First Free Story (1 of 3)Join Skift Pro
Editor’s Note: Skift is publishing a series of interviews with online travel CEOs talking about the Future of Travel Booking, and the evolving habits and device preferences of travel consumers. Check out all the interviews as they come out here.
TripAdvisor touts itself as the world’s largest travel company. With its more than 170 million user reviews and opinions, and array of portfolio companies and products ranging from SeatGuru for flights to Hotel Shopper and now Viator for tours and Lafourchette for dining reservations, TripAdvisor can influence travelers’ plans in nearly every part of the journey.
Skift discussed the future of travel booking with TripAdvisor co-founder and CEO Stephen Kaufer, and along the way Kaufer touched on the company’s recent acquisitions, direct-booking initiatives and mobile, the company’s TV advertising campaign, and vacation rentals, among other topics.
An edited version of the discussion follows:
Skift: With the acquisitions of Viator for in-destination tours and activities and Lafourchette for restaurant reservations, TripAdvisor is well-positioned to enable travelers to search and book on the site and in your apps almost throughout the travel cycle. From city guides to flights, hotels, tours and restaurants, what do you see as the most important trends in the world of travel booking?
Stephen Kaufer: It is certainly no secret that TripAdvisor has a lot of travelers who are looking to plan the entire trip, not just their flight and hotel stay or vacation rental. So with the traffic and traction we have it’s always been how can we do a better job and do we have a business model that supports and increased investment. We looked to different business models in the attractions and restaurant space and, frankly, the transaction model, helping people more conveniently make a reservation or buy a ticket for what they want is the most obvious one.
For restaurants, we picked up the leader in France and Spain [Lafourchette], for attractions we picked up the clear global leader [Viator] because we felt those products would help our travelers plan and have the perfect trip. Is it an end-to-end solution? Of course not. There’s a zillion other things travelers do when they take a trip. Can we help in one more segment? Sure. And if we can then we continue to deliver the quality products that Viator and Laforchette already have, excellent. Do we think we can help them scale globally? Yes we do. We think we can make the integrations better on TripAdvisor, a site that travelers are probably already on.
So now if I go to Paris I can search for a restaurant with availability at 8 p.m. and I didn’t used to be able to do that. Now I can. Soon with Viator you will be able to do much more in terms of actually cementing a trip, cementing those plans with what you want to do when you are there while still on the TripAdvisor site.
Skift: Speaking of Viator, a lot of people have said about tours and activities that they won’t really take off, to use a cliche, until we “crack mobile” in terms of real-time availabilities and that sort of thing. Is Viator close to getting to that point or is there a lot more work to be done?
Kaufer: Viator already has all the ingredients for mobile. On a trip that I booked recently, I booked my tour while I was in-market using Viator’s mobile app. It works. The question mark is how many people around the world already have the mobile app on their phone to book tours and attractions? Answer: Basically nobody.
The app that they might have to do that is TripAdvisor since we have 125 million downloads. But, to date it hasn’t been a great experience in helping you to find the bookable things. If you are going to take a tour of the Vatican there are a dozen different tours that are all different and interesting, and TripAdvisor didn’t help you distinguish among them.
We think we can bring a lot of benefit to the traveler in an app they already have on their phone. People are already using TripAdvisor in scale in-market so we are back to the [question], does Viator have enough supply? Of course not. There is always more that you want because you want to be as comprehensive as possible.
Skift: I wrote a story about Skyscanner launching a standalone hotel app. Given the proliferation of apps, all the properties you have, and the fact that consumers probably want to use only a few apps on their phones, do you envision combining more of your apps into a single app or is mobile Web more of the way to go?
Kaufer: The jury is still out in terms of mobile Web versus mobile app. We see resounding votes for both. We have a lot of app usage and a lot of mobile Web usage. An individual branded app, what Viator offers today, is a ton of great information in their environment. It doesn’t really make sense to copy that over to TripAdvisor. You’re right, we already have the TripAdvisor app on the phone so it is not necessarily the best thing to require the download of another app if you want to just go off and buy a ticket for a tour.
We see coexistence for the foreseeable future, and TripAdvisor hasn’t gone the route of an app for each and every brand that we have, but where there’s a specific need we do look at creating frequently a custom app for it.
Skift: Are we seeing a blurring of the lines between travel search and travel booking? TripAdvisor has booking sites Jetsetter and Tingo, and you are starting to do direct bookings in Hotel Shopper. Qunar in China has a blend of both models, and Orbitz is showing metasearch prices right below its hotel-search results. Is there a meaningful distinction between search and booking sites or is it all fading?
Kaufer: It’s true lines are getting blurred. I really wouldn’t use Tingo and Jetsetter as a blurring of the lines because we are a group of companies and those just happen to be assets in our portfolio. It is fair to look at Orbitz testing the metasearch component. It is fair to look at TripAdvisor adding Instant Booking. I think Orbitz would tell you they are an online travel agency. They contract with hotels. They sell hotel rooms. And they are putting in the meta to make sure as a consumer you don’t have to check around.
For TripAdvisor, we are not building up a market management force. We are not contracting rooms directly with us. We are in the media business. So we are helping a consumer go further down the funnel, but at the end of the day it’s still Getaroom, it’s still Best Western, and somebody else who’s selling the hotel room on TripAdvisor. So it blurs, but I am not an OTA and I don’t think Orbitz would call themselves a media company.
