511-004 TripAdvisorCompany Background In February 2000, Kaufer and his cofounders Langley Steinert, Nick Shanny and Tom Palkastarted TA out of their personal frustration. Kaufer recalled: We found it impossible to get unbiased travel-related information on the Internet. We didn’t want slick brochures or polished websites of hotels that allowed you to make a reservation but provided no deeper insight. We wanted to know what other people had to say about their stay. We found several blogs that captured personal travel experiences, but there was no single place where information from all these individual blogs was available. This formed the germ of the TA idea: a site that provided consumer comments about travel to aspecific locale. Kaufer and his small team indexed blogs, combed guidebooks and newspaper articles,and soon garnered a steady loyal following. While becoming popular with consumers, early attemptsto monetize the site through banner ads and by licensing the content failed miserably. TA thenreached out to OTAs such as Expedia and offered to provide them text links on its site. These adsshowed a 10% click-through rate, and by 2002 TA became profitable. In 2004, Kaufer and his partners sold TA to InterActive Corporation (IAC) for $210 million in anall-cash deal. The site was spun out as part of Expedia, Inc. in 2005, along with other well-knownExpedia sites such as Hotels.com and Hotwire.Growth and Culture The firm experienced rapid growth from the time of its spinout, hitting one million reviews inJanuary 2005. Kaufer stayed with TA, and in 2010 sat at the helm of the TripAdvisor Media Group,which consisted of 17 companies including TA, Seat Guru and Cruise Critic (see Exhibit 1). By 2010, TA was the largest travel site in the world operating in 24 countries and 16 languages,with listings for 455,000 hotels, 92,000 attractions and 564,000 restaurants in over 71,000 destinationsworldwide. It had over 40 million reviews and opinions and was getting 21 new contributions everyminute (see Exhibit 2 for TA’s growth, and Exhibit 3 for its organization chart). In May 2010, TA had35 million unique monthly visitors, more than Travelocity.com, Priceline.com and Orbitz.comcombined, and significantly more than its direct competitors such as Yahoo Travel (21 million uniquevisitors) and IgoUgo of Travelocity (1.1 million unique visitors).2 In 2009, TA had revenues of $352million and operating income of $196 million (see Exhibit 4). Kaufer maintained an entrepreneurial culture with informal meetings, free food and freedom formanagers to make decisions. The company believed in the philosophy that “speed wins” andmanagers were encouraged to quickly launch a product and then test them rigorously. TA was ametrics driven organization and everything was done with a focus on creating good user experienceand generating revenues for TA. The culture was well aligned by a company-wide attitude thatprompted the question “What would Steve think?” when a new idea bubbled to the surface.Core Business TripAdvisor displayed listings for hotels, bed and breakfasts (B&B), inns, restaurants, andattractions based on user-generated reviews. These listings were ranked based on user ratings andrecommendations (Exhibit 5 provides a screen shot of a typical hotel listing and reviews).2 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
TripAdvisor 511-004Consumers Visitors to the TA site could access reviews, see descriptions of the listed entries, compare prices,review photos, and map listing locations. When users were ready to book their trip or hotel, a textlink on TA directed them to an OTA or to the hotel site. TA operated independently of Expedia,sending leads to its parent company as well as all OTA competitors. Users could post reviews on alisting after logging in as a member. Membership on TA was free and in May 2010, the company had20 million registered members. A February 2009 survey of mainstream Internet users reported that 53% of those surveyedindicated that reviews and recommendations led them to choose their travel accommodations and35% had chosen a travel destination based on online reviews and recommendations.3 Less than 2% ofTA users wrote reviews. To ensure that reviews were unbiased, TA prohibited hoteliers from offeringincentives to write reviews. A Forrester study reported that most users wrote reviews because they were pleased with theirhotel or travel experience; some wrote because they were disappointed; some wanted to have aconversation; and a few used it as a shortcut to reach management.4 Kaufer believed that “users writereviews since they feel grateful for the advice they got on our site.”Business Owners Hotels, inns, and OTAs generated significant traffic through TA, with a large amount of traffic formany small B&B inns coming from TA. However, some business owners expressed concern overreviewers’ anonymity, wary that competitors or angry customers could skew reviews and harm theirreputation. In April 2009, a Detroit restaurant sued TA “for failure to investigate the allegationscontained in a false user review,”5 although the suit was later dropped. Daily Mail, a U.K.