tripadvisor magnify
11 months ago
 

TripAdvisor reaps benefits of Booking.com deal

The ink on the landmark partnership between TripAdvisor and Booking.com may only just be drying, but its effect is already being felt.

The user review/metasearch site agreed in October 2015 to have the Priceline Group’s hotel inventory made available for the TripAdvisor instant booking platform.

Booking.com inventory came first, with Priceline and Agoda content slated to come further down the road.

It’s no wonder at the time that TripAdvisor CEO Steve Kaufer talked up the move as a “huge win” for users of the site – although arguably the outcome is probably working out just as well, or even better, for TripAdvisor itself.

Investment bank Piper Jaffray, in a note to clients last week, says the “onboarding” of Booking.com’s inventory to TripAdvisor’s instant booking service has coincided with a significant jump in the number of leading properties now being available for travellers.

Its analysis found that 92% of the top five hotels in the leading 100 global inbound destinations now had a “Book on TripAdvisor” button contained on the property’s TripAdvisor page.

This is an increase from 76% in September 2015.

As a result of this increase, TripAdvisor’s “chicken and egg problem” (getting hotels on-board with instant booking) is now largely resolved, Piper claims, with the likely financial result being a stronger conversion rate for hotels.

However, conversion rates on TripAdvisor are still languishing around the 6% range compared to Priceline, which Piper estimates in the region of 20%-25%.

Interestingly, Piper says its analysis shows that the instant booking prices for 84% of the hotels were the same or better than the CPC ads offered for the same property (an increase of 14% from September).

Looking ahead, TripAdvisor should increase the “number and quality” of suppliers of prices made available for each hotel, with Piper arguing that there is no reason why that number shouldn’t be able to reach the same volume as those suppliers still using CPC auctions on the site.

The note says:

“This is crucial, as it will reverse the near-term revenue dilutive-ness of Instant Book as suppliers are forced to offer higher commission rates and improve their listing details to maximize in-cart conversion.”

NB: TripAdvisor image via Shutterstock.

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Kevin May

About the Writer :: Kevin May

Kevin is senior editor and a co-founder at Tnooz. He was previously editor of UK-based magazine Travolution and web editor of Media Week UK from 2003 to 2005.

He has worked in regional newspapers (Essex Enquirer) and started his career at the Police Gazette at New Scotland Yard in London. He has a degree in criminology, a postgraduate diploma in magazine journalism and publishes his first book - a biography about Depeche Mode - in late-2016.

 

Comments

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  1. Patrick Megaro

    TripAdvisor rates are still languishing around the 6% range compared to Priceline.com, which Piper estimates in the region of 20%-25%.

     
  2. Rosalinda Haviland

    these conversion rates are suspicious to put it mildly. I actually worked at Expedia and I can assure you the average CVR is 2-3%, sorry.

     
  3. aoms

    if the convertion rate mentioned was UV 2 book, and from hotel detail page to booking completed, 20% above is reasonable.

     
    • Hans Leenhouts

      Hello, can you explain what you mean by “UV 2 book” ? And I think that 20% conversion is possible if you project it on the potential booker who is entering the bookings funnel; meaning 80% does not complete it’s booking! Looking foward to your reply.

       
      • William Beckler

        UV is probably Unique Visitor. Someone can click multiple options from Tripadvisor to Booking.com, then UV to book for site X is the number of bookings from Tripadvisor divided by the unique people landing on the property details page.

        In my experience 25% is a reasonable number for that.

         
        • Hans Leenhouts

          Are we discussing landing on a detailpage or bookings/transactions ? Quite a confusing discussion here. Can we be more specific? I am talling about transactions = actual bookings.
          In general out of 100 visitors on a booking site/portal only 1-3 make a booking. Just like Rosalinde stated.

           
        • William Beckler

          Hi Hans
          To reply to your below question, we’re talking about a specific type of conversion. First, Booking.com’s overall conversion is well above a typical site, probably between 10% and 15%. However, in this Tripadvisor referral scenario, the traffic converts better than that. This is because we’re bypassing the browsing, research, searching, and price comparison stages of the funnel. When someone clicks from Tripadvisor to Booking.com, they have already picked that hotel and already seen that Booking.com has the best price. This means they will convert significantly better than Booking.com’s overall traffic. So 25% is totally reasonable. I would guess Expedia companies get 20% or so as well, since they slightly trail Booking.com.

          If you have experience with a non-OTA site, like a hotel reservation system, you might think all of these numbers are stratospheric. This is because millions and billions have been spent on improving the booking experience on the major OTAs, while the hotel tech providers are nowhere on that front.

           
  4. Hans Leenhouts

    I just can’t believe those conversion rates. Where are they based upon? I am not the only one who like to see more indepth information on these figures. I think it’s more in the range between 1 – 2,5 % for TA and 3-5 % for PL. Please correct me if I am wrong. Regards.

     
  5. Amal

    There is definitely some error with conversion rates. One thing which still needs to be noted is the move is going to benefit both Trip and Bookings conversion rates. CPC advertisers might not be advertising on lot of smaller and less known hotels because of their campaigns profitability issues.

     
  6. Jonathan Boffey

    I also have a hard time believing these conversion rates.

    One step down the B2B supply chain yields look to book ratios that are in the thousands or even low tens of thousands these days which simply doesn’t equate. Either that or there is a massive amount of machine generated requests (aka scraping) being serviced!

     
  7. Guillaume

    Those conversion rates seems inaccurate to me. PJ must have confused with some other metrics.

    No OTAs in this world convert at 25% not even 10%..

    However I think it’s reasonable to believe that B.com would convert much higher than TA for the reasons highlighted by Drew. There are also a lot of people on TA who just want to see the reviews and go out to book elsewhere on another OTA.

     
  8. Oz Har Adir

    20-25% conversion rate estimate for Priceline? I’d love seeing that figure backed with data.

     
  9. Paul Byrne

    Interesting that Priceline convert 4 times better than TripAdvisor.

     
    • Kevin May

      Kevin May

      @oz / @paul – yes, we were surprised at both figures.

       
      • Oz Har Adir

        While the 20% con-rates is highly ballooned, I also doubt the 6% figure is real. If I had to guess, Tripadvisor’s average would be ~3%, and Booking’s would be twice as high. Which makes me wonder, what is the great user benefit of switching from a highly converting path (Tripadvisor -> Booking.com) to a mediocre path (Tripadvisor -> Tripadvisor)?

         
        • Roberto Da Re

          Well.. I would assume that Tripadvisor % cost is lower than Booking and the hotel gets to transact direct (“own”) with the customer .. that’s why the interest for hoteliers in moving across and push that channel .. or not ?

           
        • Drew Meyers

          Both rates seem high, but it doesn’t surprise me at all that there is significant difference. TripAdvisor has tons and tons of traffic early in the research process, not ready to book a place yet. Priceline is pretty much known as a booking site you go to once you are ready to pay. Conversion has a ton to do with the quality and purchase intent of the traffic you attract; it’s not just on site content and calls to action.

           
 
 

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