Metasearch is booming in travel: an analysis

The ink of last year’s final blog wasn’t even dry yet when suddenly one of the biggest deals of the year was closed: following Priceline’s acquisition of KAYAK, Expedia also set foot into the world of travel metasearch by buying German Trivago. And hot after this acquisition Expedia it took a stake in Room77, the metasearch startup from Mountain View. It has only been a year since the latter launched its service but the total funding already totals $43.8 million. Why is metasearch suddenly such a hot topic?

The rise of metasearch

A metasearch engine is a search engine where different OTA’s can be compared. Their revenue comes from the fee the OTA’s on which the booking is eventually made is paying to the metasearcher. It’s more than clear that metasearch is a hot topic or as Carroll Rheem of PhoCusWright stated on Investors.com:

“Expedia’s acquisition of Trivago really validates how importantly the industry views metasearch as a business model and a consumer proposition. Metasearch isn’t a new concept to the online travel industry. But it’s taken quite a few years to develop the product to the point where it’s really ripe for mass consumption.”

It seems that the techniques behind metasearch are now full-grown. Travelers are also becoming more and more familiar with these platforms when looking for hotel rooms. Consumers on average visit five or six different travel sites when looking for hotels. It seems that the metasearch engine is liberating consumers from the information overload the internet is offering us nowadays. The big OTA’s took notion of this and made their moves.

Shift from air to hotel travel

It is not to be expected that Expedia nor Priceline will tweak their newly acquired platforms to prevail their offerings over others. After all this would abolish the fact why metasearch became so popular in the first place: showing the best options out of the widest available offer. With this purchase Expedia does give a clear signal that their focus is more and more on hotels over flight search; Trivago is a purely focused on hotel bookings. More OTA’s are currently shifting their business model to hotel business instead of airline business, simply because the margins on a hotel booking are much larger. Especially in Europe there is a big market for metasearch. The travel offering is very fragmented (lots of smaller chains and individual hotels) so there are great opportunities for aggregators.

What about TripAdvisor?

Tnooz reported that also TripAdvisor is testing a consumer metasearch functionality for their immense database of hotels worldwide. Except for doing precisely that what al the others are doing, showing prices and availability of a certain property, TripAdvisor is able to further filter down on the results with their massive review data. Enabling travelers to specify on hotels suitable for a romantic weekend or suited for families. This is a clear advantage that others are currently lacking. Furthermore, not many of the current metasearchers are attracting a steady 60 million of unique monthly visitors! This current development makes all the big names in travel slowly move closer to each other. As discussed in my previous post Google is also increasingly trying to dominate this sector with their hotel finder. For a good read on Google’s current developments I would recommend to read this article.

Update (15-02-2013): Skift has a full story on TripAdvisor that today introduces a hotel meta-search functionality and this service will be operational on all platforms within 6 months.

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