-basednewspaper, reported in late 2010 that “Kwikchex, an online reputation management company actingon behalf of 800 hotels and restaurants, plans to publish a list of thousands of [TripAdvisor]reviewers that it suspects of fraudulent and defamatory posts.”6 Kaufer, however, remained confident about the authenticity of reviews posted on TA. “There aretwo things we have going for us as a trusted travel advisor,” he said. “The sheer amount of reviewsfor a listing helps guarantee their authenticity and make fraudulent ones obvious outliers. But wealso have sophisticated software designed to detect fraud or patterns of fraud, and years ofproactively catching those trying to bias our system.” To address the concerns of business owners, in May 2010, TA created a new division: TripAdvisorfor Business. Christine Petersen, previously TA’s chief marketing officer, was appointed as presidentof this new division. Petersen explained the new division’s goal: We’re not just focused on the consumer. We encourage owners to monitor their reviews and address the negative ones. We often hear from travelers that how a property responds to criticism influences their booking decision more than the criticism itself. We also help business owners in analyzing TA review data, monitoring consumer satisfaction trends, and identifying which reviews might warrant a response. We have stepped up our efforts to help the hospitality industry around the world. During the April 2010 oil spill that hit the Gulf coast region of the U.S., for example, we stepped in to help travel businesses market themselves. 3 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
511-004 TripAdvisorMarketing To build traffic on its site, TA focused on three things: search marketing, public relations (PR) andsocial media. “We barely spend anything on brand or television advertising,” Kaufer noted. Search marketing TA relied heavily on search engine marketing (SEM) and its affiliateprogram to bring travelers to its site. Dena Yahya, director of traffic and revenue management,explained the challenge in managing SEM at TA: In 2010, we plan to spend tens of millions on SEM. We buy over 100 million keywords on Google, Yahoo, MSN and other search engines, almost anything that users may be typing in a search box when they start planning for their vacation. Examples of keywords for a Boston vacation might include “Boston hotels,” “Backbay hotels,” “room in Boston,” and “three-star hotels in Boston.” Once you include all possible travel destinations around the world, the number of keywords grows considerably. Add to it keywords in different languages and misspellings and the number goes up to over 100 million. Managing this large set of keywords involves developing a sophisticated strategy of which keywords to bid on, for how much, and how to assess their effectiveness. We build scripts to do the legwork on this, but in the end some manual oversight is needed to look at the traffic and understand profitability. We constantly test and experiment. We get a high return on our SEM spend, and may as much as double it next year. We’ve seen 90% year-over-year growth, and we’ve done it by being data driven. Yahya’s team also managed TA’s affiliate program, which included 1,800 partners ranging fromlarge portal sites such as shopathome.com to smaller niche sites such as romantic-vacation.com.Affiliates could take advantage of a range of TA tools such as text links, banners, and content widgetsthat could include teaser text of user reviews. Referrals through these sites had a 7% click-throughrate (CTR) and affiliates typically had a 50/50 revenue sharing arrangement with TA for these clicks. Public relations TA leveraged PR to build its brand and keep its name in the news. Petersen,who joined TA in 2004 to lead its marketing function, explained: We had no money to spend on brand when travel sites, such as Orbitz, were spending tens of millions of dollars annually. So we brought in someone to do PR. We focused on tapping the member base to capture trends and preferences in travel, and using PR to build brand recognition. Each year we’re able to create value through PR that would otherwise cost us hundreds of millions in advertising dollars to replicate. As the membership grew, TA’s surveys tapped an active and passionate panel of TA members.“We currently survey 10,000 TA Insighters survey panela members regularly, and generate news thatappeals to the media and our users,” said Brooke Ferencsik, director of communications. Surveysgenerated news about “where to go for Labor Day,” favorite New York hotels, or consumersreactions to airline baggage fees. Travelers’ cleanliness ratings of hotels generated the company’swell-known “dirtiest hotels” list. Ferencsik recalled, “When I first started, I was calling all the media.Now the media calls us for TripAdvisor’s opinion on travel developments.” The PR team managedthe effort by monitoring news, fielding surveys, and building relationships with media.a TripAdvisor’s Insighter survey panel was made up of 10,000 U.S. members who were invited to join TA’s traveler panel andsent email invitations to take TA’s regular online surveys regarding travel trends and preferences.4 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
