There were some big reveals and big hints this week as TripAdvisor reported its second quarter earnings and Kayak offered a glimpse of a future without hotel metasearch.
News editor Dennis Schaal covered the developments in detail in three separate stories throughout the week.
On Thursday morning before the earnings call, we took a close look at TripAdvisor’s evolution from content-focused site into a booking powerhouse that is well-positioned to take on Priceline and Expedia.
TripAdvisor has built its direct booking features by partnering directly with hotel chains after deals with traditional online travel agencies failed to materialize. While that failure once seemed that it would derail TripAdvisor’s ambitions, the success it has had with some of the world’s largest hotel brands has put it in an excellent position to compete.
As Schaal writes: “The TripAdvisor transformation is category-changing as it has become a booking site without all the heavy lifting of having to become the merchant of record or hiring customer service staff because the partner takes care of these tasks. TripAdvisor becomes a pseudo online travel agency along with a media and user-review site.”
“For hotels participating in Book on TripAdvisor, they are accumulating bookings at 12 or 15 percent commission, which is considerably less than what they would otherwise have to pay to sites such as Expedia and Booking.com.”
Read the full story: TripAdvisor Transformed: The Booking Site Is Now in Full Swing
During the second quarter earnings call on Thursday, TripAdvisor CEO Stephen Kaufer revealed the company’s growing booking edge:
“But I remind folks that we don’t need 10 out of the top 10 or 20 out of the top 20 to be wonderfully successful with Instant Book,” Kaufer said. “Unlike an online travel agency, if hotel brand A is not directly connected with us in Instant Book, I still have all of their properties through an OTA, through our own Tingo or Getaroom or many of our other OTA partners. So, we still have the ability to do an Instant Booking with those folks.”
He also confirmed the rapid growth of the Instant Book program: About one-third of the hotels, or 235,000, viewable on TripAdvisor can now be booked right on the site.
Read the full story: The Numbers Behind TripAdvisor’s Evolution Into the Next Booking Giant
Lost among the TripAdvisor news this week were the quiet experiments Kayak was undertaking. The metasearch giant, which is owned by Priceline Group, rolled out a test that ditched hotel metasearch for a Booking.com-like clone that keeps users on the site for the booking, rather than giving them multiple prices to book on other sites. Would Kayak leave hotels to sister site Booking.com and just focus on flight metasearch in the future?
While it may not seem like such a big deal to 99% of the public, it’s a shock in the online booking world that was big enough to make Schaal describe it as “a Kayak experiment I uncovered that almost made my heart stop.”
The experiment lives on blue.kayak.com on Safari appears as though Kayak is reframing Booking.com. The property pages feature a Reserve button for paying at the hotel instead of comparing prices from online travel agencies and hotel partners.
The messaging is the same, too, including, “Free cancellation – Pay Later,” “We’ve received our last available room at the property,” and “Most recent booking of this property was today from Norway.”
In the test, there is no navigating to partner sites for booking or even Book on Kayak options but instead there is only the Reserve button, enabling travelers to pay at the hotel.
Read the full story: Kayak’s Radical New Experiments as Booking.com Clone
The TripAdvisor news, in particular, is great news for Expedia’s hopes to have the U.S. Justice Department let Expedia’s pending acquisition of Orbitz Worldwide go through. With TripAdvisor emerging as a strong booking site and Google dabbling with hotel bookings in Google search, maps and Google+, the competition in the online travel agency space would heat up despite the consolidation of Expedia-Travelocity-Orbitz.
Read the full story: Why the Justice Department Won’t Block the Expedia-Orbitz Deal Despite the Noise