How will TripAdvisor Plus impact Hotel Revenue Management?

“TripAdviros Plus is one more possible shelf for the hotel, and under the premise that hotels know their customers, it is always positive to be available in the most varied channels. Especially in recent months with the pandemic, any low-cost, commercially sound strategy is a good one, and Trip Plus serves that purpose, I believe.
Nevertheless, there are few suggestions here: for hotels that unwaveringly practice rate parity, they must make sure there are incentives parity as well. Opaque rates with add-ons should match opaque rates in other channels, with the same add-ons.

RM teams also need to guarantee that the guests’ contact information is collected for marketing and data analysis purposes, which TripAdvisor vows to deliver. Revenue managers also need to monitor it closely, as it is a metasearch and main channel, for eventual price discrepancies.

The final keyword is measuring. Leaders should measure newly adopted channel production more frequently and attentively. Also, when that practice is combined with a closer relationship with the Marketing Manager, they will allow professionals to better understand the tool’s potential and give them the confidence to decide whether to continue or stop – and it’s okay to stop!”

“I don’t think this new feature will have much impact at all. TripAdvisor’s share of total OTA revenue in 2019 was approximately 4% (with booking.com, Expedia and C-Trip making up 87% revenue share of OTA’s). As it is a subscription service, hotels could offer special deals to this “closed user group” but, given that it will be a subset of an already small share of hotel OTA revenues, I can’t imagine it’s going to have a material impact.”

“TripAdvisor Plus, although advertised as a free product, still carries a cost to the hotel. We need to cover the costs of amenities and upgrades, plus GDS fees per booking. This might be better than high commission fees, but it’s important to not think of it as free. What will be interesting to see over time, is how other metasearch platforms will react to this approach, as it will steal customers away from them.”

“It’s still early to know, but I don’t foresee a big impact. The concept is not new (Bidroom and the like have been doing it in the past): “pay me to cut the OTAs and I’ll get you a better deal”. The question is more about whether the final customer finds it appealing to pay Tripadvisor 99$/year to get those deals offered.

Personally, I believe most people trust they can end up finding those deals themselves, by using brand.com. There could be a market for this type of business, or it could be used by corporate accounts without negotiated rates. Besides those two segments, I doubt it will have a bigger impact.”

“The TripAdvisor Plus is a great incentive; we all sign up to lots of different “subscriptions” – from streaming services to coffee and even Tate Modern. Customers who are loyal to a particular brand, gaining points and rewards when booking directly, may be tempted to start using the Trip+ so it will be interesting to see how different brands respond.

I believe that some of the brand’s benefits may be reviewed and aligned with what Expedia will have to offer. On another hand, however, there are free memberships and subscriptions available through various OTA’s, which also include some great incentives for the guest. I hope that Trip+ will actually inspire people to travel more, as those who subscribe will aim to make the most of it, so ultimately all hotels could potentially benefit.”

“Many online booking channels have their own loyalty program and the fact that TripAdvisor is adding itself to this list is not surprising. After Booking.com and Expedia introduced their loyalty program with discounted rates, hotel companies reacted with their loyalty rates. So I believe most hotels, even independent hotels, are ready in the meantime with similar offers to fight that battle. It does emphasise once more the need for hotels to start measuring distribution cost and look at NetRevPar rather than concentrating on RevPar.”

“Tripadvisor is requesting BAR minus 10 or 15% plus an amenity to the value of around US $ 20. Most of the saving is passed on to the guest. You own the customer, as the booking is made direct and you don’t pay any commission. The higher the discount, the better the ranking. Hotels in a coveted spot receive 20% more clicks to their property page.

Before participating, hotels need to work out how this fits into their pricing strategy. In my opinion, it’s better suited to upscale hotels due to the amenity inclusion. Remember, whilst you own the guest data and may get great exposure with the higher discounts, you are supporting Tripadvisor’s loyalty programme, not your own.”

