The battle to tilt a traveller’s decision in favour of a specific brand – be it for a supplier or an intermediary – continues to get intense.
The focus is on identifying a “lead” as soon as it emerges in the digital domain, and that’s where travel meta-search engines are showcasing their prowess.
A travel supplier needs to plan astutely for real-time hotel inventory availability/ pricing, and optimise campaign, budget and bid management. Since suppliers are dealing with an increasing number of traffic generation sites, associated costs have gone up. And importantly, a major component of this expenditure is going into competing with OTAs. This is unproductive since this leads to travel suppliers paying multiple times for the same conversions! How much to embrace the metasearch phenomenom is a topic of debate at hotel distribution conferences such as the forthcoming one to be held by HEDNA in June.
Distribution mix optimisation
One has to be pragmatic when it comes to assessing who is going to bear the hike in distribution costs. Will the hotel organizations endure the cut in the operating profit margin? Will the consumer be charged more for a room or an aircraft seat? Or a combination of both?
One way to counter the conundrum of rising distribution costs is to not be over reliant on the proportion of business being contributed by OTAs. Other than capitalizing on the hotel brand website, there is a need to partner with metasearch engines in a judicious manner. One needs to ascertain the lead times associated with a channel vis-a-vis average value per booking, and aptly forecast the demand over a period of time. Metasearch’s lure is that it not only passes on highly qualified leads, but it also offers the option of knowing the customer directly. So ascertaining how metasearch can chip in the overall revenue generation calls for a smarter analysis of the intent of customers. Indeed everything points to travel suppliers needing to get smarter about knowing which channels deliver the best returns. Smarter really means getting visibility into performance against a whole range of key indicators.
It shouldn’t be forgotten that metasearch engines are neither selling their own inventory, nor do they have fulfillment control over the inventory.
Also, it should be remembered that rising look to book ratios have an impact on infrastructure and resources. This has a cost implication.
To play in the online looking and booking game a robust, responsive infrastructure is needed. To build and maintain the server/ network resources required to handle high volume search requests with dynamic pricing is a commitment. For hotel inventories, some caching technology can be used for hotel descriptions that change infrequently, but prices and availability are best kept dynamic and updated in real time. The ability to respond timely and accurately to search requests is a pre-requisite to ensure inclusion in the metasearch options from which the traveller can choose.
Another aspect to consider is the complexity of the product on offer. It’s often not just a room, but a room with attributes. A hotel property may have a couple of hundred rooms, featuring five room types. Additionally it may have defined 20 rate plans. Of course, one can’t ignore the competition for each city. So consideration needs to be given to constantly changing availability and changing prices. This applies to a full spectrum of permutations of different room types, rate plans etc. These variations are all part of the hotel room search and response scenarios.
Understanding what is being searched
One way of determining whether metasearch travel sites really do offer the hotel a viable route to the buying traveller is by taking a closer look at performance. Hotel organizations should make the most of the data and analytics available to them, such as using a tool that analyses the XML message flow between search requests and replies.
Looking at system performance as well as scrutinising search and booking data can help travel suppliers apply real-time insights for competitive advantage by being able to synchronize demand and supply through better capacity management, and setting up better consumer insight and sales capabilities. Decoding the message flow gives the supplier a deeper understanding of the searches which benefits those responsible for distribution, revenue and marketing – the merging hotel disciplines.
Acting with Insight
Some concrete examples of analytic insights would be:
Consumer demand by capturing exactly what is searched
Consumer satisfaction (in terms of the options and prices offered)
Whether there are gaps between what is being searched for and what is available
Consumer experience in terms of speed of response
How many lookers are turned into bookers and at what ratio
There is also a need to look into any transmission errors that have occurred, and how they are rectified. It is also vital to assess if there is any degradation or outage in web services that impacts the overall user experience.
All these data points can help assess the commercial performance of each channel. Getting the right distribution mix and then monitoring the performance of third party channels is crucial to getting the best returns on a hotel’s inventory. Harnessing this intelligence from search and booking data is today’s competitive weapon to not only understand the channels better, but ultimately also delving into the buying habits and preferences of the consumers.
So travel suppliers need to assiduously weigh in the value of business analytics, and how the same can help in evaluating search traffic as well as bookings.
By capitalising on the strength of analytics, suppliers can come to grips with the performance of metasearch channels. It should be noted that metasearch today is an additional platform to advertise on / keep up to date / push rates/availability to.
If metasearch engines continue to get stronger in the early phases of the booking funnel, then hotel organizations need to plan well for campaign, budget and bid management. Hotels need to be spot on with their back office systems and servers, as they need to robust enough to handle large volume requests. As for competition, considering that there is price transparency on the same platform – there may be a tendency for prices to be pushed lower as a result of commoditisation. So one needs to combat and be ready for usual issues of differentiation. And one shouldn’t overlook the need to get the right mix of organic search optimisation and paid placement. Need to be where metasearch get (scrape) their information from? Do remember the game is all about marketing merging with distribution.
Taking these considerations onboard, hotels can better partner with metasearch engines, tailor their offerings for this channel, improve upon the infrastructure that is needed to support metasearch and overall improve upon their yield as well as distribution mix.
(Article originally published by triometric)