Last week, Evan Konwiser made the case about why the days are getting darker for the mass-market online travel agencies (OTAs).
Konwiser says the OTAs are threatened by metasearch sites, which aggregate listings from numerous sources. His thesis is supported by data.
But it's worth pointing out a nuance: Not all OTAs are created equal, and the largest ones appear to solidifying their market-leading positions -- relative to smaller OTAs, opaque listings, hotel chains, and direct sales to individual properties -- thanks to metasearch.
Meta favors the largest OTA brands
According to Brian Nowak, an analyst at investment bank SIG (Susquehanna Financial Group):

The audience gains of these meta sites plays to the OTAs’ advantage, as these travel intermediaries send a disproportionate amount of their traffic to OTAs and not to brand.com hotel sites.
The Kayak differential is even larger as Kayak sent 57 times more people to the OTAs than to brand.com sites.
TripAdvisor's hotel metasearch favors the strongest OTAs
It's still early days for TripAdvisor's hotel metasearch tool, which has just debuted.
In the first five months of the year, eleven times more customers went to OTAs when exiting TripAdvisor than to hotels’ brand.com sites, notes Nowak. Independent hotels lagged the OTAs by roughly 75 million exits, while the world's largest OTA brands received the bulk of TripAdvisor's qualified referrals.
The key factor here is marketing. TripAdvisor's hotel metasearch tool essentially allows companies to pay for placement at the top of its search results. Those top positions are important. As TripAdvisor CEO Steve Kaufer recently noted: "Positions four through whatever in meta get a tiny fraction of overall clicks."
Nearly half of TripAdvisor's revenue comes from Priceline Inc and Expedia Inc alone -- two behemoths who spend millions to ensure that their listings get pride of place in TripAdvisor's search results.
Hotels are at a disadvantage
Meanwhile independent hotels are barely seeing an uptick in direct travel. The chart below shows how 13 hotels that have API access saw no gain in revenue to their official websites during the TripAdvisor switchover to metasearch, according to study by Micros, a vendor of property management systems, which attributes the July spike to better integration with TripAdvisor's new system -- yet with no gain over the baseline.
Offline surveys of travelers about how they chose their hotel are in tune with the above results.
Metasearch isn't helping hotels chains, either
To an extent, major international hotel chains such as Marriott and Accor are increasingly using TripAdvisor as a traffic acquisition channel. Yet their opportunities are limited.
Mark Okerstrom, CFO of Expedia, said last year:

To the extent that someone comes from a metasearch player and provides their dates, [Expedia-owned OTAs] can land them on a landing page that says,
“Hey, I know you’re looking for this Starwood hotel for next week. By the way, here’s six others that look like that one and that other people have bought and you may like.”
That gives us an advantage versus Starwood, who can just show them the Starwood hotel.
Straightforward explanation
The reason why metasearch is a friend of the OTA giants is simple: To the biggest marketing budget goes the spoils.
Consumers tend to only look at the first few results that appear in response to their query on metasearch. Corporations with enormous marketing budgets can greatly increase the chances that their results will appear at the top of the results, either through paid links or by gaming the organic results.
Meanwhile, independent hotel owner wondering how to receive direct traffic are losing out via metasearch more than they might expect.
It's true that most hotel suppliers worldwide are not on metasearch sites, but the dynamic of consumers favoring the first few search results will still apply even if they all come on board.
The trend may gain steam
The largest OTAs have an advantage with metasearch that may only be enhanced thanks to recent acquisitions, such as Priceline Inc's nabbing of metasearch site Kayak and Expedia Inc's recently snapping up of hotel metasearch site Trivago.
For instance, Priceline CEO Jeffrey Boyd has specifically said that his brands have historically been "underrepresented" on Kayak, a situation he expects will change post-purchase.
Expedia CEO Dara Khosrowshahi has said that receiving referrals from the OTAs is a "fairly efficient" channel for the company.
Metasearch is more profitable source of customers than generic Google search, he noted.
Being a giant OTA brand also is still much more profitable than being a metasearch site. For example, Kayak had an operating profit margin of 14% in 2012, versus 35% for Priceline Inc.
The Expedia hiccup
To be sure, last quarter, Expedia Inc performed below expectations because it was much slower to adjust to TripAdvisor's new auction system for its new hotel metasearch tool. But that may turn out to be a blip on an overall trendline that continues to trend upward.
Expedia brands continue to gain on market share from their smaller rivals, except for Hotwire, which the company acknowledges has made some missteps.
Google as a wildcard
All things being equal, current trends will continue to hurt the weak, namely, smaller OTAs and independent hotel operators. But there are a few unknowns that could re-set the playing field.
Top among them is if Google took its Hotel Finder metasearch tool seriously. It alone has the money, traffic, and platform to quickly re-set the metasearch game. It could differentiate its product by positioning itself as a "neutral" player -- insisting that a direct link to the hotel itself, where available, appear as a non-paid link in the first three positions of search results.
Google could also add inventory from peer-to-peer and vacation home rentals, which are facilitated by listings companies like Airbnb and HomeAway, may affect things in unpredictable ways.
(As a side note, Kayak and HomeAway have had similar discussions about inventory.)
Yet barring some surprise like the one just glossed, metasearch has set a course toward supporting a dynamic that drives ever increasing market share to brands owned by Expedia Inc and Priceline Inc, a.k.a. Big Travel. Until a new player leapfrogs ahead with something like semantic search, the trend seems set to continue for some time.
In recent months, the US websites of TripAdvisor, Expedia, and Priceline had the most number of unique visitors of any travel sites, according to comScore, a Web analytics firm. But they shouldn't assume metasearch along with business as usual in their direct channels will keep them in the pole position.
If they want to stay relevant, OTAs need to shift away from their current business practices for various reasons, as eloquently stated by Konwiser. But metasearch itself isn't necessarily harmful in the short term for the largest brands.
The OTAs are dead. Long live the OTAs.
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NB: Illustration of various metasearch sites courtesy of Olery.