TripAdvisor 511-004 Social media TA was actively engaged in social media. The company built a Facebook appcalled “Cities I’ve Visited” that allowed Facebook users to pin maps indicating where they hadtraveled in the world. By mid-2010, the app had five million monthly active users, 18 million lifetimeusers, and more than 1 billion pins posted and five million pins being added daily. In summer 2010,TA introduced TripAdvisor Trip Friends to allow users to get travel advice from their Facebookfriends while on TA’s site. TA joined Twitter in 2009 and within a year it had 92,000 followers. Twitter enabled TA todevelop close relationships with travel bloggers and other influencers in the travel industry. In March2010, TA launched a mobile website and soon became a very popular mobile travel website.Monetization TA had three main sources of revenues: clicks on its text links (majority of revenues), display adsand subscription fees for its business listings. Text links Visitors to TA’s site read hotel reviews to decide where they wanted to stay for theirupcoming travel. Many of these visitors clicked on the “check-rate” button under a hotel name to findits rates and availability for their travel dates (see Exhibit 5 for examples of the check-rate buttons).Once clicked, the links took users to OTA sites such as Expedia, Orbitz, Travelocity, or hotel websites.TA charged OTAs and hotels on a cost-per-click basis. Costs typically ranged from $0.25 to $1,depending upon country, language, and placement of the link. Hotels were a profitable part ofbusiness for most OTAs. For example, Expedia earned almost $70 per night for a luxury hotel bookedthrough its site, and in 2010, hotels accounted for 63% of Expedia’s revenues compared to only 12%from airfare transactions.7 Display advertising Display, or banner ads, were the second largest source of revenue for TA.Robin Ingle, senior vice president, global advertising, explained the challenges related to display ads: In the beginning Steve was against display ads since they interrupt user experience and create clutter. In 2005, one product manager led an initiative to convince Steve to allow display ads under very specific guidelines, and sold by an outsourced sales firm. As the revenue stream proved incremental and minimally disruptive to the user experience, the initiative was expanded and the sales function taken in-house. While the majority of our display ads are travel related, we now accept non-travel products when approved by management. Less than 10% of total display ads are for these non-endemic businesses, like financial services. Unlike text links that are monetized on a cost-per-click (CPC) basis, we sell display ads on the basis of cost-per-thousand (CPM) impressions. We get an average CPM rate in the mid-teens (dollar- wise) on our site. One challenge is to maintain these premium rates when ad networks sell their inventory at CPMs of less than $1. Business listings In January 2010 TA introduced business listings to allow business owners toadd their hotel contact information on the TA site. Designed primarily for small businesses, thisservice allowed business owners to manage their TA listings by adding a phone number, email, webaddress and discounts to consumers via coupons. Additionally, TA offered free widgets and help sothat owners could promote their businesses by adding TA ranking and reviews on their website.Business listings was a subscription service with an annual fee of $500 to $10,000 depending on thesize of the business. In May 2010, this service became a part of the newly launched TripAdvisor forBusiness. 5 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
511-004 TripAdvisorChallenges TA was in an enviable position with continued growth and a highly profitable business. However,it faced three challenges. • TA formed TripAdvisor for Business to help business owners and generate revenues through business listings, but this posed a new challenge. Petersen explained, “How do I provide value to a New York City hotel that is listed as #42 on our site? This hotel may be a great value, but consumers often do not go past the first page of listings. We want to help this hotel but we also want to maintain the integrity of our traveler rankings.” • TA revenues came almost exclusively from its hotel listings even though it had 564,000 restaurant listings and several million restaurant reviews. Competitors such as Yelp were better known for restaurant reviews than TA, but Petersen believed that TA could broaden its portfolio even more to cover local activities such as fishing charters, scuba shops, taxi drivers or translators in China. The company recently launched its flight and vacation rental services to broaden its portfolio but it was still too early to assess