The metasearch model, part 2: The transition to meta-book

Metasearch dates back to 1999, when both SideStep and FareChase launched as search engines that aggregated prices from other online sites.

The following years saw many additional entrants into the metasearch arena - some created with that specific purpose, such as Skyscanner (2001), Kayak (2004) and Wego and Trivago (both 2005), and others that have added price comparison to their existing offerings, most notably TripAdvisor and Google. (Yahoo purchased FareChase in 2004 and then shuttered it five years later, and Kayak acquired SideStep in 2007.)

In a November 2017 report, Phocuswright found nearly half (43%) of travelers in the United States use metasearch sites to shop for flights and hotels. That’s up from 28% in 2010.

In recent years, with the rise of mobile, metasearch sites have been shifting from strictly providing price comparison and referrals to getting into the business of booking as well.

For part two of our series on metasearch, we look at this concept of direct booking on metasearch platforms.

Why do some providers see direct booking as essential, what benefits does it provide for suppliers and for travelers and what does the future hold?

In the beginning

In the early days of metasearch, roughly the first decade of the 21^st century, the model was strictly one of price comparison and referral.

Metasearch sites focused on providing consumers a clear, comprehensive view of options for flights and hotels and then transferred them to the websites of suppliers or online travel agencies to complete their bookings.

Then 2011 marked the start of a new era for metasearch.

That’s when Kayak launched its direct-booking option for hotels through the Travelocity Partner Network. A year later Kayak added direct booking for flights, starting with Air Canada, and now also offers it for car rentals.

In the years since, several other metasearch providers have enabled transactions directly on their sites, including Skyscanner, TripAdvisor, Wego and Google.

Of those, TripAdvisor shifted its strategy since first launching Instant Booking in June 2014 with Choice Hotels – varying its prominence on the site.

This was a sizeable turnaround for the brand after being one of the pioneers of the meta-booking concept at scale, with a number of major brands (both hotel chains and online travel agencies) agreeing to participate.

The introduction of Instant Booking on TripAdvisor came with some significant headwinds, it soon emerged, with the investment required on the roll-out (it eventually reached 500,000 properties) and marketing of the service hitting the companies financial performance in the markets.

At a May 2017 investment conference, TripAdvisor CEO Steve Kaufer explained it this way:

“.. it's a question of where we place it on the site. And so we refer to this as floating the Instant Book position… When Instant Book has the best price, of course, it's going to take pole position because that's going to be best for the traveler. Where Instant Book has a price that's worse, then it's never going to be in that very first position even though it might have been, mind you, a couple of years ago.

Now TripAdvisor says Instant Booking continues to be part of its product offering further down the funnel.

"It gives consumers a more streamlined option for booking, especially on mobile, while offering our partners another way to drive conversions in addition to meta and sponsored placements," say Brian Schmidt, TripAdvisor's vice president of global sales.

"We want to give our partners multiple options for driving traffic and engagement and let them choose the ones that work best for their business."

The drivers

A combination of new e-commerce models and evolving consumer behavior has fueled interest in metasearch-facilitated booking.

Consumers’ growing use of mobile devices for travel planning - a trend that is influencing the industry in so many ways - is at the core of this strategy.

“On mobile, I think users’ tolerance for being bounced between different sites in order to finish a transaction is perhaps lower than on desktop,” says Wego co-founder and CEO Ross Veitch.

“On desktop it’s slightly easier - you’ve got bigger screens, you’ve got a mouse and keyboard. I think in a mobile context, if we can keep the user in the same UI [user interface] … and we make it as easy as possible by allowing them to reuse booking credentials from previous sessions, it’s just better.”

Google’s vice president for product management, Richard Holden, says it sees direct booking as an effective way to convert browsing to booking for its flight and hotel partners, particularly on mobile where a fast, simple process is essential.

“Very often you’ll see when people have transitioned mid-transaction or mid-purchase, they lose context, they sometimes get confused, and abandonment rates increase and conversion rates fall,” Holden says.

On mobile, I think users’ tolerance for being bounced between different sites in order to finish a transaction is perhaps lower than on desktop.

Ross Veitch - Wego

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“So our philosophy is that, through Book on Google, we can help the consumer leverage credentials that they have already stored in Google, and it can be a one-click process that they can make a purchase. That’s a net-net positive.”

Skyscanner reports more than 60% of its users are now on mobile, and, since launching direct booking in November 2015, participating partners have seen a 50% increase in conversions on mobile bookings and more than 100% uplift in ancillary ticket sales.

“For us it’s an attempt to answer the question of how meta succeeds on mobile,” says Hugh Aitken, Skyscanner’s senior director of strategic partnerships.

“As mobile continues to grow, we absolutely see direct booking becoming more relevant and more traveler-focused.”

Asian influence

Along with mobile, the success of new e-commerce models in Asia is also providing support for direct booking.

In its 2017 white paper, “A Vision for the Future of Airline Distribution; Metasearch as a Dynamic Airline Marketplace,” Skyscanner points to Alibaba’s Tmall online marketplace as an example of how airline distribution will be managed in the future.

