Tripadvisor, friend or foe?
Well, this will depend on who you ask however for most of us working in tourism, there is a general agreement that they are very much a foe. A brand that was once loved by the entire industry, built up from humbled beginnings has now become a $billion tech company taking advantage of the small business that got them to where they are today.
Why are they so disliked? Well, it’s not the reviews. Online reviews are a great tool for consumers to get a better idea of what to expect for goods and services. Tour operators who put in the effort to give their guests a great experience should be rewarded with positive online feedback!
But did you know that Tripadvisor takes a 26% commission off all bookings booked through them (or Viator, their sister company). 26%! Why? Because they believe they connected the customer to the business, and if it were not for them, businesses would not be found. There is no doubt that compared to 10 years ago, a lot more guests book their tours through them, rather than through us directly. However if Tripadvisor did not exist, they wouldn’t be here to block traffic that would otherwise find us directly anyway!
It should be noted that Tripadvisor’s success is purely thanks to us! ‘We’ made it the brand it is today. ’Us’ being collectively all the small tour operators, hotels, restaurants etc. that have been linked to Tripadvisor for so long. For years, we would display their stickers, certificates and review requests on our websites and physical premises. For years we told all of our guests to rate us online and those early years most guests had never heard of Tripadvisor. However with 10’s of 1000’s of us all over the world pushing their brand day in day out, we collectively made them the most recognised review site in the world! This of course has never been acknowledged by them and as for being thanked for our help hahaha neither.
In the early days, it was only a review site and a very good one! The brand was trusted by the industry as well as all who used them. However, once they got to a point where they became one of the most visited travel sites in the world, they decided to capitalise on their extremely high traffic and changed from being a review site, to an online travel agency. It was done gradually. Initially, allowing them to sell our tours online for a commission was optional however why would any of us sign up with them if people were visiting our site anyway and booking directly?
The businesses who rated in the top 10 began to slowly plummet and lesser quality businesses began to feature at the top.
But over time, they made changes to the site whereby they began displaying businesses who sold tours through them at the top of search lists (rather than the most highly rated). The businesses who rated in the top 10 began to slowly plummet and lesser quality businesses began to feature at the top. Customers were being directed away from the better businesses to the ones Tripadvisor could make money off from their sales commission. So eventually, most of us were forced to sign up.
At the same time, due to their huge popularity (thanks to us), they started to dominate google search results. They had the traffic and now financial power to invest in SEO superpowers that small businesses simply could not compete with. These small businesses, who used to be on page one with google results, were now buried a number of pages behind, losing crucial direct traffic.
Eventually, we, the better operators were forced to join them as we were losing customers. We watched mediocre tours companies take the lions share of bookings, even when their reviews were remarkably average. Direct bookings were happening less and less. So we had to bite the bullet and join them to remain competitive.
At first their commission was a modest 10% but over time, as they became bigger and stronger they steadily increased their commission to now 26%. So for every $100 a guest spends on a tour, $26 goes to Tripadvisor! An additional 10% is a goods and service tax which only leaves 64% (and less after all of our operational expenses are paid). 26% is an extraordinarily high price for customers to spend 5-10 minutes searching and booking a tour on their site, when we are left with 64% for spending 11 hours working hard to provide our guests with a wonderful day experience to the Hunter Valley.
It’s really disappointing to realise that Tripadvisor is taking advantage of their position of power, especially because that position is due to us. We built them. Greed seems to be their driving force as they strive to be another $billion tech company.
Apart from us, the operators, hotels etc, the losers are our guests. Because as they have forced these higher commissions, we have been forced to increase our price to partially counterbalance their cost. I say partially as we can’t increase it too much as we still want to remain competitive and affordable. Let’s say we want to include an activity that has a cost? If an activity costs us $10, we now have to charge guests $13.50 extra to accommodate their 26%.
The sad fact is though, most guests will never know this. So Tripadvisor with continue to grow and become a brutal force in the industry.
Can this be changed? Yes!!! In the same way as we all built Tripadvisor by telling all of our guests to visit their site, we can all, as a whole, begin to educate our guests, one by one, about how important it is to book directly with small businesses, so we don’t have to pay these exorbitant commissions. If you are an operator, tell your guests! And as we travel around meeting other fellow travellers, bring this up and let them know! You don’t need to feed $billion tech companies unnecessarily. Your travel money should go to those directly giving you the wonderful experiences you will remember for years to come!
Oh and it should be noted, there are others like Tripadviser/Viator such as Expedia, Klook, Get Your Guide, Airbnb, booking.com…remember, book direct!