Tripadvisor has opened its Tripadvisor Plus platform to hotels, enabling them to participate directly in the membership program.
Hotels can now join Tripadvisor Plus for free. Those that do will receive special badging on the site as well as increased visibility and enhanced placement on Tripadvisor (both within and outside of Plus). They will also receive access to all customer information from each reservation.
In return, they are asked to provide Tripadvisor Plus members discounted rates and perks. Because only members can see the rates, rate integrity is preserved.
Tripadvisor Plus, announced in the fall, is currently in beta testing. Membership costs $99 annually and includes deals and perks from the hotels that are part of the program.
Tripadvisor is positioning Plus as a potentially less expensive distribution platform for hoteliers. Instead of spending money on a commission fee, which can reach as much as 30%, Tripadvisor said hotels can reduce third-party costs. They will then pass along some of those savings to Plus.
Tripadvisor does not take a commission from Plus bookings. Instead, it collects the annual membership fee, which then becomes a recurring revenue source for the company.
'A no-brainer for hotels'
"It is an interesting concept for Tripadvisor, especially," said Lorraine Sileo, senior analyst and founder of Phocuswright Research. "They have the volume of visitors to pull off something like this, and they have the attention of the hoteliers. And it's an interesting business model that gives hotels an option from other distribution channels. It's not a replacement, but it's another option to reach a new audience."
Hotels are likely to sign up for Tripadvisor Plus, Sileo said, as they are typically interested in finding new distribution channels. Additionally, Tripadvisor Plus does not constrain them to OTA parity rules.
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"They're always interested in experimenting, because they feel like they're not giving away the store," Sileo said. "They're not overpaying a commission or a merchant fee. It's a way to try out a new channel. You can turn it on and off whenever you want, so they don't feel like, 'Oh, gee, I have to give inventory during peak times to keep my search results up.' I think that they're trying to set it up so it becomes almost a no-brainer for hotels to participate."
The key question is whether consumers will bite at the subscription, Sileo said. Right now, Tripadvisor has indicated higher-end travelers are more interested in Plus, which makes sense because they are consumers with more discretionary income.
"That's all well and good, but is it going to be more of a niche for higher-end travelers or is it going to reach the mainstream?" Sileo said.