TripAdvisor Revenue

TripAdvisor’s new CFO says quality hotel content is key to instant booking conversion

TripAdvisor’s new chief financial officer Ernst Teunissen has begun his tour of the investor forum circuit, speaking today at the Morgan Stanley Technology, Media & Telecom Conference.

When it comes to the success of its instant booking product, Teunissen repeated a lot of points made on the recent first-quarter earnings report.

But he did make some fresh comments. The remark that will probably be the most relevant to hotel owners was that TripAdvisor is applying renewed energy into getting accurate, complete descriptions of hotel attributes.

He said a key factor affecting instant booking conversion rates is an improvement in the quality of hotel content. He said:

“We want to know: Is there a good, full room description? Are there nice pictures? Is it clear if the reservation is cancelable, etc) — all of which is an important factor for conversion.”

Hotels should expect more prodding from TripAdvisor to make sure their descriptions of their properties are as thorough and clear as possible if they want to drive more direct bookings through the platform.

On the consumer side, he noted that the company is getting traction on persuading users to store their credit card details on TripAdvisor for use when booking. He said this is “a rapidly improving metric.”

He said the average book value of trips reserved through Instant Booking is also going up.

“In early days, users booked lower-risk properties, such as booking on one-night stay in a hotel. Now we see larger, multi-day bookings.”

Moving on to vacation rentals, Teunissen discussed his company’s strategy. He noted, as an aside, that he had stayed in an Airbnb with his family once and that he thought the startup had built “a fantastic company”. He added:

“We have had an open platform, with lots of partners, lots of channels for supply…. It’s not unforseeable that we would work with Airbnb. We might…. But we don’t need them to be successful.”

He said TripAdvisor’s move away from a fixed, periodic subscription-based model for property owners has been popular, because owners only have to pay when they get a listing. The company generated more than 65% of its vacation rentals revenue from free-to-list in 2015.

One impact of this is that TripAdvisor will increasingly be taking income at the time when vacation stays happen, usually in the third-quarter of the year, which will shift the revenue recognition to that time.

About the company’s broader marketing work, Teunissen said the company is concentrating on messages on its own platforms to encourage users to try out its instant booking features.

It is taking some of the money it would otherwise have spent on TV campaigns this year to pour into that effort and into search engine marketing, Google AdWords, and the like.

He said there was a big acceleration in this spending in 2015 but that the spending growth will not be as big in 2016.

There has been gossip in the markets about how in August 2014 its controlling shareholder, Liberty Interactive, had spun out the shares with controlling interest into an entity called Liberty TripAdvisor Holdings. Teunissen was asked what he thought about the risk of the company being gained control over by third-party.

“We’re fortunate to have a very strong shareholder in Liberty TripAdvisor Holdings. That and the board of our company is very aligned with us in management about future investments….

That’s all as a management team we are focused on, being successful long-term. What may or may not happen with the shareholder structure is not our primary concern.”

Earlier: Instant booking is a long term play for TripAdvisor – but hits financial performance

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Sean O'Neill

About the Writer :: Sean O'Neill

Sean O’Neill had roles as a reporter and editor-in-chief at Tnooz between July 2012 and January 2017.



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  1. Patty

    Skip the hotels and book direct with the owners. Why pay service fees just go to VRBO … Oh no! Wait. Almost forgot about that service fee on their side now to. Apparently, VRBO is charging the guests to travel now to. I believe it’s really upsetting the owners and it’s around $20 to $150 or more (depending on the rates). Well, you can always pick up the phone and dial an owner or book directly with me for the Panhandle of Florida vacations!


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