The Opportunity Cost of Metasearch

As you read this, you're likely content with your hotel marketing and distribution strategy. But just under the surface, a battle rages for your customer, and many hoteliers are unaware.

They look at their media mix, replete with reasonable allocations to paid search, social media, display, SEO, and metasearch, and feel like they have covered their proverbial bases. Missing in that analysis is the amount of potential business they are ceding to OTA's or, worse yet, their competitors.  

For too long, the hospitality industry has managed marketing with an emphasis on the expense side of the ledger. Marketing's purpose is to capture business that drives new and incremental bookings.

The absence of marketing at key points in a traveler's booking journey due to budget restrictions should be recognized for what it is—opportunity cost.  

Opportunity wasted, revenue squandered. The revenue side of the ledger suffers quietly and without sufficient attention.  

Defining the opportunity for hotel metasearch

Hotel metasearch channels like Google Hotel Ads and Tripadvisor capture customers as they move down the travel booking funnel.

Hotel metasearch becomes particularly relevant when travelers have determined their destination market, have developed a consideration set, and are beginning to develop price expectations. Your marketing and distribution alarms should be firing - this is the most critical time for your property to be present in the booking journey.  

Simply put, hotel metasearch sites offer the most immediate access to customers as they are about to choose between your direct website and your competitor: an OTA.  

It's no wonder that hoteliers report that hotel metasearch advertising produces some of the most impressive returns of any channel. So much so that OTAs have devoted huge chunks of their budgets to these channels.  

Yet, our collective response as an industry is to tragically underfund hotel metasearch. The most common approach is to sign up with a hospitality metasearch provider that offers an inexpensive technology connection fee and then allocate a small amount of dollars (3-figure amounts) to the campaigns. We manage the expense side of the ledger and check the metasearch box.

Calculating the opportunity cost of hotel metasearch

The most common internal justification for an underfunded hotel metasearch marketing campaign goes something like this: 

We spent $500 on our technology connection and $700 on media, which resulted in $13,000 in room revenue. An 11 to 1 return on investment. Success!

Missing from that analysis is the cost of missed opportunity.

By capping media investment at $700, a hotel artificially limits its demand capture. They cap their revenue originating through metasearch at approximately $13,000. 

Imagine a scenario in which there is $100,000 worth of demand available to the hotel in a particular month. With arbitrarily defined budgets, the property is allowing $87,000 worth of business to arbitrage to OTA's or competitors. Under this light and taking into account the revenue side of the ledger, the property is not managing its strategy in a shrewd or calculated way. They are letting 87% of the revenue walk out the door.  

Missing at the point of conversion because of a limited budget is the real opportunity cost in hotel metasearch.

Maximizing revenue by minimizing opportunity costs

Metadesk offers a flexible and innovative hotel metasearch model. The platform places and pays for media on a property's behalf in exchange for a commission that is meaningfully smaller than an OTA. Better yet, as hotel metasearch production improves, the commission rate plummets.  

Metadesk covers the cost of media - and is not constrained by artificial budget limits. Opportunity maximized.

Because Metadesk is incentivized by direct bookings with hotel metasearch management, it is always willing to keep spending. The innovative audience targeting embedded in the platform, coupled with real-time analytics, allows our trained hospitality media pros to identify the full spectrum of demand for a property and ensure that the hotel website is ever-present in the battle to capture customers.  

Take the above example to demonstrate the difference:

The opportunity cost for the traditional model in this example is a whopping $80,200 per month!  

In many cases, that is the difference between winning and losing, between premium market share and living at the bottom of the STR report rankings. Under this light, we see the power of maximizing the metasearch channel with an ever-present approach.

Hoteliers have always faced limitations when managing the expense side of the ledger. It's a function of our industry and inertia. The promise of metasearch is that it offers us a chance to flip tradition on its head and run a truly revenue-focused approach. 

At this moment in time, few have gravitated towards uncapped metasearch marketing. Metadesk offers the opportunity to stand apart from the competition and generate real gains in market share.

