months after its official launch to consumers in the United States,
Tripadvisor is making major changes to its Tripadvisor Plus subscription
program in an effort to bring more hotels – particularly large chains – into the
program and, in turn, more subscribers.
The most notable change relates to room
rates. In the original version of Plus, which launched
in beta in December 2020 and opened
to all hotels worldwide in March, hotels provided Tripadvisor subscribers
with rates discounted below what was publicly available on their websites and
in exchange did not have to pay Tripadvisor a commission on bookings.
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, according to Tripadvisor
Plus general manager Sean Graber, is calculated by an “internal algorithm” that
will “pass the vast majority of the commission … back to consumers.” The company
says the reward will equate to the same “level of value” that subscribers
experienced in the original instant-savings Plus model.
Tripadvisor says, at launch, it will
send the money to travelers within 24 hours of check-in through several payment
“I don’t know if we are ready yet to divulge the various partners that we are
going to be using, but they are kind of household names, payment solutions you
would be familiar with. We know that choice in those is really important, so
we’ll launch with a few, and then we’ll continue to build additional payment
channels,” Graber says.
“The vision of this in the longer term is to create a wallet technology on Tripadvisor,
where when you book on Trip, you can earn funds in that wallet … and you can
spend on the trip you are currently taking or bank those funds for future
question of how the wallet will function – for example how a traveler can use
the “wallet” to pay for a meal or spa service during their stay – is still an “open
question,” says Graber. He says Tripadvisor hopes to work with hotels to develop
solutions that will entice Plus members to spend the money while on site,
rather saving it for a future trip or taking it as cash.
piece of functionality that is critical but not entirely clear – how Tripadvisor
will know that the guest has checked in to the hotel, thus triggering the
reward payment. Tripadvisor spokesperson Brian Hoyt says the company will use “a
mix of APIs and other methods” to track check-ins.
According to a source who asked not to be identified because
of a conflict of interest, “I’m
not sure they thought all of this stuff through.”
with the complexity of tracking check-ins, this source says they expect investors
to be concerned about how the rewards will be funded – noting Tripadvisor stock
finished the day down 7.6%.
the hotels pay on their normal commission cycle, which is post-departure,
that’s about seven to 45 days after departure. If Tripadvisor is giving
travelers money up front, basically on arrival, how are they going to fund
that? That’s bad from a cash-flow perspective,” the source says.
says its commission model will be able to “constantly fund” the rewards
enables us to do that is just our technology and connectivity knowledge of the industry,
and we can kind of smooth out the timing of those cash flows so we can provide more
value to our travelers,” Graber says.
says this shift from discounts at booking to cash-back at check-in comes after
getting feedback from both subscribers and hoteliers in the last several months.
Hoteliers have been concerned about rate parity since Tripadvisor was displaying
the discounted Plus-member rate to non-subscribers as a way to persuade them to
“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,” says Brian Hoyt, Tripadvisor spokesperson. Hoyt says the company
expects “thousands of more” hotels to join Plus due to the changes being
But hospitality consultant Simone
Puorto says he believes the changes have less to do with parity issues and more
to do with a desire by Tripadvisor to repackage Plus because hotels in the
program have not had good results. Puorto says several of his clients have been
participating for several months, “with almost no results.”
says a client that is located in “Tripadvisor position number one in one of the
most traveled cities in the world” has gotten just three booking through Plus in
about five months.
Hoyt says Tripadvisor continues
to have “high hopes” for the program and believes that as more hotels join
Plus, the subscribers – and then the bookings – will follow.
“It starts with the hotels savings, but Tripdvisor Plus is
so much more than that. You have to factor in the perks. You have to factor in
the fact you are getting discounts on rental cars, through the Dollar Flight Club
partnership on flights, and 10% off on every bookable experience. The value beyond
the accommodation really starts to add up,” he says.
In recent weeks, Tripadvisor has added subscriber benefits through
partnerships with Rent the Runway and Audible. Plus members also get access to
trip planning services through Tripadvisor Text.
Puorto questions if those benefits are enough to attract
travelers to pay the $99 subscription fee, particularly when there are other
options, such as Booking.com that offers a 10% discount to members of its free
The company says the original instant savings option for
Plus could be maintained for some hotels if they express interest, but it plans to focus developing the rewards model.
Tripadvisor is currently communicating the changes to
hoteliers and will launch the revised program to consumers in Q4. The company
says based on feedback from initial tests, it expects subscribers will welcome
the change. However Graber says if a subscriber no longer wants to be a part of the
program with the new cash-back model, Tripadvisor will accommodate that on a
* Check this interview with Tripadvisor's chief experience and brand officer, Lindsay Nelson, talking about the introduction of Plus during the PhocusWire Pulse: Loyalty For The Long Haul event in March 2021.
PhocusWire Pulse: Loyalty For The Long Haul - Lindsay Nelson of Tripadvisor