The In-Depth Analysis Of The Business Model Of TripAdvisor – World’s Most Famous Travel Aggregator

Updated on: Sep 6, 2023
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In the last blog, we tackled the business model of Treebo Hotels ‚Äst the raising mid-tier hotel chain in India. Today we will dig into the business model of TripAdvisor ‚Äď a worldwide travel options aggregator and booking website.

TripAdvisor is one of the world’s largest and most well-known travel and online flight and hotel reservation websites. It was founded in Massachusetts in the United States in the year 2000. Stephen Kaufer is the company’s founder. Since its inception, the ease of use of its website and amazing booking options have flung this travel options aggregator into fame and fortune.

TripAdvisor is among the slew of companies that made their fortune based on the internet. As users across the world go digital, marketing has followed them to the digital realm as well. If you are interested in new-age digital marketing, then you should definitely check out IIDE’s Free MasterClass on Digital Marketing 101 by our CEO and Founder, Karan Shah.

In this case study, we’ll take a closer look at the business model of TripAdvisor and decode its success. Let us begin this journey by first understanding more about the company.

 

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About TripAdvisor

TripAdvisor is a public website that caters to a global audience. Stephen Kaufer, Langley Steinert, and Saman Mortazavi founded the website, or rather a corporation, in Needham, Massachusetts in the year 2000.

The website’s major goal was and continues to be, to make it easier for anyone planning trips, tours, and journeys to get useful information that would make their vacation run more smoothly and be easier to plan. Liberty TripAdvisor Holdings owns TripAdvisor now.

There are travel-related reviews as well as interactive travel forums on the site, which directly employs over 3,000 employees and receives 4.5 million monthly visitors. It made about US $1.4 billion in revenues in 2020 with a global presence in over 50 countries. Creating a good website can be a game-changer for any business in today’s world and TripAdvisor is a great example of that. If you are someone who wants to learn more in-depth about website creation and management, check out IIDE’s WordPress Website Panning and Development Course to get started.

Current News about TripAdvisor (2021 ‚Äď 2023)

TripAdvisor launches AI-Powered Travel Itinerary Generator:

On 19 July 2023, TripAdvisor launched a new tool known as TripAdvisor Itinerary Generator that uses OpenAI’s generative AI technology to create custom travel itineraries or journey plans. Currently, it is only available in the US and uses User-generated content such as reviews and opinions of travelers to create personalized itineraries for specific destinations.

To promote San Diego tourism, TripAdvisor brings ‚ÄúThe Sunny Side of Things‚ÄĚ to Chicago, Los Angeles, and New York.¬†

In April of 2023, TripAdvisor with the San Diego Tourism Authority (SDTA) and The Shipyard, ran its ‚ÄúThe Sunny Side of Things‚ÄĚ campaign in New York, Chicago, and Los Angeles. The campaign featured immersive street murals and an augmented reality filter, all aimed at promoting San Diego tourism.

Tripadvisor launches its own In-house Creative and Content Studio, Wanderlab: 

On September 20, 2022, TripAdvisor launched Wanderlab, a creative and content studio to create data-driven content for its marketing campaigns. With the help of TripAdvisor’s first-party data, Wanderlab is creating personalized content that is relevant to each user’s interests.

TripAdvisor Launches New Self-Service Advertising Tool: 

On May 9, 2022, TripAdvisor launched a new self-service advertising tool called TripAdvisor Ad Express. With this tool, businesses can create and manage their advertising campaigns on TripAdvisor. It offers a variety of features such as the ability to target specific audiences, set budgets, as well as track results.

TripAdvisor Launches New Subscription Program TAP ‚Äď TripAdvisor Plus:¬†

On June 16, 2021, TripAdvisor launched a new subscription program called TripAdvisor Plus (TAP) to offer its members discounts and perks on hotels as well as other travel-related businesses. It is primarily aimed at travelers who frequently use TripAdvisor for their travel purposes.

Now that we’ve had a good picture about the basic information relating to the company, let’s start exploring the business model of TripAdvisor 

Business Model of TripAdvisor

A business model is the very essence of the company’s existence, denoting its function and its way of gathering profits. The things or services that the company expects to sell, target markets, and any estimated costs form the very fundamentals of the company’s business model. So let us start by learning more about the services offered by TripAdvisor.

