TripAdvisor Disappoints Investors As Google Places Looms

A few days ago, Social Barrel posted this blog about TripAdvisor and we found it interesting reading. The original post can be found here

"TripAdvisor Disappoints Investors As Google Places Looms

Barely three months after being spun off Expedia, TripAdvisor is already finding times are tough without big brother watching over you. The recommendations service that attracts 50 million unique visitors every month and operates in 30 countries in 21 languages has just reported less than impressive earnings on an overall pessimistic outlook.

TripAdvisor registered 2011 revenue of $637 million, a 31 percent jump over the previous year, and net income of $177 million, a 28 percent increase. This jump however did not impress Wall Street as the company has sounded earning warnings that the company’s revenues could dip in the next year. The news pushed the stock price down 15 percent in one day, to $30.04.

TripAdvisor was part of Expedia until only last December when the company was spun off as a standalone entity. CEO and co-founder Stephen Kaufer says the outlook may be pessimistic because of their increased advertising and marketing efforts in Asia and China.

He however says the company is growing at a healthy rate. TripAdvisor will, needless to say, be well advised to take extra care when it comes to the credibility of recommendations on the site. Quite a number of hotel owners have complained that the reviews are not always genuine and that TripAdvisor is not doing enough to authenticate these reviews.

In fact, the British Advertising Standards Authority banned the company’s UK site from saying reviews “were from real travelers, or were honest, real, or trusted,’’ since it does not verify the identity of every user behind every review.

This piles pressure on TripAdvisor as the success of their business lies in the credibility of the feedback and recommendations on the site.

 

The company will also have to contend with the entry and expansion of Google Places, a service similar to TripAdvisor that Google offers. CEO Kaufer however brushes this threat aside saying that if Google could predict what customers want better than TripAdvisor, then Google deserved to be in the lead.

With large companies such as Google morphing into multifaceted entities with tentacles all over the place, it’s difficult to say what the realistic future of companies such as TripAdvisor is."

Daniel Mbure

ASA Adjudication on TripAdvisor LLC

After 3 complaints, the ASA recently had to step in and tell TripAdvisor not to claim or imply that all the reviews that appeared on the website were from real travellers, or were honest, real or trusted.

We've reproduced the text below and the original piece can be found here.

"Ad

Claims on tripadvisor.co.uk, a website providing holiday and travel consumer reviews, stated "... read reviews from real travellers ... TripAdvisor is the world's largest travel site, enabling travellers to plan and have the perfect trip. TripAdvisor offers trusted advice from real travellers and a wide variety of travel choices and planning features ... TripAdvisor.com features: More than 50 million honest travel reviews and opinions from real travellers around the world". Review pages on the website featured the TripAdvisor logo next to the claim "Reviews you can trust" above a chart that gave details of the rating summary and percentage recommendation of the relevant location. The website was viewed in July 2011, when TripAdvisor was owned by Expedia, Inc.

Issue

KwikChex Ltd and two hotels challenged whether the claims "Reviews you can trust", "... read reviews from real travellers", "TripAdvisor offers trusted advice from real travellers" and "More than 50 million honest travel reviews and opinions from real travellers around the world" were misleading and could be substantiated, because they understood that TripAdvisor did not verify the reviews on their website and therefore could not prove that the reviews were genuine or from real travellers.

Response

TripAdvisor LLC (TripAdvisor) said they provided a unique forum for travellers to obtain impartial, unbiased information from numerous sources, reflecting a wide variety of backgrounds and opinions. They said users were able to choose from any number of individual reviews that were posted on the site, and that whilst their users would not expect every reviewer to share their subjective tastes, the high level of trust that users placed in the site was demonstrated by the site’s continued growth since it was founded ten years ago. TripAdvisor said they did not claim to be 100% fraud free; no review site could guarantee that it was 100% free of fraudulent content. They said, however, that they did use advanced and highly effective fraud detection systems, and dedicated substantial resources to identifying and minimising any non-genuine content.

TripAdvisor said users would not continue to rely on the site if they did not trust the content, and they provided data showing a high volume and proportion of repeat visitors to the site. They said the number and proportion of reviews contributed by repeat reviewers was also high and growing.