their success. • TA was an undisputed leader in the U.S. market, but it faced significant challenges in many of the international markets, such as China. Could it replicate its success in global markets?China By 2010, TA operated in 24 countries worldwide. “It is relatively easy to launch a newinternational site in the local language,” Adam Medros (HBS 2004), vice president of global product,noted. “We launch a few global sites every quarter. We usually do not have marketing ordevelopment people on the ground in our international markets, with the exception of a few marketssuch as the U.K. and China.” Kaufer elaborated on TA’s international strategy: We do not sweat the details, but instead launch a site and refine it over time. Right now the reviews are mostly in English even if the site itself is in the local language. We have not done any in-depth consumer studies, since consumer behavior tends to be quite similar across the globe. Differences in local markets are primarily at the level of competition we face. We are already quite successful in many markets, such as France, Spain and Italy. However, Germany and China remain challenging.Entry in China In 2008, Kaufer hired Hao Wu to launch TA in China. Wu had worked in Silicon Valley for severalyears before moving back to China in 2004. For the next few years he worked for Alibaba beforejoining TA. Wu started building TA’s Chinese operation by translating a lot of text available on thecompany’s U.S. site and adapting it to local tastes. TA launched its Chinese site in April 2009 underthe name DaoDao, which came from a Chinese expression meaning “to arrive.” By August 2010,DaoDao had 40,000 Chinese hotel listings; 600,000 user reviews and six million unique monthlyvisitors that were growing quickly. In 2009, the Chinese online travel market was estimated to be $6.9 billion, and it represented only11% of the entire travel market. The online sector was expected to grow to about 20% by 2011.8 Theundisputed local leader among OTAs was Ctrip with 53.6% market share, followed by eLong, anExpedia company, with a 9% share.9 Similar to Expedia and Orbitz, Ctrip enabled users to search andbook air, hotel and train travel. Taking its cues from TA, Ctrip also provided hotel reviews on its site.6 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
TripAdvisor 511-004 In October 2009, as part of its $50 million investment in China, TA acquired Kuxun, China’ssecond largest travel search engine that helped customers find the best prices on flights, hotels, andtrain travel throughout China. TA expected Kuxun’s trip planning functionality to complementDaoDao’s hotel review content. Kuxun continued to operate as an independent company, though itshared information with DaoDao. Wu described how DaoDao adapted the site to local conditions: Chinese consumers are very price sensitive, so we decided to include travel deals on our site. This is a deviation from our U.S. operations but similar to what the Chinese OTAs offer on their sites. Sometimes hotels provide this information to us, but we also collect it ourselves by scanning the environment. In addition, we encourage users to write reviews by offering them some incentives such as frequent flier miles on Air China, or a DaoDao Green Card that offers consumers travel discounts. Our goal is to get one million reviews by the end of 2010.Challenges Wu described four of his most pressing challenges: First, China is a challenging market for any international company. Yahoo and eBay failed in China; Google pulled out of the Chinese market recently; and About.com and Monster are struggling here. Local competition reacts very fast and is quick to copy what it sees working in the U.S. or elsewhere. To act fast we need to find a way to operate as a local startup. Can local teams do whatever it takes to be successful? Our challenge is to find ways to act locally and still be able to coordinate with headquarters. Second, less than 10% of Chinese consumers do online travel booking. Chinese online population is generally young with limited disposable income. Travel behavior in China is also different. Most Chinese travelers take one trip per year, travel to near-by destinations, and do not have a lot of experience with hotels. We still have to educate the market. Third, we have only a limited number of established OTAs in China who are bidding for leads, so monetization is a challenge. In July 2010 we introduced business listings but have had only limited success so far. Finally, we currently have 45 full-time employees and we plan to increase that number to 60 or 70 by the end of 2010, and to almost 100 by 2011. Finding local talent is tough. People working in structured international businesses, such as Google, may not be perfect for us. We want people who have local knowledge but also have an entrepreneurial spirit.Vacation Rental10 Kaufer considered vacation rental to be a natural extension of TA’s hotels listing business.Recognizing the large potential of this fragmented market, in August 2008, TA purchased a majoritystake in a U.S.