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One hotel chain, Marriott International, which participates in TripAdvisor Instant Booking, and one that doesn’t, Hilton Worldwide, are now both using TripAdvisor’s comparison shopping and booking features to persuade travelers through advertising to book direct on the hotels’ respective websites.
In the case of Marriott, its advertising campaign in TripAdvisor’s mobile app elicits some strange — yet logical — dynamics as Marriott competes against its own TripAdvisor-Marriott partnership. As you can see in the screenshot (below left), consumers can get a $149 rate for a stay at Marriott’s Canyon Villas in Phoenix if they book the room on TripAdvisor with Marriott Vacation Club handling the booking and performing the customer service.
But you can also see at the bottom of the same screenshot a Special Offer, which turns out to be from Marriott. In the next screenshot (below right), Marriott Rewards advertises that members can receive a 20 percent discount if they book on Marriott.com using a promotion code. It turns out the Marriott.com rate would be $146 instead of $149 through TripAdvisor/Marriott Vacation Club in TripAdvisor Instant Booking although the chain promises a 20 percent discount when using the promotion code.
So why would Marriott agree to be a TripAdvisor Instant Booking partner and then undercut that partnership by advertising to consumers on the same screen within TripAdvisor metasearch that they can can a lower rate on Marriott.com?
Let’s backtrack a bit. TripAdvisor in 2015 launched Instant Booking, which enables consumers to book hotels on TripAdvisor without having to click off to partner sites as they do through TripAdvisor metasearch. When an Instant Booking occurs, TripAdvisor partner hotels such as Marriott, Accor, Starwood and Wyndham and online travel agencies such as Booking.com, Agoda and Laterooms.com perform the customer service in the background.
TripAdvisor did this because the switch to mobile, in particular, meant it couldn’t adequately monetize all of those consumers who were using its metasearch, or hotel-price comparison, feature to shop for stays weren’t necessarily clicking off to book on partner sites or were doing so much later in the research process so TripAdvisor wasn’t getting compensated.
By joining TripAdvisor Instant Booking, Marriott pays TripAdvisor a lower commission for these bookings than it would pay for Marriott bookings through online travel agencies such as Expedia and Booking.com, and Marriott still gets a lot of branding as consumers get reminded, “TripAdvisor in partnership with Marriott.”
Marriott.com is the chain’s lowest-cost channel — much lower than online travel agency sites and considerable lower than TripAdvisor Instant Booking, too. HeBS Digital estimates that its clients’ costs for direct bookings on their own websites are 4-7 percent versus more than 18 percent for commissions paid to online travel agencies. The amount of commission that the chains have to pay TripAdvisor for Instant Bookings undoubtedly would fall somewhere between the online travel agency versus book-direct range.
That’s why it makes sense for Marriott to advertise on TripAdvisor a special offer for Marriott Rewards members even though it is offering a booking option on TripAdvisor higher on the screen. Marriott’s distribution costs are lower for bookings on its website.
In the screenshots below, you can see that Hilton Worldwide, which has chosen not to be a partner in TripAdvisor Instant Booking, is advertising Hilton’s book-direct campaign, with an ad, “Special Offer, STOP CLICKING AROUND,” in TripAdvisor metasearch. TripAdvisor visitors can book Hilton’s Hampton Inn Phoenix-Biltmore on TripAdvisor through Booking.com or, as the Hilton advertisement states, they can click over to Hilton.com where “HHonors members get the lowest price anywhere.”
Marriott and Hilton’s book-direct advertising campaigns on TripAdvisor are adept because the chains are taking their offers to the largest website — 350 million monthly unique visitors, according to comScore Media Metrix, on the planet. These advertisements, which support others on TV, on the chains owns websites and myriad other venues, punctuate how strategic the hotels view their respective direct-booking initiatives.
It’s ironic that TripAdvisor CEO Steve Kaufer has publicly stated he would welcome offering the hotel chains’ book-direct rates through TripAdvisor Instant Booking.
For now, though, TripAdvisor has to settle instead for the hotel chains’ book-direct advertising.