A few weeks ago, there was a pretty big announcement from TripAdvisor where they introduced a new direct to consumer program called TripAdvisor Plus. Plus is a program that is $99 per year, and in return consumers get deals, upgrades and discounts on hotels and travel. You can read about the full program here.
Why TripAdvisor Plus?
This is really the first time TripAdvisor has gone directly to consumers like this and it is mainly to attempt to diversify their revenue streams. Today a lot of their revenue is coming from suppliers like hotels and OTAs who are paying to advertise and paying for TripAdvisor’s metasearch platform. In the past year that revenue stream has proven to be a lot less reliable, especially when major things like COVID happen.
Another reason is that Google has really eaten into TripAdvisor’s metasearch business. Google has made their metasearch offering more and more prominent on search results and TripAdvisor has taken a hit from that. So again, it's about diversifying that revenue.
Lastly, several years ago, TripAdvisor created a program called Instant Booking where consumers could book directly through TripAdvisor and hotels could sign up for certain tiers to participate. This program never really took off with hotels or with consumers, but this new Plus offering leverages that technology and so they are trying to salvage something from that investment.
How Does It Work?
Whenever these types of updates happen we want to ask ourselves, what does it mean and why do we potentially care? First, let’s take a look at what this looks like live on TripAdvisor:
In the visual above you’ll see a search result for some dates in October for Boston and you can see the icon for TripAdvisor Plus in the upper left and other messaging that promotes why consumers should sign up for Plus. In that space where they are promoting the Plus rate is where they traditionally would have only been promoting metasearch.
The other interesting piece is that the default search view, where this visual comes from, is showing “Best Value” and since Plus is all about discounts, deals and upgrades then that is perceived “value” to the consumer. This makes the “Best Value” view show all the Plus hotels first. The user can still change the search results to “Traveler Ranked” to view based on reviews and ratings, but the default search view seems to favor hotels that are offering Plus rates.
What You Need To Know.
For launch, the way that TripAdvisor has gained an influx of hotels is they've partnered with a company called Getaroom. Getaroom is a popular travel site that focuses on offering discounted rates and better values for travelers. This has given TripAdvisor an initial set of about 100,000 properties to start, which gives them the substance they need to start promoting this.
What they're trying to do now is continue to grow by going to suppliers direct and pitching them on the benefits of offering deals to Plus members. One of the benefits TripAdvisor is promoting is that this is a zero commission program. However, if you opt-in, the way that you would manage the rates is through different GDS rates codes that you would setup. Any bookings coming through this are powered by the GDS and so there are some costs there, it’s not “zero commission.” Granted, the costs of this type of booking are significantly reduced from your OTA commissions. The upside with how this is set up is that it’s coming through as a GDS booking, which means you own the customer relationship and guest details.
The other very important thing to know is that the booking, while powered by the GDS, is actually taking place on TripAdvisor, using that aforementioned Instant Booking technology. See an example of what this looks like:
The challenge here is to think about whether we, as hoteliers and hotel marketers, want to train people to go to TripAdvisor to make their reservations and if we want consumers to perceive that there is value in going through TripAdvsior versus booking through us direct.
There is still a lot to be learned about this, but some pretty interesting happenings so far and certainly something that we're going to be keeping an eye on. We'll provide more updates as things progress and for now make sure go onto TripAdvisor and do some exploring and searching, see if you or your compset are already showing as part of the Plus program and figure out what that means.