-based company Flipkey.com, which had a listing of 50,000 vacation homes in all 50states of the U.S. “We bought Flipkey for their technology and their relationship with propertyowners,” said Kaufer. T.J. Mahony, the founder of Flipkey, stayed on after the acquisition, along withall of his team. In June 2010, TA acquired U.K.’s largest independent vacation rental site, Holiday Lettings, whichhad 40,000 properties across 116 countries and almost 25 million visitors per year. After theacquisition, Holiday Lettings continued to operate as an independent site under its own name. ByAugust 2010, TA had an inventory of 110,000 vacation rentals around the globe (see Exhibit 6 for anexample of a vacation rental listing). 7 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
511-004 TripAdvisorThe Vacation Rental Market Vacation rental properties included homes, condos, villas, cottages and timeshares. Propertieswere available either via rent-by-owners (RBO) or professionally managed vacation rentalmanagement companies (VRMC). The RBO market was slightly larger than the VRMC market interms of inventory supply and revenue. The RBO market relied heavily on renting through personalcontacts, and fewer than three in 10 owners listed their property online. The VRMC marketrepresented an estimated 5,000 companies; most VRMCs had fewer than 100 units undermanagement. Fewer than half of all VRMCs had bookable Web sites or used online intermediaries. According to a study by PhocusWright, the U.S. vacation rental market was $24.3 billion in 2009,more than 20% of the U.S. lodging industry’s revenues, and 8% of the U.S. travel market. In 2008,only 12% of all vacation rentals were booked online, but this was projected to grow to 22% in 2010.11VRMCs represented the bulk of online bookings, as most RBO sites did not offer online booking.Exhibit 7 shows a comparison of the hotel and vacation rental market.Consumers Only 10% of U.S. adults reported staying in a vacation rental between 2000 and 2010, and mostconsumers rarely considered vacation rentals when planning leisure travel accommodations. Lack ofwell-known brands, low category awareness, high complexity around rental property bookings,concerns about quality, and lack of “hotel-like” services were some of the concerns that preventedconsumers from considering a vacation rental (see Exhibit 8). In addition, consumers lacked trust andthere was significant fear of the unknown, which was accentuated by many fraudulent listings. Yet,once converted, renters were highly loyal, with nine out of 10 stating their intention to rent again.12Competition Given the fragmented nature of the market, competition was hard to pin down. Many ownerschose to manage their properties themselves on sites such as Craigslist. Others paid a fee to list theirproperties on one of the many RBO or VRMC rental sites, such as HomeAway, LesiureLink,ResortQuest, VacationRoost and ClearStay. Major OTAs such as Expedia and Orbitz also dabbled invacation rentals, with mixed results. The OTAs’ model was driven by volume, which worked well forhotels, but was not as successful for vacation rentals. In 2010, HomeAway was by far the largest online vacation rental provider, with 11 online brandsin its portfolio, representing 540,000 listings in 120 countries.13 It had 10 global offices, and 2009revenues of $120 million.14 HomeAway had acquired several companies in the recent past, andMahony described their strategy as “fast and furious.” Unlike TA, HomeAway was actively engagedin brand advertising and it aired its first Super Bowl commercial in February 2010.Challenges Within two years of its entry in the vacation rental market, TA had amassed 110,000 listings. RBOspaid an annual fee of $239 (or $29.99 per month) to list their property with TA, while VRMCstypically paid about $10 for each lead. Petersen gave TA a C-minus for its performance in this marketand highlighted several challenges the company faced in its vacation rental business: • How could TA gain a foothold in a fragmented market where HomeAway had a major lead? Mahony described the dilemma, “HomeAway has 700 employees, raised $0.5 billion, and acquired 18 largest vacation rental companies in the world. Should we be fast and furious like HomeAway or slow and deliberate to build quality listings and earn users’ trust?”8 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
