation of real-time hotel / flight supply, Tailored hotel/ flight/ attraction search functions, wide selection of both chains and independent hotels / attractions, Service – inc. chats, AI, Voice.
- Price: Transparent price comparison, Best price guarantee, Price alerts.
- Content: Verified reviews, Easy to use information, Expert content, Personalization, Ongoing content marketing.
- Hotelier/ Restaurateur tools: Advertising options, Profile management and enhancement, Ability to add dynamic / video profiles, Data and intelligence.