According to Forbes, 75% of the world’s most valuable consumer brands sell on Tmall, covering a broad spectrum of products from companies such as Toyota, Disney, Maserati, Adidas, Starbucks, Samsung and L’Oréal.

“Shopping sites like Tmall offer suppliers ‘flagship stores’ to brand their products in a way that is almost identical to their own sites,” Skyscanner says in its report.

“These are still marketplaces where sellers must compete for their business, but offer an online shop window for brands that provides the same experience to users as their own sites.”

In the same way Tmall’s brands benefit from the site’s massive user base - online analytics firm Alexa estimates Tmall has more than 500 million monthly active users - Vietch says it makes sense for Wego’s partners to capitalize on the platform’s loyal audience.

“In terms of the scale of the business, we are just over a billion dollars at the moment. That’s growing at about 70 to 80% year-over-year,” he says.

“People are using our app for a reason - they have an affinity for our brand. They have previous experience with us. We’ve trained them over time how to use it. So it makes sense if we extend that into the booking flow and keep it consistent, people are going to be more comfortable with that and are going to convert in higher numbers.”

Vietch says of the 700 different integrations Wego currently has for flights and hotels search, about 100 suppliers and online travel agencies have enabled direct booking - currently just for flights, although he expects to add some hotels in the next six months.

Brand first

Tmall’s concept of showcasing brands is also a characteristic of the direct booking being offered by travel metasearch providers.

So as mobile continues to grow, we absolutely see direct booking becoming more relevant and more traveler-focused

Hugh Aitken - Skyscanner

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“On one side we have our travelers, now 80 million-plus every month unique visitors - and on the other we’ve got our partners. How do we make that global marketplace work as effectively as possible for both sides?” Aitken says.

“We very much see it as a branded marketplace for our operators. It’s fairly clear you are booking with British Airways or with Scoot or with Cathay Pacific not with Skyscanner. We want to be a marketplace where our partners' brands stand out.”

Vietch says Wego has gone through a few iterations of its user interface to ensure users easily recognize the participating brands.

“Brand is important. We often see people booking something other than the best price – they do that for a reason,” Vietch says.

“People like to book with brands they have previous experience with, they have some affinity with. So it’s important, it helps with conversion rates, if you make the partner branding nice and prominent. And importantly for post-booking customer service, we want them to know who’s going to look after them.”

Google’s Holden echoes that sentiment about Book on Google.

“We are very much focused on fulfilling the transactions as quickly as possible, whatever we can do to boost conversion rates, and we’re not about having the customer relationship. We are very much about handing that off to the partner,” he says.

Localization

And while the brands are front and center, on the back end, metasearch providers such as Skyscanner and Wego are ensuring the user experience is localized in terms of language and currency. Aitken says Skyscanner is currently able to provide localized results for more than 40 markets, giving suppliers global booking capabilities regardless of their location and technical expertise.

Vietch says this has proven to be a very valuable benefit that has resonated with Wego’s partners.

“We have a lot of users in the Middle East who are using our services with an Arabic interface. Everything is right to left. And a lot of our booking partners don’t support Arabic - either on their sites or in their booking flows,” Vietch says.

“So effectively, by plugging them into our facilitated booking, we are taking care of all the localization for them, enabling them to be active in markets they aren’t set up for otherwise. That has been quite a powerful catalyst.”

NDC

While some direct booking connections are made via APIs, as more airlines adopt IATA’s New Distribution Capability it is becoming a big part of the equation.

By enabling retail-focused content and uniform connections between suppliers and distributors, NDC is making it easier for metasearch platforms to integrate partners for direct booking.

Kayak is one of the metasearch providers that has achieved IATA NDC Level 3 certification.

“This certification is an important milestone and achieving it has opened up new ways for us to improve the direct booking experience,” says Susan Lee, Kayak’s vice president for North America commercial partnerships.

“Whether it’s baggage fee information, guaranteed seat selection, mileage accrual, lounge access or other more tailored services offered by the airlines - we are laser-focused on making sure our users have access to all of the choices offered by our partners.”

Future outlook

Looking ahead, Vietch says in addition to integrating more partners for direct booking and expanding to new verticals, Wego may develop solutions to address partners’ challenges related to payments.

“We are looking at offering payment facilitation as part of the platform,” he says.

“Taking on risk processing, fraud prevention, allowing the users to pay us … we think we are in a better position to do the fraud monitoring because we see the users longitudinally, so we have a history with them. It also allows us to offer some of the local alternative payment methods above and beyond credit cards. And it allows lots of our global partners to participate without having to do all of the legwork around payments and localization. That’s sort of where we are heading.”

Aitken says Skyscanner will continue to grow its marketplace, creating a frictionless shopping experience for travelers not just for flights but also across all product categories. He also says it will move toward partner branding, “becoming more and more prominent” in the direct booking experience.

In its paper, Skyscanner writes, “Our vision for the future is collaborating with airlines in delivering our version of the supplier managed marketplace to travelers worldwide. We want to bring airline products on our site as close to the direct experience as possible, with carriers controlling their products and brand while benefitting from our traffic, and audience, across that range of devices. … For travelers the experience on Skyscanner is then virtually indistinguishable from the experience on airline.com.” 

• The metasearch model, part 1: All things Google