Businessmodel of TripAdvisor

Customer Segments

TripAdvisor provides a range of services to broad spectrum of customers, including individuals, commercial entities and property owners within the travel and hospitality sector. The Company’s principal customer segments are:

• General Consumers, comprising individual travellers, professional and business travellers, families, and groups;
• Advertisers, comprising a range of commercial entities, brand marketers, and advertising agencies, typically advertising travel and hospitality brands;
• Property Owners, comprising owners and managers of properties that can be rented as holiday units. TripAdvisor is an international business. It serves its local market of the US, as well as operating localised versions of the TripAdvisor website in 46 countries worldwide and in 28 languages, including English, Spanish, Chinese, Russian, Arabic, Greek, Korean, Polish, Norwegian, Turkish, Danish, Swedish, Dutch, Thai, and Japanese.

Value Propositions

TripAdvisor provides value to its customers in the following ways:

• Its reputation and industry standing, with the Company established as a leading travel services providers, offering reliable services and information with regard to a broad range of destinations;
• Its community and user-driven content, with the Company’s platform utilising the knowledge and experience of a wide spectrum of travellers to provide accurate and up-to-date information and insights on various properties, resorts, and locations;
• Its international reach, with the Company serving a global consumer base through its operation of local websites and multilingual service channels;
• Its technology and innovation, with the Company offering weekly engineering releases that provide new features and functionality for its online and mobile channels, with the Company committed to developing new and effective technology solutions for its customers; and
• Its accessibility and flexibility, with the Company operating numerous online channels, as well as offering mobile applications, that allow customers to make and manage bookings from anywhere. ### Channels

TripAdvisor operates a website at www.tripadvisor.com, through which it provides information on its services and destinations. The Company’s website also serves as its flagship online portal, through which customers are able to search hotels, flights, restaurants and activities across multiple destinations, and complete bookings and reservations. The Company also operates local versions of its online portal across 46 countries worldwide. Offering services in 28 languages. TripAdvisor additionally offers mobile applications for iOS and Android platform, which allows customers to manage and make bookings on the go.

In addition to its flagship TripAdvisor portal, the Company manages and operates a further 23 travel media brands, that provide related travel reservation services. This includes wholly owned subsidiaries that operate the following websites: vacation rental portals www.flipkey.com, and www.vacationhomerentals.com; travel reservation websites www.independenttraveler.com and www.tingo.com; flight services websites www.airfarewatchdog.com and www.seatguru.com; and attraction booking portal www.viator.com.

TripAdvisor also operates an in-house sales and marketing team that directly serves the Company’s advertising customers, operating out of the Company’s international network of offices.

Customer Relationships

TripAdvisor operates principally on a self-service basis, providing general consumers with a full range of services through its various online and channels. Through the Company’s various online portals, customers are able to search flights and hotels, make reservations, manage account details, and make payments without interacting with members of the Company’s sales teams.

TripAdvisor provides a more personalised service to its advertising customers, with which its consults directly in order to establish a detailed service brief and identify the most appropriate solutions for each individual customer. The Company seeks to establish longstanding, recurring business relationships with brand marketers, advertisers, and commercial entities.

TripAdvisor provides a range of support services to its customers through its online help centre. This includes technical support guides, service guidelines, and FAQs. Customers are also able to contact dedicated support teams through the Company’s website and over the phone. They can also interact directly with the Company through its social media accounts, including with Facebook, Twitter, Instagram, Pinterest, and LinkedIn.

The Company’s flagship TripAdvisor website is largely community-driven, with users able to write reviews for destinations and hotels, interact with one another through the site’s forums, and share travel advice.

Key Activities

TripAdvisor is an online travel company. It owns and operates a portfolio of online travel brands, primarily its flagship travel portal www.TripAdvisor.com, which provides a range of self-service travel solutions to consumers.

