Business Listings on TripAdvisor – What is the Real Cost?

According to a study commissioned by TripAdvisor, hotels with a “Business Listing” are paying TripAdvisor on average 10 dollars out of every 60 dollars they take in bookings.

Hotels that pay TripAdvisor a Business Listing  get their direct contact information added to their standard TripAdvisor listing and can display “special offers” for TA users.  Hotels pay several hundred or thousands of  dollars each year for this service, depending on the size of the hotel.  In the UK Business Listings currently cost anything from £225 for properties with less than 5 rooms to £6,500 for large hotels with 500 rooms.

TripAdvisor commissioned Forrester Research Inc., a research company based in Cambridge Massachussets, to analyse the return on investment (ROI) to hotels of this form of advertising on the TripAdvisor website. In conducting its study, Forrester looked at hotels that belong to the Sabre Hospitality Solutions network, a marketing company for the hotel industry that has actively promoted the use of TripAdvisor business listings among its clientele.

According to Forrester Research, Sabre hotel clients are receiving an average of only $6 dollars in incremental bookings for every dollar spent on TripAdvisor busines listing subscription fees.

Putting a brave face on these disappointing results, Amanda Webb, director of online advertising and media for Sabre Hospitality Solutions said “We are encouraging our clients to renew their TripAdvisor Business Listings subscriptions, as many of our participating hotels have seen excellent results. The hotels we represent that utilize RezTrack(R) to measure results averaged six dollars in incremental bookings for every dollar spent on Business Listings, and some hotels are even seeing $20 for every dollar spent” .

Unsaid is the fact that many other clients must be getting a lot less than six dollars for every dollar spent.

“Sabre Hospitality has done a great job identifying new online marketing opportunities for its clients, including TripAdvisor Business Listings, which has generated remarkable results, as the Forrester study reveals,” said Christine Petersen, president TripAdvisor for Business. “We look forward to a strong and ongoing relationship with Sabre and its clients.”

http://www.prnewswire.com/news-releases/sabre-hospitality-solutions-reports-tripadvisor-business-listings-yielded-strong-roi-for-hotel-clients-in-2010-116152074.html

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9 responses to “Business Listings on TripAdvisor – What is the Real Cost?

  1. Thank you for publishing your post regarding our Bsiness Listings product at TripAdvisor for Business.It is true that Business Listings might not be a profitable channel for every property in this world. But remember you have the flexibilty to cancel at any time and TripAdvisor will refund you on a pro rata basis. Hence why there is no much risk associated with the subscription to this service.

  2. I had a premises business listing on TA last year, briefly…At the time, and now, we were also listed on booking.com and Laterooms.

    Our listing page on TA also had boxes you could tick and at the time, a big ‘Book Now’ button which of course took you to either booking.com or Laterooms, to which obviously, we pay commission.

    So, we ordered the business listing and was horrified when it appeared.

    TA had put a single small line of standard text on our listing page which referred to our website, but left the big ‘Book Now’ button in place. So was this value for money? No. Which button is a browsing guest going to push? Go figure!

    When I confronted them on this, it was my fault apparantly, as it was I who had the relationship with booking.com etc. and that it was I that should leave booking.com and Laterooms if I wanted the big book now buttons taken away.

    I could not understand their logic then or now. It is not I that controls their website! Therefore I had the business listing taken away and a refund was duly paid. Business Listing? Waste of time & Money.

    • Your point is well made. As you know, TripAdvisor benefits from a commission if someone books through booking.com or Laterooms. They would both have their cake and eat it if you paid several hundred dollars for a Business listing.

      Business listings have been shown to work for those at the very the top of the TA listings for their area (and it must be an area that people commonly search for) but otherwise you have to weigh the returns very carefully, as TA’s own private survey showed.

      http://tripadvisorwatch.wordpress.com/2011/02/15/business-listings-on-tripadvisor-what-is-the-real-cost/

      No surprise that the results were largely swept under the carpet, so low was the ROI for most businesses.

      • I have recently sold a business that as listed on TA. I can now speak the truth with more freedom. If you are not in the top 3 for your area and your hotel is not truly unique (which for most hotels is true lets face it) then TA does not work. Also remember that most at the top of three listings are faking many reviews for this reason. I saw that The Dorchester in London (an obviously well run and established hotel of repute) was barely over 4 stars yet many in other towns have 5 star rave reviews: TA is fast becoming a joke for this reason. Renter beware.

        The vacation rentals only allow you to review if the owner confirms that you stayed there. No wonder their reviews are good. What is to stop the owner from only confirming the good reviews? Maybe the guest can confirm with a scanned document but how many would bother?

        Either get rid of this nonsense or allow the same to the hotels, which would at least get rid of the negative reviews that opposition can be involved in.

        I was on a small island and know for a fact that ALL top 3 hotels wrote their own reviews. For the person on the inside this is easy to spot (100 reviews in 6 months all excellent, always mentioning the owners and staff and the name of the hotel in every review). It is so unfair that many of the other places are tempted to do the same.

        Smaller destinations with many hotels with huge amounts of 5 star reviews should be investigated. It is all so obvious.

  3. Thank you for publishing your post regarding our Business Listings product at TripAdvisor for Business.TripAdvisor, hotels with a “Business Listing” are paying TripAdvisor on average 10 dollars out of every 60 dollars they take in bookings.this is true

  4. Phil, why do you say that 400% roi is “dissapointing?”
    Are they just massaging the numbers?
    Thanks for the clarification.

    Wes

    • No, I was not suggesting any massaging of figures, but 15% of your gross revenue is not a good return in my books. The listing sites that I use give at least double that return. Also there are sites that charge a commission-based fee between 10% and 15% of the booking value – guaranteed, no booking = no fee, no risk.

      I don’t have the latest report, but in the USA hotel marketing expenses measured as a percent of total revenue was under 5% in 2001. This is from The Hospitality Research Group of PKF Consulting (HRG) annual Trends in the Hotel Industry report. Two other reports published in 2007-8 on the US Lodging Industry said that the average hotel spends between 5.7% and 6.3% of its total revenue on marketing. If one of your marketing media is costing 15% of your gross revenue per booking then the others have to work a lot harder to get to that average.

      However, regardless of the stats, most telling is the fact that this news has been buried rather than made the subject of a press release by TripAdvisor. It would be a first for TripAdvisor not to publicise positive news.

  5. Thank you for publishing your post regarding our Business Listings product at TripAdvisor for Business.

    May I correct the pricing in the UK for our 2011 rate card:

    Business Listings can cost as little as £225 for properties with less than 5 rooms. For properties between 6 and 10 rooms, the cost is £300. If your property is in our top 500 destinations most requested by travellers (like London, Brighton, Oxford) the Business Listings will cost a bit more £245 for properties with less than 5 room or £360 between 6 and 10 rooms. .

    The maximum cost per property is £6,500 if you have more than 500 rooms in our top 500 destinations.

    It is true that Business Listings might not be a profitable channel for every property in this world. But remember you have the flexibility to cancel at any time and TripAdvisor will refund you on a pro rata basis. Hence why there is no much risk associated with the subscription to this service.

    Best regards, Guillaume

    • Apologies if the rates I quoted are now out-of-date. The price of a business listing has been discounted at various times ever since its introduction and it’s hard to keep up with the rates – they’re certainly hard to find on the site unless you apply for a listing.

      I’ve corrected the rates in line with what you’ve quoted here – many thanks.

      Phil

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