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.”