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How TripAdvisor brings trouble and triples the bills of hotel owners!

The testimony of an Alsatian hotel


Many hoteliers have made their networks or unions see the strong increase in the rate of their subscription to the Contact Area of TripAdvisor. While Synhorcat declares a 70% increase, the head of an institution in Alsace tells us of a 300% increase just between 2013 and 2014!



The page of Hostellerie le Marechal on TripAdvisor - Screen Shot
The page of Hostellerie le Marechal on TripAdvisor - Screen Shot
Alexander Bomo, Commercial Director of Hostellerie le Marechal, a 4-star hotel in Colmar, in the Haut-Rhin (68) had a very bad surprise when renewing his subscription to the Contact Area of TripAdvisor for 2014.

Beginning in June 2014, when he received an email from the comparator website notifying him if the automatic renewal of subscription, he noticed a 300% increase of the annual rate!

In 2013, the amount of his fee amounted to €988.26. In 2014, the bill rose to €3,074.05, of which €2,561.71 go to the Contact Area and €512.34 go to the mobile phone application update.

An increase that is hard for the hotel owner to digest. "I feel trapped, says Alexander Bomo. TripAdvisor decided the renew their rates unilaterally. Even the sales representative who gave me the news seemed embarrassed."

By way of explanation, the website’s team sent him Excel spreadsheet that summarizes his "return on investment".

It details the number of clicks received on his address on the website, the minimum conversion rate and then estimates from this data, the turnover generated by his webpage on the website...

Which, according to TripAdvisor, provides a return on investment of 758.17% for Hostellerie le Marechal. An incorrect rate, corrects Alexander Bomo, because it does not take into account the commissions he pays to online agencies, such as Booking.com, when the client goes through them to reserve a room.

"I cannot do otherwise"

Because this is also what hurts the Alsatian institution.

The Commercial Director explains that he envisioned for a time of not renewing his subscription to the Contact Area. But if he had opted for this solution, his rates would no longer appear in the TripAdvisor search results.

They would then only display the prices from online agencies. Which would, therefore, have led the hotel of paying more commissions and see its profits decrease.

"Thanks to my channel manager, my rates appear among the three or four best results, with a link to my website for reservations. But since this year, TripAdvisor does not provide this option to hotels that are not subscribed to its Contact Area.

This greatly reduces the chances of attracting customers to your hotel’s website. So I do not have a choice, I could not do otherwise than renew my subscription"
summarizes Alexander Bomo.

On its website, TripAdvisor states that the Contact Area can "boost direct bookings." It allows hoteliers to publish three types of contact information from a list that includes the URL of the hotel website, telephone number, e-mail address, the link to promotions, the link to packages and the link to the virtual tour.

Subscription to the Contact Area also offers the ability to publish special offers on certain institutions' websites to attract visitors and fill empty rooms during low seasons.

The offers scroll randomly on top of the results page of a rental search for a given destination, regardless of the popularity of the hotel or of the search filters.

A 70% increase, according to the Synhorcat

Interesting options for which Alexander Bomo, like many of his colleagues, is ready to spend the money.

However, it's hard to accept a price increase that would not be justified by a significant improvement of services. Especially if he is informed of that only at the time of payment.

Hostellerie Le Maréchal is not alone in this. On May 19th 2014, the National Union of Hotel, Restaurant, Catering and Café Owners (Synhorcat) issued a call for testimony on this issue.

The organization explains that the online advice company "has increased its rates by almost 70% since last year." It ensures that "some hoteliers reported having seen the amount of their bill of €800 in 2013 increase to €1,350 in 2014."

On its blog, TripAdvisor claimed, in February 2013, of having more than 50,000 subscribers to its Contact Area. The operation has certainly been very profitable for the website.

According to our information, the Synhorcat has not collected more evidence since this publication. The Union of Jobs and Hospitality Industries (UMIH) for its part, is also aware of similar cases.

Nevertheless, Alexander Bomo decided to keep his subscription to the Contact Area on TripAdvisor for 2014. But he received another bad surprise, the amount of the subscription fee was charged by the website on a credit card he had provided two years earlier and that had since then expired *.

A doing for which he demanded accountability from the TripAdvisor sales teams as well as the bank. But that remains unanswered at present.

Promoting a hotel online is definitely not an easy task!

TripAdvisor's Answer

"TripAdvisor has improved the pricing structure of the Contact Area, a system oriented towards specific pricing for professionals.

Rather than a generalized tariff structure, which until now was the basis of our service, a price algorithm is now being developed to be tailored to each institution. The calculated rate is based on key criteria such as location, facility size, the number of page views on TripAdvisor. It is obvious that these factors vary significantly from one property to another.

We made these changes to ensure fairness, which is important for our community. Through the Contact Area we want to make sure each institution receives a price that reflects the value delivered to each customer. The benefits offered by the Contact Area are numerous and significant, offering properties of all sizes the opportunity to expand the reach of their marketing actions on a global scale.

Subscribers of the Contact Area have the opportunity of adding their direct contact on their TripAdvisor page, to gain visibility on the site by posting adapted special offers, as well as being able to reach travelers via mobile devices, whose uses are increasingly growing in the travel industry. Subscribers to the Contact Area also have access to tools that help them to improve their knowledge of their customers and maximize their market position.

Launched in October 2013 TripConnect also allows subscribers to Contact Area to boost direct bookings by participating in prices comparator on TripAdvisor. Available only to subscribers of the Contact Area; the purpose of TripConnect is to allow owners to track their traffic on TripAdvisor and see when travelers are looking for available rooms on the website, which was previously only available to OTA or large hotel chains. This advanced technology allows to homogenize the rules of the game in the travel industry, helping small independent hotels by increasing revenue while reducing marketing costs.

Overall, we believe that the recent changes made to the pricing model of the Contact Area on TripAdvisor offer independent hotels the opportunity to pay a fair rate corresponding to the value they receive from this product."

Written by Pierre Coronas translated by Joséphine Foucher the 19/06/2014
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