Whether it's on hotel, online travel agency or metasearch sites, having attractive pricing is a very powerful thing. We think Kaufer is a smart guy. He knows he isn't going to get hotels' special rates for loyalty program members today, but he's trying to lay the groundwork for a deal later on.
TripAdvisor CEO Stephen Kaufer wants hotel chains such as Hilton, Marriott, Hyatt, and InterContinental Hotels Group to offer their special, book-direct rates for loyalty program members on TripAdvisor.
It’s not a huge surprise that TripAdvisor wants to offer hotels’ lowest rates either through TripAdvisor metasearch, which sends leads to the hotels’ website, or through TripAdvisor Instant Booking, which has consumers completing their bookings right on TripAdvisor.
But it likely won’t be happening anytime soon because the whole point of hotels offering lower rates for loyalty program members is they want guests to booking directly on their own websites and not through an intermediary such as TripAdvisor or Expedia, for example. Hotels can thus encourage repeat visitors, boost their loyalty programs and don’t have to share revenue with TripAdvisor or an online travel agency partner.
Still, in TripAdvisor first quarter earnings call yesterday, Kaufer asked whether there was a business model that would enable TripAdvisor to get hotels’ special, book-direct rates.
“With respect to why the pricing initiatives that some of the big hotel chains have put on with kind of special rates, we can absolutely see a case in point or an example set where those brands choose to push their special pricing onto the TripAdvisor meta and/or IB (Instant Booking) platforms such that they want the exposure of some great rates,” Kaufer said. “And our perspective is if it’s a rate that’s available to travelers, then we’re happy to show it.”
Expedia wants these rates, too, but likewise isn’t getting them.
Kaufer said loyalty programs are a threat to TripAdvisor because they entice consumers to book elsewhere but he doesn’t expect them to grow in importance.
“We don’t think the dynamics around consumer loyalty have changed all that much over the past set of years, so, while it’s on the horizon, it’s not something that I think will materially change behavior over the next several years,” Kaufer said.
For now, a chain such as Marriott International shows published rates on TripAdvisor, mostly the same as those that it makes available around the Web, but when users click on a Marriott link on TripAdvisor, they navigate to Marriott’s websites where they get the choice of joining the loyalty program and getting a nightly rate that might be $4 lower than the published rate or just booking the rate that’s available for nonmembers.
TripAdvisor or online travel agencies could conceivably come up with a model that would incentivize the hotel chains to make their book-direct rates more widely available but for now there are no signs that’s going to happen.
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Photo credit: TripAdvisor is getting hotel chains' published rates -- the same ones they make available around the Web -- but won't be getting their book-direct special rates anytime soon. TripAdvisor