Services of TripAdvisor

In today’s highly competitive travel industry, TripAdvisor has distinguished itself by offering a wide range of services that cater to both travelers and businesses. These services not only cater to the diverse needs of travelers but also provide businesses with valuable tools for success in the digital age of travel. Here are some of the key services provided by TripAdvisor:

Hotel and Accommodation Bookings: TripAdvisor allows users to search and book hotels, resorts, vacation rentals, and various other types of accommodations around the world. With the help of TripAdvisor, users can read reviews, view photos, and compare prices before booking anything.

Flights: TripAdvisor enables users to search for flights, compare prices, and book airline tickets. It also provides information about different airlines, routes, and flight options.

Restaurants and Dining: TripAdvisor provides reviews, ratings, and information about a wide range of restaurants, cafes, and eateries. It can also provide users with recommendations for local dining options and reviews about other travelers’ experiences.

Attractions and Activities: TripAdvisor can help users discover and explore various attractions, landmarks, and activities in different destinations. It also provides information about popular tourist spots, museums, theme parks, and more.

Travel Forums: TripAdvisor hosts a community forum where travelers can ask questions, share advice, and discuss various travel-related topics. It is a great platform for travelers to interact and learn from each other’s experiences.

Travel Guides: The platform offers travel guides for various destinations, providing information about things to do, places to visit, local culture, and practical travel tips.

Travel Planning Tools: TripAdvisor provides tools to help users plan their trips, including itinerary planners, packing guides, as well as a travel budget calculator.

Traveler Reviews: A main aspect of TripAdvisor is its user-generated content, where travelers can leave reviews and ratings for accommodations, restaurants, attractions, and more. These reviews contribute to the overall community’s knowledge and help others make informed decisions.

Trip Inspiration: TripAdvisor can also help users explore curated travel ideas, itineraries, and destination recommendations based on their preferences and interests.

Mobile App: TripAdvisor offers a mobile app that allows users to access its services on the go, making it easy to search for information and make bookings while traveling.

Let us now take a look at the TripAdvisor company’s target market.

Target Audience of TripAdvisor

Since the business model of TripAdvisor is holistic and tries to impart very exciting travel experiences, that its target demographic is the middle and upper-income traveller segment, based on the suggested places and blogs. They are especially focused on catering to families and their blogs and travel guides have a lot of family vacation itineraries to interest their patrons.

Let’s have a look at the buyer’s persona of TripAdvisor given below:

Buyer’s Persona

Name:

Max Thompson

Place:

San Francisco, California

Age:

24 years

Profession:

Freelancer

Motivation

  • Affordable and flexible travel options
  • Exploring new cultures
  • Connecting with locals
  • Enriching her life experiences
  • Trying local cuisine
  • Convenient booking experiences
  • Savings on travel expenses

Interest & Hobbies

  • Hiking
  • Traveling
  • Photography
  • Fine dining
  • Visiting museums

Pain Points

  • Budget constraints for travel.
  • Time-consuming bookings.
  • Finding authentic local experiences
  • Inaccurate or outdated information
  • Balancing work and life
  • Finding affordable and family-friendly options Ensuring safety while traveling
  • Hidden fees
  • Limited reviews

Social Media Presence

  • Facebook
  • Instagram
  • TikTok
  • Twitter / X
  • YouTube

Overall, the company’s target customers are all travel lovers who use any operating system device to look for online assistance with travel services. As a result, they’ve created application platforms that work with all of the major operating systems, including Windows PCs, Windows Phones, Android OS, WatchOS, and iOS. Knowing how to make an application has become a must for most organisations to cater to their customers better. If you are interested in learning more about how to create and optimize an application, you should check out our App Store Optimization Course.

Now that we know who TripAdvisor’s target audience is, let’s look at how the company uses its advertising to approach to reach out to them.

Business Strategy of TripAdvisor

TripAdvisor is unquestionably the world’s largest travel site, with over 465 million reviews and selections for restaurants, hotels, and tourist attractions. It also boasts 315 million members, but what is it about the organization that has resulted in such a big customer base? The answer lies in the business strategies employed by TripAdvisor.

One of TripAdvisor’s most effective strategies is to offer business visitors access to the site and add information that the firm values. As a result, several travel-related businesses have expressed an interest in having their content published on the site. As a result, many businesses who need to advertise something online have discovered that TripAdvisor is a good place to start because it already has a significant customer base. One can say that a big part of the business model of TripAdvisor relies on UGC or user-generated content to stay relevant.

