"Travel meta search still has room to grow significantly in flights"
Published: 03 Oct 2008
By EyeforTravel.com Correspondent, Las Vegas
Lot of developments continue to take place in the travel meta-search engine category in the US. If last year search engines strengthened their Web 2.0 applications, in some cases via inorganic growth, this year the likes of Kayak and Mobissimo have come up with several new offerings.
Assessing the role of travel meta-search engines, Gregory Saks, senior associate, Compete Inc. says the category is continuing to grow very quickly.
However, most of this activity has centered around selling flights (in case of Kayak, the flight vs hotel activity split is 81 percent for flights, 78 percent in case of SideStep, 97 percent in case of Farecast, 95 percent in case of Mobissimo and 64 percent in case of Yahoo!'s Farechase property).
"To continue their successful growth, meta search will likely turn to other categories such as lodging, car, and package products," says Saks. He added, "Travel meta search still has room to grow significantly in flights. It may require heavier marketing investment to attract larger leisure segment. Also, aging of younger travelers appears poised to benefit meta search."
From consumer's perspective, Saks said: "Consumers are speaking with their behaviour. When it comes to finding airfare, many consumers simply prefer the user experience on meta search engines compared to the technology that powers the carrier's own websites, and in some cases, the online travel agencies. Other travel sites must work to make their user experience competitive when it comes to comparison shopping for flights."
Currently, Kayak, with SideStep, drives the meta search category, with five million and three million monthly unique users, respectively, according to Compete.
The industry has witnessed the acquisition of SideStep and Farecast this year. On the current status, Saks says the category is dominated by Kayak, and its new property SideStep. "Given the momentum that these two brands have, it may be difficult for upstarts or smaller competitors to win big in the US travel meta search market," he says.
The US-based travel meta-search engines have been expanding their operations in Europe. Referring to the fact that US online travel agencies such as Priceline and Expedia are generating a significant portion of their growth and profits from the European market, Saks said for this reason, such expansion is of interest to meta search engines.
Also, online travel agencies are using travel meta search the most. According to Saks, five percent of the OTA traffic comes from the travel meta search engines. But airline/carrier websites convert this traffic the best (2x their average website conversion rates).
In one of the recent developments related to the relationship between the suppliers and travel meta-search engines, Kayak.com decided not to display American's airfares and content.
On how travel suppliers are approaching such partners for their distribution, Saks said, "American Airlines is very protective of its brand and its distribution channels. While Kayak had been a partner that delivered a high volume of traffic and bookings to AA.com, American has shown here that it is still willing to make bold statements even if it costs them business in the short-term. Other carriers are certainly watching the situation unfold and it will be up to them to determine how aggressive they want to get."
From product perspective, Kayak.com is gearing up for the addition of Kayak.com UI to Travelpost.com. In fact, Steve Hafner recently said that the plan is to turn Travelpost.com into a true competitor to TripAdvisor.
"Since being acquired by Kayak, web traffic to Travelpost.com has doubled. Travelpost still only has about 1/10th the web traffic of TripAdvisor, so they will have their work cut out for them, however, it definitely appears that progress towards this goal is being made," said Saks.
In the last few months, several new travel travel search and discovery applications have emerged.
On impact of such start-ups, specially the travel 3.0 agents such as UpTake, on the operations of travel meta-search engines, Saks said, "There will be exciting new online travel services, such as UpTake, that bring new benefits to travellers. Kayak and meta search are now very popular. Therefore, even if sites like UpTake grow into successful businesses, it does not appear to be a direct competitive threat at this time."
Ritesh Gupta
EyeforTravel.com
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