As the battle for bookings rages on between travel brands and online travel agencies (who charge anywhere between 15–30% commission per booking), it’s easy to see why hoteliers and agency leaders have fallen for quick-fix solutions like metasearch advertising.
Designed to let brands add a direct booking link within prominent online price aggregators, metasearch ads are a brand’s last line of defense when consumers shop through the likes of Google, Kayak or TripAdvisor. Instead of exclusively showing prices available through common online travel agencies (OTAs), now hotels can also include a “brand.com” link, giving consumers one last chance to return to the hotel website and book direct. If the prices are the same on “brand.com” as they are on OTAs, problem solved, right?
Sure, metasearch ads serve an important role as a reminder for consumers to book direct. In fact, I was an early adopter of metasearch advertising and still offer it for many of my agency’s hotel clients across the world. It often generates double-digit returns on investment (ROI) and on a monthly basis converts numerous bookings that previously would have been reserved through an OTA into a direct booking for the hotel.
Like anything in life, however, metasearch ads aren’t free.
If we look at the cost of acquisition for a metasearch booking, what is the true difference compared to an OTA? Yes, it’s booked directly through the hotel, but brands are still losing money compared to an organic booking, where 100% of the revenue goes to the hotel. You can either pay $1,000 in ad spend to get $5,000 in “brand.com” revenue through metasearch, or you can generate $5,000 in OTA bookings and pay $1,000 in commissions. From a purely mathematical standpoint, why not just let the OTAs make the bookings for you and use the $1,000 metasearch budget elsewhere?
The primary issue, as I see it, is that marketers and hoteliers often forget that conversions made through metasearch are likely going to convert through an OTA anyway. The money you spend luring the consumer back to “brand.com” is often equivalent to what you’re paying in OTA commissions. In marketing terms, a metasearch ROI of 15–20 times is misleading — you’re really not making any more money for the hotel than you were before.
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Let me be clear: Hotels should not stop spending money on metasearch ads. There is real value in paying extra for direct bookings because it trains the consumer to book direct the next time they return to the hotel. Plus, unlike OTAs like Expedia and Booking.com, metasearch ads will provide the hotel with customers’ email addresses, phone numbers and physical addresses for recurring marketing, whereas the OTAs want to keep that information for their own marketing.
Combined with strong revenue management practices (maintain rate parity with OTAs), incentives for booking direct (hotel amenities, Wi-Fi, etc.), and a streamlined, user-friendly booking engine (that keeps guests on the hotel website), the fact of the matter is, metasearch ads can be a great long-term investment. Your true return on metasearch spend won’t be immediate, but it will come when consumers organically decide to book direct for their next visit in six months.
So, are metasearch ads too good to be true? Yes and no. If you see them as a useful marketing tool to train consumers to book directly in the future, your patience will likely be rewarded. If you’re wide-eyed over double-digit ROI and see them as an instant business acquisition channel, chances are your bottom line will say otherwise.