GA FEB tripadviosr
8 months ago
 

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.

Conclusion

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.

NB: This is a viewpoint by Pablo Delgado, CEO of Mirai and is republished with permission from the Mirai blog. Click here to see the original.

NB2: Image by Shutterstock

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  1. Max Starkov - HeBS Digital

    “Book on TripAdvisor” is definitely NOT “direct-with-the-hotel” booking platform as they claim to be.

    Both Google and TripAdvisor have made numerous claims that “Book on Google” and “Book on TripAdvisor” are de facto bookings directly with the hotel. Let’s not fool ourselves: Both of these programs are not some CPA (Cost per Acquisition) advertising formats. These are pure OTA services where both Google and TripAdvisor insert themselves between the travel consumer and the hotel, take over the customer engagement and relationship, and close the deal/the booking on its own website, and get an agency commission for doing the “agency work”, similarly to all OTAs and traditional travel agents.

    These new programs contradict the mere definition of the direct online channel. The Direct Channel is a “Distribution channel in which a producer (manufacturer of good and services) supplies or serves directly to an ultimate user or consumer, without any middleman (agent, distributor, wholesaler, retailer).” (BusinessDictionary.com). “Owning the customer” and engaging the customer on a one-to-one basis is the ultimate objective of the direct online channel.

    Let’s examine this claim from 2 perspectives: the travel consumer and the property:

    Travel Consumer:
    • They search hotels on “Book on Google” or “Book on TripAdvisor”
    • They identify a hotel that they like most
    • They check dates/availability and pricing
    • If they like what they see, they book right on Google or TripAdvisor
    • They are asked to enter their names, address, credit card info, billing address, etc.
    • The reservation is confirmed
    • Google and TripAdvisor pass the guest information and credit card to the property
    • Any post-reservation customer service is referred to the hotel directly (floor and room preferences, etc.)

    How is the above different from a booking on Expedia, Booking.com or on any OTA site? It is exactly the same flow for any travel consumer on any OTA site.

     
    • Pablo

      Hi Max, I also think Instant Booking makes Tripadvisor an OTA. However I do see a huge difference between IB and Booking.com and Expedia.

      With Instant Booking, hotels can contact the customer for any email marketing campaign or whatever they want. At least today (we’ll see tomorrow), email address is passed to the hotel in IB. With Booking.com and Expedia email address is not passed to the hotel and they cannot (by contract) contact customers or email market them. Email addresses and the right to contact customers let hotels build a direct relationships with them. This is a must for hoteliers today, and one of the most important weapons to fight OTAs.

      Not only hotels have the client’s email but also they send the confirmation email. That means hotels can sell other services such as restaurants, rental cars, upgrades or different hotels of the chain. When OTA send the confirmation email, they sell their “brand” as well as other of their services (and hotel sees no revenue)

      I have to say I do not like IB because it is a barrier between the customer and the hotel. However, if hotels do not connect their “direct channel” (absolutely agree IB has nothing to do with direct bookings), OTAs will. I am afraid Instant Booking will always be there (with special impact on mobile). Hotels can try to fight OTAs or leave this space to them. In other words, hotels will get the reservation paying 20%-22% commission through an OTA or try to get it at 15%-18% (including booking engine fees) connecting “directly” Between these two bad scenarios, I’d rather choose the latter.

      Pablo

       
    • Pablo

      The best option for hotels is to ban all OTAs to connect to Instant Booking (I’d rather expand this ban to all webmarketing campaigns with the brand/name of the hotel). If they manage to do so (something OTAs do not accept today), hotels have no need to connect to IB. Otherwise, I’m afraid they have to adapt and pay the “toll”.

       
 
 

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