In our upcoming webinar, we'll be speaking to Hotel Hero Dr Jan Sammeck, Director of eCommerce at Deutsche Hospitality and author of 'Online Marketing for Hotels', about the steps hotels can take to build an efficient long-term spending strategy on metasearch.
In anticipation of the webinar, we asked Jan about his views on effective metasearch management, the growth of Google and some classic meta mistakes hotels make...
TRIPTEASE: How valuable is metasearch to Deutsche Hospitality?
Jan: Its value is very high. At Deutsche Hospitality, we see that metasearch conversion rates are among the highest of our channels. Today, meta is one of the most effective online marketing mechanisms for generating direct bookings.
With that in mind, how much of their budget should hotels allocate to metasearch?
Practically, there should be no limit to the absolute value of your budget. More importantly, you should continue to spend it as long as you generate a satisfactory ROAS. Or, the inverse of that, the Cost of Sale (COS). For example, if a COS of anything below 14% is acceptable for your hotel, you should spend as much budget as you can on metasearch without exceeding this prohibitive level.
What's more effective: managing metasearch bids in-house or using a partner?
There are some positives to managing meta auctions in-house. For example, you could respond quicker to rapidly-changing bids than a traditional agency that normally does weekly or monthly bid adjustments. Having knowledge about the meta set-up and management can also mean less dependence on agencies in terms of possible cost-saving, given that your personnel costs are lower than the agency fees.
To be successful on meta, you need the right talent - and it is hard to find. Metasearch management done correctly can also be extremely time-consuming. This time could be invested elsewhere with higher returns, so you need to calculate the opportunity cost of having a meta manager in your hotel vs using a partner's services.
For hoteliers, the appeal of working with tech partners is that they can 'set it and forget it'. Of course, it can be easier to keep an eye on your hotel's results on metasearch without having to go through the nuts and bolts of bid management.
What is the impact of a passive approach to meta bidding (no participation)?
It's simple: not participating in meta auctions means missing out on direct bookings. Even if bidding can be pricey, meta-allocated bookings can still cost you less than bookings through OTAs.
"A passive approach equals to leaving money on the table, which OTAs will grab."
Is Google the right metasearch channel for everyone?
I believe that Google will continue to dominate the market. So, yes, right now it is the right distribution channel for every hotel - but only under the condition that Google is the dominant search engine in your hotel's respective region.
But don't forget about local metasearch sites - if they are popular amongst your guests, you should be adding them to your distribution mix. The distribution budget should then be allocated based on the ROAS generated on these sites.
How much budget should hotels allocate to metasearch?
Practically, there should be no limit to the absolute value of your budget. More importantly, you should continue to spend it as long as you generate a satisfactory ROAS. Or, the inverse of that, the Cost of Sale (COS). For example, if a COS of anything below 14% is acceptable for your hotel, you should spend as much budget as you can on metasearch without exceeding this prohibitive level.
How do you measure success on meta?
At Deutsche Hospitality, we apply the metrics of ROAS/COS to each meta channel and see whether it fits into the overall COS for any particular hotel’s direct booking revenue.
What are the biggest meta mistakes a hotel can make?
Not having your rates in check! Without rate parity, you better stay away from metasearch. Also, I see some hotels being passive at managing their bids on metasearch, therefore not fully exploiting their revenue potential for this number-one distribution channel or wasting money on clicks that cannot convert!
If you want to find out more about how to build a bidding strategy that marries high volume with high return, join Jan on our webinar on August 28 at 4pm BST.