NEWTON, Massachusetts—Over its 14-year existence, TripAdvisor has morphed from a consumer-based review site aimed at collecting feedback from peer travelers into a business-to-business giant helping hoteliers manage their online presence and be more relevant in the consumer’s research and booking phase.
The company, which spun off from parent company Expedia, Inc. in December 2011 for approximately $25 per share, is evolving now more than ever. Its metasearch platform, which debuted in 2013, took the site immediately from a hotel research tool to a comparison shopping and booking transactor, and TRIP stock now trades at nearly $110 per share.
According to a commissioned report conducted by PhoCusWright on behalf of TripAdvisor, more than half of global respondents do not want to
make a booking commitment until they read reviews and find out what other travelers think about a property. TripAdvisor offers more than 150 million reviews across various industries. The site receives nearly 260 million unique monthly visitors.
“Reviews help (consumers) feel more confident in their travel decisions and help them to have a better trip,” said Marc Charron, president of TripAdvisor for Business.
“Early on, when there were a smattering of reviews on the user-generated review sites, they were so unbelievably helpful, the word of mouth about online word of mouth really gained uncanny momentum,” said Michael Hraba, project manager at Waterford Hotels & Inns.
Hraba said it took years for even the best hotel brands to be on board with an open, transparent world where consumer opinion ruled the roost. While a handful of smaller operators still are digging in their heels, most Hoteliers—even those who were once reluctant to embrace TripAdvisor due to questions about review validity—now understand the importance of managing their presence on the site.
“The hospitality industry is indeed beginning to take TripAdvisor’s size and influence seriously,” said Chad Oliveiri, VP of content and partnerships at eCornell, which has partnered with TripAdvisor to develop a three-hour course for hoteliers to offer online reputation-management best practices. “There's no denying the impact TripAdvisor has on reputation management for big and small brands. ... Hoteliers are certainly recognizing they can't afford to ignore (it).”
“We partner with almost 1,000 brands worldwide who display TripAdvisor ratings, reviews and opinions on their websites, meaning that over 500 million people globally see our content on third-party sites every month,” Charron said. “Travel brands and hospitality partners wouldn’t integrate our content on to their own websites if they didn’t find it useful for their customers.”
Transformation
The site then added hotel rates and availability to complement reviews. Aggregating the rates into a comparison-shopping tool for the consumer was the next logical step.
TripAdvisor’s business move to offer a metasearch platform means hoteliers are now using TripConnect to place bids in TripAdvisor auctions similar to the process with Google AdWords. This allows hoteliers to pay to get TripAdvisor business direct rather than through a third party’s commission structure. The model is cost per click, and hoteliers are charged the amount they bid for each click.
“We are currently working with connectivity partners on a solution that will help independent hotels gain more direct bookings through a new iteration of our TripConnect service,” Charron said. “This is scheduled to roll out in Q3 of this year.”
According to a recent TripAdvisor survey, 51% of hoteliers responded that they generate bookings with TripAdvisor, compared to 25% with other review sites and 21% with banner ads and other online advertising.
TripAdvisor also offers what it calls Business Listings, launched in 2010, where operators can pay a fee to have their hotel’s contact information and a link to their direct booking engine, as well as the ability to run special offers that appear throughout the site. Charron said there are 69,000 Business Listings subscribers globally, which is an increase of 38% year over year.
TripAdvisor has been working with Forrester Consulting to measure the value of Business Listings, and results of nine case studies have “always shown good return on investment,” Charron said.
A recent Forrester Consulting study of the Ayres Hotel Collection of 20 upscale boutique hotels in Southern California revealed: $16.43 is earned for every $1 spent on Business Listings; there’s a one-month payback time; and 1,025 bookings per year across all 20 hotels attributed to website click-throughs, Charron said.
Next up
The next step is mobility.
Choice Hotels International in May became the first hotel company to partner with TripAdvisor on its mobile instant booking feature. This feature allows travelers to book their hotel on the TripAdvisor mobile app and mobile website rather than redirecting customers to the Choice Hotels website.
TripConnect instant booking will work on a commission-based cost model, where hoteliers pay a percentage of the booking fee once the guests completes their stay.
“We’re launching this solution because we know many independent hoteliers’ websites are not optimized for mobile,” Charron said. “It’s a big investment and not necessarily a priority for hotel owners who are busy running their business.”
Now that TripAdvisor has evolved from a collection of reviews to a robust research and booking tool, will the focus on reviews go away?
“It’s our reviews that make TripAdvisor unique. This is why people come to TripAdvisor, because we help them plan their trip,” Charron said. “With the recent launch of instant booking, we’re looking to improve the experience for travelers searching and booking hotels on their mobile device.”
“Embracing TripAdvisor simply became the necessity because there isn't one site that comes close to impacting our image and bookings like TripAdvisor. What's more, we are finding them a little friendlier to hoteliers, giving us the ability to invest in having our website, phone and email on our listing to promote direct bookings,” Hraba said.
“Now that they are finding a way to allow hotels to insert their booking engine into the listing for direct bookings, we finally have a tool to battle the problems of (online travel agencies) and that expensive side of distribution and revenue management,” he added.