This week’s Update provides additional information (and perspectives) on Tripadvisor’s new subscription program (Tripadvisor Plus), parity updates from South Korea and the latest on Fareportal’s antitrust claims against JetBlue. Enjoy
Tripadvisor Plus Continues to Garner Attention
(“Tripadvisor’s new subscription service represents potential boon for lodging industry,” says GlobalData, March 19, 2021 via Travel Daily News)
(7 Takeaways From Tripadvisor’s Confidential Pitch Deck to Hotels, March 17, 2021 via Skift Travel News) (subscription may be required)
Readers of my weekly Update know that I’ve expressed a few concerns about Tripadvisor’s new subscription program, Tripadvisor Plus – supplemental property-level terms and conditions that harken back to the days when distributors demanded broad discretion in using a property’s intellectual property (terms and conditions that may also require a property to violate any applicable brand requirements), sourcing rooms and discounted rates from wholesalers and bed banks, etc. As seen in the two stories featured above, industry analysts continue to examine the new program and its effects on Tripadvisor and the properties that elect to participate.
- Transition to a Direct-to-Consumer (B2C) Booking Platform. For some, the program represents Tripadvisor’s dramatic shift from a historically B2B player to a B2C player (in direct competition to other B2C platforms – Expedia, Booking.com, etc.). Gone are the days of Tripadvisor serving only as a review site.
- Cost Savings? As seen from our first story above, the fact that the program is “free” (i.e., no commissions or other charges are paid directly to Tripadvisor for being featured) continues to garner much of the attention (though participation requires discounts of at least 10 percent (recommended 15 percent) and other guest perks – wine, upgrades and other additional benefits, all of which presumably cost something).
- Tripadvisor’s Organic Search Results May Not Be as Organic. According to Tripadvisor, the more value a participating property offers (via discounts and other perks), “the higher you [properties] get placed in our organic search results and marketing channels.” For those properties that don’t participate in the new program? Well, you know what happens…Time to check those Tripadvisor terms and conditions regarding needed sort order disclosures.
This week’s Update features several stories on the big online travel newsmakers of last week – Google and Kayak. Enjoy.
Google Once Again Embraces Organic Search and Eliminates Hotel Listing Fees
(“Tripadvisor’s New Subscription Service Edges the Company Toward Online Travel Agency Status,” March 7, 2021 via Skift Travel News) (subscription may be required)
(“Google eliminates fees for hotel booking links”, March 8, 2021 via Phocus Wire)
(“Google Drops Costs for Hotels and Resellers to List Rates in Price-Comparison Search”, March 8, 2021 via Skift Travel News) (subscription may be reqired)
(“VIDEO: What Google's overhaul of hotel booking ads really means”, March 9, 2021 via Phocus Wire)
Was it a response to Tripadvisor’s recently announced roll out of its “free” subscription program, Tripadvisor Plus? Perhaps it was a response to the many antitrust claims filed against Google late last year by the U.S. Department of Justice and state attorneys general. Or is it simply Google’s next step toward total world domination (or at least domination of hotel metasearch)? Regardless of the reasons behind its change, Google’s recent announcement came as a surprise to many. While the industry continues to analyze the significance of the change (see our multiple stories linked above), here’s what we know: Google is adding two new organic slots/links (underneath four paid slots) to users’ search results when they search for accommodations in a particular location. The two new slots will be available to participating hotels, online travel agents or other booking sites without charge. According to Google, the ranking of these free slots will be based on an algorithm that considers price, click-through rates and the landing page experience, but not on any existing commercial relationship with or payment to Google. The links themselves will continue to be provided via feeds from partners, including hotels, online travel agents and integration partners. Who said search engine optimization (SEO) was dead?
This week’s Update features stories on Google’s recently announced online third-party tracking changes, the (permanent) nature of virtual experiences, growth of “digital” kitchens and important updates on what group events may look like post pandemic. For those of you who missed our mid-week update on Tripadvisor’s troubling plans for obtaining discount rates for its Tripadvisor Plus subscription service, we’ve also included that story again. Enjoy.
Are Virtual Experiences Here to Stay?
(“Why virtual tours and activities will stick around after the pandemic,” March 4, 2021 via Phocus Wire)
One small Seattle-based company seems to think so. Even months before the pandemic began, Amazon was working on its virtual experiences offering. With the launch of Amazon Explore in September, Amazon joined Airbnb, Viator and Klook in offering “risk-free” virtual experiences and activities. Now with the pandemic’s end in sight, members of the travel industry are asking whether these travel alternatives will remain relevant. Amazon and other experience platforms believe that these offerings will continue to be used as both an alternative to travel and as a compliment to travel (think Rick Steves). Actual suppliers of the virtual experiences report mixed results, though most recognize they may play an important sales and marketing function in the future. What will be most interesting to watch in our post-pandemic world is whether lessons learned (and the supplier connections made) by Amazon while offering virtual experiences will lead the behemoth e-commerce platform to transition to actual experiences and activities.
This week’s Update takes a close look at Booking Holdings’ recent fourth quarter and year-end earnings release. Enjoy.
Booking Holdings’ Financial Results
(“Booking Holdings focuses on payment platform, connected trip and U.S. growth as 2020 revenue drops 55%,” February 24, 2021 via Phocus Wire)
(“Booking Holdings, Inc.'s (BKNG) CEO Glenn Fogel onQ4 2020 Results - Earnings Call Transcript,” February 24, 2021 via Seeking Alpha)
(“Booking Holdings Reports Financial Results for 4th Quarter and Full-Year 2020,” February 24, 2021 via Booking Holdings)
Booking Holdings (including brands such as Booking.com, Priceline, Agoda, Kayak, RentalCars.com and Open Table) released its fourth quarter and full-year 2020 financial results last week.
Highlights from the release include the following:
- Gross bookings dropped 63 percent in 2020 to $35.4 billion
- Total revenues dropped 55 percent in 2020 to $6.8 billion
- Room nights booked dropped 58 percent in 2020
- Adjusted EBITDA dropped 85 percent in 2020, though even with this drastic drop, Booking Holdings remained profitable on an adjusted EBITDA basis in 2020 ($880 million)
- Marketing expenses in 2020 dropped sharply to $2.2 billion (down from $5 billion in 2019)
- Company staff were cut by approximately 23 percent, resulting in approximately $330 million in personal expense savings (no additional cuts are currently anticipated)
Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.