demystifying hotel metasearch

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Demystifying HotelMetasearch

WebinarOctober 31, 2013

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Kevin MayEditor & Moderator

Gene QuinnCEO & Producer

Your hosts

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Tracie CarilloGlobal Head,Hospitality SalesTravelport

Your panelists

Doug AleyVP, Product and Corp. DevelopmentRoom77

Max RaynerPartnerHudson Crossing

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Poll no. 1

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Poll no. 2

6 Confidential ̶̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC

Demystifying Hotel Metasearch

Tnooz - Travelport WebinarOctober 31, 2013

Max Rayner

Confidential ̶̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC7

How do you make a buck in this town anyway? A little about meta

Hotel metasearch answers a vital need, but not so well

What stands in the way, and how to get around it

Next up

Contents: Demystifying Hotel Metasearch


How do you make a buck in this town anyway? A little about meta


What is hotel metasearch?

Metasearch

Push & Pull APIs Search & Book Extranets

UX Algorithms Analytics

CPA CPC CPM

Traffic App installs Brand awareness

Coverage Conversion rate Acquisition cost

Inventory Descriptions Rich media


What is hotel metasearch?

Key activities go both left-to-right, i.e. supplier to consumer…

Contract Hotels

Get Content

Get Availability

Aggregation & Display

Search Inputs

Web & AppTraffic

… and right-to-left, i.e. consumer to supplier:

Caches &Algorithms

Referral

Confidential ̶̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC

Who plays the hotel metasearch game?

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With apologies to all those left out – such as Alexa ranks below 100K


How do they make money?

Metasearch products have a few sources of revenue (actual numbers fudged to protect the guilty):

Commissions from contracted hotels CPA ~ 15% of booking value

Annoying compare-a-site tick boxes CPC ~ 35¢ to 15¢ pre-checked

CPC items within results pages CPC ~ 95¢

CPM if any CPM ~ $9

GDS Financial Assistance (FA) Let’s ignore those for nowand/or API provider Rev Share


So what does the metasearch funnel look like?

Gross oversimplification to make a point (actual numbers fudged to protect the guilty): Ignoring multi-channel effects

Lumping loyalty/return visits and media costs into effective costs for traffic

You paid $1M, you got back $1M

Now you have to cover tech and SG&A costs?

Maybe it’s better than it looks…

20K bookings $900K

Internal pages CP-X net $50K

Checks and pre-checks net $50K

1,400,000 searches

(2 searches per visit, 30% abandonment)

1,000,000 visits

cost $1M (with an allowance for loyalty and SEO/organic returns)


We thought you said it was a good business?

You have different levers, and if you optimize each it can get much better: Acquiring loyal users whose return visits don’t cost you much

Suppose you pay $2 per user acquired (whether for an email or app download)

But you can expect an annual value of revenue per loyal user of $7-$10. So as you grow return traffic costs you less and makes you more than the 90¢ per general visit

Top destinations can be quite expensive but you can optimize niche/long tail $2-$3 CPC for top locations, but with higher ADR & LOS than average

You could manage down to $1.50 CPC, with a maximum 33% on returns… ~$1/visit

Conversion rates and brand awareness can fix most ills Range all over from 1% to 4%. Conversion & loyalty can make or break your day!

If you got the money, you can carpet bomb on TV until you’re a household name


Hotel metasearch answers a vital need, but not so well


Why we’re not there yet

Despite massive computational power, metasearch is dumber than a thermostat


What could be better?

Many traditional metasearch solutions look no different than OTAs Just one enormous matrix of names, costs and reviews by random people

Some of course offer a little more:

Room 77 Hipmunk



The taboo about meta not taking payment details needs to go Many metas have wisely concluded that distributor mobile Web sites are

often so sketchy that they’d rather conclude the payment on their side… And moreover that helps with overall loyalty and UX, though of course a

higher customer service expectation goes with the territory



Sell me customer delight, not in-and-out click churn For once it would be great to see a recommendation that feels just right

for me rather than leave me grouchy

Open the doors to an experience, not a bed with way too many dusty pillows

Address mobile and tablet first… if those are good, so will be your traditional Web

Hide all the annoyances from me: latency,bad hotel site UX, excessive choices,waste of time in general


What stands in the way, and how to get around it


Content (descriptive and rich), and Availability are a blocking factor

The pipes to deliver content and to get push or pull availability and rates have been historically underwhelming…

… but some bright lights such as Travelport’s Universal API (UAPI) are opening new realms by merging GDS and non-GDS content and making it accessible at scale

So are new entrants in rich contentdelivery such as IcePortal.com

Universal Record

(Super PNR)

Uni

vers

alPr

ofile

GD

S andnon-G

DS

UAPI


Source systems are sketchy, too

Few of the mission critical systems for hotels were created anticipating Web scale anything…

CRS

PMS

WholesaleDistrib.

ChannelMgt.

Rev.Mgt.

Campaigns

CMS … but we are getting much better at engineering around their limitations and creating caching layers elsewhere

… and getting better at integrating third-party signals critical to personalization from systems such as Acxiom’s Audience Operating System (AOS)


If it’s better for users it will be great for your business. Four areas:

How to make it better?

"Value Innovation – The Strategic Logic of High Growth". Harvard Business Review 75, January–February 103–112

ReduceWhat current pain points/costs could be reduced well below industry standards?

Semantics gaps: “Left bank Paris boutique hotels” shouldn’t be just text index entries

EnhanceWhat elements of customer value could be enhanced well above industry standards? Personalization: I’m not always the

same me, and sometimes I don’t even know who I am

EliminateWhat are current pain points/costs taken for

granted by the industry that could be eliminated?

Mobile UX and payments: Not so hard to do right, and so painful when wrong…

CreateWhat elements of customer value could be

created that are not available now? Machine 2 Machine & Person 2 Person:

Add human curation and direct engagement to machine based search


What does success look like?


Success might look like this…

“Cheers” meets Web scale data

Know who I am (now, and also later, and when I may be a different “me”)

Supplement machine-to-machine exchanges with UGC, including dynamic human-to-human exchanges

3Cs: Coverage, customization, curation

Massive aggregation with dynamic personalization: Watson won Jeopardy, why can’t you?

Confidential ̶̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC

Hudson Crossing 112 West 34th St.New York, NY, 10120United States of America

[email protected]@hudsoncrossing.com

Thank You! Looking forward to Q&A

mailto:[email protected]



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Poll no. 3

Who will win in mobile?Doug Aley, Room77VP Product & Corporate Development

51%2013 time spent on internet is

mobile

50%2014 US population with

smartphone

70%

Of 2013 new connected devices sold

The question is no longer “is mobile important?”

But “who will win?”

JERRY SEINFELD You know the message you're sending out to the world with these sweat pants? You're telling the world: "I give up. I can't compete in normal society. I'm miserable, so I might as well be comfortable."

So who will win?

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Poll no. 4

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Q & A

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Replay and presentation from today’s webinar will be available at www.tnooz.com

Please send your questions to [email protected]

Thank you!

http://www.tnooz.com/


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