• TripAdvisor hails influence

Travel-related spending influenced by TripAdvisor sites outpaced growth in overall travel and tourism spend, according to a study by Oxford Economics.

The report followed a series of disappointing results from the reviews site, which has been attempting to monetise its position in the sector.

The study, Sizing the Worldwide Travel Economy, conducted by Oxford Economics in partnership with TripAdvisor, reported that last year, TripAdvisor was responsible for USD546bn (10.3%) of

global tourism spend and that this influence continued to grow at a 7.4% annual average rate in the last 10 years. Globally, the site was said to have influenced more than 433 million trips last year last year.

Influenced travel was been defined as any travel in which TripAdvisor played any role. This included generated impacts as well as any travel which would have otherwise have occurred but used TripAdvisor reviews and scores to inform behaviour.

Charlie Ballard, director of strategic insights, TripAdvisor, said: “The travel category is indeed enormous and outpacing other consumer spending worldwide, and TripAdvisor not only inspires travel, but also causes more travel – in particular by encouraging travellers to take longer trips by showing them how much more there is to see and do.”

The pair said that econometric analysis with Oxford Economics had proven that TripAdvisor drove more travel and this was more evident through increased visitor nights and spending than through arrivals.

The study said that large growth in influence was evident for both domestic and international travel. The influence on international travel was shown to be consistently higher, with TripAdvisor having less impact on the internal traveller. This was shown to be particularly relevant in the UK, with UK tourism larger than in Spain and France, driven by the domestic market.

Oxford Economics told Hotel Analyst: “Domestic is really that big. The number of domestic overnights in all paid accommodation is much larger for UK than for France and Spain – we also estimate higher average spending per day.”

Heather Leisman, VP, industry marketing, TripAdvisor, told Hotel Analyst: “We are focused on building a more holistic end-to-end user experience and improving the user experience so travellers continue to come back to TripAdvisor time and time again as well as building out more advertising opportunities for more partners that will enable us to deliver healthy profitable and diversified growth for years to come.  In fact, we have been helping business owners reach potential customers at that critical stage of the user journey by creating new advertising opportunities like Sponsored Placements for accommodation providers and TripAdvisor Ads for Restaurants.

“At TripAdvisor, our core mission continues to be helping travellers unleash the full potential of any trip, using the wisdom of the crowd to decide where to stay, where to eat and what to do. Everything we do is about enhancing the user experience, for example by making it easier for users to plan, by helping them find the information they need, compare various options based on criteria like price, amenities, cuisine type, location or activity type, and ultimately eventually make a booking, whether it be via our site or partner sites. All of the advertising opportunities on TripAdvisor are geared towards aiding consumers in that path to purchase, from offering price comparison options like our meta search auction, delivering compelling display advertising campaigns which provide relevant information about travel destinations or even offering users an easy way to contact or make a booking for an accommodation, restaurant or tour.

“However, our commercial partnerships never influence any of the review content or traveller rankings on the site. As a result, we believe that our efforts to monetise TripAdvisor enhance the experience for users and do not impact the site’s credibility for consumers.”

Earlier this year saw TripAdvisor launch a sponsored product which would allow paying hotels to appear at the top of a user’s search results.

Martin Verdon-Roe, VP B2B product & marketing, TripAdvisor, said: “Given the influential role TripAdvisor plays in the inspiration, shopping and decision phases of a traveller’s planning and booking experience, we decided to build a product to help accommodation business owners reach potential guests at this critical stage of the path to purchase journey. Sponsored Placements is the smarter advertising solution the sector has been waiting for – developed to increase a property’s exposure on TripAdvisor and reach highly-qualified travellers with high booking intent.”

TripAdvisor’s most-recent results saw the company warn of a decline in hotel revenues in the short term. Tripadvisor CEO Steve Kaufer told analysts on the group’s fourth-quarter earnings call: “We know we still have a lot of work to do. It is incumbent upon us to execute and unlock this growth potential.”

The study had echoes of the Expedia, Inc study, also in partnership with Oxford Economics, released in March, which reported that guests who booked using an OTA stayed 8% longer and spent nearly 18% more per trip than non-OTA bookers.

The company said that 21% of surveyed travellers used an OTA in trip planning and booking, and according to the data, OTA bookers stayed 8% longer and spent nearly 18% more per trip than non-OTA bookers. Coined by Oxford Economics as the “OTA Premium,” this variance between OTA guest and non-OTA guest spending was, it said, evident across all categories, including food and beverage, retail, recreation and entertainment, and transportation. The largest spend difference was in the retail category, where the OTA premium was nearly 26%, followed by transportation and recreation and entertainment, both upwards of 20%.

Charlie Osmond, chief tease, Triptease, told us: “If you look at the detail of Expedia’s study, what is actually revealed is that an OTA booker on average spends more on their entire trip than would a booker on a different website. This is of course true when you take into account that an ‘entire trip’ booked on Expedia may include flights, multiple properties, entertainment, and other transportation. The research doesn’t indicate any ‘OTA premium’ when it comes to spending on a per hotel basis.”

 

HA Perspective [by Katherine Doggrell]: Influence is a fine thing, but, as anyone hoping to avoid jail as part of the ongoing investigation into the most-recent US election is praying, it’s hard to prove unless you’re in a bubble.

That TripAdvisor’s influence is a factor in booking travel has never been questioned. The site has done much to make travellers feel secure when visiting new locations and it has threatened the dominance of the brands by providing another way for travellers to be reassured about quality. Acceptance of peer-to-peer review has helped to drive the success of platforms such as Airbnb and made TripAdvisor into a social network.

But influence don’t pay the bills. TripAdvisor has had problems turning reviews into cash and is currently throwing a myriad options the way of the chains and the OTAs, offering one and all a route to market and putting its position as a trusted source on the line as it does.

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