TripAdvisor’s New Subscription Service Represents Potential Boon For Lodging Industry, Says GlobalData
Cost reduction remains one of the primary objectives for hoteliers as the travel and tourism sector continues to grapple with the effects of COVID-19. TripAdvisor's new subscription service, TripAdvisor Plus, provides an opportunity for hoteliers to boost visibility to travelers online for free as it is the travelers who pay the subscription fee, not the hotel businesses. This is an attractive offering for the industry in light of decimated revenues across 2020, says GlobalData, a leading data and analytics company.
Johanna Bonhill-Smith, Travel & Tourism Analyst at GlobalData, comments: "Hoteliers typically incur significant costs through both online distribution and third party commissions when working with online travel agents (OTA's). However, by signing up to TripAdvisor Plus, this could help reduce such costs. Rolling out across the first half of 2021, this new service is a key differentiator within a highly competitive market place and if successful could challenge the likes of leading OTA's Expedia Group and Booking Holding's in post-pandemic travel."
GlobalData's poll found* that both reducing staff headcount and reducing salaries were two of the most common actions taken by hotels during COVID-19. Cash conservation is likely still a high priority for the lodging industry as companies strive to make up for large losses across 2020 due to COVID-19.
Bonhill-Smith adds: "Different to traditional OTA models, hoteliers can list their services on TripAdvisor for free as a TripAdvisor Plus member. The only requirement is that a minimum discount of 10% is provided for travelers that subscribe alongside other perks that can be thrown in such as complimentary wine, spa packages, and room upgrades. The better the offer, the higher the hotel is likely to rank in search results. The launch of this service will not only boost visibility for hoteliers, but will also likely lead to more bookings and, in time, a greater retention rate."
The success of the platform depends on both customers and businesses signing up. Travelers will be the ones that will have to pay by signing an annual membership of US$99 - but it does come with overriding benefits and 'insider deals'. With global travelers now likely searching for the 'ultimate getaway' at an affordable price to catch up on lost holidays in 2020 and businesses still striving to reduce costs where possible, the odds of success look to be in TripAdvisor's favour.
Bonhill-Smith continues: "Differentiation is a major focus for all OTA's as it is a highly competitive marketplace. TripAdvisor has not only launched this service to differentiate itself from competitors, but has also strived to support small, independent businesses across its platforms during the pandemic. It embarked upon a partnership with Small Business Live to support small businesses that were most at risk in facing the pandemic.
Bonhill-Smith concludes "By demonstrating its support for smaller companies throughout this pandemic, this not only marks a key differentiation point but also shines a positive PR light on the company going forward."
* Data taken from GlobalData's Poll (210 global respondents from Hotels)
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