TripAdvisor 511-004 • To grow in this market, TA needed to acquire both owners and renters. The owners market was fragmented and therefore hard to reach. Negative user reviews could discourage owners from listing their properties with TA. Renters posed a different challenge. Awareness of the category was low and TA was known for hotels, not vacation rentals. In addition, TA had to find ways to build renters’ trust and encourage them to write reviews. • Given the lack of category awareness, a fragmented market, and TA’s strong association with hotels, should TA engage in brand advertising similar to HomeAway, or should it stay with SEM that served it so well in the hotel business? Should Holiday Lettings and other brands within TA’s umbrella be folded under a single brand to build a strong presence or was TA’s philosophy of letting each brand operate independently the right approach?Flights In February 2009, TA launched its metasearch service for flights, similar to Kayak. TA compiledfare information on its site, directed travelers to OTAs and airlines, and got paid for these leads (seeExhibit 9). Reflecting on the decision to enter the flights business, Kaufer said: It was a highly debated decision but in the end we decided to go for it for two reasons. First, when people plan their travel, they often start with flights. By offering a flight product, we could get into their travel planning process earlier. Second, Kayak and others are getting into hotels and building user reviews. So if they move into hotels, we need to move into flights to stop them. We also decided to organize the flights group as an independent division of 20 to 30 people, to ensure that they get their fair share of mind within the company. “The flights business is the milk on the shelf,” elaborated Saltzburg, “and like grocers, OTAs andother sites use it as an essential volume leader to attract customers. Flights is a large market and it isnot new to us—we already had flight shoppers on TripAdvisor using our former flights product, andthen millions of additional flight consumers using our other sites including BookingBuddy, SeatGuruand AirFareWatchDog.” Supporting Saltzburg’s view of “air as milk,” Allison Danziger, director offlights, noted, “Almost 40% of new member registrations to the TA site currently come throughflights.”Market and Competition By 2010, most consumers searched the Internet seeking lowest airfares, often using search enginesto compare options across OTAs. The most popular stops for travelers going online to select a flightwere OTAs (42%), carriers’ websites (41%), and metasearch sites (13%). Metasearch was the fastestgrowing segment, and Kayak was the leader in this group with 2009 revenues of $150 million.15 In mid-2009 OTAs eliminated their $7 to $12 booking fee to encourage consumers to book ticketson their site instead of booking directly with the airlines. Most OTAs saw a significant increase intraffic after the elimination of these booking fees. “While the economics of flights have changed sincethe OTAs decided to eliminate booking fees,” acknowledged Danziger, “it still remains profitable.” Google’s threat In July 2010, Google announced its intention to acquire ITA, a leading flight-information software company, for $700 million. ITA, founded in 1996, developed software thatenabled users to quickly search for and access airline schedules, ticket prices and seat availability. By2010, ITA software was used by many major airlines and OTAs including American Airlines,Southwest Airlines, United Airlines, Continental Airlines, Bing, Kayak, Orbitz and TA. In 2009, ITAsoftware handled $25 billion in total sales for its clients, and as much as 65% of sales transactions on 9 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
511-004 TripAdvisorairline websites.16 Since most travelers started their search using Google, the travel industry wasexpected to challenge Google’s intended acquisition to prevent it from gaining an unfair competitiveadvantage.Challenges With the potential acquisition of ITA by Google, the highly competitive flights market was likelyto become even more challenging. Kaufer mused, “While Google is a formidable player in anybusiness, it has not always succeeded in new areas. Should we concede this market to Google andKayak, or should we pursue it aggressively to build a service that feeds users to our core business?”Time to Set Priorities As Kaufer pondered over these options, his summer vacation in Martha’s Vineyard alreadyseemed a distant memory. Reflecting on the future opportunities and challenges, he remarked: We have been very successful in the last ten years. The challenge for us is to build on that momentum in the future. International expansion, especially in China, vacation rentals and flights all represent great opportunities and at the same time pose new challenges. How do we build on our core business and prioritize these options to maximize our chances of success in the future?10 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
TripAd dvisor 511-004 5Exhib 1 bit TripAd dvisor Media Group Comp paniesSource: Company documents.Exhib 2 bit TripAd dvisor Review and Opinio (millions) ws ons )Source: Company documents and Exp pedia Inc., Q2 10 C Company Overv view. 11 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
511-004 TripAdvisorExhibit 3 Organizati ional ChartSource: Com mpany documen nts.Exhibit 4 TripAdviso Media Net or twork’s Finan ncial Performa ance Over Tim ($ million) me )Source: Exp pedia Annual Re eport 2009, and F Form 10-Q for per riod ending 6/30 0/10.Note: FY22010 data are for six-month endi June 30, 2010 Revenue inclu r ing 0. udes advertising and media servi ices offered by T TA to E Expedia and estim mated at fair ma arket value. These account for abo one-third of t total TA reve out the enue.12 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