TripAdvisor organises its activities into two reportable business segments: Hotel, which comprises the Company’s hotel and price comparison services, its instant booking features, and subscription-based hotel products, such as Business Listings, and transaction-based hotel products, such as Jetsetter and Tingo; and Other, comprising the Company’s holiday rental, restaurant booking, and holiday attraction booking services, notably including the activities of its subsidiary Viator. TripAdvisor also provides a range of digital advertising solutions to brand marketers, advertising agencies, and businesses. The Company serves a global customer base through a network of local websites in 28 languages.

Key Partners

TripAdvisor operates in partnership with a network of companies and businesses that assist in delivering and implementing the Company’s services. These partners can be categorised broadly as:

• Supplier and vendor Partners, comprising suppliers of tools, technologies, and services that are utilised across TripAdvisor’s numerous digital channels and corporate infrastructure, with a view to supporting and supplementing the Company’s in-house operations;
• Hospitality and Booking Partners, comprising a range of hotels, property managers and owners, and hospitality groups that list their hotels and resorts on the TripAdvisor platforms;
• Affiliate and Marketing Partners, comprising a range of companies and websites that drive traffic to the Company’s online portals in return for commissions on sales;
• Connectivity Partners, comprising a range of booking portals and booking service providers that collaborate with TripAdvisor in integrating customer reservations, reviews, and performance tracking functionality; and
• Strategic and Alliance Partners, comprising a range of companies and organisations with which the Company collaborates on joint projects. TripAdvisor’s connectivity partners include TravelClick, SiteMinder, Bookassist, Ericsoft, Maximojo, Innkeeper’s Advantage, and HotelProxy. The Company has also launched a recent instant booking partnership with Marriot International, and has collaborated with VisitScotland to promote travel opportunities in Scotland.

Key Resources

TripAdvisor’s key resources are its technologies and intellectual properties, its numerous online portals and travel brands, its IT and communications infrastructure, its partnerships, and its personnel.

TripAdvisor relies on its intellectual property rights in relation to its content, proprietary technology, software code, ratings indexes, databases of reviews and forum content, images, videos, graphics and brands. The Company protect its brands by pursuing trademark registration of its core brands, such as TripAdvisor and the Company’s Owl Logo, maintaining a trademark portfolio, and securing contractual trademark rights protection.

TripAdvisor leases approximately 280,000 square feet of office space for its corporate headquarters in Needham, Massachusetts. It also leases approximately 410,000 square feet of office space at approximately 40 other locations across North America, Europe and Asia Pacific, including New York, Boston, London, Beijing and Singapore

Cost Structure

TripAdvisor incurs costs in relation to the development of its technologies and intellectual properties, the development and maintenance of its network of online and mobile portals, the maintenance of its IT and communications infrastructure, the operations of sales and marketing channels, the management of its partnerships, and the retention of its personnel.

In 2015 TripAdvisor accrued total costs and expenses in the amount of $1.26 billion. Its largest costs related to selling and marketing expenses, which totalled $692 million for the year, followed by general and administrative costs –  including the payment of salaries and benefits to its international workforce of more than 3,000 employees – that totalled $210 million. The Company also recorded significant technology and content costs, which were recorded at $207 million for the year.

Revenue Streams

TripAdvisor generates revenue primarily through the operation of online travel and booking portals. The Company’s revenue is derived from three principal streams:

• Click-based advertising revenue, comprising revenue derived from links to partner booking sites and contextually relevant branded and unbranded text links;
• Display –based advertising revenue, comprising revenue derived from a variety of more traditional display-based advertising placements across the Company’s portals; and
• Subscription-based, transaction-based, and other revenue, comprising revenue derived from subscription services such as Business Listings, commissions and transaction fees, and content licensing fees. In 2015 TripAdvisor generated $1.49 billion in revenue, up on the $1.25 billion recorded by the Company in 2015. Around 85% of the Company’s revenue was generated by its Hotels segment, with the Other segment accounting for the remaining 15%. The Company’s various advertising solutions account for the vast majority of the Company’s annual revenue.