On the last post, I was explaining on the two-major business model in OTA; Agency Model versus Merchant Model. As the services are being evolved, the new service was being launched to the market. It is the meta search engine.
Under OTA, consumers will be able to compare and purchase fares, hotels, and rental cars online and make purchases and purchase. However, we had to compare the OTA web site and compare it with Excel file. Under these circumstances, the meta search engine appears. Users could get the aggregated search results from Hotels.com or Booking.com.
- What is Meta Search Engine?
Wikipedia defines Meta Search Engine as below.
A metasearch engine (or aggregator) is a search tool that uses another search engine’s data to produce their own results from the Internet. Metasearch engines take input from a user and simultaneously send out queries to third party search engines for results. Sufficient data is gathered, formatted by their ranks and presented to the users.
In the travel industry, meta search engines aggregate rates and availability of hotels from different sources, mainly OTAs but sometimes directly from the hotels. This makes it easier for users to find a hotel by simply entering their journey dates and comparing between the different options provided. This also helps users quickly find their ‘type’ of hotel within a few mouse clicks.
- OTAs vs. Meta Search Engine
The OTA makes a partnership with the hotel and sums the data directly from the hotel website, whereas the meta search engine does not have such strings attached to them. They collect and manage data directly from the OTA and position the search engine top point as a one stop destination for captured users. This is the reason why it caused friction between the OTA and the metasearch engine for quite a while.
- New Era of War between Meta Search Engine and OTAs
The Meta Search Engine providers were generating its revenue from selling display advertising to OTAs as CPC or CPM products. These players found out that these products can be made by themselves instead of giving commission to OTAs.
TripAdvisor’s Instant Booking only offers a CPA (commission) model in two formats: 12% (guarantees at least 25% of visibility), or 15% (guarantees at least 50% of visibility).
Book on Google does not incur any additional cost, although in order to activate it you need an active campaign on Google Hotel Ads, which does have a cost in its CPC (cost-per-click) or CPA (cost per action or commission) models, which range from 10% to 50% (depending on your choice).
trivago Express Booking also doesn’t incur any extra cost, although in order to activate it you need an active campaign on trivago, which does have a CPC-based cost (cost-per-click).
Yet, these players are not providing 100% OTA features to users. It is like half and half OTAs.
Then how come the hotels could cooperate with mutual OTAs, the meta search engine players? On the next post, we will introduce you the war between hotels and OTAs.