How to Optimize Your Hotel’s Metasearch Campaigns for Mobile Devices

Google Search started prioritizing mobile first back in 2016 as visitation and growth from users on mobile devices started growing. As of 2023, almost 60% of traffic on the web is from mobile devices. Visibility on mobile devices is crucial if your hotel wants to be present during important parts of the consumer journey to purchase. GCommerce’s portfolio of hotel websites sees over 66% of all traffic coming from mobile devices.

Hotel metasearch campaigns have become an increasingly important part of this journey, especially on Google search. It’s powering new SERP features visible down the continuous scroll page, such as this newer hotel listing feature (with rates from hotel ads) under organic listings shown below.

Learn how your hotel can best approach optimizing your hotel ads and metasearch for this device type and ensure you have the right visibility to reach your goals.

How do I optimize my hotel’s metasearch ad campaigns for mobile devices?

Campaign Adjustments

Metadesk recommends optimizing your hotel metasearch campaigns based on performance by segment based on your hotel’s objectives. Some platforms, such as Google Hotel Ads offer the ability to use a bid modification by device type. You can also opt out of certain device types on channels such as Google and TripAdvisor altogether. You can view reporting on how each device type performs in terms of clicks, bookings, impression share, and more within metasearch management platforms to better understand how each device type segment performs before making any specific adjustments. 

Optimize Your Landing Page for Mobile Devices

An important part of your hotel’s metasearch performance is the booking engine landing page where the traffic lands. Although most hotels work with 3rd party providers, making it hard to have control over things like page speed - optimizing this experience can improve performance from mobile traffic in your metasearch campaigns. Make sure your mobile booking page is easy to navigate on a mobile device. You could also test mobile-only offers or last-minute deals to appeal to mobile device users, many of whom tend to be more likely to be last-minute bookers than desktop users.

Optimize For Local Search + Your Google Business Profile Listing

A critical part of your Google Hotel Ads’ visibility in Google search results is how well you’re focused on local SEO ranking signals. This includes how built out and up-to-date your Google Business Profile listing is, how many reviews your hotel has vs the competition, making sure you're responding to reviews, and more.

What device type drives the most bookings for hotel metasearch?

Although mobile devices account for over 60% of site traffic on average, this traffic tends to be higher in the funnel during the consumer path to purchase. On average, mobile devices only account for 30% of a hotel’s total website revenue production. The trend is the same as we look specifically at hotel metasearch campaign production. GCommerce’s portfolio sees 58% of all hotel metasearch clicks come from mobile devices but only 35% of total revenue.

This data can help you optimize your budget allocation.

If you are limited on budget for these typically bottom-of-funnel campaigns and focused on driving higher impression share to the segments that produce more revenue, you might opt to increase bid adjustments for desktop or decrease them for mobile traffic.

Remember, though, even though most bookings come via desktop - it’s important to be visible on mobile since that’s where consumers are spending most of their time (and clicks) interacting with your campaigns while they are shopping and considering which hotel to stay at in a destination - they just tend to book on desktop. If you remove visibility and impressions from mobile, you might end up hurting your overall performance due to lowered visibility.

What Google’s Sunset of Commission Bid Strategies Means for Your Hotel Ads Campaigns

Google recently announced that support for commission-based bid strategies in Google Hotel Ads would be deprecated, and the bid strategy types would be going away in October 2024. 

Historically, Google Hotel Ads campaign types have had access to a few different bid strategies. Commission-based bid strategies are unique to hotel ads campaigns, and they allow hotels to set their bid optimization to be billed based on either pay-per-stay or pay-per-conversion. 

What does this mean for your Google Hotel Ads campaigns?

For hotels that want to run hotel ads campaigns, the ecosystem requires they use a 3rd party connection to access their rates and inventory feed via Google’s Hotel Center. This hotel center feed is then connected via third-party platforms or directly from a hotel’s CRS provider. 

As long as your hotel ads and metasearch provider isn’t relying upon one of these bid strategies, then no change is needed. 

At Metadesk, we rely on advanced bid algorithms and machine learning technologies coupled with ongoing optimization and targeting methods. Although our most popular billing model happens to be a pay-per-stay model, we don’t utilize Google’s pay-per-stay or pay-per-conversion bid strategy type. So, no change is needed to keep the current visibility and success you’re currently experiencing with our metasearch management services.