TripAdvisor on Trial, Jury Out on Global Giant

TripAdvisor v. Australia’s richest man. A juicy headline, though not quite true. But there’s no question TripAdvisor’s credibility as a review site will be on trial when Meriton Serviced Apartments, owned by billionaire Harry Triguboff, challenges Australia’s competition watchdog in the Federal Court of Australia next year.

The case comes at a delicate time for TripAdvisor as the US company struggles to transition to a meta-search booking business model while persisting with its controversial and clandestine review process, prompting calls for the Australian Competition and Consumer Commission to drop the Meriton action and take on TripAdvisor instead.

On the commercial front, TripAdvisor does not generate significant sales for Australian hoteliers, no real emotion or allegiance there, but mention reviews and it pours out – they still hate the fact that anyone can review their properties on TripAdvisor whether or not they’ve stayed there. The lack of recourse also burns.

Meanwhile, travel consumers may still be posting reviews in huge numbers but unfortunately for TripAdvisor they are spending less per head . This has to be connected in some way to site navigation, which has become worse with the focus on promoting hotel sales above all else.

TripAdvisor is in limbo, caught betwixt and between, its identity blurred, inconclusive.

No doubt it will come into sharp focus when Meriton fights claims by the ACCC that the company gamed its TripAdvisor ratings by using a TripAdvisor product called Review Express to selectively target guests they believed would write positive reviews while ignoring those who had complained while staying in their properties.

“They want to fine us, but we will fight that,” says Triguboff. “The public has been misled. The public has much better judgement than the government is giving them credit.”

Meriton’s lawyer Joseph Callaghan agrees “in some hotels we did the wrong thing (but) the behaviour was corrected immediately” and that its ratings were not impacted when Meriton abandoned the contentious practice.

Should Meriton be on trial for its actions? Many in the industry think not.

They reckon it is TripAdvisor – a secretive monopoly with the ability to randomly make or break a property – that should be in the dock.

“Even if Meriton did do this selective targeting, I don’t think the ACCC have any right to police them for encouraging happy guests to leave reviews over unhappy guests,” writes Bernie O’Keefe,  Digital Marketing Director of Tangalooma Island Resort.

“For some reasons the rules and norms change because its in a digital channel.

“Do you think if someone complains at the reception desk at any hotel in the world, that the receptionist would then prompt them to go on TripAdvisor to share their experience? I don’t see any difference with that and what Meriton is doing here.

“If anything the regulators should be policing TripAdvisor for the lack of transparency in how they verify reviews, the enforcement of their own review guidelines, the inability to challenge TA at times of dispute, and their overwhelming (uncompetitive) market position.

“TripAdvisor holds all the power here with no scrutiny from regulators. In short the regulators have gone after the wrong offenders.”

Whatever happens with the court case, it’s very clear that TripAdvisor has reached something of a fork in the road in the Australian market.

Its effort to generate more revenue through meta-search isn’t working while virtually all its traffic comes because it is the world’s largest travel review platform – 390 million average monthly unique visitors and 435 million reviews.

As discussed, hoteliers have never really liked TripAdvisor for its review process but, commercially, they are generally pragmatists (witnesses the frequent industry angst regarding OTAs and their continued use) and it’s here that TripAdvisor is really falling down.

TripAdvisor is a secondary booking channel for most Australian hoteliers, way down the pecking order behind the large OTAs and even other meta-search sites.

Muddying waters is the preferred booking agreement has with Booking.com, which means the powerful OTA dominates the hotel search results on TripAdvisor.

It often pops up as the top listing or indeed if TripAdvisor is listed as the vendor that booking mostly goes to Booking.com.

“It’s an interesting one,” says the revenue manager of a major international hotel group in Australasia.

“As you  know when you search for availability and rates on TripAdvisor it diverts ultimately to Booking.com.

“Of course the entire industry is seeing an increase in business from that channel, so how much is direct and how much is from intermediaries I don’t know.

For the same reason, “I cannot tell you whether volume from TripAdvisor has gone up, down or stayed the same.

“It’s a relatively smallish number and doesn’t feature high on my radar to be honest.

“Over time it’s not clear what space they are playing in.”

He says communication between TripAdvisor and its accommodation customers has been poor to non-existent on all the key issues.

A survey of three Australian hoteliers shows general apathy about the brand as a booking channel either through meta-search result or the review pop-ups.

  • “The offer pops up with a discounted rate and parking overlaid on our page, if you call or email. You’d be crazy not to book! But still very few bookings. ” Sydney hotel.
  • “We have not used the Instant Booking facility on TA. Our Auckland hotel was supposed to trial it but couldn’t get the connectivity right  ” Perth hotel.
  • ” We don’t use their instant booking connection but our reviews have been coming in fairly fast over the last few months. Nobody seems to want to take up the pop up offer though, which is my only real indicator from them. ” Sydney independent.

Another revenue manager for a Sydney five-star property says he couldn’t justify the spend.

The return on investment is poor, he says, while the ad slots are dominated by wealthy OTA’s so he believes the best strategy is save money and market through Booking.com and Expedia.

“We advertised on TripAdvisor’s meta-search but stopped because return on investment (ROI) was minimal.”