Second, the organization uses quality assurance techniques to ensure that only genuine data and reviews are published on its website. The brand does not allow for automatic review publishing, instead of requiring reviews to go through several authentication steps that include IP address and email address validation. As a result, visitors are more likely to use the site than they are to use most other travel sites.

The site is always being updated to keep it up to date with the latest technology standards. This has made it easier for marketers to combine their brand and marketing tools because customers can simply access the advertisements, which is exactly what an ad agency requires. Making TripAdvisor usable in twenty languages has also proven to be a successful marketing technique.

Advertisement revenue is split into two categories: the number of times ads are displayed and the number of clicks the ads produce on the ad-renting businesses’ websites. TripAdvisor is the company that makes the most money from clicks.

Here are some examples of digital marketing strategies used by TripAdvisor in recent years:

Digital Marketing Strategies Used by TripAdvisor in Recent Years

 

AstroTravel Guide for July ‚Äď Instagram Campaign (2023):

Towards the end of each month, TripAdvisor releases its Astro Travel Guide for the next month on Instagram. On 27 June 2023, TripAdvisor launched its Astro Travel Guide for the month of July with its two Instagram posts. It creatively connects zodiac signs with travel destinations and provides personalized travel recommendations to its followers. The campaign taps into the trend of using astrology to guide life choices, making it appealing to a broad audience. It is a fun and lighthearted way to introduce the idea of travel to people who may not be thinking about it yet.

Business Model of TripAdvisor - Astro Travel GuideSource: TripAdvisor’s official Instagram channel

The campaign had the following goals:

  • Encourage users to interact with the brand by liking and commenting on posts.
  • Increase awareness by showcasing TripAdvisor‚Äôs destination knowledge and inspire travel.
  • Provide tailored travel suggestions based on astrology signs for personalization.
  • Encourage users to share their travel experiences related to the campaign destinations, creating a valuable stream of User-generated Content (UGC) that can be leveraged for future marketing efforts.

Overall, the campaign has performed well with both posts receiving over 1,000 likes each and significant comments, indicating strong engagement and interest from the audience. Overall, it is a well-designed campaign that effectively promotes travel in July.

The Sunny Side of Things (2023):

To promote San Diego tourism, TripAdvisor ran its campaign ‚ÄúThe Sunny Side of Things‚ÄĚ in New York, Chicago, and Los Angeles. From April 3 to April 30, the campaign ran for almost a month. It was created by Wanderlab, Tripadvisor‚Äôs in-house creative studio in partnership with The Shipyard for San Diego Tourism Authority (SDTA) and it featured street murals hand-painted by local San Diego artists ‚Äď Channin Fulton, Hanna Gundrum, and Phoebe Cornog. They‚Äôve also added augmented reality (AR) filters to these street murals.

The idea behind this campaign was to make people think about visiting San Diego. To do this, they added QR codes to these murals. Viewers could interact with the street art by using QR codes on each mural. Whenever a viewer scanned these codes, they would activate special augmented reality experiences that match the art on the murals. 

The goal behind this was to create experiences that people can easily share and enjoy, whether they’re standing in front of the mural or sitting at home. The entire campaign was about promoting San Diego. It consisted of helpful trip planning guides on TripAdvisor as well as content (GIFs and Stickers) that people can easily share on social media platforms like Instagram and Facebook.

Business Model of TripAdvisor - Mural by Phoebe Cornog at 740 W Randolph Street in Chicago’s West LoopSource: Mural by Phoebe Cornog at 740 W Randolph Street in Chicago’s West Loop

‚ÄúWe are thrilled to inspire travel to San Diego with the launch of our inaugural out-of-home immersive art experience which features augmented reality that brings this sunny Southern California city to life in locations around the country. The transformative work emerging from the partnership between Tripadvisor‚Äôs Wanderlab Studio and San Diego Tourism Authority is only one of many dynamic creative formats that our team, armed with traveler insights and first-party data, will create to better engage and inspire both travelers and partners on and off our platform.‚ÄĚ ‚Äď John Boris, chief growth officer, Tripadvisor.

The campaign had the following goals:

  • Inspire Travel: Encourage people to consider visiting San Diego.
  • Create Shareable Experiences: Generate content that viewers can easily share.
  • Enhance Engagement: Engage viewers both physically and virtually.
  • Promote San Diego: Showcase the city‚Äôs attractions, culture, and more.
  • Drive Website Traffic: Direct viewers to TripAdvisor for trip planning guides.
  • Integrate Traditional and Digital: Successfully blend traditional and digital marketing methods.

