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OTA marketplace fragmented but travel experiences are converging – Skift

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By Dennis Schaal, Skift 

skift

If the online travel industry is seemingly becoming one big blur with price-comparison sites such as TripAdvisor, Trivago and even Google starting to resemble online travel agency-like booking sites, and online travel agencies such as Expedia and Orbitz starting to offer metasearch-like prices from competitors, then brace yourselves because this convergence trend won’t be ending anytime soon.

Expedia Inc. CEO Dara Khosrowshahi addressed the topic on October 29 during the company’s third quarter earnings call, saying:“I think that in this industry you are getting various players and various experiences roll into each other in a way … that has changed and you are not going to have … these clear delineations between experiences the way that you had.”

Khosrowshahi pointed to user reviews as an example, noting that they used to be “only in TripAdvisor’s bailiwick” but user reviews are “something that is very big on our site now,” and they improve booking conversion. TripAdvisor is “more involved in the booking path,” Khosrowshahi said. “You have seen us and various players test with meta-like product on the OTA (online travel agency) path. So I think a lot of these experiences are getting melded together.”

Look at some of the other convergence trends: TripAdvisor, which has evolved from reviews to hotel metasearch and now hotel bookings, with Booking.com its latest partner. And Expedia’s hotel metasearch site, Trivago, has just started taking bookings in Germany on desktop and mobile.

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If the metasearch sites and Google are becoming quasi-online travel agencies (although they are not the merchant of record and don’t handle customer service), then online travel agencies are increasingly offering metasearch-like price comparisons to competitors’ sites.

Consider that Expedia.com, Orbitz (now owned by Expedia) and the Priceline Group’s Kayak are all offering links to rival hotel sites when their customers are in the process of researching or booking hotels.

In the photo at the top of this story, a consumer ready to book the Wingate by Wyndham Los Angeles International Airport on Expedia.com will see a message from Expedia: “We shopped around to make sure you’re getting the best deal” and then can view rival hotel pricing from Getaroom.com, EasyClickTravel and Expedia Inc. sites Expedia.com, Hotels.com, Venere and Travelocity.

The rationale is two-fold: Consumers can view rivals’ pricing and they’d presumably realize they are getting a decent deal for the Wingate by Wyndham from Expedia.com — and if they decide to book elsewhere then at least Expedia is going to earn some advertising revenue from it.

There are numerous other examples of convergence and the blurring of lines. Booking.com and others now offer HotelTonight-like same-day deals, and on HotelTonight, which initially was limited to same-day deals, you can now book hotels seven days in advance. Hotel sites such as Expedia, Booking.com and TripAdvisor are aggressively adding vacation rentals and apartments. Online travel agencies used to be purely transactional sites and they have now entered into the media/advertising business.

Most online travel agencies, which initially specialized in online bookings, now routinely offer the option of making your reservations over the phone by speaking with an agent. “A lot of these experiences are coming together,” Khosrowshahi said. “We don’t know exactly where it is going to shake out, but we’re trying to optimize for the customer experience and our partner and supply experience. And I think so far what we’re doing is working, what TripAdvisor is doing is working, clearly what Priceline is doing is working.”

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No one, including the Expedia CEO, knows where these trends will end up. In fact, it is the nature of trends that as soon as they lose steam, another one gets energized. “And I think the bigger players are going to keep growing,” Khosrowshahi said. “This is a hugely fragmented marketplace and I do think these experiences are coming together. We just don’t know exactly where it is going to shake out. Our interest is pretty simple in keeping our consumers and partners happy.” Stephen Kaufer, the CEO of TripAdvisor, which was spun off from Expedia, likewise sees bookings sites and metasearch sites blending and competing side by side.

In an interview with Skift last week, Kaufer said: “A site where a consumer can go and see a price comparison display so that they don’t have to shop around to the eight or 10 sites themselves — that is a value and I don’t think that value proposition is going to go away. There can be a site that just does that and clicks off to other sites, traditional meta. There will be sites like ours that do that and Book on TripAdvisor, where you can book everything, or almost everything. We all saw Orbitz playing with their price comparison, a very traditional online travel agency, now adding some price comparison, linking off to their competitors. You can kind of come at the value proposition from a lot of different ways. TripAdvisor has chosen one way, but that notion of price comparison I don’t think is going away any time soon.”

All of the changes and overlapping categories will not only be complicated for consumers to figure out, but decision-makers at hotels, airlines and car rental companies will likely need to sit back and see how all things get sorted out as well. Being open to take advantage of the changes is paramount.

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Crossposted with permission from Skift. Read the original article here.

Image Credit: Wikipedia user Mtcv

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