TripAdvisor said an independent study conducted in July 2011 showed that respondents found reviews on the site to be accurate of their actual experience of the hotels they had visited. They said, in addition, a growing number of companies had entered into agreements to feature TripAdvisor content, and a large number of hotels and other providers currently used their self-service ‘widgets’ to automatically add updated TripAdvisor reviews to their own websites. TripAdvisor believed that review content distribution was the most widely adopted of its kind in the industry and spoke volumes about the travel industry’s confidence in their website.

TripAdvisor said, whilst they were concerned about any non-genuine content, they maintained that the practical impact of small numbers of fraudulent reviews was effectively negligible. That was because research data showed that the average traveller read dozens of reviews before making a booking, and tended to discount reviews that were significantly out of line with others. TripAdvisor said their users had experience of other unrelated online review sites more generally, such as for music, books and consumers products, and as a result tended to have a healthy scepticism of user reviews in general. They believed that mitigated the effect of any fraudulent content that might occasionally come to a user’s attention.

TripAdvisor said, because trust was such a key component in the site’s ongoing success, they had invested heavily in systems, processes and resources to identify and minimise fraudulent content: they provided details of their anti-fraud systems in confidence. TripAdvisor said they also provided an opportunity for owners or managers of hotels and other locations to respond to reviews publicly on the site, and required that every review was accompanied by an active declaration from the reviewer that it was genuine and honest. They said that declaration clearly informed the reviewer that any fake reviews were both illegal and prohibited by their terms and conditions. TripAdvisor said it was not practical for them to screen each and every item manually before it was posted, and explained that their independence from the operators and the site’s non-transactional nature meant that there was no practical way for them to verify identities by reference to credit card details or reservation details, for example. They explained, however, that the techniques and practices they used to combat fraud were ever-evolving and increasingly sophisticated, and kept fraud to an extremely low level.

Assessment

Upheld

The ASA considered that consumers would understand the claims "Reviews you can trust", "... read reviews from real travellers", "TripAdvisor offers trusted advice from real travellers" and "More than 50 million honest travel reviews and opinions from real travellers around the world" to mean that they could be certain that the reviews posted on the site were from genuine travellers, and accurately reflected those travellers’ experiences of the places they visited.

We noted that reviewers were asked to agree to a declaration that their review was their genuine opinion of the hotel and that they had no personal or business affiliation with the hotel, or been offered an incentive to write a review for it. We also noted that reviewers were not asked to similarly confirm that they had no competitive interest in the place they were reviewing, or were posting a review on behalf of a competitor or other interested party, and we did not consider that agreeing to a declaration in itself would necessarily prevent non-genuine reviews from being posted on the site.

Notwithstanding that, we understood that reviews could be placed on the site without any form of verification, and that whilst TripAdvisor took steps to monitor and deal with suspicious activity, it was possible that non-genuine content would appear on the site undetected.

We noted that TripAdvisor allowed hoteliers a ‘right of reply’ to critical or negative reviews posted on the site and that they believed that users of the site had a healthy scepticism as a result of their experience of review sites more generally. However, we did not consider that consumers would necessarily be able to detect and separate non-genuine reviews from genuine content, particularly where a hotel or other establishment had not received many reviews, and nor did we consider that a hotelier’s response in itself would go far enough to alert consumers to, and moderate, non-genuine content.

Because we considered that the claims implied that consumers could be assured that all review content on the TripAdvisor site was genuine, when we understood that might not be the case, we concluded that the claims were misleading.

The ad breached CAP Code (Edition 12) rules 3.1 (Misleading advertising) and 3.7 (Substantiation).

Action
The ad must not appear again in its current form. We told TripAdvisor not to claim or imply that all the reviews that appeared on the website were from real travellers, or were honest, real or trusted."

Are hotel groups ready for total transparency in traveler reviews?

Here's an excellent blog post we found by Daniel Edward Craig. The original piece can be found here. We also recommend the rest of his blog if you have time to read around!

As traveler reviews continue to grow in influence and pervasiveness, more hotels are debating, “Should we post reviews on our website? Do we dare?” 

Even hotels with rave reviews and top ratings are hesitant. Hotels are highly controlled environments, where everything is “my pleasure” and beds are made for you. Websites work hard to evoke this utopian image. Why expose them to the anarchy of social networks, where people can be irrational, mean-spirited, or a competitor in disguise?

