Brian Hoyt, Tripadvisor
“While we have tens of thousands of hotels
you can access at any given moment through Tripadvisor Plus today, we knew that
we wanted even more supply. Because our belief is that more supply directly
equates to the ability for more travelers to access the benefits of the program.”
Quote from Brian Hoyt, Tripadvisor
spokesperson, in an article on PhocusWire this week about changes coming to the
Plus subscription program.
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Yes, it is true that a larger supply of hotels participating in the
Tripadvisor Plus program would mean that subscribers have more choice over where
and how to access the program’s benefits.
But it's worth remembering that before travelers can access those
benefits, they actually have to pay the $99 fee to become a Plus subscriber.
In the original model, launched in the United States in June, that
annual subscription fee was the only source of revenue for Tripadvisor since it
did not require participating hotels to pay a commission on bookings (in
exchange for hotels giving subscribers discounted rates and perks).
Tripadvisor will not disclose how many subscribers it has – but one
could assume it’s not what the company considers “enough” at this stage, hence
the desire to make changes.
As Hoyt explains, Tripadvisor is changing the fundamental
structure of the Plus program with the hope of attracting more supply. The
complaint from hotels – particularly large chains – was that in the original
model, rate parity was an issue since Plus was openly displaying discounted room
Effective in the fourth quarter of this year,
Tripadvisor Plus will shift to a cash-back benefit for subscribers. Participating
hotels will provide their lowest publicly accessible retail rates and pay a
commission on bookings. After check-in, Tripadvisor will pay the traveler an
amount that it says will equate to the same “level of value” of the original
upfront savings, estimated to be about 10 to 15% - although it’s unclear if
the company will transfer the entire commission amount to the subscriber.
Let’s assume this change does what it is intended to do: satisfies
the concerns of hotels, prompting them to join the program.
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It’s a stretch to believe that the move will instantly result in more
consumers becoming Plus subscribers, which is the revenue driver for
Even with a longer view, will consumers – in large numbers – be willing
to pay $99 up front for the delayed gratification of cash-back at check-in?
Tripadvisor points out that Plus benefits go beyond the savings on
hotels to include discounts on rental cars, flights, experiences and more. That
certainly adds to the appeal, but likely only to frequent and/or big-budget
How many subscribers, and bookings, does Tripadvisor need to have
to make Plus a worthwhile product?
Additionally, there are operational issues. Tripadvisor says the reward
is transferred to subscribers within 24 hours of check-in. But how exactly will
Tripadvisor access check-in data from hotels around the world? How does that
transfer – and the future “wallet” it is planning – become reality? And what
does it mean for Tripadvisor’s balance sheet if it is paying subscribers a
reward at check-in, but potentially not receiving commission from the hotel until
While questions around Tripadvisor Plus remain, it's worth recognizing the value in innovating, testing and - when necessary - starting over. Tripadvisor
says these changes are indicative of the natural evolution of a new product,
incorporating learnings and feedback. As the Plus product evolves, the industry will be watching.
PhocusWire's editorials examine a trend or development highlighted in an article during the week.