Thursday, September 20, 2007

Some of the meta search engines don't deserve our money, say Expedia

At a recent Travolution advisory board meeting, Clive Peoples, head of customer communications for Expedia UK, was brutally honest about how the company rather dislikes views some meta search engines.

There are a lot of companies out there that will spend a lot of money just on advertising just to generate traffic and get bought by another company – and they are not long-term models. I have no interest in helping them do that.

In the US there is work we’re doing with Kayak and other companies, but there’s just an awful lot of companies launching and we’re not looking to channel any of our profits into their back accounts to help build them up.
Ooh, ouch.

Now many people would assume that Peoples just happened to be talking about TravelSupermarket, which has splashed a rather considerable amount of cash on TV advertising - and has failed to persuade Expedia to work with it.

When pushed a little further, Peoples said:
We’ve got a very large brand, which is very good for us as we get a lot of traffic directly.

Not being present on TravelSupermarket does not cause us any problems at the moment, because what we are seeing is that people are going to TravelSupermarket and are coming to us anyway as well.
We think this is rather fascinating stuff from Expedia and goes to the heart of the meta search-online travel agency issue.

What stage should the likes of TravelSupermarket be at before Expedia will allow its products to be listed? Some would suggest that a recent floatation - via its MoneySupermarket parent brand - on the London Stock Exchange might illustate resemble some degree of longevity.

But perhaps not.

Tim Frankcom from Yahoo! and Kelkoo defends the meta search model against accusations that it can destroy brands.
It’s going to be good traffic because it’s been refined, been through a filtering mechanism, so if it can be acquired at the right price and as long as they can convert it into a booking, then it actually makes sense for OTAs and suppliers to take part in it.
The problem exists in other parts of the industry, where business types are still struggling to find ways to work together.

At a recent private dinner in London, the boss of an online travel agency struggled to comprehend why the boss of a very large traditional tour operator would still not allow a partnership.

Kevin May, editor, Travolution

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Guillaume said...

Well the position of Expedia regarding meta search engines is not new. I remember that Simon Breakwell back in 2004 in a PhocusWright conference in Paris was also quite negative about these new entrants and said that he didn't feel meta search engines would bring significant added value to the consumer. Therefore, Expedia decided not to work with meta search engines because they were only focusing on prices. And if they started to work with these guys, they will allow a diversion of their direct traffic to the likes of Kayak and TravelSupermarket.

At least, they remain on the same strategy...


Nomenklatura said...

This is no different from the way the electronics dealers and many other types of retailers swore they would never pay for traffic from price comparison sites.

They didn't, until the traffic got big enough to be interesting, and then some of them did, and now all of them do.

Expedia is just trying to slow down the inevitable. This is probably the optimal strategy for them, but they must know that it says little about whether they can stop it happening.

Travolution Blogger said...

Guillaume: We were not suggesting it is a new development. The fact that Breakwell said this in 2004 and it remains the Expedia position is interesting in itself, despite the meteoric rise of some of the big MSEs, which would undoubtedly send SOME traffic their way.

As Peoples said in our session, Expedia does partner with Kayak in the US and it turns out that they also work with Kelkoo in some markets.

The rather frank admission for why they are not working with - in not so many words - TravelSupermarket is why we wrote the post.

Ed Whiting said...

I think that Exedia Inc. is ahead of all the other Travel Sellers. has secured future distribution through Trip Advisor which Expedia Inc. bought.

In the UK you can see this on the Hitwise clickstream stats that they relay on Trip Advisor disproportionally for thier traffic compared to the other top 20 Travel Sellers in UK. I am not sure whether Expedia get more favourable rates from Trip Advisor, but who cares, they played the smarter move years ago and continue to do so.

I wrote an article on my Blog only earlier this week on this topic which goes into more stats.

Ed Whiting

Dave Simmons said...

Expedia have clearly laid down a challenge to the Meta-Search players - add value to what we are doing or we will not work with you.

That seems fair enough given the strength and maturity of the Expedia proposition.

Adding value to our travel partners (as well as our users) is the whole concept behind Global Travel Market. Instead of taking a mass market, mass destination approach to Meta-Search as all of the other players in the market have done, Global Travel Market is the only Meta-Search player that develops market specific search platforms. With sites such as Australia Travel Market, Asia Travel Market and Biz Class Travel Market, Global Travel Market enables our partners to cost effectively target high yielding niche markets.

The challenge for us all is to find ways to add value. We believe we do just that.

Dave Simmons
Global Travel Market

Travolution Blogger said...

Ed: Thanks for the comments. yes, certainly was an incredibly smart move by Expedia Inc to purchase TripAdvisor. What price TripAdvisor these days eh?

Travolution Blogger said...

Dave: Do you expect Expedia would work with you guys?