He adds: “Their reputation is declining in the industry. Some hotels don’t even care about TripAdvisor any more.

“Honestly, I don’t like TripAdvisor but can’t discount it.”

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One thought on “TripAdvisor on Trial, Jury Out on Global Giant”

  1. This is my story from a few years ago. We sold our business and Trip Advisor was a contributing factor, we felt so vulnerable.
    16th of July

    Dear Tom and Yvette,
    I hope you are well. I am writing to you about the review that you left on Trip Advisor. I understand completely that you were dissatisfied with the service that you received at breakfast and I am sorry for that. I have invited you to contact us for a full refund but I would now like you to suggest what else I can do for you in order that you remove the post before it sends me into liquidation.
    I have seen bookings fall dramatically since your review and I have had some cancellations also. The thing is, when a traveller is looking for somewhere to stay and they are looking for a guest house, as soon as they see a title such as “The Neglected Guests” high up on the list, with the ‘poor’ rating, they immediately look elsewhere. I know you would be fully aware of this. Who wants to stay in a guesthouse where it is clear in black and white that you will be neglected?
    Do you really think that your stay with me warranted such a damaging title on the review? Were you both really neglected so badly? I know that you have spoken to Kirsty but she held out little hope of you deleting the posting. If you have deleted it already, thank you.
    From my point of view I remember coming in to see you after Kirsty had told me that in the lounge were two of the nicest guests she had ever served. Recently, I haven’t been meeting all the guests and Mark and Kirsty have been holding the fort at the front of the house, but Kirsty said that you were just lovely and I took off my apron and went out to meet you.
    I checked that you both had drinks and we spoke about many things and delved into each other’s lives. We talked about Perth, breakfasts at the Blue Duck, my in-laws and the work that Daniel does with music in Perth, the road you now live on, your careers, parties at celebrities houses, property prices, our fathers both being doctors, the Greek population in Australia, my surname being Greek, and finally I had said that Mark and I would both be present the following night because he will be delighted to meet you both. From this memory, I am struggling to think of anyone who has ever come to stay with us with whom I have had so much in common in the first hour of meeting even though we have had over ten thousand people stay or dine with us in the seven years since we bought the business. I have to say that I really think that the neglectful label is unjust.
    I just want to give you a bit of background to your stay to put you in the picture. On the day that you came to stay I had told the Irish assistants that we would be closing the house for two to three weeks. I know that you and I discussed our fathers Tom and you asked me whether mine was still working. I didn’t tell you the truth because who on their holiday wants to be told that the person whom they are having a lively chat with is in the throes of a terrible grief. This sounds like something I am making up, but at the time of your stay my father was dying of cancer and I wanted to be with him. I had just decided that I would be going to Ballarat to be with my family and Mark would be joining me later with our children. Kirsty didn’t feel that she could run the place alone as she lived 20km away and has 4 children of her own (one with Down’s syndrome as you know). So I suggested that Nicola and Clara begin their travels and we close for a few weeks beginning on the Wednesday. Nicola and Clara were far from happy about this but agreed as they didn’t want to be left entirely in charge.
    I can only imagine that in the morning of your stay they were reacting to the news that they would be leaving. Normally they would serve hand-picked tomatoes and rocket with two eggs and would have lit a fire but on this day they didn’t and I constantly wonder why.
    So, you came to stay on Saturday the 7th of May. On the 14th you wrote your review under the name of ******** and I replied twice; once directly to you on the 14th through TripAdvisor and once on the TripAdvisor manager response form on the 15th for damage limitation reasons and to refund you. The Irish girls left on the 15th. As you will remember, I foretold the ramifications of such a terrible review.
    On the 17th, two days later (my father’s birthday) I had returned to pick up some belongings but was called urgently back to Ballarat as my father was being taken into palliative care. I slept on the floor in the hospice from that day on and was by my father’s bedside with my mother throughout the ensuing week. He spoke his last words to me of “Thank you, Annabel” then was under sedation for his last 6 days. I have included the Order of Service of his funeral for you so that you can see that I am being completely honest with you and you can see reaction to his death and the legacy that he has left on the Leicestershire Villages website. He was a pioneering GP, was chief examiner for both the Royal College of General Practitioners and for The Royal College of Physicians and I was fielding calls from all over the world from upset patients, friends and colleagues. However, at the same time, my mother and I sat down on either side of his dying body to discuss what could be done about this review of yours which was going to bring my business to its knees.
    I feel that your title, The Neglected Guests, is so unfair to both Kirsty and me, and it frightens me that a gorgeous couple such as you, whom I trusted implicitly, can write such a damning review on the one website where it will really hurt. It has shocked me to the core.
    Tom, if it is any consolation to you as a doctor, and perhaps to give you some feedback, I have to say that the standard of care which my father received was outstanding. I am so glad that after years of caring for others, he received so much wonderful care himself.
    If you don’t remove the posting, it is not the end of the world because we have decided to put the business up for sale. It is too much of a risk for us to have a business like this where an unfair and damning review from a guest can destroy us in a second. We have had seven great years and memories that we will treasure.
    If I do see you again in the Blue Duck or on the beach in the coming months I will happily say hello and shake your hands because I honestly thought you were such lovely people.
    Yours Sincerely,

    Annabel

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