Online Travel Agencies (OTAs) have taken the travel and hospitality industries to a new level over the past decade, but in recent years there has been a shift towards convergence of OTAs and metasearch engines. Metasearch engines, like Kayak, TripAdvisor, and Hipmunk, have traditionally shuttled users to OTAs or air/car rental sites white it came time to complete their bookings.
In essence, the metasearch engine was the means for getting to the ultimate endpoint of the OTA. Forward thinking companies like Expedia and Priceline utilized this stream of production to their advantage by acquiring their own metasearch engines. Expedia Inc. controls Trivago and the Priceline Group owns Kayak.
Companies like Orbitz, Travelocity, and CheapOair are considered metasearch “paupers” according to a recent Skift article, but Orbitz Worldwide CEO Barney Harford sees things differently, and last year he boasted that his company did not need to make a speculative investment and acquire a travel metasearch site.
The Orbitz Plan
While Orbitz Worldwide does not own their own metasearch engine, Orbitz.com, Cheaptickets.com, and LastMinute.com have done the next best thing. With an assist from advertising soultions’ provider Intent Media, the three OTA sites have not integrated metasearch-like hotel pricing from competitor’s sites right beneath some of their own hotel displays.
From the hotel display, a user can click on one of the competitor’s links and navigate away to that site to make a hotel booking.
Why This Model Makes Sense
Intent Media co-founder and CEO Richard Harris says the logic behind these property price ads are that only about 5% of lookers may book something on an OTA site, and these metasearch-like ads with hotel rates enable the OTAs to monetize the users who want to comparison shop and would likely book elsewhere anyway.
OTAs have displayed similar ads from competitor’s sites before – but usually without showing the competitors’ rates. If they displayed links to competitors, they would usually do so opening one browser at a time and without first showing any pricing.
However, displaying these opposing rates, while somewhat risky or seemingly counter-intuitive for the publishing site, earns a higher cost per click than not showing the rates because lookers are more likely to book.
To read the full Skift article, click here.