This campaign is a prime example of how traditional and digital marketing can go hand in hand. It seamlessly blends traditional hand-painted murals in public places with modern digital features like QR codes and AR filters, creating an exciting and shareable experience that goes beyond physical locations. Overall, TripAdvisor‚Äôs ‚ÄúThe Sunny Side of Things‚ÄĚ campaign brilliantly demonstrates how blending traditional and digital marketing strategies can effectively promote a travel destination.

Vacations Miss You (2021):

In 2021, TripAdvisor launched its campaign ‚ÄúVacations Miss You‚ÄĚ in the United States with an aim to encourage people to start planning their vacations again after the COVID-19 pandemic. This campaign is a prime example of the company‚Äôs innovative digital marketing strategies. The campaign consisted of video ads showing lonely and forgotten luggage as well as how people are missing out on travel experiences.¬†

Here’s the ad they ran for this campaign-

Apart from the ad, they also ran a contest in which they encouraged people to share photos of their ‚Äúsad‚ÄĚ luggage on Instagram or Twitter with the hashtag #VacationsMissYou for a chance to win Tripadvisor Plus subscriptions worth $99.¬†

For this contest, TripAdvisor effectively leveraged social media platforms, specifically Instagram and Twitter, to engage its audience and promote its services. The main idea behind this was to connect with travelers, tap into the emotional connection they have with travel, and leverage user-generated content to create a significant buzz on social media. While the primary goal of this contest was to engage users and create a sense of anticipation for future travels, TripAdvisor also indirectly promoted TripAdvisor Plus by adding its subscriptions as a prize.

Business Model of TripAdvisor - Sad luggageSource: TripAdvisor.com

The campaign had the following goals:

  • To remind people of the joy of travel and the importance of taking a break.
  • To encourage people to start planning their next vacation.
  • To position TripAdvisor as the go-to resource for travel planning.
  • Create a buzz and emotional connection with the audience.
  • Encourage user-generated content and social media engagement by inviting participants to share photos of their ‚Äúsad‚ÄĚ luggage on Instagram and Twitter.
  • Promote TripAdvisor Plus subscriptions by offering them as prizes.
  • Increase brand visibility and engagement on social media platforms, especially Instagram and Twitter.

Overall, the campaign worked really well, creating more than 1 billion impressions and greatly boosting traffic to TripAdvisor‚Äôs website and app. It also generated significant social media buzz with numerous travelers sharing their creative and ‚Äúsad‚ÄĚ luggage photos. The hashtag #VacationsMissYou trended on both Instagram and Twitter, further boosting TripAdvisor‚Äôs online visibility. The campaign successfully promoted TripAdvisor Plus subscriptions, drawing attention to the exclusive benefits they offer to travelers.

According to TripAdvisors report:

  • 61% of US respondents who didn‚Äôt travel in 2020 are comfortable traveling in 2021.
  • Those earning $100,000 or more (34%) are more likely to have booked 2021 trips compared to others (19%).
  • 41% of 2020 travelers have booked 2021 trips, contrasting with 13% of non-2020 travelers.

Now that we have explored some of TripAdvisor’s innovative digital marketing strategies, let’s delve into the key takeaways that can help marketers in enhancing their own digital marketing campaigns and engagement strategies.

Key Takeaways for Marketers: Learning from TripAdvisor’s Recent Campaigns

In today’s dynamic digital landscape, effective marketing strategies are crucial for brand growth and engagement. As a prominent player in the travel industry, TripAdvisor has consistently demonstrated its effectiveness in creating innovative campaigns. Here are some of the key takeaways from the above campaigns that you can use to improve your own marketing efforts:

