With the Priceline Group and TripAdvisor entering the restaurant booking space with their acquisitions of OpenTable and Lafourchette, respectively, Yelp, which is mostly known for its user-generated shopping and restaurant reviews, is getting more aggressive in the hotel sector through a new partnership with Hipmunk.
Hipmunk became the only hotel provider on the Yelp platform, enabling Yelp users to book hotel stays on Yelp without leaving the website or Yelp apps.
When Yelp users view a hotel and select Book a Room/Show Prices they’ll view the pricing details under a “powered by Hipmunk via Getaroom” icon and then can complete the hotel booking on Yelp.com or in Yelp apps.
In this example, Getaroom would be the merchant of record for the hotel transaction and would be responsible for customer service for Yelp users. Hipmunk has multiple such direct-booking partners, including Getaroom and Hotels.com, for example.
Will Yelp Try to Compete Head-on With TripAdvisor?
With Yelp’s decision to sign on Hipmunk as its hotel booking partner, it remains to be seen how aggressive Yelp will get with hotel bookings.
Through the end of 2013, only 4% of Yelp’s 52.8 million reviews were for the “travel and hotel segment” compared with shopping (23%) and restaurants (20%).
In the Yelp app, hotels aren’t currently emphasized. The Nearby feature in the app defaults to show restaurants, bars, coffee & tea, and More Categories on the first screen. Hotels and travel aren’t listed among Popular Categories in the Yelp app, and hotels and travel are the 14th listing if users select More Categories.
“There will be no immediate changes to the way businesses in any category are displayed on the site or app because of this partnership announcement, besides seeing the ability to book right from their Yelp page (which is a pretty impactful update),” says Yelp spokesperson Rachel Walker.
Yelp, which partners with the Priceline Group’s OpenTable for restaurant reservations, already did a smattering of hotel bookings through the click to call functionality in its apps, and by linking off to some hotel websites for bookings such as it currently does for the La Quinta Inn Manhattan.
But, Yelp’s partnership with Hipmunk gives Yelp much more hotel-booking coverage through Hipmunk’s online travel agency and hotel direct-booking partners.
Yelp undoubtedly will see increased conversions of lookers to bookers in its apps and on the Web when users book hotels on Yelp.com and in its apps through Hipmunk without having to navigate away to a third-party website to book.
The Yelp Platform
Yelp views the Hipmunk partnership in the context of the expansion of the Yelp Platform, a transaction platform for food delivery and spa appointments that was introduced in 2013.
In addition to adding Hipmunk for hotels, Yelp is also bringing on CellarPass for wine-tasting appointments, and several new food delivery partners.
“A good way to view this is that we’re looking to make Yelp as useful as possible for consumers, so we want to add all kinds of transactions and booking capability in the future,” Walker says.
Hipmunk’s New Marketing Strategy
Hipmunk CEO Adam Goldstein says the Yelp partnership is part of a new Hipmunk strategy and was not merely an “opportunistic” deal.
The flight and hotel metasearch site has been seeking ways to broaden its reach and it sees such marketing and distribution partnerships with third-parties such as Yelp as a cost-efficient way to do so.
Hipmunk is not interested in doing behind the scenes white-label partnerships, but would only do them if the Hipmunk brand is visible, Goldstein says. Hipmunk’s direct-booking partners, including Getaroom and Hotels.com, get some visibility, as well.
“We have no interest in being a white label provider,” Goldstein says.
Goldstein wonders if all of the online travel agency TV advertising that has been taking place over the last two years is really sustainable.
“We think TV is an inefficient and expensive way to go,” he adds, referring to marketing and advertising options.
On Hipmunk’s current status, Goldstein cites the $20 million Series C funding round that Hipmunk secured in May, adding that the company has increased its ranks to 53 employees, and is hiring people for executive finance roles, marketing and engineering.