Is metasearch the Hoteliers new best friend? Shopping analytics can help you decide

The battle to tilt a traveller's decision in favour of a specific brand - be it for a supplier or an intermediary - continues to get intense.

The focus is on identifying a "lead" as soon as it emerges in the digital domain, and that's where travel meta-search engines are showcasing their prowess.

A travel supplier such as a hotel chain or airline needs to plan astutely for real-time hotel inventory availability/ pricing, and optimise campaign, budget and bid management. Since suppliers are dealing with an increasing number of traffic generation sites, associated costs have gone up. And importantly, a major component of this expenditure is going into competing with OTAs. This is unproductive since travel suppliers are paying multiple times for the same conversions! How much to embrace the metasearch phenomenon is challenging hotel distribution managers, especially as it can be a complex to fully understand the nuances of advertising and keyword bidding.

Distribution mix optimization

One has to be pragmatic when it comes to assessing who is going to bear the hike in distribution costs. Will the hotel organizations endure the cut in the operating profit margin? Will the consumer be charged more for a room or an aircraft seat? Or a combination of both?

One way to counter rising distribution costs is to not be over reliant on the amount of business coming from OTAs. Other than capitalizing on the hotel brand website, there is a need to partner with meta-search engines in a judicious manner. One needs to ascertain the lead times associated with a channel vis-a-vis average value per booking, and aptly forecast the demand over a period of time. Meta-search's lure is that it not only passes on highly qualified leads, but it also offers the option of knowing the customer directly. So ascertaining how meta-search can chip in the overall revenue generation calls for a smarter analysis of the intent of customers. Indeed everything points to travel suppliers needing to get smarter about knowing which channels deliver the best returns. Smarter really means getting visibility into performance against a whole range of key indicators.

Understanding implications

It should be remembered that meta-search engines are neither selling their own inventory, nor do they have fulfillment control over the inventory. In their simple format they act as a market gateway between suppliers and consumers. It should also not be noted that rising look to book ratios have an impact on infrastructure and resources. This has a cost implication for the hotels.

To play in the online looking and booking game a robust, responsive infrastructure is needed. To build and maintain the server/ network resources needed to handle high volume search requests with dynamic pricing is a commitment. For hotel inventories, some caching technology can be used for hotel descriptions that change infrequently, but prices and availability are best kept dynamic and updated in real time. The ability to respond timely and accurately is important. To ensure inclusion in the metasearch options from which the traveller can choose.

Another aspect to consider is the fact that a room need not be just a room, but can be associated with an array of options or additional services – all of which can add to the complexity of the information that needs to be displayed, giving the consumer what he needs to compare and benchmark. A hotel property may have a couple of hundred rooms, featuring five room types. Additionally it may have defined 20 rate plans. Of course, one can't ignore the competition for each city. So consideration needs to be given to constantly changing availability and changing prices. This applies to a full spectrum of permutations of different room types, rate plans etc. These variations are all part of the hotel room search and response scenarios.

Understanding what is being searched

One way of determining whether metasearch travel sites really do offer a viable route to the buying traveller is a closer look at performance. Hotel organizations should make the most of the business intelligence embedded within the requests and replies message flow that takes place in the XML extended language.

Looking at system performance as well as scrutinising search and booking data can help travel suppliers to use real-time insights for competitive advantage by being able to synchronize demand and supply through better capacity management, and setting up better consumer insight and sales capabilities. Decoding the message flow gives the supplier a deeper understanding of exactly what is being searched for and how demand is being met. This benefits the executives and departments responsible for distribution, revenue and marketing – the merging hotel disciplines.

Acting with Insight

By capturing exactly what is searched for, some concrete examples of insights would be:

• Level of demand for certain offerings
• Consumer satisfaction (in terms of the options and prices offered)
• Consumer experience in terms of speed of response
• Any inventory gaps between what is searched for and what is available
• How many lookers are turned into bookers and at what ratio
• System performance (speed of response, load factors, errors, etc.)

Hoteliers can analyse reports that dig deeper into performance, by location, property, agent, etc. For example, when analysing search data they can look specifically at things like: Ability to analyse prices at a deeper level to ensure competitiveness (e. g. potential bookings are not being lost due to the price being too high).

Harnessing this intelligence from search and booking data is today's competitive weapon to not only understand the channels better, but ultimately also delving into the buying habits and preferences of the travellers?

Opportunity

So hoteliers need to assiduously weigh in the value of business analytics, and how the same can help in evaluating search traffic as well as bookings.

By capitalising on the strength of analytics, suppliers can come to grips with the performance of meta-search channels. It should be noted that meta-search today is an additional platform to advertise on / keep up to date / push rates/availability to.

If meta-search engines continue to get stronger in the early phases of the booking funnel, then hotel organizations need to plan well for campaign, budget and bid management. Hotels need to be spot on with their back office systems and servers, as they need to robust enough to handle large volume requests. As for competition, considering that there is price transparency on the same platform – there may be a tendency for prices to be pushed lower as a result of commoditisation. So one needs to combat and be ready for usual issues of differentiation. And one shouldn't overlook the need to get the right mix of organic search optimisation and paid placement. Need to be where metasearch get (scrape) their information from. Do remember the game is all about marketing merging with distribution.

This way hotels can better partner with meta-search engines, tailor their offerings for this channel, improve upon the infrastructure that is needed to support meta-search and overall improve upon their yield as well as distribution mix. Taking the trouble to read data that is readily available will help hoteliers master the metasearch channel and their costs.

For more detailed discussion on hotel distribution challenges and opportunities to overcome those challenges download the whitepaper: "How Shopping Analytics Can Optimise Hotel Distribution"