Skift: So far Expedia and Booking.com have said they don’t want to take part in TripAdvisor’s direct booking, or Instant Booking. Is the reluctance so far of the biggest online travel agencies to participate a matter of them not wanting to see the big get bigger or are there branding and economic issues at play?
Kaufer: I think the OTAs, and specifically the Priceline and Expedia companies, have simply said that they are not participating for now. They have been very clear, from what I’ve read, in not ruling it out forever. The “for now” presumably revolves around the fact that we just have it out on mobile. The phone, not including tablet, is a small portion of our bookings and a small portion of the OTA bookings. It is great for the consumer on the phone, but it’s not particularly a big deal in terms of the number of leads that we send.
When we look at Instant Booking going forward, we think that the independent hotelier and the B&B owner, so long as there is a way to technically connect with them, we think it is a great opportunity for them to expand their distribution opportunities. It’s a distribution channel. It’s not an OTA. It’s not buying a click from Google. It’s something in between.
Skift: Are you hopeful that once Instant Booking gets onto desktop that your dynamic with the larger online travel agencies, and your relationships, may change? That perhaps some of them who have publicly stated they are out for now, may be in?
Kaufer: I’m forever hopeful. The big OTAs and all of the options for the consumer, we’d like to see everyone in the Instant Booking store. I’ve also been clear publicly that our strategy does not depend upon any OTA participating or not. We will continue to sign distribution partners, folks that can take bookings for the room, and if it is good value for the consumer, we will present that as an option to them in that Instant Booking funnel.
Skift: On vacation rentals, I think you guys came out with a number that you now offer 630,000 vacation rentals through TripAdvisor/Flipkey. Meanwhile, HomeAway CEO Brian Sharples said during HomeAway’s second quarter earnings call that HomeAway hasn’t felt the impact of TripAdvisor in vacation rentals. Sharples said: “This is a marketplace business where you need both supply and demand. So it’s one thing to have properties, it’s another thing to get bookings against those properties.” Are you buying his argument that TripAdvisor has some beautiful numbers regarding vacation rentals but really isn’t driving demand or being felt in the marketplace?
Kaufer: Actually I do agree with Mr. Sharples: It is a marketplace, you need supply and demand. I was only at liberty to talk about the increased supply that we have, which is a big number and just means to consumers, hey, we have good choice. We are proud of that number, but it really doesn’t tell the whole story.
We don’t disclose the demand numbers and the bookings that we do, but he [Sharples] knows we are in the marketplace. I’m sure we have siphoned some demand from other sources. I have no way of knowing whether it is from HomeAway, from offline rental agencies or from any other player in the marketplace. But we do a very nice business in vacation rentals that’s growing quite nicely so we ourselves are pleased with our own progress.
Skift: Would you say it’s a big priority for the rest of this year and 2015 to do an even better job in vacation rentals?
Kaufer: I always look to do better than previous years, but you shouldn’t take that as any disappointment with our performance in 2014.
Skift: There’s been so much publicity, positive and negative, about the Trivago TV advertisements in the U.S. and the Trivago Guy, Tim Williams. And we all know the impact that William Shatner has made for Priceline. So do you think the TripAdvisor ad campaign in the future might benefit from having a human spokesperson, and what impact has your campaign had to date?
Kaufer: I object to the comparison between someone as famous and well-known for generations as William Shatner on so many highly successful television shows with an actor who has a certain look about him. The publicity around the Trivago Guy is publicity in ad-media circles, as near as I can tell, as opposed to consumers who recognize Mr. Shatner. I look at the decision of whether to go with a human spokesperson or not as there is no best practice. Lots of different things work.
And when you look at our TV commercials, “Don’t just visit Paris. Visit TripAdvisor Paris,” it is clearly ringing the bell with people in the markets where we are active [U.S., France, and Australia]. We are pleased with the campaign. I’m not feeling a particular need to change something dramatically. We will always tweak and tune, but the core proposition resonates with our audience.
It’s not just about, did I save you $20. Price message is a nice message, but that’s not why travelers love TripAdvisor. They love TripAdvisor because it really helps them have a great trip. And that’s a message we are uniquely able to fulfill on vis-a-vis any other travel site.
Skift: I think you mentioned during your Q2 2014 earnings call that you were considering expanding the TV ad campaign to one or two new markets. Has that happened yet or can you say what new markets you will be in this year?
Kaufer: We did start doing some advertising in Canada.
Skift: Is there anything else you’d like to mention about the future of travel booking?
Kaufer: It’s a little bit ironic that so many of the big players have turned to offline advertising for an online product. But, it remains a way to reach a large number of people. And, TripAdvisor as a company has really never relied on offline advertising, but we too have reached out because we feel we now have a really great product in almost every market, and it’s just a question of does everyone know what we have.
We have the price comparison. We have the content. We have the photos. We have the room tips. We have all the different pieces for the flight, the hotel, or the thing to do while you are there or the place to eat. Sometimes we can book, sometimes not, but we have all the information to really help plan and have that perfect trip. So to us it really seemed a great time to start shouting about it globally. Again, the 2015 budget hasn’t been written yet, but we see a tremendous amount of opportunity ahead.