Before I book any hotel, I will do a quick search on TripAdvisor to make sure I am not in for any surprises. The review site was not always my first stop on my journey to booking. In fact, I didn’t even know TripAdvisor existed until I started working for Hotel News Now in December 2011.
Fast forward to present day, and I am well aware of the platform and its effect on the hotel industry. And so is every hotelier. Hotel reviews have never had as much power as they do today. Sales and marketing departments are building entire strategies around the review site.
This fall, TripAdvisor decided to up the ante on its offerings, launching instant booking capabilities on mobile (coming soon to desktops and tablets).
In a recent interview during The PhoCusWright Conference, TripAdvisor CEO Stephen Kaufer discussed the future of TripAdvisor’s newly launched instant booking platform. He shared some interesting insights, namely that TripAdvisor “doesn’t want to be that full-service online travel agency.” The instant booking feature, he added, makes the platform a mix between a metasearch website and OTA.
If those seem contradictory statements as I’m sure they did to most attendees, Kaufer assured them that what TripAdvisor is doing is different.
TripAdvisor does not handle the payment as might an OTA but rather facilitates it. The company uses a commission model for instant booking, where a payment is only charged once a booking is made, as opposed to a cost-per-click model for metasearch.
In an earlier session at PhoCusWright, Expedia CEO Dara Khosrowshahi explained that TripAdvisor’s instant booking could turn out to be a “dumb pipe” for Expedia. In other words, Expedia’s network will exist solely as a transfer portal to TripAdvisor, and the company won’t be able to give consumers value-add options. Kaufer addressed some of the larger OTAs’ reluctance during his interview:
“We want to help the OTAs. We want to help the chains. The transactions they could receive, we think that's a good opportunity. Some OTAs think it’s a fabulous opportunity. Some are waiting. Some of the big ones are not joining in. … If you look closely at (our instant booking feature), it changes every week. As those changes happen, maybe some of the big OTAs will get interested.”
Larger OTAs such as Expedia and Booking.com parent company Priceline have refused to integrate with TripAdvisor. Kaufer said he believes they will regret their decision.
“They (OTAs) are getting premium branding all the way through the flow. We are saying this transaction is powered by the OTA. We reinforce this property is booked through OTA A, B or C,” he said.
“There's nothing that we're doing that's going to disrupt (the OTA) ecosystem.”
It will be interesting to see how the relationship between the larger OTAs and TripAdvisor moves forward. Kaufer said that there is a “chunk of consumers” that want to finish their booking process on TripAdvisor, but I think there will be a challenge in getting travelers to look at the review site as a booking engine. When someone does one thing really well (i.e. TripAdvisor and reviews), it’s hard to see them in another light. For example, some of the larger OTAs have copied TripAdvisor, allowing for hotel reviews to be displayed on their sites. And I believe most travelers still visit TripAdvisor to read reviews over any of the OTAs that offer such a service. What do you all think? Share your thoughts in the comments below.
Email Samantha Worgull or find her on Twitter.
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