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Industry observers have said it for years: Eventually, travel metasearch will evolve beyond being price comparison and click-through sites. The change is already nipping at the heels of the old metasearch model with Google tightening its grip around the travel search-and-refer game and with online travel agencies under pressure to reform “lowest-price” practices.
Lowest-price marketing may be coming to a head. Within the past two months, consumer and competition watchdogs from Singapore, Japan, and the United Kingdom have called on travel booking sites to clean up their act on misleading price and discount displays. Japan’s Fair Trade Commission earlier in the year probed major online travel agencies (OTAs) alleged to have pressured hotels into offering their lowest prices on their platforms, among other practices.
In the increasingly murky and crowded realm of price comparison, Line Travel Japan aims to differentiate itself by launching its own loyalty points system, on top of the points awarded by the online travel company the consumer books with.
CEO Kei Shibata believes Line Travel is the first metasearch site in the world to have its own points rebate initiative. TripAdvisor in August said it’s working on a new loyalty program for the first time, as Skift had reported.
At the time of launch, participating OTAs and suppliers include Booking.com, Expedia, Airbnb, Jalpak (Japan Airlines), Trip.com, Agoda, Ikyu.com (Yahoo Travel), and Travel (NTT Docomo).
Users who book with these partners via Line Travel will earn Line points (one point equals one Japanese yen), in addition to any loyalty rewards offered by the booking website, such as Booking.com. Line points stack on top of OTAs’ respective loyalty rewards.
To redeem, users convert them to Line Pay (the company’s digital wallet) credits, which can then be spent on products on the Line platform. Users can also convert Line points to other travel suppliers’ loyalty points, including Japan Airlines miles.
The two-tier points system was first trialed in January on the mobile app and, seeing its effectiveness in increasing bookings, is now extended to the desktop site, which Line Travel claims has 26 million monthly users.
With this, search results will show not only the price displayed by OTAs — but the amount of rebate points users could receive from booking with certain OTAs.
This has the potential to disrupt how OTAs can perform in metasearch comparisons. Those unable to get a leg up on lowest price may gain an edge by enticing bookers with point rewards.
It’s a smart way for the metasearch to upsell OTAs beyond the basic click-through referral fees and ads. Now that OTAs are losing lowest-price control, they may not rank top in metasearch results, which tend to sort by best price. So to get a leg up over competing OTAs, they can offer bookers a more attractive points back, although this is more expensive for OTAs and metasearches.
It’s worth noting, however, that OTAs offering the lowest hotel prices still have top visibility. A look at Line Travel by Skift on October 9 shows a user first sees the lowest-priced option. It takes clicking on a drop-down arrow to reveal the full list of booking sites, ranked according to lowest price. And where two OTAs offered the same price, the one with more attractive points reward, strangely, was ranked lower.
Shibata declined to share figures but claimed that conversion ratios “have grown multiple times higher” as a result of the program.
“Because of multiple reasons, including the recent OTA [callouts], yes, metasearch has to evolve beyond being mere price comparison services in order to stay relevant. A loyalty/reward points program is one solution,” he said.
But he admitted the solution is not without its barriers.
“First, popular loyalty programs are not easy to create and sustain by a stand-alone travel player. You need a big scale, large financial capacity, and resources to make it happen. It is even harder for metasearches because they are generally not in a position to track the transactions by themselves, and they don’t own the customers,” he said.
Traditionally metasearch refers users to the booking site, without knowing the eventual booking figures. Only the few who have found a way to “own” the user/user data, such as through an app, are able to do rewards or loyalty points programs.
Many metasearch businesses are also built based on cost per click as opposed to cost per booking.
Line Travel surmounts these barriers through its partnership with Japan’s Line, one of Asia’s most popular chat and social media apps. Line Travel is an integration between Shibata’s Venture Republic, which owns Travel.jp, and Line. In a little more than a year, the company has become the largest travel business account on the app, with 19 million followers and generating “multiple thousands of transactions” every day, according to Shibata. Its website has 26 million monthly visits, growing at 30 percent year-on-year, the company claims. It’s ranked the fourth largest online travel website in Japan based on an analysis by SimilarWeb. Taking into account the follower count from the Line app account, Shibata believes the business is now “arguably the second or third largest OTA/meta service in Japan.”
How to Avoid Becoming Roadkill
Other Asian metasearch players such as Wego are on their way, however. From relying on organic and paid web search for the bulk of its traffic, Wego today traces more than 75 percent of user sessions to its native app, according to CEO and co-founder Ross Veitch. He also sees travel service providers moving to Wego’s facilitated booking platform, where users book end-to-end without leaving the app.
“If somebody is still operating the ‘traditional’ meta model at this point, they run the risk of becoming roadkill as Google forces their own travel meta and booking products onto the top of search results pages,” Veitch remarked.
“We have a product road map that extends 12 quarters into the future with lots of potentially game-changing new features, including some in the realm of loyalty, content, guiding users pretrip and in-trip, but we prefer to talk about new products and features when they are ready to launch and a user can actually play with them,” Veitch told Skift.
Both Line Travel and Wego agreed that loyalty initiatives, content differentiation [travel guides and recommendations], and super-app ambitions will propel the business of travel metasearch into its next phase in Asia.
Shibata stressed that travel metasearch players are overall “required to move closer to bookings/transactions,” such as assisted/facilitated booking and loyalty programs.
Content is one component that has become more central to metasearch strategies, Shibata added, attributing this to the greater difficulties travelers experience in the face of ubiquitous price comparison options.
“Price comparison services are everywhere [including Google’s]. Content plays a very important role now because users have bigger and different challenges when it comes to deciding which destination they should travel to, what to do in destination, et cetera. [The right] content can do a great job to address these difficulties by guiding the user along,” said Shibata.