For over 12 months now WIHP has been working to promote hotel bookings through the TripAdvisor Show Prices button. With hundreds of campaigns run for hotels around the world we’ve put together an overview of the service, some stats and advice for hotels that intend to advertise on the channel.
The show prices button pops-up the hotel’s booking engine with pre-selected dates together with several other pages consisting of OTAs selling the property (in most cases). It’s a cost-per-click model for the hotel or OTA that chooses to be present on the list of pop-ups.
Essentially what hoteliers and advertisers need to understand about this button is that it’s a rate comparison tool. However unlike most other rate comparison tools, this one is much more qualified than others since people that click on Show Prices have normally read reviews and are more likely to buy.
For those who have read the articles on ZMOT or the book published by Google, you will understand that TripAdvisor comes at a crucial step on the buying funnel, just before the booking is finally done.
About TripAdvisor ads ROI
There are various view points on the ROI of TripAdvisor ads, some say it is expensive, some say it’s not worth it etc. Here is the straight data: In our experience with several hundred campaigns the ROI has varied from 0 all the way to 54X the amount paid. Yet the average hovers between 13 and 16X the amount paid. That begs for the question, why does the ROI vary this much?
The reasons vary, from hotel rank, quality of reviews, rate strategy, availability and even the hotel’s popularity in travel guides. Here we’ll cover the main points that determine a good ROI.
1. TripAdvisor Show Prices is a rate comparison tool
As you can imagine a rate comparison tool means the guests are going to take the cheapest/best deal they can find. In some instances the hotels insist on having a higher rate on their website than on their OTAs. While we leave them the freedom to manage their rates as they see fit, we do explain that this is not going to help the ROI on their campaign
2. TripAdvisor rank does affect the ROI but it’s not how you think
TripAdvisor is on the crossroads of most hotel bookings. Hotels on the top positions get a lot of traffic from shoppers still looking for ideas of where to go. This traffic is less qualified since the visitors are still on their research stage. Hotels lower on the list get guests that have found the hotel they want to stay at and are mainly checking reviews to ensure their choice is right. Of course hotels on the top of the list also get that traffic but they get an additional traffic that is less qualified.
For the hotels we worked with which are in the top 10 of very busy cities we had an ROI of 12X average for the year. That ROI fluctuated over the year from 9X to 24X.
For hotels ranked in the middle (e.g. 300 out of 1300 hotels) the ROI averaged at 16X and fluctuated between 9X and 43X for certain month.
For hotels ranked in the bottom (e.g 1200 out of 1800) the ROI averaged at 10X and fluctuated between 4X to 19X
3. Booking Engine design makes a difference
As mentioned when a guest clicks on the check rates page they are sent directly to the hotel’s booking engine with pre-selected dates.
More than 80% of the bookings that are generated via the TripAdvisor “Show Prices” button don’t happen immediately. From our analysis of the booking path guest click and check rates, then return the hotel’s website and get more information (mostly they go to the Rooms page) and then complete their booking.
Thus the booking engine must have a clear link to the hotel’s home page in order to convert.
4. No availability is expensive
If your hotel has no availability on the dates selected you will get clicks but they won’t convert. For clients using SynXis and a few other booking engines we send the availability information to TripAdvisor to avoid those showing hotels that have no availability.
However Booking.com and other OTAs also do this for your hotel so you could rely on them to provide the information to TripAdvisor. In any case, if you’re entering a period where you have no availability turn off your campaign.
5. TripAdvisor is not all
We experienced some hotels that had a mediocre ranking on TripAdvisor yet they had a plenty of visits and conversions from their TripAdvisor page. When analysing those hotels we saw their popularity came from referrals such as blogs or news sites and even from searches for the hotel name. These guests had already been on the hotel’s site and went to TripAdvisor afterwards to check reviews.
Thus the hotel’s rank on TripAdvisor isn’t necessarily the only factor that will determine a hotel’s ROI. What we recommend in this case is that no matter your current position, ensure the latest reviews (the first page) are good as these visitors are interested in your hotel not in your rank.
The Pros and Cons of TripAdvisor advertising:
The advantages of being present are numerous, not the least of which is that you are protecting your brand by ensuring you are present where it counts and this is definitely where it counts.
Of course it also means direct bookings and that is the biggest advantage.
The Show Prices ads work well for hotels on the top as well as hotels much lower on the TripAdvisor ranking. We’ve worked with hotels ranked 1000 and lower (out of 2000) which had an ROI of 10X on average and went all the way up to 19X in certain month.
TripAdvisor’s system of opening multiple pop-ups when one clicks isn’t the greatest system for the user and frankly it’s a little archaic.
By default TripAdvisor doesn’t have a system of budget control. It means that through most advertisers one leaves an open budget and receives the invoice at the end of the month. This can be quite costly and in some months the bill can run pretty high. We had to develop a system internally to manage budgets for our clients as this was definitely lacking.
If your hotel suddenly receives a stream of bad reviews you can assume the bookings will be affected as well.
TripAdvisor Show Prices ads have a very good ROI if managed properly. Unlike paying for an ad in a magazine or other channels TripAdvisor advertising gets boosted or slowed down depending of the reviews your hotel gets.
But properly managed ad campaigns followed up with good internal service at the hotel shouldn’t be overlooked as a direct advertising channel.
VP Marketing and Sales
See more in
Expert of online marketing and hotels sector, WIHP's experts are at your disposal.