Some metasearch sites have lost a bit of marketing appeal for advertisers. More brand marketing and Google are likely among the factors behind the trend.
Travel metasearch sites such as Trivago and Tripadvisor fell considerably short of pre-pandemic 2019 revenue levels in 2022 while travel companies in other sectors, such as Airbnb in short-term rentals, and tours and activities provider Viator greatly exceeded their marks from three years ago.
The following chart shows that Trivago reached only 64 percent of 2019 revenue last year while Tripadvisor’s hotel metasearch feature climbed to just 85 percent of pre-pandemic revenue numbers in 2022. In the hotel sector, Marriott came up just short of the mark, having achieved 99 percent of 2019 revenue last year.
Source: Skift and public financial filings
Airbnb; Viator, which is part of Tripadvisor; United, and Expedia Group all surpassed their 2019 revenue numbers last year. In 2022, Airbnb and Viator exceeded their prepandemic top lines by 75 percent and 71 percent, respectively. United (up 4 percent) and Expedia (2 percent) inched ahead. Expedia might have been a tad further ahead of 2019 if it hadn't sold its corporate travel unit, Egencia, which generated $620 million in revenue that year, to American Express Global Business Travel in November 2021.
Booking Holdings hasn't reported its fourth quarter and full-year 2022 numbers yet, but in the third quarter of 2022 it blew past the revenue amount it recorded three years earlier by 21 percent. So one would expect Booking to show that it recovered considerably faster than rival Expedia when Booking publishes its 2022 financials on Thursday.
What Is Travel Metasearch?
What are travel metasearch sites? In general, they are websites where online travel agencies and hotels can bid for placement within a hotel listing, for example, and consumers can view their rates on a given date range, and then click over to these online travel agency and hotel websites to complete their bookings. Google, for one, supplements paid booking links from advertisers with free links from hotels and online travel agencies. Online travel agencies are the largest advertisers in metasearch compared with hotels, use these sites as an important vehicle to market their hotel offerings, and pay them each time a traveler clicks on one of their links.
The following is a Tripadvisor metasearch listing for a stay at the Ibis Madrid Calle Alcala hotel on the night of February 24. Expedia likely bid the most for the featured position, and there are about 16 other deals displayed, all from online travel agencies with the exception of one hotel, Ibis. (Notice that in this instance all of the nightly rates are within $1 of one another.)
Are Tripadvisor and Trivago Outliers?
Kayak co-founder and CEO Steve Hafner, whose metasearch company is part of Booking Holdings, said of Trivago and Tripadvisor: "They definitely lag the big OTAs (online travel agencies) but that mainly reflects their desire to focus on profitability versus top-line growth."
While Tripadvisor's hotel metasearch globally generated only 85 percent of its 2019 revenue in 2022, the company stated Tuesday during its fourth quarter earnings call that its metasearch revenue in the U.S. achieved parity with 2019 levels in 2022, and trended upward in the fourth quarter of last year.
The question remains whether Trivago and Tripadvisor metasearch are currently weak links in the metasearch sphere — compared with Google — or whether the entire sector is in a swoon. Hafner wouldn't comment on Kayak's performance, nor would Trivago concerning the reasons it lagged the online travel agency recovery.
Our focus has been on public companies Trivago and Tripadvisor, which publicized their metasearch performance. The leading metasearch player, Google, doesn't break out the performance of its comparative shopping service, Google Travel, and wouldn't comment on its trajectory.
Google Metasearch May Be the Benefactor
However, advertising revenue from the travel industry and the retail sector were Google's strongest performers in the fourth quarter, the company reported.
While Alphabet, Google’s parent, saw its overall advertising revenue tick down 1.6 percent in the fourth quarter, travel and retail revenue increased. It should be pointed out, though, that Google generates its travel advertising revenue from two sources: Google.com and its metasearch feature travel.google.com. So it's unclear from Google's telling how Google's metasearch feature in particular has performed.
However, Skift Research argued in December that metasearch sites such as Trivago and Tripadvisor have been losing market share to Google metasearch. "Metasearch sites have been losing consumer traffic share to Google metasearch," a Skift Research report said. "Data from SimilarWeb backs this up and suggests that Google became even more dominant during the pandemic jumping from a ~51% traffic share in the U.S. to 62%."
Beyond Google's ascendance and the fact that public company metasearch firms are emphasizing profitability over growth, there are other factors behind the tepid revenue recovery of some metasearch companies as compared with more robust growth at travel companies in other sectors. Among them, online travel agencies are leaning into brand marketing to elicit more direct bookings and loyalty program signups, and may be seeing declining marketing efficiencies when advertising in metasearch. Hotels saw an increased percentage of direct bookings earlier in the pandemic, but that may be swinging back in the other direction now.
Unfavorable foreign currency exchange rates also impeded 2022 revenue numbers at metasearch and online travel agency sites when measured against 2019. Another potential factor is that Expedia Group has helped Marriott and IHG clamp down on smaller online travel agencies making unauthorized use of discounted wholesale rates from these two hotel brands and advertising them on metasearch sites.
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Tags: advertising, airbnb, booking holdings, booking.com, expedia, future of lodging, google, hotels, kayak, kayak hotels, marketing, marriott, metasearch, online travel agencies, online travel newsletter, otas, skift research, tripadvisor, trivago, united airlines, viator
Photo credit: Pictured is hotel guest using a computer. Some travel comparison shopping websites haven't recovered in 2022 to pre-pandemic levels. k4dordy / Flickr