Series of Steps from Tripadvisor—Now Viator—Leaves Operators with Questions

The online travel agency (OTA) is making changes, such as different product prices, commission rates, Reserve Now & Pay Later, and more. Some operators are getting frustrated.

by | Feb 11, 2020

From “urgency” messaging on products to pricing changes and commission variances to making the “A” in their name lowercase, changes are afoot at the online travel agency (OTA), Tripadvisor.

New Approach to Commission & Pricing

Last week Tripadvisor sent a letter to things to do operators notifying them of an upcoming change that will impact prices of tours, activities and attractions.

“Starting today, we will standardize our commission rates by destination and product type,” reads the letter. “By doing so, we hope to create a more balanced marketplace with a single minimum commission rate for all operators of your type in your area.”

The letter has set the tours and activities community ablaze with confusion and general ambiguity over what the changes could mean for the future of their business.

“I do worry about the uncertainty that they could create in the sector by taking what looks like extreme measures without abundant clarity in their communications,” says Stephen Oddo, CEO and Co-Founder of Walks, who says Tripadvisor is a top global partner for the company. “They’ve alluded to a commission model change, but so far I’ve only seen consumer retail price changes.”

Beyond stating plans to standardize commissions and assign rates based on destinations, the details are murky. The statement follows months of apparent pricing experimentation, where operators have noticed changes to retail prices on their tours.

At least one concerned operator on a public forum said the price of her tour has already been raised on Tripadvisor; another operator said her commission rate was higher.

“As most operators know, commission rates tend to vary broadly across the industry,” a Tripadvisor spokesperson tells Arival. “We hope that by having consistent, single-minimum commission rates, we’ll bring our rates in line with industry standards and create a more balanced marketplace—one in which all operators in a given market, running the same type of product, pay the same amount in commission.”

The spokesperson adds that this model is not only fair for operators, but will also allow travelers to have a more objective view when selecting products by focusing on the quality and uniqueness of an experience.

New ‘Urgency Messaging’ Has Operators Wondering

The recent letter is just one example indicating Tripadvisor may be trying to use elements of the hotel industry to sell tours, activities, attractions tickets and experiences.

The OTA has started to test bright “sell out soon” notifications on some things to do products. According to one Canada-based tour operator, her products featured the red tag, “Tours tend to sell out – travelers recommend booking in advance!” even though that specific tour does not typically sell out.

This feature is sometimes used by other online travel agencies, such as GetYourGuide, which places “Likely To Sell Out” in red text on some tours, and Klook, which uses red tags, banners and “strikethrough” pricing to signal travelers to buy. 

In late October 2019, Tripadvisor launched “Reserve Now & Pay Later,” allowing travelers to input their payment details to reserve their experience, but defer payment until 48 hours before their scheduled experience. Some operators fear the tactic could lead to more last-minute cancellations, and could skewer expected sales. However, after examining a few months of data, Tripadvisor says Reserve Now & Pay Later has a 25% adoption rate, and even encourages travelers who use it to purchase more expensive products. 

Rumors that Tripadvisor may be exploring options for operators of tours, activities and attractions to enhance the visibility of their tours on the platform via a fee have circulated amongst operators—a feature that has long been available for hoteliers.

And to add even more confusion to the mix, last month Tripadvisor restructured by laying off several hundred employees and internally announcing Viator and Tripadvisor Experiences would operate independently.

“We’re continuously experimenting with different business models and releasing features that will help us gain more insight to meet the demands of both operators and travelers,” says the company spokesperson.

Indeed, many of these changes could theoretically drive more bookings. But operators don’t seem thrilled about their businesses being used as test subjects, and a shifting selling platform. 

“As Tripadvisor is so focused on consumer trust, it’s hard not to be concerned this will erode it,” says Oddo. “For our part, Walks is well-diversified and we’re confident in our channel mix, product quality, and technical agility.”

Want to learn what’s up with Tripadvisor, first-hand? Ben Drew, new president of Viator, will take the stage at Arival Berlin 2020 for an “Ask Me Anything-style interview with Arival CEO Douglas Quinby. Register now for Arival Berlin 2020!

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