Everyone in the hotel industry seems to be in favor of Metasearch engines.
Or, let’s turn this the other way around: have you ever heard someone telling you and other hoteliers that you should NOT be on Meta?
Likely not, as “Metasearch Engines” seems to be the buzzword of modern times in Hospitality.
But hopefully yes, someone did warn you about the pitfalls that lie hidden behind Meta.
And so In this video I’m going to show you a couple of very simple examples that will prove how, at least in this historical moment, it makes no sense to be on Metasearch, WHEN it makes no sense to be on Meta, and WHY Google Hotels Ads is the only exception.
Let’s dig in.
Own Your Hotel Distribution
First and foremost: are you in control of your distribution?
And look, whether you say Y or N to this question, there is only one way that puts you in the driver’ seat of your hotel distribution: COLLECT ALL BOOKING PAYMENTS.
In simple words:
- do all customers pay you, direct, upon arrival or check out, and then you pay due commissions to the OTAs? Good, good chances to be in control.
- do you let 3rd-party channels collect the payments from final customers? Good, well, no good: you are in NO control of your distribution. Plain and simple.
And so, what does it have to do with Metasearch Engines. Let’s check this out:
Typical scenario in Google Hotel Ads with the first featured results on top and a whole bunch of free booking links underneath.
The direct-booking channel is listed in the featured option, other than as a FBL, which means a click on this will essentially generate a cost.
However, it’s pretty clear that this hotel has some distribution issues. Does it make sense to be there as a featured option when other channels offer better rates?
Useless paid clicks
Someone may argue that eventually people won’t click on it and so the hotel won’t have to pay.
Point being, these are the results that come up when users use the brand name, or hotel name, in the search-field on Google.
The intention behind someone searching for a hotel name on Google can be either:
- Transactional: he has completed the planning phase and he/she is ready to finally make the hotel reservation for the selected hotel;
- Navigational: the prospect is in his/her planning mode, he might have seen the hotel on some OTAs and now thanks to the billboard effect, he wants to see the hotel website
Transactional: we pay to show up here, but our higher rates reduce the possibilities to get a click.
In other words, our estimated CTR gets slimmer and slimmer. The lower the CTR, the greater the price we’re going to pay for a click.
In fact, gaining a slot in the prominent area of these featured options is an auction-based game. 2 of the most important variables that determine whether we win or lose the auction are:
- what we’re willing to pay (aka the maximum CPC that we are willing spend)
- our CTR, meaning the likeliness to get clicked
And so, not only claiming a featured slot when we have higher rates is useless, it’s actually harmful.
Navigational: the user hasn’t cleared up his mind as to which hotel to pick for his trip, he’s still in discovery mode but has already identified a few options, including your hotel.
Again, you pay to show up here with your higher price.
However the prospect is not yet in his booking mode, he’s not ready to make a reservation. He just wants to see your website and gather more information.
So, he sees this prominent link of yours here, he doesn’t care about the higher price because, as said, he doesn’t want to book, at least not just yet, so he clicks.
The result? You paid for a click to bring in a prospect who would have landed on your site anyway, organically, because he was specifically looking for your website link via Google. And, later on when he will probably be ready to make the booking, good chances that he will go straight to some other channel because you have already shown him that your rates are higher.
Useless paid click that eroded your budget.
Many hotels have a commission-based model and so, in the strict sense, these hotels don’t pay by the clicks, they pay by the actual reservations, or even actual stays, no matter how many clicks the featured option gets.
Though commission-based models are the least profitable and revenuable for Google, because Google is taking the risk of exposing hotel results essentially for free, if no reservation is made.
And this is also a variable in the action-based game we discussed a moment ago. And since I believe all hotels of the world are on Meta and, specifically, Google Hotels Ads, to boost their visibility and get more direct bookings, a commission-based bid may certainly be the safest option, but likely not the most profitable.
The Reversed Billboard Effect.
What I have shown you above is the most classic example that explains why you should not be on Meta, not even on Google, if you don’t control your distribution.
But what if you are in control of your distribution instead?
I’ve been playing with Meta quite intensively especially in the last year, to come up to the conclusion that it makes no sense to be on Meta other than Google Hotels Ads.
Here’s why.
This is a hotel that I follow and this screenshot was taken a few days after activating Tripadvisor, in addition to Google Hotel Ads.
The official site of the hotel is clearly the best deal but you see here?
TA, which is a Metasearch Engine, shows up on Google Hotel Ads, which is another Metasearch Engine, even though in this case it’s just a free booking link.
And it does so by using the same direct cheaper rate I have on my site.
So, do you see what’s happening here? I’m competing with myself.
Instead of being the one and only with the cheapest rate, now I’m competing with another 3rd-party channel that I’m actually paying to bring me more visibility and bookings somewhere else.
TA, that should be a Metasearch engine, just like GHA, in this case becomes an OTA.
Remember? This is still an auction-based game: the greater the competition, the lower the CTR, the higher the costs.
Now you might say: Ok, but if someone clicks on TA then TA will redirect them to my site anyway and I gain a direct booking.
In this case my answer will be: “don’t underestimate how freaking lazy people are, especially on the web”.
Because this is what happens after clicking the TA result:
My cheapest official-site rate is there, but the most prominent result is Booking’s.
How much more chances would I have to get the click with my official site if I was as prominent as Booking, and Booking was relegated to the side column results?
The View Deal button under Booking’s result is so much more prominent than any other option, that people may not notice they are selecting a higher rate.
This is what I refer to as Reversed Billboard Effect, the revenge of the OTAs: leverage the cheaper direct price of a hotel website to bring bookings to their sites.
Smart!
Other Metasearch Engines
So what about Kayak, Trivago, Skyscanner and other Metasearch engines?
Look, even combining them all you’ll never have the visibility that GHA is capable of granting you.
It mainly depends on your budget but, especially if you have a low budget for advertising on Meta, I’d rather focus on Google rather than splitting small amounts horizontally across too many channels.
Being on all Meta has become like being on all OTAs: it’s stupid to think that the more OTAs you’ll listed in, the more bookings you’ll get.
And since I love the concept of decluttering, my suggestion is plain and simple: the less, the better.
Yet pls don’t forget, it all starts with you distribution. Own it and Master it, or accept to be played by.