And yet despite the risks, in October Starwood joined a small minority of major international hotel groups and took the bold step of posting raw, unedited guest feedback to its official website. Visit the W London page on Starwood.com and you’ll find a range of opinions, from “Groovy, bling ambience” to “It sucks! Avoid at all cost”.

To willfully allow negative commentary—doesn’t that contravene everything we know about marketing? Or is it a shrewd, forward-thinking move that shows confidence in the product and will ultimately convert more travelers?

Reviews are everywhere these days. Independent properties from B&Bs to boutiques post TripAdvisor widgets and feeds. Online travel agencies have been amassing reviews for years, and recently Expedia announced big plans to go even more social. Even destination marketing organizations like VisitScotland.com and Quebec City Tourism have gotten into the action. On VisitLondon.com and WhistlerBlackcomb.com you can view TripAdvisor ratings, rankings and recent reviews without leaving the site.

But you won’t find reviews on Hilton.com, Wyndham.com, Fairmont.com, Hyatt.com or BestWestern.com, nor on InterContinental, Mandarin Oriental or Taj websites. Many now post Facebook and Twitter links, but feeds of raw commentary are rare.

It’s a particularly complicated dilemma for hotel groups, which must answer not only to guests but to owners, members and franchisees. One black sheep in the family can tarnish the reputation of other properties and the brand as a whole.

And yet an increasing number of travelers won’t book a room before consulting the opinions of other travelers. Reputation has emerged as a major factor in influencing decisions, rivaling price, location and brand. If travelers can’t find reviews on the hotel’s website, they’ll look elsewhere, and they might never come back.

So slowly but surely hotel groups are devising ways to integrate reviews and commentary into their websites. The solutions so far, however, involve compromise.e reputation of other properties and the brand as a whole.

And yet an increasing number of travelers won’t book a room before consulting the opinions of other travelers. Reputation has emerged as a major factor in influencing decisions, rivaling price, location and brand. If travelers can’t find reviews on the hotel’s website, they’ll look elsewhere, and they might never come back.

So slowly but surely hotel groups are devising ways to integrate reviews and commentary into their websites. The solutions so far, however, involve compromise.

Choosing to bypass TripAdvisor, Starwood allows guests to post reviews of its brands, which include Westin, Sheraton and W, directly to its website. Reviews are checked for profanity but are otherwise posted warts n’ all. A verification process alleviates concerns about fake reviews.

Will travelers trust reviews vetted by the company that’s trying to sell them rooms or will they continue to seek out independent review sites?

Starwood’s system seems heavily weighted toward members of its loyalty program. Of the 63 reviews of the Westin New York all but one are from Starwood Preferred Guest members. As presumed fans of the brand won’t they be more generous in commentary? My suspicions were quickly confirmed when I encountered one five-star review after another. Then I realized reviews are listed by star rating, with the best first. You can change the default setting, but isn’t this a bit sneaky when we’re used to chronological order on review sites?

Overall Starwood’s system is well organized and detailed, with information about reviewers, rating categories, and the ability to comment on reviews. Management has responded to select reviews of the Westin, but the responses are virtually identical, as though scripted, even in reply to complaints.

On the heels of Starwood’s announcement, Marriott announced it too was going full frontal with guest reviews. But reviews are nowhere to be found on Marriott.com. You’ll find them on the Marriott Rewards Insiders site, and you need to join to post a review. My theory that loyalty club members would be more generous was quickly disproved here, where some commentary is downright nasty. New York’s Marriott Marquis is rated two stars—far below its four-star rating on TripAdvisor.

Unlike Starwood, Marriott doesn’t list the best reviews first, but, bizarrely, lists the oldest reviews first. There are no filters, categories or reviewer details. I couldn’t find any management responses—though I too might be speechless in face of some of these comments. As a whole the system reminds me of reviews on Google Places: sparse, a bit messy and mostly unhelpful.

Of major international hotel groups, France’s Accor was the trailblazer, having integrated TripAdvisor reviews and ratings on Accor.com back in 2010. The move was all the more impressive given that its portfolio includes a range of brands, from economy to midscale to luxury. As Executive Vice President Jean-Luc Chrétien explained to me in an interview in late 2010, “We want to be very transparent and to provide our web visitors with all the information they need to make their decision.”

