Expedia readies TripAdvisor spinoff citing hotel review reliability

As Expedia shareholders get set to vote Dec. 6 on the TripAdvisor spinoff, Expedia is telling potential investors that travelers overwhelmingly find TripAdvisor’s user reviews to be reliable.

Expedia cites July 2011 custom research performed by PhoCusWright and a conclusion that “98% of participants found that TripAdvisor’s hotel reviews … accurately reflect the experience.”

Other data points from the survey, according to TripAdvisor, included:

  • 69% of respondents found TripAdvisor reviews to be “highly or extremely accurate;”
  • 92% agreed with the statement that TripAdvisor hotel reviews “help me pick the right hotel for my travel needs;” and
  • 83% said they usually or always take a look at TripAdvisor reviews before selecting a hotel.

Participants, solicited randomly, viewed a pop-up window on TripAdvisor, with a link to a survey designed and programmed by PhoCusWright. The number of respondents was 3,641.

Meanwhile, if there are concerns about fake reviews, hotels gaming the system and any review headwinds, they aren’t reflected in the roadshow presentation.

Subject to the Dec. 6 shareholder vote, Expedia expects to complete the spinoff of TripAdvisor, with its $458 million in 2010 revenue and $261 million in 2010 adjusted earnings, by the end of the year.

These are very nice margins if you can get them.

Part of the secret sauce is that no media opportunity goes to waste.

With Business Listings, display ads and sponsorships, lead generation from search, and display ads with cost-per-click revenue, each TripAdvisor page is a cash-generator.

 

TripAdvisor notes that the pace of its iterations is very much part of its “winning culture” and part of the reason that the company has seen its revenue notch a 46% compound annual growth rate from 2006-2010.

Social media and mobile adoption are key components of the strategy.

Consider that TripAdvisor offers more than 50 million user reviews, 8 million user photos, 57 million Facebook connections and 10 million downloads of its apps.

Barring unforseen circumstances, expect to see TripAdvisor, while still controlled by Barry Diller and Expedia, trading as a standalone company within the next few weeks.

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Dennis Schaal

About the Writer :: Dennis Schaal

Dennis Schaal was North American editor for Tnooz.

 

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