TripAdvisor used its results to announce the relaunch of its hotel shopping experience, supported by a TV marketing campaign.
The news, released alongside The Priceline Group and Ctrip’s results, came as the American Hotel & Lodging Association planned to lobby against the “unfair” practices of online travel companies.
TripAdvisor CEO Steve Kaufer told analysts: “We’ll be back out to the marketplace at a heavier weight with a more streamlined user experience that’s focused around hotel shopping. Think of it as less distractions on the page, more on how can we help you save some money in your shopping experience, how can we give you the best value for the hotel that you’re looking for, not just the highest rated, but the best rated in your price point.
“We don’t want to just say that you can book on TripAdvisor. We want to drive home the point that you’re going to find the best price on TripAdvisor.”
The company has continued to struggle as it moves from a reviews site to a meta-search product and instant booking offering. Kaufer said that, looking forward to 2017-2018, he believed that Instant Book played a key role in doing what’s “best for our travellers …though not as big a role as we had anticipated a couple of years ago”.
He added: “The challenge for the Instant Book team is always making sure that piece of the product has the best price. When we do that, we’ll earn more than our fair share.”
The results came shortly after InterContinental Hotels Group became the last of the global operators to sign up to Instant Book. Robin Ingle, SVP, global advertising, TripAdvisor, said: “Trusted hotels, like those within the IHG family of brands, give hotel shoppers confidence that they’ll be able to have a better booking experience through TripAdvisor because of the wide range of inventory, room content and the best rates we offer.”
For the first quarter average monthly unique hotel shoppers reached nearly 150 million, up 9% year-on-year, and TripAdvisor-branded click-based and transaction revenue per hotel shopper increased 2% year-over-year. The company maintained its guidance that profits would be flat to down.
At The Priceline Group, the company said that it would continue to push growth in its non-hotel inventory, which president & CEO Glenn Fogel said created “a more robust marketplace” different to its competitors in that it did not charge travellers for bookings.
The Booking.com platform now includes approximately 640,000 instantly bookable vacation rental properties, representing year-on-year growth rate of 51%.
The company reported a 27% increase in room nights booked and, due to the change in the timing of Easter, said that it expected rooms night to grow by 16% to 21% in the second quarter. Outgoing CFO Dan Finnegan said that the group was “comfortable with the combined forecasted growth rate for the first half of the year, which we believe is reflective of generally healthy macro travel trends”.
According to Bloomberg, the AH&LA is planning to lobby the new, President Trump-appointed members of the Federal Trade Commission, to convince them that The Priceline Group and Expedia, Inc, are a duopoly in the OTA space.
In a statement the AH&LA said: “There is nothing surprising about AHLA’s efforts to educate government officials and consumers about the negative consequences of increased consolidation within the online travel agency marketplace.”
Fogel responded to the news of that AH&LA’s planned campaign, commenting: “We have good relationships with our hotel suppliers. And if we didn’t have good relationships, we wouldn’t be able to grow as fast as we have been.
“We have a mid-single-digit percentage market share in this business. I have never heard the word monopoly used in the same sentence about somebody who has a mid-single-digit share.
“I don’t fault anybody for wanting to try and bring people to their business directly. I do fault anybody who makes misstatements or allegations that aren’t true.”
At Ctrip, the company continued to push its international business, in addition to pursuing lower-tier cities in the domestic market.
James Liang, executive chairman, said: “By leveraging Skyscanner and other strategic overseas investments, we expect to further strengthen our international product offerings and improve user experiences for both Chinese and international travellers.”
Accommodation reservation revenues for the first quarter were USD301m, up 28% on the year, primarily driven by an increase in accommodation reservation volume.
For the second quarter of 2017, the company expects the net revenue growth to continue at a year-on-year rate of approximately 40% to 45%, against a 46% year-on-year increase in the first quarter.
HA Perspective [by Katherine Doggrell]: TripAdvisor has been floundering for some time, vacillating between Instant Book and meta search and the news that the group was going to come down on the side of value and, well, possibly sideline Instant Book was welcomed by analysts and the market, with the company’s shares up on the news.
It was probably less great for the hotel operators, who had hailed Instant Book as another route to market which did not cost them the customer relationship. But then, as Kaufer noted, getting the best price wasn’t easy and, to make the product a success, it needed to have the cheapest price on offer – something the operators cannot give away. So for hotels, back to those direct drives which, as Marriott International’s Arne Sorenson said this week, were starting to work out.
Unless, of course, the AH&LA has its way and the OTAs are derided for skewing the market. We have all been here before and, while Fogel makes his point about market share, what it appears that the AH&LA would like to wield power over is really share of eyes. The OTA brands are uppermost in the eyes of the consumer because their marketing spend is in the billions, not the millions. It seems a hopeless cause. But, given Trump’s behaviour over the last 100-odd days, it’s worth a punt.