The world of hotel searching and shopping is evolving…
This FREE webinar by Tnooz and Travelport will demystify how metasearch relates to the hotel industry and clarify the opportunities and challenges in this ever-evolving and cutting-edge business model.
Webinar presenters are:
Max Rayner – partner, Hudson Crossing
Doug Aley - VP of product and corporate development, Room 77
Tracie Carillo – global head of hospitality sales, Travelport
Kevin May - editor and moderator, Tnooz
Gene Quinn – CEO and producer, Tnooz
3. Your panelists
K
Tracie Carillo
Global Head,
Hospitality Sales
Travelport
Max Rayner
Partner
Hudson Crossing
Doug Aley
VP, Product and
Corp. Development
Room77
6. Demystifying Hotel Metasearch
Max Rayner
Tnooz - Travelport Webinar
October 31, 2013
6
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
7. Contents: Demystifying Hotel Metasearch
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
7
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
8. How do you make a buck in this town
anyway? A little about meta
8
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
9. What is hotel metasearch?
Push & Pull APIs
Search & Book
Extranets
Inventory
Descriptions
Rich media
Meta
search
Coverage
Conversion rate
Acquisition cost
9
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
UX
Algorithms
Analytics
CPA
CPC
CPM
Traffic
App installs
Brand awareness
10. What is hotel metasearch?
Key activities go both left-to-right, i.e. supplier to consumer…
Contract
Hotels
Get
Content
Get
Availability
Caches &
Algorithms
… and right-to-left, i.e. consumer to supplier:
Referral
10
Aggregation
& Display
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
Search
Inputs
Web & App
Traffic
11. Who plays the hotel metasearch game?
With apologies to all those left out – such as Alexa ranks below 100K
11
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
12. How do they make money?
Metasearch products have a few sources of revenue
(actual numbers fudged to protect the guilty):
Commissions from contracted hotels
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)
and/or API provider Rev Share
12
CPA ~ 15% of booking value
Let’s ignore those for now
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
13. 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
1,000,000 visits
cost $1M (with an allowance for
loyalty and SEO/organic returns)
1,400,000 searches
(2 searches per visit, 30%
abandonment)
Checks and pre-
You paid $1M, you got back $1M
checks net $50K
Now you have to cover tech and
SG&A costs?
Internal
Maybe it’s better than it looks…
pages CP-X
net $50K
20K
bookings
$900K
13
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
14. 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
14
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
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
15. Hotel metasearch answers a vital
need, but not so well
15
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
16. Why we’re not there yet
Despite massive computational power,
metasearch is dumber than a thermostat
16
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
17. 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
17
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
Hipmunk
18. What could be better?
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
18
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
19. What could be better?
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
19
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
20. What stands in the way, and how to get
around it
20
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
21. 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
Universal
Record
(Super PNR)
So are new entrants in rich content
delivery such as IcePortal.com
21
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
GDS and
non-GDS
Universal
Profile
UAPI
22. Source systems are sketchy, too
Few of the mission critical systems for hotels were created anticipating
Web scale anything…
… 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)
CMS
Rev.
Mgt.
CRS
PMS
Wholesale
Distrib.
Campaigns
Channel
Mgt.
22
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
23. How to make it better?
If it’s better for users it will be great for your business. Four areas:
Reduce
Enhance
What current pain points/costs could be
reduced well below industry standards?
What elements of customer value could be
enhanced well above industry standards?
Semantics gaps: “Left bank Paris
boutique hotels” shouldn’t be just text
index entries
Personalization: I’m not always the
same me, and sometimes I don’t even
know who I am
Eliminate
Create
What are current pain points/costs taken
for granted by the industry that could be
eliminated?
What elements of customer value could be
created that are not available now?
Mobile UX and payments: Not so hard
to do right, and so painful when wrong…
Machine 2 Machine & Person 2 Person:
Add human curation and direct
engagement to machine based search
"Value Innovation – The Strategic Logic of High Growth". Harvard Business Review 75, January–February 103–112
23
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
24. What does success look like?
24
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
25. Success might look like this…
Massive aggregation with dynamic personalization: Watson won
Jeopardy, why can’t you?
“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
25
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
26. Thank You! Looking forward to Q&A
Hudson Crossing
112 West 34th St.
New York, NY, 10120
United States of America
Confidential ̶ All Rights Reserved | Copyright 2013 - Hudson Crossing LLC
info@hudsoncrossing.com
talent@hudsoncrossing.com
32. 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."