Tripadvisor is to travel, as Uber is to cabs and Google is to search. They have almost gained a monopoly in their respective industries. As per Statista, about 22% of travelers in the US book their hotels through travel agents. Also, 88% of travelers prefer using an online travel portal like Tripadvisor to book their trip.
Online travel portals offer a one-stop-shop to the tech-savvy travelers to book hotels, flights, tours, etc from the comfort of their homes. Travel agencies are now transitioning to make their travel business available to a wider audience through online travel portals and mobile applications. Therefore, to increase your revenue, build customer loyalty, brand visibility, and customer base, it is a must to have an online travel portal.
What is TripAdvisor?
TripAdvisor is a leading travel and accommodation website in the US. It shows reviews of hotels and restaurants. It also lets customers post reviews or opinions related to travel, gather travel-related information, and engage in travel forums. The website provides free access to customers as they provide a huge part of the content. Meanwhile, it uses the advertising model to earn revenue.
The travel portal allows users to post videos and images of their vacations. It also facilitates travel marketers to promote their properties through videos. Moreover, users can also personalized folders for them to save reviews of hotels, attractions or restaurants in a My Trips folder. Users can also check the pricing and availability of hotels across various online travel portals.
Success Stats of TripAdvisor
- 730 million user reviews & opinions for 8 million listings of restaurants, attractions, hotels, and vacation rentals.
- 1.3 million hotel listings worldwide
- Worldwide revenue of over $1.62 billion.
- Largest Social Website with 315 million reviewers.
Which business model does a travel portal like TripAdvisor follow?
Online travel portals mainly use a combination of three business models to generate revenue. These business models are the Merchant model, the Advertising model, and the Agency model. Every company uses one of these as the main revenue stream and others as the other sources of revenue.
For instance, Expedia uses the Merchant business model, Booking.com uses the Agency model and TripAdvisor uses the Advertising Business Model. Let’s look at the different models that your online travel portal can use.
Advertising Business Model
The predominant revenue model of TripAdvisor, that is based on cost-per-click advertisements displayed on the website. TripAdvisor earns a fee from advertisers such as hoteliers when users click the link won TripAdvisor’s website to visit the advertisers’ page.
Similarly, travel apps such as Hipmunk and Kayak are driven by advertising. They charge CPC to supplier websites and online travel agencies for flights and hotels. These websites redirect users to the respective websites of hotels and flights when they click on the links.
The advertising model is the most affordable one for small travel agents looking to build an online travel portal like TripAdvisor. However, to sustain your online travel portal on the advertising model alone, it needs to attract a lot of customers or use the existing data and infrastructure to offer new services.
Agency Business Model
Under this business model, the online travel agencies charge a commission on each transaction to mediate between service providers and travelers. Booking.com uses the agency model as the predominant income stream. It lets hotels list their availability on the website and charges a 10%-30% fee for each transaction.
It also derives about 74% of its income through the agency model; 19% through the merchant model and 6.6% through the advertising model.
Merchant Business Model
In this model, travel portals act as a merchant and buy a large inventory of hotel rooms to resell them via the website. Customers have the facility to book their accommodation directly in the travel portal.
Expedia uses the merchant business model as the main revenue stream. It earned a revenue of over $5 billion in 2018. This model accounts for 63% of the revenue of Expedia. Further, the agency model contributes 28% and the advertising model contributes 8%.
What are the key features your online travel portal should offer?
The level of convenience and ease of navigation for your customers are based on the features you provide through your travel portal. Apart from the basic sign up, search, and profile set up features, there are certain essential features that provide extra convenience to customers. Features make their travel booking and on-the-go experience convenient. Let’s take a look at some of these features to make your online travel portal standout like TripAdvisor.
An essential feature for travelers as it finds the location of your customer. The location is used to provide personalized offers or look up specific addresses or accommodations. This feature also aids your travel portal with map integration to help customers search for hotels and landmarks.
Ratings & Reviews
Essentially, TripAdvisor works on reviews of customers which can be viewed by other travelers to proceed with their travel bookings. Ratings and reviews instill a sense of trust and credibility for your website and the listings amongst your customers.
Reviews by other travelers along with photos and videos of their trip facilitate other travelers to make their plans accordingly. Moreover, they motivate service providers to work on improving their offerings.
The nearby feature is essential for travelers who have already reached their travel destination. The feature helps them locate nearby restaurants, attractions, and other places of interest. It also comes in handy for travelers who make spontaneous plans and don’t have a strict itinerary to be followed.
24*7 Customer Support
Travelers require instant customer support on-the-go to quickly resolve their issues or queries. An online travel agency that provides 24*7 customer support is always preferred by customers. They can have a stress-free trip when they know you will always be there to help in any situation.
Deals & Offers
Customers often wait for exclusive deals and offers to make their travel plans. Send push notifications of hot deals or discounts to enable them to leverage the best deals.
Your online travel portal can also provide customers with loyalty points which give them further discounts or exclusive deals if they make the booking using your portal. If your customers get the best deals through your travel portal, they will surely return to you to make bookings in the future.
Customers love this feature as they don’t have to constantly track price fluctuations of flights if you have this feature on your travel portal. The track price features send notifications to customers when there is a fluctuation in the price of the particular flight they are considering to book.
What challenges your travel portal may face?
The travel market being so lucrative poses stiff competition especially for the new entrants in the market. However, overcoming the challenges is not difficult if you are prepared beforehand and have a strong value proposition The challenges your online travel agency may face are listed below:
Leaders of the travel industry like Expedia, Booking.com, TripAdvisor, etc with their own niches have created fierce competition for the new OTAs to sustain and gain an edge over the others. In this cut-throat competition, it is only wise for the new entrants to choose a small niche rather than offering services from multiple niches.
By targeting a smaller audience, your online travel portal can easily observe the travel booking patterns and requirements of travelers and target those areas to increase customer loyalty and revenue.
Demand For Personalization
Due to a lack of personalization, travelers prefer making their bookings on online travel portals that are able to best personalize their travel and provide an exclusive, authentic experience to them.
However, many travel portals fail to provide a highly-personalized experience to the travelers of today. Your online travel portal can leverage the opportunity of providing a high-level personalized experience to travelers and gain a competitive advantage in the market.
Lastly, if you wish to build an online travel portal like Tripadvisor, you will need to find a reputed travel portal development company that has a good portfolio of clients and an extensive experience in developing successful travel portal software.
Enuke Software is one of the leading travel portal development companies, that follows a strict protocol from understanding your business idea, to planning and designing a well-sited travel portal for your business.