Tripadvisor Plus Is Case Study in Online Travel Hype
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Dennis' Online Travel Briefing
Editor’s Note: Every Wednesday, Executive Editor and online travel rockstar Dennis Schaal will bring readers exclusive reporting and insight into the business of online travel and digital booking, and how this sector has an impact across the travel industry.It was only a little more than a year ago that Tripadvisor co-founder and CEO Steve Kaufer touted the company's fledgling — and since all but obliterated — Tripadvisor Plus subscription membership program for discounted hotel rooms as potentially a billion dollar business.
"You could think of it (Tripadvisor) as we serve 1 billion travelers a year," Kaufer told financial analysts in February 2021. "And if -- I have to say this carefully — but if it's only 10 million that sign up for Tripadvisor Plus, that's still less than 1 percent of our annual traffic. But 10 million sign-ups times $100, and obviously, the math works pretty nicely in a recurring subscription revenue."
Subscriptions were — and still are — deservedly hot in travel and beyond. Financial analysts jumped on the Tripadvisor Plus bandwagon, and bought into the boasts. In February 2021, Bernstein's Richard Clarke raised his price target on Tripadvisor stock, in part because of the subscription plan, to $45, from $40, and rated the shares "outperform."
"Despite being in beta stage, confined to certain areas of the U.S., and without a full basket of direct supply, it is still something to get excited about," Bloomberg quoted Clarke as saying about Tripadvisor Plus that month.
At the time, big hotel chains were balking at participating in the program, which displayed substantial rate discounts to subscribers and, importantly, sometimes to non-subscribers prior to booking, and clashed with industrywide rate parity rules. Insiders whispered that the chains would eventually join Tripadvisor Plus, but even if they d
