What is the Difference Between Hotel Metasearch and OTAs?
Hospitality marketers know how much research travelers do before booking their trips, but even with that volume, being front and center when and where those searches happen is crucial.
According to a behavior study on Google searches, a stunning 50 percent of users click on a search result within 9 seconds of completing their search, and the average is just 14.6 seconds. Competing for online bookings is a real estate game, and tools like OTAs and metasearch are important for hoteliers to claim that important real estate on Google and other platforms.
So, what are OTAs and metasearch and how do they work? Here’s a deeper dive.
What are OTAs?
OTAs are Online Travel Agencies, which include websites such as Booking.com, Expedia, Priceline.com and a number of others. Through the 2000s, OTAs gained dominance in the hospitality industry as consumer behavior shifted toward online bookings.
While OTAs allow hotels to have listings that include photos, hotel information and features, room rates and availability, and reviews, their importance runs much deeper. Because of their size, OTAs spend massive amounts on advertising to convert travelers. According to their most recent year-end financials, the two largest OTAs, Booking.com and Expedia, spent roughly $5 billion each on marketing costs, a large chunk of which goes to Google for advertising. Recent data suggests nearly 40% of digital bookings are done through OTAs.
Hotels can decide what room availability they want to offer OTAs and can set rates, but partnering with OTAs is an important piece of your hospitality marketing plan. OTAs are a primary choice for leisure travelers and also take up valuable real estate on Google through both advertising and organic search. OTAs on average take between 10-20% commission on bookings, but it beats losing visibility and bookings to the hotel down the street.
What is Metasearch Marketing?
While OTAs were first off the proverbial hospitality starting line, metasearch has gained serious ground in recent years as an easier way for travelers to compare hotels and prices in one spot. Popular metasearch sites like Google Hotel Ads, Tripadvisor, Kayak, and Trivago showcase your hotel property by pulling in rate and inventory information.
Not only are metasearch engines more convenient for travelers to find and compare hotels, but hoteliers can benefit too. First, by taking part in metasearch, a hotel gets a piece of that valuable real estate in the top half of Google and other metasearch engines. Metasearch receives prominent placement and interactive elements on Google as you can see below. Don’t take part, and you won’t be visible in that panel to the right and your hotel loses a prime opportunity.
An even better potential outcome of metasearch conversions is the ability to drive direct bookings through your website. While OTAs push people to bookings on their websites through ads, metasearch helps you get direct bookings with lower commissions. In fact, Google now allows bookings right from the panel. Metasearch engines like Google and TripAdvisor typically have commissions between 10-15%, notably lower than OTAs.
One thing to keep in mind with metasearch is the added complexity. You’ll need to know (or work with a marketing partner who knows) how to integrate metasearch with your online booking engine or CRS. Metasearch also has a number of bidding models ranging from cost-per-click (CPC) to commission-based models that are important to understand.
How the OTA vs. metasearch landscape is shifting
OTAs may have gotten a headstart on metasearch, but as the COVID-19 pandemic settled in throughout 2020, metasearch proved to be more durable and able to last against adverse conditions. At O’Rourke Hospitality, we saw metasearch outperform OTA advertising for clients by 2-3x, and in some cases, 10x or more.
For Lark Hotels, which has iconic properties from coast to coast in the United States, there was a 39.8% greater return on ad spend (ROAS) against Google PPC ads in the final six months of 2020, a trend that doesn’t appear to be slowing down (see our case study). OTAs continue to be a huge player, but Google’s increased interest in metasearch and other hotel features, combined with changing customer behavior, has begun to reshape the landscape.
Should my hotel go with OTAs or Metasearch?
So, should your hotel go with OTAs or metasearch? The answer to that question isn’t as simple as picking one of the options. The best option for most hotels is really both. You need a strategy to take advantage of both OTAs and metasearch and find the best mix and setup for your needs. According to research firm KANTAR, 7 of the top 10 most clicked advertisers on Google were OTAs or metasearch companies. In fact, only two hotels, MGM Resorts and Marriott, were in the Top-10 of click share. When it comes to decision-making, OTAs and metasearch are king.
Rather than thinking of OTA vs. metasearch as an either/or, it’s best to think about how they can work in tandem to deliver bookings. You should consider:
- Making sure your hotel is set up for optimal performance on Google and TripAdvisor, including taking advantage of Google Hotel Ads’ newly announced free booking links.
- Get set up with prominent OTAs and work with a strategist to determine the best fits. You can move back and forth based on performance.
- Continue to monitor your OTA and metasearch listings, updating photos and responding to customers. Research done by TripAdvisor showed that hotels that included at least one photo had 138% more traveler engagement and ones that had at least a 50% response rate on reviews increased their booking chances by 24%.
The bottom line is, making sure your hotel has maximum visibility is key and hotels need OTAs and metasearch to ensure they take up the valuable real estate that keeps them front and center. Looking for more insight into OTAs, metasearch or other hospitality marketing tools? Reach out or check out our blog for more resources.