In my last blog I wrote about Revenue Management and how a combination of knowledge and technology can help hoteliers improve their revenues and bottom line numbers. Revenue Management is all about selling the right room, to the right guest, at the right moment, for the best price, through the right channel. In this blog I will focus on a trend that cannot be ignored when it comes to driving consumers to the right channel: Metasearch channeling the customer to the hotel’s direct channel.
Metasearch is a type of search engine that bases outcomes on a combination of results from other search engine databases. Popular Metasearch sites in the hospitality industry are Tripadvisor, Kayak, Google Hotel Finder and Trivago. All these sites source information from OTA’s and the hotels’ own website to display them in a clear overview to the consumer. While Google and Trivago use the price as the most important criteria, Tripadvisor assigns highest importance to review ranking.
Despite the fact that hoteliers cannot ignore the major OTA’s, throughout the past decade there is a major change occurring in the sales funnel. Hotels should conclude that the best channel to sell hotel inventory is the direct sales channel, being walk in, phone call, or directly booking on the hotel’s website. Selling rooms on OTA’s is expensive as high commissions are charged per booked room. Since a few years metasearch sites have started to gain popularity for both the hoteliers as the travelers. Metasearch sites improve the value proposition to the online travel consumer by adding more information in the search results (Hotel location, information, customer reviews, real time availability and rate comparison). The traveler benefits of a clear overview of room rates on various sites, including the brand.com site (the hotel’s own website with its booking engine). This drastically decreases the number of websites visited before making a purchase decision. For the hotelier key benefits of using Metasearch sites include the possibility to shift share from OTA’s to the direct online channel and apply dynamic price marketing (see Dynamic Rate Marketing).
Some interesting newer trends in this shift in the sales funnel are the fact that Booking.com acquired Buuteeq and rebranded this to BookingSuite. OTA’s are increasingly aware that hoteliers are trying to promote the direct booking channel over the commission based OTA’s and we can therefore see that Booking.com is targeting hotels with a new product in order to keep strong market share in the online reservation segment (and pursue a commission based payment model). In this segment Booking.com will compete with other suppliers of Online Booking Engines such as many channel managers that already offer this as part of their product mix, but also companies such as Bookassist and HeBS Digital. The latter also provides consultancy and advise on how to setup campaigns.
At SmartHOTEL we are currently focusing on broadening our connectivity portfolio to interface with partners that offer an Online Booking Engine and with partners that offer services to setup campaigns by utilizing metasearch in the best way possible. A couple of Online Booking Engines and other partners that are currently connected to the SmartHOTEL switch are BookingSuite, Net Affinity, Hoteliers.com, myhotelshop. We are also in the process of redesigning our own Online Booking Engine in order to maximize connectivity with several metasearch engines and allow hoteliers to up- and cross-sell during and after the booking process.
It is important to understand that Metasearch cannot be solely considered as a distribution channel but is much more of a marketing tool. Proper usage of Metasearch helps to put hotels out there and ensure that consumers are driven to the hotel’s direct booking channel. As explained in the previous paragraph, hoteliers can benefit of savvy partners who can help them setup campaigns and apply dynamic price marketing throughout their sales funnel.