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Why hotels cannot afford not to show competitive pricing
As metasearch is growing up and building out, other parts of the industry are catching on. Pamela Whitby reports
Few could now argue that metasearch is indeed a fast growing channel.
According to a recent EyeforTravel report - Smart Analytics 2015: Identify, Track and Target the Modern Digital Customer Effectively - metasearch to date has been most prevalent as a booking channel in North America. But that is changing fast as customers increasingly turn to metasearch to cut through clutter and aggregate services. In fact, EyeforTravel’s research finds that only friends and family (54%) are more popular than price comparison sites (43%) in the research phase.
The Momondo Group is certainly seeing rapid growth and chief executive Hugo Burge has this to say: “As more and more people adopt the model, metasearch continues to build traction; that’s a clear endorsement of the model and the power of the experience.”
As more and more people adopt the model, metasearch continues to build traction; that’s a clear endorsement of the model and the power of the experience
Hugo Burge, Chief Executive, Momondo Group
The group’s own in-house analysis, for example, reveals that metasearch as a category will grow at 40%+ CAGR between 2014 and 2017 and growth across both the Cheapflights and momondo brands continues to be very rapid.
Going forward metasearch is certainly growing up and building out as more consumers - and the industry - see the benefit of being able to quickly and easily compare prices. However, while price is a factor for many customers, there is likely to be a growing focus on factors such as ‘convenience’, ‘value’, ‘trip duration’ and ‘timings’.
“There continues to be scope for significant growth – in terms of geographies, categories and in the criteria, which consumers compare,” says Burge, adding that “it’s not merely about the best price but also convenience and discrete customer needs”.
Burge admits that “it’s horses for courses and markets are different”. But for him it’s about ability to allow a full comparison and to ensure that customers have as as full and transparent a view of the market as possible.
Smoothing the way
EyeforTravel’s research notes that there is still a substantial reduction in conversion through to booking via metasearch, so brands still need to be visible on all major sites. So smoothing the transition for customers being redirected or looking to purchase will be another major competitive edge.
Metasearch is stepping up to this mark by offering facilitated booking or instant booking in a bid to drive conversions. Kayak is one of those and according to vice president Debby Soo facilitated bookings have increased conversions by 50%. Perhaps unsurprisingly, facilitated bookings are very prevalent in mobile hotel bookings with 60% of Kayak users taking this path.
What is clear is that the growth in metasearch has implications for both online travel agents and hotels as we outlined last week in OTAs vs Metasearch: collision course or room for both?
The point made here is that there is plenty that hospitality brands can learn from the metasearch proposition to increase effectiveness of their direct channel. Shire Hotels, a small UK chain, is one that is doing just that and has developed what it describes as a Trivago-style price comparison tool in house and says conversions are up 98% as a result.
But Shire Hotels isn’t alone and increasingly hotels are looking to give customers more information on their own website. Some will develop it in house, while others will buy the technology in from a company like Triptease, which recently secured its latest round of funding to the tune of $2m, and has developed Price Check, a smart widget that sits on hotel websites to display verified prices from three OTAs in real time.
Charlie Osmond, Triptease’s chief executive, says he is absolutely driven by research, data and analytics and they have run several A-B tests to measure the effectiveness of the tool.
“What our data shows is that when customers see the price check tool, it increases conversions by as much as 35%,” he says.
While Osmond is certainly not forecasting the death of OTAs as a result of hotels showing competitive pricing, what he is saying is that hotels can without any doubt make their direct channel more effective simply by displaying competitors pricing. So whether hotels develop something like this in house or outsource it, they can’t afford not to do it.
That’s got to be something worth thinking about.