“Subscription models are growing, but their implementation for independent hotels is extremely hard. Tripadvisor Plus can be a powerful tool for independent hotels to get exposure and conversion from a potential high-valued customer base and get a competitive advantage. As for all intermediated channels, even if there is no “commission”, there is still a cost involved relating to connectivity and the % off the BAR rate (plus the frills that hotels agree to include in the program).

From a revenue management standpoint, hotels must consider the usual opportunity Vs risks scenario which is valid for any commercial activity. The questions are always… how much incremental revenue it is going to bring me? Is it real incremental revenue or just a shift of demand from one channel to the other? If the opportunity is there, then it is in the hands of the revenue manager to get the most out of the situation; at first attract and covert, then engage and retain.

I don’t see Tripadvisor Plus being any different from the way hotels manage consortia agreements, but I see the opportunity for visibility and competitiveness and yet another tool to grow online exposure.” 

“The concept of TripAdvisor Plus (offering subscribers a discount and other benefits, which do not affect the integrity of public rates) is certainly not a novelty in online distribution, seeing as this is done by OTAs and other wholesalers. It is certainly an initiative aimed at reviving the TripAdvisor brand following years of decline and losses, exacerbated by the pandemic.

As far as I can see, there are no contraindications to this initiative, as there are no fixed costs and commissions, and the only required “cost” is the granting of a discount (however opaque) and other benefits, so there is no harm in trying. And this is the best time to experiment.

It is much too early to say what sort of impact it will have on performance, both because demand has not yet returned to normal levels, and because there are still some selective criteria for hotels to be eligible for the program.

But in general, like all experiments, results must be measured after a certain period of time, and it will be important to take stock of not only the conversion rate and how much it has yielded in terms of direct production, but also how much it may have subtracted from other channels, and then make a final overall assessment.”

“The “Cost of Acquisition” is something that all revenue managers should be assessing. It is, after all, selling the right room, to the right customer, at the right time, for the right price and through the right distribution channel most cost-effectively. As it stands with its requirement for discounted members-only rates, that will not be widely visible and it will be interesting to observe as I anticipate the smaller, independent properties seeing this as cost-effective Vs OTAs.

Currently advising that it is free for hotels to join and with zero commission, effectively the discount to enhance the visibility will in most cases seem like a good deal. However, it will be interesting to understand how this will appear in the rankings. The TripAdvisor network, with its members, has an opportunity to secure more customer data. However, it will need to be managed to ensure it doesn’t impact the holy grail of direct business.”

“The new Trip Advisor will help plan & book in one place making it easier to book. OTA insight and Trip Advisor’s innovative collaboration will help hoteliers access new buyers and find new revenue opportunities. The new initiative offers additional visibility for participating hotels and well-reduced distribution costs as opposed to higher fees and commissions. The participating hotels will be placed higher in organic search results as well as receive special badging, allowing hotels to stand out.

According to TripAdvisor’s research, it shows that the participating hotels for TripAdvisor Plus received 20% more clicks to their property page on the platform. If only a small percentage of clicks is converted into bookings, it will be an additional revenue opportunity for the hotels. There is no upfront cost to participate. Hotels can opt-in and out anytime as occupancy levels change. Participating hotels must offer a baseline discount of 10%, however, a 15% discount is recommended to be more competitive. Rates are opaque to respect rate parity agreements with OTAs.”

“It is yet another online ‘platform’ that tries to bind customers on a loyalty base. I believe online marketing is key in the current landscape of revenue management and sales, and it is up to each property to decide the best sales approach for them. Depending on the size/chain/location, there are a million different ways of selling and there is no “one size fits all” solution. Online channels can be used for the benefit of your property sales but you should not sign up with just any channel for the benefit of exposure. A strong, targeted marketing plan is needed to focus on the right channels.

TripAdvisor tries to aim itself at customers who are used to getting offers ‘specially created for them’, which might help certain properties. But as many channels are doing this in one way or another, there is also the risk of offering too much and it just being like any other channel. So brings us back to the question, what is the impact on hotel revenue management? It all depends on your hotel and the needs that your location brings.”

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