TripAdvisor Launches Cruise Metasearch to Tap Into a New Revenue Stream

TripAdvisor upended the hotel sector by persuading travelers to post reviews of their stays online. Now, the company is asking them to look to it first when researching cruise vacations.

After years of collecting ship reviews from avid cruise-goers on CruiseCritic — a forum that TripAdvisor acquired in 2007 — the online travel company has amassed a body of such user reviews. The company is using that as a base for TripAdvisor Cruise, a collection of reviews and search tools that it hopes consumers will visit as habitually as many travelers visit the site to read hotel reviews.

The company has begun offering price comparison search for 70,000 cruise itineraries in the U.S and UK. Cruise lines such as Carnival, Royal Caribbean, and Norwegian are participating as advertisers, as are online travel agencies like Expedia, Cruise.com, and Priceline. They are buying advertisements via the metasearch format that TripAdvisor uses.

TripAdvisor also debuted pages that profile every cruise, even for cruise lines not participating in its metasearch. The so-called Ship-tinerary pages include a mix of content culled from cruise lines and user-generated content, such as reviews and photos, to help consumers research their trips.

Notably, shoppers compare cruise deals by clicking links that send them off to sellers or re-sellers, rather than book while remaining on TripAdvisor’s interface. The company appeared to be betting that by not competing with cruise operators to “own” the customer, its new metasearch offering will appeal to cruise operators looking to drive consumers directly to their sites and call centers. Some of the largest cruise companies have profit margins of more than 15 percent and sophisticated advertising operations that, until now, haven’t yet spent much on TripAdvisor as a platform.

However, the move has risks. Cruise is a complex product that may not lend itself to a text-and-photos-based reviews format for the first-time or even repeat shopper.

Competitive Space

Cruises have been advertising online for more than a decade, of course.

For example, metasearch brands such as Kayak and Qunar have long-offered cruises in a price-comparison format.

“Other companies have meta, though we believe we have more inventory and reviews than other meta players do,” said Bryan Saltzburg, president of TripAdvisor Flights, Cruise, and Car.

Online travel agencies have gained more traction than metasearch companies in cruise sales by backing their services with call centers.

TripAdvisor said the number of cruise operators advertising in its metasearch as of today exceeds by four times the amount that’s reselling with the global online travel agencies in the U.S. and the UK.

However, TripAdvisor is making a big bet on self-service knowledge without any call-center support.

In other words, some first-time cruisers and mass-market consumers may find sifting through their the various “Ship-tinerary” pages on their own to be overwhelming.

“You can’t take human agents out of the process because cruises are a complicated, high-touch product,” said Heidi Allison-Shane, editor of cruise news site AllThingsCruise and co-founder of lead-generation site CruiseCompete.

Complexity is driving many uncertain consumers into agents’ arms for hand-holding, experts said. An exception may be the frequent users of CruiseCritic, which as a brand has focused on avid cruise-goers, who clearly find the reviews adequate given their familiarity with the product.

“In the past few years, cruise lines have been differentiating aggressively with distinctive features, more tightly targeting specific demographics with specific itineraries, and trying to personalize offerings with an array of upsell offers,” said Anthony Hamawy, president at Cruise.com, an online agency that promotes its call center heavily. “You can be comfortable using the internet to do online shopping but still find cruise booking to be complicated and want some help.”

Consumers increasingly want online videos of cruise ships for research, said Douglas Diggle, CEO of the cruise industry consultancy Across Oceans Group. Cruise lines looking to in-source direct sales have populated their sites with exclusive videos detailing all aspects of their floating paradises.

“Cruise lines won’t say it out loud, but they’re frustrated with the errors that some of the less professional home-based agents make,” said Diggle. “So they’ve been staffing up their call centers with retired crew members who can talk smartly about products they’ve actually sailed on. The overall goal is to ensure a consistent total guest experience by developing direct relationships with shoppers.”

From the cruise lines’ point of view, the test will be if TripAdvisor saves them a lot of effort in that its platform attracts and convert the customer without the help of agents.

Hybrid Approaches

Humans are the secret sauce behind nearly every online travel company selling cruise as an agency. A case in point: Expedia CruiseShipCenters consists of a network of about 250 independently owned, retail travel franchises.

One up-and-coming online player in cruise, Dreamlines, an online agency focused on selling cruises, has been backed with cruise center support. It operates in 10 countries, and provides inventory from more than 100 cruise operators. The Hamburg, Germany-based company with 650 workers, has raised about $130 million (€107 million) in funding since its launch in 2012, excluding last year’s $11 million (€10 million) convertible debt investment by Global Ports Holding, a giant cruise ports operator.

Additional Revenue

TripAdvisor anticipates a few opportunities for additional revenue.

After a consumer books a cruise, they’ll need a flight that matches up with their travel dates. In the future, TripAdvisor may help with that via cross-selling suggestions on the site and in email marketing, a spokesperson said. The company will also rev up its sales of cruise-related display ads.

Its so-called social feed is another opportunity. Last November, TripAdvisor revamped its homepage to provide advice and social feed to users. The plan is to make it more than reviews and news articles from travelers, influencers, and brands by adding merchandising placements that tout hotels, restaurants, and cruise linking to pages where customers can book. A user who has chosen to follow information on a popular cruise port or a cruise brand like Carnival will eventually see in the feed “shelves” of merchandised placements for suggested cruises.

In the future, TripAdvisor may launch review collection programs with cruise companies, a spokesperson said. For now, travelers have to find their way back to TripAdvisor to post a review.

The broader expansion into selling cruises and other products could help TripAdvisor buffer a multi-year hit to the margins its core hotel review and booking business. The company recently expanded its sales of tours and activities. Last year, CEO Steve Kaufer said that its attractions business should have commissions of 15 to 20 percent, similar to its online hotel business, but the addressable market would be only around half that of hotels.

What next? To support its attractions business, TripAdvisor bought Bokun, a reservation software tool used by many experiences operators. In cruise, the most widely used reservation, distribution management, and booking engine for the sector is Revelex, used by many retail travel agencies and cruise companies, with TravTech’s agent tools a close rival. TripAdvisor would need to acquire a company like those to gain insights into the back-end sales of cruises and to gain an edge in metasearch beyond competing to provide the most reviews and inventory.

Kaufer’s famous motto is that “speed wins.” It took TripAdvisor a year to deliver its new vertical. TripAdvisor began reorganizing to build a cruise product last April with Saltzburg’s appointment as the leader. It started ramping up its advertising for jobs for its cruise product last September.