How independent hotels can use metasearch to compete with the big chains - Insights

How independent hotels can use metasearch to compete with the big chains

Insights

metasearchThis year has seen a major increase in direct booking campaigns from the big chains. We’ve watched Hilton and Marriott engage in extensive promotion of their brand websites using loyalty rewards and discounts to entice conversions and we expect to see that trend grow in 2017.

But where does this leave independent hotels?

While the big chains with their large teams dominate the market, smaller hotels are tasked with attracting direct business with little in the way of time, resources or the technology to compete. That means many rely on OTA bookings instead. But total reliance on OTA bookings does not make sense, when a direct booking can represent as much as a 25% revenue boost compared to the same transaction from an OTA. This is where metasearch comes into play.

What if an independent hotel could tap into the success of metasearch marketing without the hassle of managing multiple channels – and do it on a limited budget?

Dispelling metasearch myths

The metasearch landscape is daunting and challenging even for the big players. There is room in the market for everyone, even the smallest businesses. Knowledge is power, so first let’s address some common myths and misconceptions about metasearch.

Myth number 1

“I cannot afford to participate in the metasearch programs because I cannot compete with the OTAs on bidding channels.”

Reality

The CPCs associated with metasearch channels can indeed become very expensive and must be managed closely. These must also be tempered against your goals. If the goal is to always be in the top spot, you can expect a lot of competition and proportionally higher costs.

However, independent hotels can help themselves in many ways by including special rate offers that are lower than the OTAs. Most meta channels determine positioning first by the lowest rate, and then off the CPC. By offering a direct discount, you could in fact have a higher position at a lower CPC than what is being paid by the OTAs!

Myth number 2

“I cannot possibly manage so many different channels across multiple extranets.”

Reality

This is quite likely true! Hoteliers need to use tools that allow them to manage metasearch from a single point of entry, much like a channel manager tool. This also allows for the application of a proper cross-channel optimization strategy, where you can easily shift funds and objectives between multiple accounts. There are tools geared for smaller hoteliers now available to address this very need.

Myth number 3

“Actually, I can manage multiple channels. I just set them up and let them run by themselves.”

Reality

A connect-and-forget strategy can be very dangerous when it comes to metasearch. Quite simply, things happen. To give you an example, on April 22, 2015, Britney Spears announced she was going to appear at the 2015 Billboard Music Awards. Generally, you wouldn’t expect this to have any relationship to metasearch. However, Britney also has residency at a Las Vegas Hotel and Casino, and on that day their click volume increased by 400%. Imagine how much money that could have cost them if the traffic kept going!

Metasearch and your objectives

These examples offer insight that may challenge any assumptions you may have about metasearch for independent hoteliers. It could be time to reconsider your strategy and objectives.

Metasearch campaigns can be used to accomplish many things, so it is important to first understand your objectives. These may include:

  1. Branding/visibility
  2. Click volume
  3. Guest ownership
  4. Low cost of sale
  5. High return on ad spend

These goals are not always completely exclusive from one another, nor always work in tandem. It’s important to build a set of goals that best suit your needs.

A relatable scenario

Not every hotel will have the same goals, strategies, or results, nor should they. Perhaps you want to try metasearch but you can’t fit it into your budget this year and do not know what to expect in terms of performance.

In this instance I would suggest you seek out commission models. Google and TripAdvisor are good examples of these and can help you dip your toe in the water. You can then use this data to build future plans.

So, how do independent hotels compete with the big chains? With the right tools, technology and guidance along the way. Metasearch engines should be a crucial part of every hotelier’s marketing plan. They offer the benefits of direct booking and enable long-term relationships with customers. Yes, they can seem complex to manage, and so far only large hotel groups have been able to use them profitably. But tools are now available to that will help independents take advantage of metasearch the way the big groups can.

About the Author

dean-schmitDean Schmit has been with DerbySoft for more than 2 years and currently serves as Sales Operations Manager. He can often be found evangelizing to hotels (in webinars, at industry events, and elsewhere) the value of participating in metasearch.  Prior to DerbySoft, Dean held a number of roles in the industry with companies such as TrustYou, Standing Dog Interactive, and Pegasus Solutions.

You’ll find guidelines about how to set your metasearch goals, helpful examples explaining the keys to success, walk-throughs of relatable scenarios, and even more myth-busting with DerbySoft’s free eBook. Interested to read more? Download DerbySoft’s free eBook here.

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