TripAdvisor 511-004Exhibit 5 Sample Hotel Page (Paris) 13 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
511-004 TripAdvisorExhibit 5 (continued) Sample Paris Hotel Page with ReviewsSource: www.tripadvisor.com, accessed September 2010.14 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
TripAdvisor 511-004Exhibit 6 Vacation rental listings for Edgartown, Martha’s Vineyard (U.S.) 15 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
511-004 TripAdvisorExhibit 6 (continued) Sample reviews of a vacation rental listingSource: www.tripadvisor.com, accessed September 2010.16 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
TripAdvisor 511-004Exhibit 7 Hotels versus vacation rentals Hotels Vacation RentalsIndustry Dominated by major brands Fragmented, no major brandsProduct Consistent High variabilityAverage Length of Stay 1-3 nights 6-7 nightsAverage Daily Rate $100 $215Bookings Flexible Rigid, rule-basedBooking Process Simple transaction Complex transactionDistribution Broadly distributed Limited distributionTargeted Guests Individuals, couples, groups Families and groupsAppeal Mass appeal Niche focusCustomer Base Some loyalty High loyaltyBarriers to Purchase Price and location Price, trust, fear of the unknownAverage Occupancy Rate 60% 35%Source: Adapted from PhoCusWright, “Vacation Rental Marketplace: Poised for Change,” 2009.Exhibit 8 Reasons for not considering or purchasing a vacation rental Dont know / never considered it 36% More expensive 31% Prefer hotel services 26% Don’t want to cook or clean 21% Don’t know enough about such properties 19% Could not find the right property in destination 15% Didnt want to put down a deposit 9% Concerned property would not match expectations 9% Not enough information about a property 7% Concerned about the homeowner 5% Stayed with family, friends 4% Policies too restrictive 4% Concerned about the rental agency 4% Unable to book it online 4% Could not pay with a credit card 2% Bad experience with previous rental 2% Not staying long enough 2%Source: PhoCusWright, “PhoCusWright’s Vacation Rental Marketplace: Poised for Change,” January 2009. 17 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
511-004 TripAdvisorExhibit 9 Sample Flights PageSource: www.tripadvisor.com, accessed November 2010.18 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.
TripAdvisor 511-004Endnotes 1 See Scott Kirsner, “Google acquires ITA Software: The background briefing,” Boston Globe, July 1, 2010,http://www.boston.com/business/technology/innoeco/2010/07/google_acquires_ita_software_t.html,accessed July, 2010. 2 Site comparison of Yahoo! Travel and IgoUgo, http://www.compete.com, accessed November 2010. 3 “Online Resources that Influence Travel Decisions According to U.S. Internet Users, February 2009 (% ofrespondents),” March 18, 2010, eMarketer, accessed July 2010. 4 Henry Harteveldt, “Why Travelers Contribute Ratings, Reviews and More Online,” Forrester, September 10,2009. 5 “Restaurant sued TripAdvisor and got nowhere” October 5, 2010, tnooz.com,http://www.tnooz.com/2010/10/05/news/restaurant-sued-tripadvisor-and-got-nowhere/ accessed October2010. 6 “Fake TripAdvisor reviewers to be named and shamed,” Daily Mail, October 27, 2010,http://www.dailymail.co.uk/travel/article-1323673/Fake-TripAdvisor-hotel-reviewers-named-shamed.html,accessed October 2010. 7 “Expedia, Inc., Company Overview, Q2, 2010,” Expedia presentation at its website,http://files.shareholder.com/downloads/EXPE/1049079262x0x391386/5b817cfe-b649-4c98-b5ae-680f830b77bc/EXPE%20Q210%20Company%20Overview.pdf, accessed October 2010. 8 “TripAdvisor expands in China with agreement to acquire Kuxun.cn,” Press News, TripAdvisor, October30, 2009, http://www.tripadvisor.com/PressCenter-i267-c1-Press_Releases.html accessed November 2010. 9 Maggie Rauch, “Ctrip versus eLong versus everyone else,” www.tnooz.com, October 15, 2010,http://www.tnooz.com/2010/10/15/news/ctrip-versus-elong-versus-everyone-else/ accessed November 2010. 10This section is based on Daniel J. Connolly and Douglas Quinby, “Vacation Rental Marketplace: Poised forChange,” PhoCusWright report, 2009. 11 Ibid. 12 PhoCusWright, “Vacation Rentals: Market Opportunities and Technology Trends. Special Report,”October 7, 2008. 13 HomeAway “Company Description,” available at http://www.homeaway.com/info/about-us/company-description, accessed Sept. 2010. 14 HomeAway, Inc. company information record, Hoover’s, Inc., www.hoovers.com, accessed Sept. 2010. 15Victoria Petrock, “Online Leisure Travel: Six Post-Recessionary Trends,” eMarketer, April 2010, viaeMarketer, accessed July 2010. 16 D.C. Denison, “Google rumor puts focus on ITA; Deal would create dominant online travel business,”Boston Globe, April 22, 2010, via Factiva, accessed June 2010. 19 This document is authorized for use only in Customer Relationship Management / PT-PGPM by Prof. Neelu S. Bhullar from August 2012 to December 2012.