Tuesday, 20 June 2017

TripAdvisor gets a negative review...

 We think this article in Barrons - and the research it reports, is missing the bigger picture

Credit Suisse have downgraded their target price for TripAdvisor stock to nearly 10% below its already depressed level. This judgement is based on what Credit Suisse see as a need for TripAdvisor to increase its advertising spend to remain competitive. 

TripAdvisor - a sorry story for investors; but also a strong message for the hospitality industry

But we think there is a bigger picture - and it's called Google... 

Google is becoming the dominant player in hospitality search 

Just search for a hotel or restaurant - what do you see? Let's do just that (we will take two landmark properties - but perform the search for you own, it will be the same)...

First on desktop:


What do we see here? We see one of the main reasons for the inexorable slide in TripAdvisor's share price: over 40% of this search given over to Google's own knowledge panel


In a different format, but what potential diner needs TripAdvisor's 4,600 reviews when they can access over 400 from Google at a click?

Then on mobile:


More and more purchasing decisions are being made by referencing the headline score and the the three rich snippets - those aspects that the hotel can most easily ensure provide an accurate reflection of their offering


This is the most modern format: with the reviews tab prominently displayed. We expect most Google search formats to conform to this format over time

Our advice

There's no need to radically alter strategies, but be aware that Google - and Google's own reviews - are an increasing influence on consumers' booking habits. You should be aiming for a score of 4.5 plus (the point at which consumers cease to hesitate) and it is a rare property that will be able to consistently achieve this without professional review management.

If in any doubt at all, consult us.

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