  • Use data to your advantage: TripAdvisor collects a wealth of data about their users which they use to inform their marketing decisions. This data can help you to target your marketing messages more effectively and measure the success of your campaigns.
  • Focus on creating a positive user experience: TripAdvisor‚Äôs website and app are designed to be easy to use and navigate. They also focus on providing users with helpful and informative content. This helps them in creating a positive user experience that keeps people coming back for more.
  • Run contests and giveaways: Contests and giveaways are a great way to generate excitement and engagement among your audience. TripAdvisor often runs contests and giveaways on social media to promote their services.
  • Partner with other businesses: TripAdvisor also partners with other businesses to offer discounts and promotions. This is a great way to reach a wider audience and drive traffic to your website or app.
  • Measure your results: It is highly important to track the results of your marketing campaigns as it can help you see what is working and what is not. This information can also help you in improving your future campaigns and get better results.
  • Create content that is shareable and engaging: TripAdvisor‚Äôs content is designed to be shareable and engaging. This helps them get people talking about their brand while driving traffic to their website or app.
  • Use storytelling to connect with your audience: People are more likely to connect with a brand that tells a compelling story. TripAdvisor does this well in its ‚ÄúVacations Miss You‚ÄĚ campaign, which tells the story of how people are missing out on travel experiences due to the COVID-19 pandemic.
  • Use humor and emotion to connect with your audience: TripAdvisor often uses humor and emotion in its marketing campaigns to connect with its audience. This helps them make their messages more memorable as well as effective. The most recent example of this is TripAdvisor‚Äôs ‚ÄúAstro Travel Guide‚ÄĚ campaign which uses astrology to create a fun and lighthearted way to recommend travel destinations.
  • Be authentic and transparent: These days, people can easily tell when something‚Äôs fake or not right. TripAdvisor is transparent about its data collection practices and how it uses it to improve its products and services. This helps TripAdvisor in building trust with its users.
  • Stay up-to-date on the latest trends: TripAdvisor is always looking for new ways to use digital marketing. They are constantly experimenting with new trends and technologies to stay ahead of the competition.

Now that we’ve covered everything about TripAdvisor’s business model, from its services to its digital marketing strategies and campaigns, lets take a look at some of its major competitors.

Top 5 Competitors of TripAdvisor

In today’s competitive online travel and review sector, TripAdvisor has established itself as a significant player with its vast collection of user-generated travel insights and suggestions. However, it is not the only one in this race. Let’s take a look at TripAdvisor’s top five competitors and see how they set themselves apart in this fast-paced industry:

Booking.com:

Founded in 1996 in Amsterdam, Booking.com is a travel metasearch engine that allow its users to compare prices and book hotels, flights, rental cars, and other travel products. It is the largest travel website in the world, with over 280 million active users. What makes it different from TripAdvisor is it focuses on booking travel products whereas on the other hand, TripAdvisor focuses on providing travel reviews and recommendations. If you want to learn more about Booking.com, check out our detailed marketing strategy of Booking.com.

Expedia: 

Just like TripAdvisor and Booking.com, Expedia is another leading online travel agency (OTA) in the world, with over 190 million active users. It is part of Expedia Group which also owns Hotels.com, Orbitz, and VRBO. In total, the group consists of more than 200 travel sites. What makes it different from TripAdvisor is that it allows users to book travel products directly through its website.

Google Travel:

Google Travel is a travel search engine that allows users to search for and book travel products, including hotels, flights, rental cars, and vacation packages. It is part of Google’s suite of travel products which also includes Google Flights and Google Hotels. What makes it different from TripAdvisor is the fact that it is integrated with Google Search which means that users can find travel information directly from their search results. 

Airbnb: 

Airbnb functions as an online platform linking individuals interested in renting their properties with those seeking accommodation in specific locations. It is the largest homestay rental platform with over 67 million listings. What makes it different from TripAdvisor is that it focuses on providing accommodation options, while TripAdvisor focuses on providing travel reviews and recommendations. If you want to learn more about Airbnb, check out our blog on the business model of Airbnb.

This sums up the entirety of the business model of TripAdvisor. Now, let’s summarize and conclude our learnings.

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Conclusion

TripAdvisor has been a go-to site for anyone looking for recommendations on everything from restaurants to hotels for many years. The site’s easy-to-understand ranking system makes finding the top locations to visit in any area simple. The ultimate goal of TripAdvisor’s revamped website and app is to create a fully digital travel agent using artificial intelligence and machine learning. Much like a traditional flesh-and-blood travel advisor, the smart software would come to know the individual and be able to give truly intelligent personalized recommendations.

TripAdvisor has gained popularity and success due to its smart marketing and leveraging of digital channels. You can also learn how to create impactful and targeted digital marketing campaigns by learning the up and coming field that is taking the world by storm. All you have to do is be a part of IIDE’s Online Digital Marketing Course which upskills you in all aspects of the rising digital marketing field.

Want to know more about the marketing strategies and business models of different companies? Head on over to IIDE’s Knowledge Portal to learn more

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Aditya Shastri

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

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