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OTAs Versus Meta Search Engines

The Importance of Understanding the Difference Between OTAs & Meta Search Engines:

What is an OTA?

OTAs (Online Travel Agents) for example Expedia, Hotels.com, laterooms.com etc gather inventory and prices from hotels placing them all onto their own website. This is excellent in terms of a user experience as a person can search, view and book a hotel after easily sorting through the various hotel options. Without these OTAs, a user would have to go through to each individual hotel website for details. The user makes the transaction directly with the OTA and not the hotel when they wish to secure a booking. The hotel receives payment from the OTA who sends on the reservation fee minus their commission. If at all possible, hotels like to minimise their reliance on OTAs but sometimes it is necessary to ensure full rooms so it is a necessary evil which hotels have to make.

What is a Meta Search Engine:

Examples of popular Meta Search Engines include Trivago, Google Hotel Finder and Trip Advisor and others. To many, a Meta Search Engine will look identical to an OTA because the user is presented with a list of hotel inventory in a particular location. The main difference however, is that Meta search engines don't actually sell hotel rooms; they actually charge hotels and OTAs on a cost per click basis to just show their inventory on their site.

Above demonstrates how Booking.com, Expedia and 11 other OTAs are buying traffic via PPC from Triavgo.

OTAs buy this traffic, secure a booking and then they charge the hotel a commission equaling many multiples of what it paid for the traffic originally. There is a way to prevent this and the more savvy hotels know this and utilise it as much as possible. Basically, these hotels send their inventory directly to the Meta search engines, where they purchase the cheap traffic themselves on a cost per click basis. This reduces their costs per acquisition versus if they allowed the OTAs to buy the traffic at a low cost and then resell it to the hotel at many multiples of the original cost.

The above shows how Intercontinental.com are sending their inventory directly to Google Hotel Finder in comparison to Parc 55 Wyndham who are allowing Booking.com and Hotels.com to take their traffic which they will then sell to Parc 55 at many multiples of what they are purchasing it for.
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