Holiday Rentals, Flipkey & Tripadivsor! What Do You Think?

I have had a few conversations in the last month with home owners, who have used FlipKey and also received some of their comments on their business with TripAdvisor!

First it’s important to understand how the companies work and where the ownership and shareholder implications affect their decisions. The following is a brief timeline and are extracts from various official sources. It’s not well known they control so much digital web space, but we weren’t aware how much!

Trip Advisor History – The Acquisition Specialists (Wikipedia ref)

TripAdvisor was founded in February 2000 by Stephen Kaufer.  The company was purchased by InterActive Corporation in 2004. IAC spun off its travel group of businesses under the Expedia, Inc. name in August 2005. In May 2007 TripAdvisor acquired Smarter Travel Media operator of SmarterTravel.com and BookingBuddy.com; SeatGuru.com; TravelPod.com; and Travel-Library.com. Also in May 2007, TripAdvisor acquired The Independent Traveler, Inc., publisher of Cruise Critic.com and IndependentTraveler.com

In February 2008, TripAdvisor acquired Holiday Watchdog a user-generated travel site in the U.K. In July 2008, TripAdvisor acquired Virtualtourist, a travel website with reportedly over 1 million registered members and OneTime.com a travel comparison site.

In July 2008 TripAdvisor acquired a majority stake in FlipKey.com, a vacation-rental website.  In October 2009, TripAdvisor purchased Kuxun.cn, China’s second-largest consumer travel site and hotel and flight search engine.

In April 2009 TripAdvisor launched its official site in China daodao. Since then it has indexed more than 20,000 hotels and restaurants information and customer reviews, and made all kinds of top lists, becoming one of the biggest travel websites as of now.

In June 2010, TripAdvisor acquired the United Kingdom’s largest independent vacation rental website, holidaylettings.co.uk. In September 2010, SmarterTravel, part of TripAdvisor Media Group, launched SniqueAway, the first members-only site where each travel deal is endorsed by the people.

In April 2011, it was announced that Expedia would split into two publicly traded companies by spinning off the TripAdvisor brand of travel sites. According to Expedia CEO Dara Khosrowshahi, the move, “allows the two businesses to be pure plays and to operate with the proper amount of focus to grow respectively.” In December 2011, TripAdvisor was spun off from Expedia in a public offering.  Note “Pure Plays”(ed)

August 2008 – “The Acquisition”

TripAdvisor today announced it has purchased a majority stake in FlipKey, a leading vacation rental review site.  ”Vacation rentals are the hot emerging category in travel and FlipKey has a great foundation and a smart business approach,” said Steve Kaufer, founder and CEO of TripAdvisor. “We believe we can help FlipKey become the leader in the space and, in turn, FlipKey content will satisfy a growing need for TripAdvisor users.”

“TripAdvisor is ‘it’ in the world of user-generated travel reviews, so we are thrilled to have the support of the TripAdvisor Media Network,” said TJ Mahony, FlipKey founder and CEO. “We’re honoured to have been chosen as the vacation rental provider to the world’s largest travel community and look forward to working with TripAdvisor to build our business.”

What People think about Trip Advisor!

The Guardian Newspaper produced a great report that covers nearly all elements of the good and bad!  Here are a couple of extracts.

http://www.guardian.co.uk/travel/2011/jan/25/tripadvisor-duncan-bannatyne

1.       No one is more annoyed by TripAdvisor right now than Duncan Bannatyne, the Dragons’ Den panellist, who is considering legal action against the site, which he has called “despicable and cowardly”. Bannatyne complained that a “dishonest” review compared his Charlton House spa hotel in Somerset to Fawlty Towers and asked TripAdvisor to remove the posting. “They have tried to bully me, they have sent threatening letters and emails, they have urged me to shut up, but they won’t speak to me directly,” he said. He says publishing defamatory or fake reviews is a threat to hoteliers, who cannot fight back.

Emma O’Boyle, UK spokeswoman for TripAdvisor, then issued this statement: “We offer hoteliers the opportunity to respond to every review written on TripAdvisor. However, in the case of Bannatyne’s hotels we have had several worrying examples of individuals being intimidated by Bannatyne and his hotel representatives. TripAdvisor has a zero-tolerance approach on bullying as we defend the freedom of speech. We also take fraud very seriously and will investigate these occasions thoroughly.”

2.       An “online reputation services” company called KwikChex, acting on behalf of more than 1,000 hoteliers, says it estimates there are at least 27,000 legally defamatory comments on TripAdvisor, “allegations that are false and should, if necessary, be tested in court”. Chris Emmins, who runs Kwikchex, is in the process of contacting TripAdvisor about some of these specific comments, with “a notification saying: ‘We regard these reviews as suspect, this user may now be open to legal action, please inform them.’ We’re hoping that people will reconsider their comments, particularly if they are a competitor, and remove the material they’ve posted . . . In virtually every country, when it comes to defamation, the judge will ask what opportunity the defendant has been given to correct the situation, so we’re going this route to say, legally, we’ve done everything we can.” After that, Emmins suggests, they’ll take further legal action against the defamatory reviews that haven’t been taken down.

