After the recent launch of instant booking (read our post “What is instant booking and how does it work?” for a complete analysis), TripAdvisor has caused a stir and now wants to compete face to face with the main OTAs.
Therefore, has TripAdvisor become an OTA? Despite them saying that they are not an OTA and that they are happy being a “booking supplier”, at Mirai we believe that TripAdvisor has indeed become an OTA, although with a few subtleties.
Why it is an OTA
- Because almost the complete booking process takes place within the TripAdvisor page. It is quite clear that the final client is their target; they want to build loyalty with him so that he comes back to make his future bookings. Whether the hotel likes it or not, it seems a correct strategy from the point of view of TripAdvisor.
- Because, in the eyes of the client, the important thing is that he makes the booking on TripAdvisor as he would in any other OTA like Booking.com. Whatever happens “behind the scenes” is of no interest to the client. The mark of quality and security that the client sees is provided by the TripAdvisor brand.
- Because they earn sales commissions just like other OTAs. In fact, the hotel or OTA that is offering their stock must communicate all booking modifications and cancellations to TripAdvisor at the end of every month.
Why it is not an OTA
- Because the confirmation of the reservation, the last of the typical steps of the booking process, is provided by the supplier, not by TripAdvisor.
- Because the post-sales customer service (modifications, cancellations, questions) is carried out by the real booking seller (the hotel itself or another OTA, who offered their stock and rates to TripAdvisor). In other words, TripAdvisor provides the booking and then moves on.
- Because the client’s details are fully transferred to the hotel or another OTA, and therefore they too can try to build loyalty, something that TripAdvisor does not forbid you to do by contract (something which other OTAs do).
- Because despite you paying commission to TripAdvisor, it will not appear as a channel in your channel mix. It is just a sales source but the channel will in fact be another (your website or an OTA). To this effect, it is equivalent to Adwords, the Business Listings or any other traffic source.
- Because TripAdvisor does not get involved with the payment process, transferring this responsibility directly to the actor involved (hotel or OTA). Processing advance payment on behalf of the hotel is a regular feature of most OTAs except Booking.com and a handful of others.
In any case, the direct nature of instant booking is perhaps not the main issue: While the hotel manager ceases to participate awaiting the resolution of this existential doubt, the real OTAs are gaining market share thanks to instant booking.