 The most recent hotel company to join the party is Four Seasons, which this week introduced a “Reviews at a Glance” widget on property pages as part of its new (and vastly improved) website. It looks similar to a TripAdvisor widget, with three partial reviews displayed and a TripAdvisor logo and link, along with tabs, links and sample posts for Facebook and Twitter

If any hotel group can risk total transparency it’s Four Seasons, which goes to great lengths and expense to please its guests. And yet it’s a brave move nonetheless for a company that so carefully cultivates its image. “It really does require that incredible sense of confidence that says we deliver our promise," Executive VP of Marketing Susan Helstab told USA Today’s Barb De Lollis.

Upon closer inspection, however, the reviews, tweets and posts displayed on the site aren’t pulled from a live feed; they’re cherry-picked and glowing with praise. To see all commentary you must click the TripAdvisor, Facebook and Twitter links.

No big deal, right? Well, yes and no. The widget can easily be mistaken for a live TripAdvisor feed, which in my mind diminishes the value and impact of the raw, unedited feeds on other hotel websites. Will travelers notice the difference?

So kudos to these hotel groups for making these leaps toward transparency. But to really earn traveler trust in social media we need to resist meddling in order to ensure our best foot is forward. Social media changes the rules of marketing. Travelers don’t expect perfection, but they do expect transparency and authenticity. The days of glossy brochures with fairytale descriptions and ecstatic supermodels are behind us.

So until a hotel group comes up with a better system, I think I’ll continue to consult third-party review sites before making my purchase decisions. 

 Daniel Edward Craig

http://www.danieledwardcraig.com

TripAdvisor: Faking it

This landed in our inbox the other day and we thought it was worth sharing!

From The Good Hotel Guide, Adam Raphael writes an interesting piece about TripAdvisor.

TripAdvisor: Faking it

TripAdvisor’s founder, Steve Kaufer, was in London recently to try to counter the bad publicity his hotel recommendation website has been receiving. In a round of media interviews, he made some good points. One was that TA's popularity with travellers around the world shows that it is meeting a real need. Many hoteliers also benefit from the travel website's recommendations.

Mr Kaufer chose, understandably, to skate over the criticisms of how his business operates. Claiming that only 'a handful' of reviews on TA's website are fake, he dismissed the Advertising Standards Authority inquiry into his company’s methods as a minor marketing problem. 'No big deal,' he said. 'We will remove the website’s tag line: “Reviews you can trust”.' Just as well. They can't be trusted.

Quite how many of the 60 million reviews on TA’s website are collusive or malicious is unclear. Kwikchex, a reputation- management company, claims that one in four is phony. Based on our experience in checking readers' reviews, we suspect it could be more. No one really knows, least of all TripAdvisor. One of the more revealing answers that Mr Kaufer gave was that his company employs just 'a couple of dozen' people to monitor whether reviews are genuine. So it is able to check only those reviews flagged by TA's programmes as suspect.

Just how easy it is to circumvent these computer defences has been shown repeatedly by newspapers. Hoteliers know that the best way to dupe TA is to send a strongly positive but not totally over-the-top report. And if this requires too much skill, there are lots of PR companies, which for a small fee, will submit bogus five-star reviews which they guarantee will not be flagged.

The ethical borderline between a hotel encouraging guests to write to TA and commissioning a fake review is often narrow. Recently TA published a list of 'the best 15 B&Bs in Britain'. Only one of these B&Bs features in the current Good Hotel Guide. There appears to be only one conclusion. Either we are doing a bad job, or these B&Bs listed as the best are even better at cultivating review sites.

Another TA practice which irritates many in the hospitality trade is the way it chooses to feather its own nest. The Dulaig, which has an entry in the Guide, has been ranked for the past three years by TA as the best B&B in Grantown-on-Spey. But if you go to TA’s website, you are told: 'We don’t have room rates for this hotel.' Instead, travellers are directed to B&Bs which have signed up for online booking services with TA’s associated companies such as Expedia. Good business or sharp practice? As TA purports to be a website battling for the consumer, I would say it is the latter.

Adam Raphael

Good Hotel Guide Newsletter, Issue 33 - February 2012