What is the Relationship Between ADR with CPC and ROI on Metasearch - In Particular for TripAdvisor and Google Hotel Finder?

[Jason Price]

What is the Relationship Between ADR with CPC and ROI on Metasearch - In Particular TripAdvisor and Google Hotel Finder?

We have identified an interesting pattern in metasearch comparing the performance of low and high ADR properties. For lower ADR properties who are typically more dependent on the OTAs, are faring better than higher ADR properties when it comes to CPC and ROI. We have seen that by keeping the CPC low and still maintaining visibility in slots 2 and 3 the returns tend to be higher then when they are in slots 1 and 2, this is a difference of 800% ROI vs 400% ROI, respectively. Generally speaking, higher ADR properties tend to generate larger revenue from metasearch but naturally at a higher CPC which can impact ROI. We know that higher ADR properties tend to have larger metasearch ad budgets so these hotels can act more aggressively in maintaining visibility on the metasearch channels. Furthermore, savvy higher ADR properties are building a case to scale back on OTAs where this can be allowed. Reducing OTA participation in metasearch will reduce CPC as all OTAs are looking for their commission from high priced properties.

As for the past few weeks in CPC and ROI, here is a summary:
-Cost per click averages on TripAdvisor, the highest CPC was $10.01 in the 1 position, the lowest was $1.01. On Google Hotel Finder the highest was $37.92 CPC for a hotel in NYC and the lowest 84 cents.
-As for ROI, the highest on TA was 2793% and on Google 7231%.

Let us know your experience on the metasearch channels.