October 07, 2015

Why Google/TripAdvisor is a blessing for hoteliers willing to embrace a new paradigm

The metasearch model did not to work for the vast majority of hotels, especially the independent ones. That's why Google and TripAdvisor are moving away from their respective programs to a commission based model - potentially even resulting in lower OTA commissions if the market works as it should.

Using Metasearch to create demand is a good idea, but is just too costly and risky for many hotels. They just do not have the budgets to compete with the OTA´s. The independent hotel ROI model is different from an OTA’s ROI model. In meta search advertising, it is David versus Goliath, except this time Goliath wins ninety-nine times out of a hundred.

The cost of sale will be pushed down by this added competition. In Europe where we already see that hotels are now not legally obliged to offer rate parity to OTA´s. We will see revenue managers increase their pricing where the cost of sale is higher. Likewise with these two major players entering the market and especially with Google´s dominance in mobile search this is likely force other players to reduce their % to maintain market share.

OTAs are necessary for attracting clients to your hotel. The real trick is siphoning traffic from OTA’s and getting them to book on your website. This is where hotels have a major opportunity for getting some payback after years of feeding the OTA beast.

Get the full story at the Hotelient Blog

Read also "Why “Book on Google” and “TripAdvisor Instant Booking” are bad for hoteliers"