Phocuswright 2015: TripAdvisor and Booking.com hail compromise over instant book

Phocuswright 2015: TripAdvisor and Booking.com hail compromise over instant book

Compromise helped bring Booking.com on to TripAdvisor’s Instant Book platform, president and chief executive of the review giant Steve Kaufer told the Phocuswright conference.

He told delegates at the annual event in Florida that the move was a clear win for TripAdvisor and a win for customers who will benefit from Booking.com’s vast inventory.

And he said the move does not impinge in any way on hotel chains seeking to exploit the opportunities of the TripConnect direct booking channel.

Asked about Booking.com’s agreement to use the facility having originally opted not to, Kaufer said:

“The art of compromise is a wonderful way to do business. Maybe we should have started there.”

And he added: “We have had a certain number of conversations with [hotel] chains and I remind them that [Booking.com parent] Priceline as a global provider really does bring value.

“Priceline can help the chain deliver more bookings, more room nights.”

The Booking.com instant booking deal is currently live but just for a portion of TripAdvisor’s traffic.

The compromise the two firms reached is that the booking process allows much greater profile for the third party retailer’s brand.

Chief executive of Booking.com, Darren Huston, told Phocuswright that he did not want to be a ‘dumb pipe’ and that the two travel giants had arrived at a good compromise.

“In the world of technology you can have multiple winners,” he said. “If you are not comfortable with coopetition you cannot be in the business.”

Huston said the outcome agreed with TripAdvisor could become a model for other metasearch sites, although he said he did not think instant book would “change the world”.

Expedia has refused to work with TripAdvisor on instant book, but its chief executive and president Dara Khosrowshahi said it would take another look given the Booking.com deal.

He said the way instant book was originally conceived did not give the brand the customer was transacting with enough visibility.

“TripAdvisor is a super important partner for us. We were not interested in the instant book product based on where it was a year or two ago.

“The formula we have for TripAdvisor is we make very little money on the first transaction, all of the money we make is through lifetime value as we acquire those customers.”

Expedia is seeing lower traffic volume coming from TripAdvisor due to instant book, said Khosrowshahi, but it has been able to mitigate that through alternative sources.

Kaufer said Khosrowshahi’s objection to instant book was always caveated in terms of the way it was originally presented.

However, he said it was now possible to see how far it had moved and it remained to be seen whether that was enough to convince Expedia if it was something they can work with.

“There’s a lot of interest on the part of the hotel brands and OTAs to make sure that the consumer understands that they are booking with Marriott, or Booking.com or Agoda.

“From our perspective we are good with that. We want to be a facilitator, we want someone to be able to consider a product, decide whether it’s right or not and be able to complete a booking on TripAdvisor if they want to.”

Kaufer admitted TripAdvisor was still years away from educating the customer that they can book on the site.

“It’s going to be a multi-year transition for us in the heads of consumers. They are still going to go to all the big booking brands, all the places they are familiar with.”

Asked to comment on the prospect of one day TripAdvisor buying Expedia, the firm it was spun out of, Kaufer said that would not be good for the travel eco-system.

“We do not feel we actually need to be the traditional OTA. We can address all the things consumers are looking for with the model we currently have,” he said.

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