The team at TripAdvisor continues to investigate ways to monetise their position in the travel buying journey and their new offering, TripAdvisor Plus, has a focus on pay for performance.
NB: This is an article from Avvio
Is it going to work for every hotel out there? No. Will it drive incremental business from a site with millions of high intent travellers, probably. Let’s have a look at both sides of this new model.
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What is it?
It’s a Netflix style subscription model where TripAdvisor charges end consumers a $99 annual fee (similar to Amazon Prime) to unlock special rates and perks.
Sounds great! So why should hotels participate in Tripadvisor Plus?
>> Hotels can sign up to this new model for free – with no upfront costs and zero commission rate
>> It promises a more engaged set of travel buyers with much higher travel intent. Tripadvisor had 124 million website visitors in March alone (Source: ‘SimilarWeb’)
>> Hotels have the ability to turn Plus on and off to help drive demand into need dates
>> You own the guest data – all of the guest information and credit card information comes down to the hotel
Will it have an impact on the industry? There’s enough noise in the market for Skift to link Trip Plus with Expedia’s recent announcement that they will add all 225m bookers into their new Reward programme.
“According to TripAdvisor data hotels that sign up to TripAdvisor plus received 20% more clicks to their property page, leading to increased demand.”
To ensure the rates are not widely available on the open internet, discounted room rates available via Tripadvisor Plus can only be viewed by members and can only be booked by Plus subscribers, thereby preserving a hotel’s rate integrity.
Finally, as a Plus subscriber, you have extra visibility. You receive a special badge and enhanced placement within the Best Value sort order.
The devil – as always – is in the detail. Whilst it appears the Trip Plus badge would be applied to your hotel once you have signed up, the support site clarifies that hotels will only get the badge if the discount is equal to (or greater than) $75 for the stay. Putting this out of the reach of many hotels for a one or two-night stay.
The customer proposition is great. We can see lots of TripAdvisor loyalists relishing the chance to pay $99 as a one-off fee and potentially recoup that cost in a single summer stay.
It’s nice to see some different thinking in the industry, but I believe there are a few barriers to mass uptake from hotels:
>> While it’s free for a hotel to sign up they have to Ioffer a minimum 15% discount and all the connectivity is done via Sabre or Amadeus, so you have to pay the GDS fee as well (estimated to be at least an additional 10%).
>> Some initial reports out of early BETA hotels are saying that the discounted rate is leaking out online (and not staying behind the Trip Plus member “wall”) giving hotels parity issues
>> TripAdvisor has built its booking path so the booking stays on TripAdvisor and never comes to your site, so while you own the guest data you don’t own the guest journey
>> You have to commit to a greeting at check-in “thank you for being a TA Plus member”, so you are effectively building the TripAdvisor brand rather than your loyalty programme.
No one has tackled the travel subscription market at scale and TripAdvisor is almost uniquely placed to do this. With millions of loyal users and high-intent, qualified traffic they have the potential to have a real impact.
If Trip can show this business is (a) incremental and (b) cost-effective they might get a legion of hotel fans onboard. But high costs via the GDS and potential parity issues may deter some to wait and see. Watch this space.