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Travel metasearch corporations were once among the activities in the travel space. They have allowed consumers to compare hotel or flight costs at a glance from multiple providers, and many online travel agencies have understood the desire to get one.
In 2012, Booking Holdings (then Priceline Group) announced an agreement to acquire Kayak and Expedia acquired a majority stake in Trivago.
In 2016, China’s Ctrip (now called Trip. com Group) agreed to acquire Scotland’s Skyscanner. “We’ve noticed a big expansion of their [Skyscanner]” in airfare sales in Asia, said Jane Jie Sun, chief executive of Trip. com Group. Skift at the time. ” When the opportunity arises, we act very quickly. “
Typically, metasearch sites don’t sell most airline tickets or hotel reservations on their sites — users click through to access online agencies, hotels, or airlines to book them electronically.
But in recent years, the metasearch category, or at least some of its major players, have struggled financially.
In a recent research note, Wells Fargo Securities wrote that it “remains cautious” about two public companies, Tripadvisor and Trivago. “You continue to see meta-studies being questioned as a category, while third-party knowledge indicates that post-pandemic demand is normalizing. “
Let’s take Tripadvisor as an example. Everyone would agree that Google has eaten up the market share of Tripadvisor’s metasearch engine.
In 2023, Tripadvisor’s hotel metasearch, as reflected in its Tripadvisor brand segment, still accounted for the majority of Tripadvisor’s business. But its revenue grew just 7% in 2023, to a 49% expansion for Tripadvisor’s Viator tours and activities segment. The Tripadvisor brand, which accounts for the largest percentage of hotel metasearch, saw its EBITDA grow just 1% to $348 million in 2023.
A screenshot of Tripadvisor’s hotel metasearch comparing Hyatt’s rates, for example, with those of Booking. com, Trip. com, and Agoda. Source: Tripadvisor
For its part, Trivago posted a loss of €164. 5 million (about $176 million in the red) in 2023. On Monday, its shares were trading at less than $3.
In an email exchange, Brian Fitzgerald, CEO of Wells Fargo, told Skift that the larger Google Hotels and Flights festival, which attracts users at the beginning of their searches, is a primary factor weighing on Tripadvisor and Trivago.
Fitzgerald sees others, too.
Hotels have attracted more direct traffic through their loyalty programs: many offer their loyalty program members lower rates on their websites than metasearch sites such as Google, Tripadvisor, Kayak, and Trivago.
Online travel agencies like Booking. com and Expedia have their own loyalty systems and have started offering deep discounts to attract their own direct traffic. This hurts metasearch platforms, even if they are owned by online travel agencies.
“Almost everyone in the ecosystem has envisioned a loyalty program in some form and started making a cash investment in logo advertising to drive more direct traffic,” Fitzgerald said. “It was a slow process. We can’t pinpoint an express quarter where everything went haywire, but as a result, life for the classic form of metasearch platform has become more challenging.
In the early days of user reviews, Tripadvisor had competitive merit because it had so many and the online agencies few, but they held their own, Fitzgerald said.
“The price of TRIP and the meta of have been somewhat eroded,” he added.
Another thing is that online agencies have turned to logo marketing campaigns and today there are many other marketing platforms to choose from, from YouTube to streaming platforms to TikTok.
Kayak co-founder and CEO Steve Hafner believes he still likes to compare hotels and flights.
“It’s healthy,” Hafner said.
Reacting to Fitzgerald’s comments, Hafner said Kayak offers loyalty rates from certain hotel chains, when the chain gives Kayak permission to do so.
Hafner, however, agreed with Fitzgerald that online agencies’ downsizing practices have impacted metasearch.
“OTAs are very smart about discounting,” Hafner said. “So even Booking. com’s Genius fares can be had on Kayak. “Booking Holdings owns Booking. com and Kayak.
Our global industry daily policy. Written through editors and analysts across all Skift brands.
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Tags: reserve funds, booking. com, expedia, google, kayak, loyalty, metasearch engine, online newsletter, skyscanner, trip. com group, tripadvisor, trivago
Photo credit: M. Trivago announces third-party hotels for 2023. Source: Trivago
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