Now move onto the economist and read this article from 2011.

http://www.economist.com/blogs/gulliver/2011/08/hotel-reviews

“I was interested to read HOTELS magazine’s interview (requires log-in) with Christine Petersen, president of TripAdvisor’s “TripAdvisor for Business” division. In particular, I enjoyed her rather blasé response to a question about ways TripAdvisor could combat the problem of fake reviews on the website.

When HOTELS asks if TripAdvisor has considered requiring would-be reviewers to supply a reservation number in order to prove that they stayed at the property they want to assess, Ms Petersen responds:

No, because we fully believe in what we do. We’re not a booking site, and I don’t care how someone books. Think about road trips in the U.S. If someone is driving along and notices, “Oh, there’s a Holiday Inn here.” They may pay in cash and not have any reservation number and then not be able to post a review…………………………”

Note the booking site comment. I guess the hotel adverts and Bookingbuddy etc. generate no revenue!

The Trip Advisor Experience (we aren’t onto FlipKey yet)

TripAdvisor is all about hotels and this is their first modus operandi.  Key space is taken by the hotel booking systems and then it’s a site “car crash” (or is it just me that think this?).  Somewhere between the designers, the board and the competing companies (they own) you get lost in a morass of information from individuals and businesses, none of whom you know have ever heard of or are even likely to be so. Throw in a pop-up survey,  best destinations, sponsored links, weather, restaurants, friends flights, reviews and you may just miss the holiday rentals (top menu bar).

So what do we have under this rental menu item?  Our offices are in Torquay, so when we search we for Torquay have:

“140 Trusted Torquay Rentals” (Really! Trade descriptions may have something to say)

Most of which are agents properties with one or two reviews only, which either means this system isn’t too popular as a review centre or they haven’t been listed for too long!  The inventory of course comes from FlipKey/Holiday Lettings.

Take as an example in Torquay, Masts B5, one photograph and £499 – £1319 per week as shown on FlipKey (the agent looks like it’s taken the fishing net and cheap route) and an identical listing on Trip Advisor, just displayed differently.

Now look at HolidayLettings.co.uk the other company within the group! More photos as this site was around long ago. There is a different “From” price but the FlipKey and Holiday Lettings calendars are synchronised, but Trip Advisors isn’t. We wonder why? Also Holiday lettings photos are transported across or maybe not paid for!  Is it technology or price or just bad integration or management? Very confusing and even more so when a complete novice tries to get to grips with this!

There is nothing terribly clever about any of this, except that the owner of a property who used to have a choice of focussed purist sites is now being bombarded with upsells and cross site marketing that seems, from correspondence, to result in more enquiries but actually less bookings!  This costs an owner more money, means more work and less returns.  It feels like one of those African pools,

you see on wildlife programs that dry out in the summer and all the fish crowd into shallow water and then get picked off at will by predators!  Or when a wilder beast comes to drink and gets dragged in and devoured by a Nile crocodile!

Now awards are being made to businesses by this group for excellence, badges are being handed out that can be added to websites, plus people regularly add reviews to their own websites about how good they are (you never see the bad ones though)!  Why then are many places with excellent reviews actually empty (we know a few!).  Personally I book a rental based on communication with an owner or a good agent or on the referral of a “good” friend I can trust on his tastes, not strangers or possible competing accommodation provider who have managed to infiltrate the review system.

What makes the whole thing more galling is that these sites all “play” with subscriptions and cross marketing. Unsubscribe from FlipKey and we believe you lose your excellent reviews on Trip Advisor.  The listing contact details, fair enough, however some people have considered this act of “pay or lose the data” akin to blackmail. You could of course copy the reviews to your site, but no doubt the T&C’s will somewhere say you can’t do this!

TripAdvisor and its group have somewhere less than 150,000 holiday rentals on their site(s) compared to HA with 630,000+, so a long way to go to catch the behemoth. The issue is that the ponds are getting smaller for the home owner, who, let’s face it, has invested a huge amount in their property and is trying to do the best they can!  (Imagine if TA and HA combined forces then the pond will dry out).

Unfortunately, for home owners there are some decisions being made out there by the few that affect the whole. This is quite an unusual affair in a world where entire countries are crumbling through the use of social networking.

Even more curious is that the entire model could be reversed to put the owners in charge and to make a share of the “Goliath” company’s incomes, reduce the marketing spend and make a collective industry.

Holiday Homes aren’t hotels, they aren’t hire cars and they are very personal affairs managed by individuals and small companies.  Trip Advisor comments are more likely to be negative than in a well organised hotel as the expectations on a rental’s amenities and space are often higher and the ease with which fuses or light bulbs can blow, things can be missed on a clean in a much bigger space  is greater.  These things should be covered and managed, no doubt, but hotels have people on site 24/7 so minor irritants can be sorted immediately! The upside is many rental owners pay personal attention.

Consider however that margins are narrower, seasons shorter, food and drink don’t increase the income and the taxes are often quite punishing. Any increases in marketing spend and leveraged cross selling hurts!

It is possible that we are only a small step away from a major sea change in this industry, championed by owners!  Perhaps this is why we are now seeing offer after offer from these giants as owners become despondent and seek new pastures to get their business!

 

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