A new TripAdvisor subsidiary stealthily is working to launch a new private sale offering of four- and five-star hotels.
The new Expedia Inc. operating company, working under the project name RICO because details weren’t public, would be part of Smarter Travel Media [including BookingBuddy, SmarterTravel, SeatGuru, Airfarewatchdog and FrequentFlier.com], which in turn is part of the TripAdvisor Media Network.
Plans may be subject to change and there are a lot of lingering questions about the under-the-radar initiative since nothing has been officially announced about project RICO, which likely won’t be the ultimate name of the company.
But SmarterTravel Media is outlining the following details to prospective hotel partners.
The new website, slated for a soft launch in late August or early September, would offer four- and five-star hotels only and give them the ability to offer their properties exclusively — at least by region — for up to seven days to qualfied members.
Initial plans call for RICO to target high-income individuals, particularly affluent women 35-55 years old.
The target RICO consumer-member, who supposedly can join by invitation-only, is a “selective, brand-conscious shopper who loves to brag about the rare find she’s scored” and is “always aware of the trends but doesn’t necessarily follow them,” according to sales materials.
Hotels signing up for this Smarter Travel Media private sale offering would offer net rates, have no up-front costs and do not need to sign long-term contracts.
As is standard with the merchant model, consumer hotel bookings would be nonrefundable.
The hotel can control the room type and blackout dates, and reservations are handled via Excel spreadsheets, with no extranets or rate codes required.
Karen Kirsten, a spokeswoman for Smarter Travel Media, wouldn’t discuss project RICO or confirm its existence, saying the company never discusses new products before they are launched.
“As a leader in travel deals business, deals are our sweet spot and we will continue to evolve and grow our products,” Kirsten says.
Smarter Travel Media’s entry into private sales coincides with the travel industry’s new flirtation with this trend, as evidenced by the relatively recent launches of JetSetter, Kayak Private Sale, RueLaLa.com, Vacationist and Tablet Private Sale, to name just a few companies in the segment.
RICO would be a departure for Smarter Travel Media, which until now focused exclusively on the advertising and media business and not merchant-model hotel transactions.
It’s unclear whether RICO would handle the transactions itself or outsource them to a third-party company, as Kayak did with its private sale effort.
It also remains to be seen why Expedia Inc. decided to add a new operating company for the RICO effort instead of having Expedia.com, SmarterTravel or another existing subsidiary merely introduce a new private sale product to its portfolio.
There are a number of theories on the new subsidiary angle, ranging from speculation about the possibility of TripAdvisor having acquired an as-yet undisclosed company to kick-start project RICO to the advantages of focus that a separate operating unit would bring.
So, what do competitors think of the fact that TripAdvisor President and CEO Stephen Kaufer now would have a private-sale transaction site to round out TripAdvisor’s advertising and metasearch businesses?
Says one competitor: “It’s great to see validation of the category. Everyone likes this space.”
I think this is an example of the snowball just getting bigger.
It makes sense for TA to launch this as a new brand rather than channel within existing entity. They have the distribution power, huge SEO advantage across their network, and other benefits that could help them grab market share in an expanding niche in no time.
That said, if they go the acquisition route instead, Tablet should be at the top of their list. Their product is excellent and they have legions of adoring fans.
Can you explain the principal of “private sale”?
Ciaran: Sure. With these private sales’ sites, in theory, at least, they are not open to the wide swath of the general public, but you have to register to see these hotel deals or receive an invitation from a friend etc. to register.
So, these hotels can offer supposedly discounted rates and not see their brands take a big hit.
The hotels are usually offered for a day or two at a time and usually these sites only features a handful of deals at the time.
In practice, though, it is easy to register for these sites and become a “member” for free.
However, perhaps in the future they will begin to charge membership fees.
Fascinating stuff. Nice scoop Dennis… as a consumer I would love something like this too.
J
as a hotelier, how can I find out how to particpate?
Carolyn: Email me @ dschaal@tnooz.com
Dennis – how is this a merchant model? Does Expedia guarantee volumes or control pricing?
Thanks
Hey Jeremy: Thanks. There sure are a lot of these private sale products sprouting up all over.
Nadav: It’s the merchant model in the sense that the hotel provides net rates and Smarter Travel Media aka Expedia gets the markup.
They won’t be using the retail/commission model.
As far as guaranteeing volumes, I don’t think that comes into play.
These “private” hotel sales won’t be taken up by hundreds of business travelers heading to the next meeting or conference.
I look at it as sort of a side product for Expedia.
Agree, making sure no one else gets to skim the cream instead of them. Or at least that they have good feelers in that game.
That is getting a bit more subjective, however I much favor the Zune Marketplace. The interface is colorful, has more flair, and a few cool features like ‘Mixview’ that allow you to rapidly see associated albums, songs, or different customers associated to what you’re listening to. Clicking on a kind of will heart on that item, and another set of “neighbors” will come into view, allowing you to navigate around exploring by related artists, songs, or users. Speaking of users, the Zune “Social” is also great enjoyable, letting you find others with shared tastes and turning into friends with them. You then can listen to a playlist created primarily based on an amalgamation of what all your friends are listening to, which can also be enjoyable. Those concerned with privacy will likely be relieved to know you possibly can forestall the public from seeing your personal listening habits when you so choose.