Is TripAdvisor an OTA for hotels? Discuss…
TripAdvisor‘s launch and ongoing global roll-out of its Instant Booking product poses the question “Is TripAdvisor now an OTA?”
NB: This is a viewpoint by Pablo Delgado, CEO of Mirai.
Despite its insistence that it is not an OTA and that it is happy being a “booking supplier”, at Mirai we believe that TripAdvisor has indeed become an OTA, although with a few subtle differences.
Why it is an OTA
- Because almost the complete booking process takes place within the TripAdvisor page.
It is quite clear that the final client is its target; it wants to build loyalty with them so that they come back for future bookings. Whether the hotel likes it or not, it seems a correct strategy from the point of view of TripAdvisor.
- Because, in the eyes of clients, the important thing is that they make the booking on TripAdvisor as they would in any other OTA.
Whatever happens “behind the scenes” is of no interest to the client. The mark of quality and security that the client sees is provided by the TripAdvisor brand.
- Because it earns sales commissions just like other OTAs.
In fact, the hotel or OTA that is offering their stock must communicate all booking modifications and cancellations to TripAdvisor at the end of every month.
Why it is not an OTA
- Because the confirmation is provided by the supplier, not by TripAdvisor.
- Because the post-sales customer service (such as modifications, cancellations, questions) is carried out by the hotel itself or the OTA which signed up for Instant Booking.
In other words, TripAdvisor provides the booking and then moves on.
- Because the client’s details are fully transferred to the hotel.
Hotels can use these details and try to build a relationship directly. This is allowed under the contract with TripAdvisor, unlike OTAs who actively discourage this type of behaviour.
- Because despite you paying commission to TripAdvisor, it will not appear as a channel in your channel mix.
It is just a sales source, but the channel will in fact be another (your website or an OTA). To this effect, it is equivalent to Adwords, the Business Listings or any other traffic source.
- Because TripAdvisor does not get involved with the payment process.
Transferring this responsibility directly to the hotel or OTA is a big difference between TripAdvisor and the OTAs. Processing advance payment on behalf of the hotel is a regular feature of many OTAs.
In any case, the direct nature of Instant Booking is perhaps not the main issue – hotels who stay out of Instant Booking while wrestling with the questions of whether to participate or not are, in fact, simply handing market share over to the real OTAs.
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