TripAdvisor and the crowds
TripAdvisor utilizes having genuine information about the hotels to bring more readers to the site which in turn, write their reviews as well and the platform grows attracting more hotels to partner with TripAdvisor. Indirect and direct network effects come into play.
Crowdsourcing is defined as the process of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, specifically from an online community, rather than from traditional employees or suppliers. TripAdvisor, a Boston metro area based giant is doing exactly that and capitalizing on customer reviews and tips provided by the general public.
Nowadays TripAdvisor takes pride in being the largest travel community in the world, reaching 375 million unique monthly visitors. On the base of the data and reviews that were gathered since February 2000 TripAdvisor developed models for monetization and now offers “ a wide variety of travel choices and planning features with seamless links to booking tools that check hundreds of websites to find the best hotel prices”. None of their current successes (IPO, revenues, etc.) would have been possible without the crowd knowledge.
So how did they convince the crowds to share their experience and review on their website? At the beginning TripAdvisor gathered information from guide books, newspapers and magazines. On the top of the page they had a big button saying “Visitors add your own review”. Apparently customers like to have an outlet for their views, complains, and appreciations, quickly the amount of users generate content surpluses the external “professional” one.
TripAdvisor utilized digital technology to allow users easily rank hotels and restaurants using the star system and provide an “essay type” review. Users provide some personal data about their preferences and type of travel which allows TripAdvisor to calcify the reviews and provide more relative content. For example, I can get reviews from couples who were looking for a romantic getaway rather from families with kids.
One of the struggles TripAdvisor has is to make sure the reviews are genuine and are not generated by the hotel owners. They scan reviews and blacklist hotels with multiple “suspicious” reviews about them.
Having genuine information about the hotels brought more readers to the site which in turn, wrote their reviews as well and the platform grew. Indirect and direct network effects come into play.
As TripAdvisor grew and accumulated data, reviews about hotels, resturants and location, its power grew as well as the barriers for entry for potential competitors grow the bigger the site is. People view TripAdvisor as the place you go to compare hotels or get real reviews about a hotel. If you spend time on the website researching a hotel the probability you would book it through this website increases, especially if the prices you are offered there are competitive.
The more the network grew the more reviews TripAdvisor accumulated. More data points make the start rating more accurate.
Recent Washington Post article states that :” This summer, the annual study “Portrait of American Travelers,” by travel marketing company MMGY, highlighted the barreling trend of user-generated content. Forty-one percent of about 2,800 respondents said they visited a travel review site for destination information, up 7 percent from last year. Only 37 percent said they relied on friends and family for trip ideas. In addition, more than half of the participants said they trust review sites over ratings by such established opinionators as AAA and Forbes.”
Nowadays TripAdvisor works closely with other booking websites to generate additional profit streams. It recently announced a “room booking” deal with Priceline.
Moreover, hotels are utilizing the start system and physically display their TripAdvisor star rank at the hotel lobbies.
TripAdvisor has been phenomenal in leveraging and commercializing the crowd. It operates with negligible overhead to create a very useful and relevant platform. However, I am not sure if it has invested in its top contributors which have enabled the success of the platform.
Great post, Esty. I personally use trip adviser when booking hotels and rely on the data posted there when making my decision. One thing I think they can do better is help customers in the hotel discovery process. They did add some relevant filters to try and better understand the customer’s needs (e.g. whether it’s a romantic getaway or a family trip) but the amount of data on the website can be overwhelming for people who are not looking for reviews of specific hotels. If they improve hotel discovery then TripAdvisor can become a “google for hotels” and not just a website for finding reviews of specific hotels and rankings.
Thanks for the post! I think TripAdvisor has done a phenomenal job crowdsourcing user reviews and vacation ideas. I do agree with MaskofZorro’s comment that the website hasn’t done anything to reward top contributors. People who contribute to the site receive TripCollective points. The cumulative point value of a reviewer is associated with a certain level, which displays the reviewer’s knowledge and contribution to the site. However, the fact that these points are not redeemable for anything like the Yelp elite recognition events or air miles make them somewhat useless for a review’s viewpoint. I think it would be wise for TripAdvisor to start rewarding top contributors to ensure people continue to contribute to the site and also contribute quality content.
I am a huge fan of TripAdvisor! I’ve used it regularly over the past few years and especially this past year organizing travel while at HBS. The one thing I found a bit overwhelming was the amount of things TripAdvisor throws at you when doing a basic search of what there might be to do in a particular city or area. Similar to Noam’s comment above, I feel like it can be tough to maneuver through TripAdvisor’s search results or pull together a tactical itinerary. Given the amount of data they have both from other travel sources as well as travelers themselves, I wonder if there’s an opportunity for TripAdvisor to begin pulling together sample itineraries for future travelers, complete with top recommendations on what to see, how to travel between attractions, and where to stay. They could then open this up to travelers themselves to start contributing itineraries based on specific locations, number of days, etc., to help provide future travelers with a very strong starting point on planning their next vacation. As of now, TripAdvisors does a great job in providing recommendations for one-off aspects of a trip, but there might be potential in becoming a more holistic travel aid.
Thanks for the post. TripAdvisor is an excellent example showing how user-generated content based monetization strategy can be effectively executed. As you correctly mentioned, it is very important for TripAdvisor to ensure that its reviews and ratings are authentic and genuine. In addition, I think building an ability to offer personalized information to its users will be the next key challenge / opportunity for the company in the near future.
Great post – thanks!
Interestingly, the vast success of crowdsourcing reviews in this industry has brought new challenges (and opportunities) to hotel managers. How can you track and react to thousands of reviews on a range of websites? Some start-ups (for example: http://www.trustyou.com) have capitalized on this by using software to semantically analyze and aggregate all the reviews’ text and not just generic star ratings on a few categories.
Its really interesting to think about the difference between TripAdvisor and other crowdsourcing companies that rely on user generated content. When considering Wikipedia for example, you can verify that the facts are true by checking footnotes or having the community help monitor. With reviews, its a personal opinion, which becomes much harder to verify. The system they have in place and the data you mentioned put them in a better position to ensure the quality and integrity of the reviews, however it still can be an issue.
Especially given their new revenue model to allow booking through their website. One of the main reasons they were so trusted was that they weren’t in any sort of relationship with the hotels. I’m curious to see how these new partnerships will impact the public perception around the integrity of the reviews, if at all.