As the standard methods of doing business — bookings for OTAs, referrals for metasearch — evolve with new technology, the relationship between online travel agencies (OTAs), and metasearch continues to evolve.
Metasearch sites such as Kayak originally presented travelers with a spectrum of inventory before sending to an OTA for booking, Now, the meta model has evolved to include booking buttons directly within the results. Typically, these bookings are still transacted by a third-party merchant of record, reports Tnooz, even though metasearch now competes directly with direct-to-supplier channels.
Meanwhile, OTAs such as Orbitz and LastMinute.com have moved from showing only the prices from partner hotels and airlines to delivering a broader spectrum of metasearch results alongside commission-based listings. These agencies then earn referral fees when travelers click through on those links, following the traditional metasearch model.
What the landscape around online travel agencies, metasearch and suppliers will look like in the next several years is in flux. However, approaching challenges like "book-now," evolving relationships with hotels and emerging competition will be essential in defining the segment's future.
Suppliers and "book-now"
As metasearch sites provide a more straightforward experience for consumers with the "book-now" feature, the question is whether or not this challenges the OTA business model. A key approach in developing a response to the "book-now" phenomenon is to embrace positioning as the merchant-of-record when travelers book direct on metasearch sites. Startups are also active in this space, providing online commerce solutions to increase conversions.
It's important to not see this as a metasearch versus OTA problem, but a mutually beneficial opportunity where both parties can coexist and cooperate to give consumers what they want where they want it.
Evolving relationships with hotels
As Tnooz notes, suppliers such as Shire Hotels in the United Kingdom are actually pulling data from metasearch to provide comparison prices right within the supplier-direct experience. Startups are offering services in this space as well, with TripTease providing a tab with OTA price comparison for hotels to demonstrate transparency and best-available-rate positioning. This keeps the consumer on-site and prevents bleed to OTAs.
Although it may seem that hotels are simply pointing customers toward the competition, that's not what's happening all. Displaying results from Expedia and other OTAs directly on the hotel's site not only allows new opportunities for price competition, but it helps build trust between guests and hotels. Hotels have seen increased conversion rates, making this trend an important one to consider for hotels, OTAs and metasearch companies.
As Eye for Travel recently reports, Google and Amazon have thrown their hats in the hospitality-search and -booking ring. One possible outcome of these new entrants is that hotels can directly compete with OTAs, leveraging a new booking channel with extensive distribution.
The winners in this era of channel competitiveness are those that find creative avenues to compete while offering traveler-friendly approaches to earn "buy-now" business. Competition is not always a bad thing and success is determined by how travel providers work with suppliers to provide inventory to customers. There is much to be gained from cooperative relationships. As these emerging players become more invested in metasearch, there will be more opportunities to grow together and improve the booking experience for everyone.