TripAdvisor’s Data Strategy Yields Dividends

I suspect that many a bored office worker has spent time researching their holiday destination on tripadvisor as they dream of escaping to a far away beach. The site provides information on hotels, tours and other tourist information along with the manytravellers’ reviews. Once you have chosen a destination, you can see what accommodation gets the best reviews, and then once you’ve chosen the accommodation you can drill down to a level of detail to see exactly what different people have said. Through the partnerships with hotel booking sites you can then check and

compare rates for your chosen hotel.

There was a time, before web 2.0 platforms, when a well-thumbed copy of  Lonely Planet guide book was a favourite way of research accommodation options for the prospective traveller needing to plan their trip. The lonely planet researchers had been there before you, they had tried out the restaurants, the hotels and seen the sights, reporting back with their objective reviews. Now travel websites like Lonely Planet’s own thorn tree, tripadvisor and Gogobot, to name just a few, are able to harness the network effect to build a nearly exhaustive list of travel options for nearly any destination in the world.

Tripadvisor is an immense source of data about accommodation for travellers, with over 60 million reviews of travel services. It has aggregated these reviews to provide rankings, making it easy to navigate and evaluate the information. Tripadvisor’s data has value through aggregation but also at the detail level where real people are providing reviews of services. The coverage within the site has reached and surpassed an inflection point where it’s difficult for other sites to compete – there are few destinations it doesn’t hold information about. It uses the network effect to continue to build this data as well as more old-school strategies. It uses its close commerical relationship with booking site Expedia to prompt travellers – who have booked through Expedia – to post their reviews on their return from holidays. They have further extended the data coverage through aquisitions of other travel sites.

It’s not just traveller reviews that tripadvisor is offering, it’s also detailed listing of service providers, like hotels. These service providers are themselves providing richer data about their hotel or tour, and they are rewarded with greater findability, that is, higher search engine rankings in Google. A hotel listed on tripadvisor will show with its own site ranking in the search and again with the high ranking that the tripadvisor entry holds. Perhaps this is why Google Places, which has a high ranking within Google searches, is a target for tripadvisor’s CEO’s ire.

Tripadvisor is an excellent model of how a web 2.0 platform monetises data collected from people like you and me. The breadth and depth of the data combined with a strategy to build partnerships with the service providers means that revenue for click-based advertising for fourth quarter of 2011 was $99.8 million. This revenue stream is supplemented through syndicating the data to organisations that pay to become licensed partners who are able to use the API to add value to their own sites.

As such a large player there can be a significant commercial impact of negative reviews on tripadvisor. Some hoteliers have questioned the validity of negative reviews of their own service, as well as of positive reviews of their competitors. The very openness that is contributing to the value of the  aggregated data means it is open to individuals skewing the results.

Tripadvisor demonstrates the web 2.0 pattern of data built from network effects can

deliver strong commercial outcomes; the company manages to build increasing returns in a crowded competitive landscape.

Tripadvisor’s competitors, such as gogobot or google places, would seem to offer a more sophisticated social aspect to their platforms. I wonder if this is enough to steal a march on such a dominant player.

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8 thoughts on “TripAdvisor’s Data Strategy Yields Dividends

  1. Tripadvisor has come under fire alot last year for its authenticity and accuracy in some of its reviews. I remember reading an article once where restaurants/hotel will pay users to write positive comments. Although Tripadvisors was intended for impartial reviews, it made me think twice on how reliable data is online.

  2. There certainly has been a lot of controversy, there have been cases of jobs advertised on freelancing sites that suggest they’re looking for people to write positive reviews for money, tripadvisor has been sued by hoteliers and accusation that competitors write negative reviews of their rivals.

    I wonder if this is the plight of data driven platforms like tripadvisor and wikipedia: once they reach a point where they become the dominant reference point we have less tolerance for the vagaries of user contributions. The ‘outliers’, contributions that are biased or just plain untrue, carry a greater weight because of the importance of the platform and this affects our perception of the value of the platform itself. Personally I apply a personal filter, anyone who gives poor rating and in the same review complains about a lack of ice tells me they’re not a traveller with similar requirements to mine.

  3. Interesting article, actually I didn’t know that Tripadvisor was the leading online service in this field. The tone of the comments can certainly have a big impact on a hotel commercially — actually this is a bit scary because I can imagine a situation where a hotel would post “false negative” comments on their competitors’ page just to gain commercial advantage… Does Tripadvisor provide any sort of protection against these type of attacks?

  4. Apparently everything gets moderated but to give you an idea of the effectiveness of the moderation, a journalist wrote about posting ‘faked’ reviews and managed to put in enough to change the ranking of a hotel before getting sprung.

    • Everything does not get moderated – if it passes automated checks on IP address and cookies then it gets published. They only look at reviews if someone complains about them and they NEVER edit as that would mean they would be responsible for content in US law. They will delete a review if it violates their guidelines (like hearsay) but otherwise there is no verification of facts.

      Phil

      • Thanks for posting Phil. It certainly opened my eyes reading the research that you’ve been doing.

        It’s an interesting point you raise about the legal ramifications of the responsibility taken when moderating user generated data. Tripadvisor themselves advise we should be applying our own judgements when reading reviews. They do however assert that they moderate reviews using automated tools to flag suspect reviews which are then assessed by their team of moderators. http://www.tripadvisor.com/help/how_does_TA_ensure_quality_of_reviews. Whether these are effective as you know is another question entirely.

        For me, I get a lot of value out of tripadvisor but I do apply a filter to the reviews that don’t resonate with me, mostly I look for feedback that answers the important questions, is the pool nice and big and are there good eating places in the area!

  5. Apart from the problems and bad publicity that Tripadvisor has faced, I like the idea that I can choose what holiday I want to have online, and read, with a gain of salt, the reviews other people have posted. At least, in some respects, I am informed about the place from another perspective.
    But What i also like about trip advisor is when I am logged into Facebook, it shows which of my friends have used Trip Advisor, and this allows me to see what my friends have said about a certain place they have been to. At least this source, I can trust more than a response that someone has posted who I don’t know.

  6. Tripadvisor has done a lot to promote smaller out of the way hotels and inns and made these properties more visible to travellers, this is a benefit of using crowdsourcing and collective knowledge to augment the traditional travel guides. My friend’s small inn was flooded with bookings after they got good feedback from travellers, it helps them a lot especially those who do not have the massive budget for international promotion. Good choice of topic.

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