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How metasearch is shifting the balance of power

Metasearch engines in the travel space have made great strides towards becoming a user-friendly, cost effective way to search for travel accommodations.  According to Pia Vemmelund, the managing director at Momondo, “we’re going to see further mass adoption across new geographies – and explosive growth”.  This has the potential to drive further consolidation in the metasearch sector in the coming months and year, with smaller players finding bigger bedfellows.

Let’s take a look at a few key trends that have helped metasearch grow in recent years, and will continue to foster growth in the future.

Metasearch aims to be a convenient tool for travelers.

How are metasearch engines fulfilling the convenience factor for travelers?  Metasearch players have focused on ensuring that search technology renders results quickly and accurately, in an east-to-use display.

By working closely with travel suppliers and OTA partners to improve the booking process, metasearch engines have been able to dramatically increase their product over a short period.  These players have also strived to improve their website experience across every possible screen, allowing for an optimized experience across all devices.

Personalization is a mega differentiator.

As we discussed in an earlier blog post, the millennial generation views personalization as a form of loyalty, and there is a growing trend towards personalizing search results to offer all users a more targeted results.

Vemmelund believes that metasearch engines will attempt to branch out from ‘pure’ search, and those seeking a blend with booking.  Ultimately, this could change the business model of some major players.

Going forward, it will be important to establish brand loyalty among potential travelers with the right mix of push notifications, bonuses and retargeting.  No single person is the same, which will place an added importance on acquiring as much meaningful data about a customer as possible.

Just having this data is important, but another goal for metasearch engines will be to integrate this data across multiple channels.

Finding new ways to boost revenues is important.

How can metasearch engines generate additional revenue?  Here are three opportunities:

1) Selling new products – airport transfers, insurance, physical goods (travel bags), tours and activities.

2) Cobranding with other verticals – partnerships with financial institutions for co-branded credit cards is an example.

3) Selling meta-metadata – statistics on queries, purchases, destinations, etc.  Selling these analytics to suppliers has the potential to be a tremendous revenue booster.

The balance of power is shifting back to the supplier.

Most industry experts believe that metasearch engines will continue to bypass OTAs, and this will be due in large part to forming direct contracts with end suppliers.  Why does this make sense for metasearch engines?

-Because metasearch sites are implementing changes faster than most OTAs, they are able to do more for the supplier in less time than OTAs, or at least do it cheaper.

-Metasearch sites are a cheaper channel for suppliers than OTAs.  Use of metasearch shifts the balance of power back to suppliers.

-The end user experience is better in a direct model.

Key Points

-Recent metasearch improvements have made them a favorite choice among consumers when planning to travel.

-The next step for these metaseach engines is to form direct connections with the suppliers as they have the potential to be a more cost effective channel going forward.

-Integrating consumer data across a multi-channel travel space will make metasearch engines a more powerful and cohesive tool.

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