Introduction
TripAdvisor is a public website that caters to a global audience. It is an online platform that helps users to collect travel information, post reviews, and book things like hotel rooms or car rentals. The Business model of Tripadvisor involves its business plan, revenue model, its competitors, SWOT Analysis and many more.
TripAdvisor boasts reviews on all the activities and destinations that users can write about. This acts as a further proof of trust for anyone hesitant to engage in a certain activity or eat in a given restaurant, among others. TripAdvisor implemented various features that would improve the livelihood of its hotel and restaurant partners.
Business plan
TripAdvisor business model matches the demand for people looking for a travel experience with supply from travel partners around the world providing travel accommodations and experiences. The business model of TripAdvisor is largely based on advertising. TripAdvisor has expanded into subscriptions, which tend to offer much greater profit margins.
Revenue model
TripAdvisor makes money from click-based advertising, subscription services, commissions, sponsored placements, listing fees, and reservation fees. Whenever a user clicks on a booking link, the media partner (in this case online travel agencies, or OTAs, as well as direct suppliers in the hotel category) pays a fee for that particular click.
The second major source of income originates from subscription services offered to hotels, B&Bs, and other lodging services. Another subscription-based income stream is its Plus membership, which grants payers a variety of discounts on hotels and and experiences, access to travel advice, and more.
Competitors
- kayak.com
- expedia.com
- booking.com
- hotels.com
- marriott.com
- travelocity.com
- viator.com
SWOT Analysis
Strengths
- Diverse Product Portfolio of Reviews: The products and brand portfolio of Tripadvisor Reviews is enabling it to target various segments in the domestic market at the same time. This has enabled Tripadvisor Reviews to build diverse revenue source and profit mix.
- Managing Regulations and Business Environment: Tripadvisor Reviews operates in an environment where it faces numerous regulations and government diktats. In Customers, Internet areas, the firm needs to navigate environment by building strong relationship with lobby groups and political network.
- First Mover Advantage: Tripadvisor Reviews has first mover advantage in number of segments. It has experimented in various areas Customers, Internet. The Sales & Marketing solutions & strategies has helped Tripadvisor Reviews in coming up with unique solution to tap the un-catered markets.
- Successful Go To Market Track Record: Tripadvisor Reviews has a highly successful track record of both launching new products in the domestic market but also catering to the various market based on the insights from local consumers.
- Superior product and services quality can help Tripadvisor Reviews to further increase its market share as the current customer are extremely loyal to it.
Weaknesses
- Lack of critical talent: I believe that Tripadvisor Reviews is suffering from lack of critical talent especially in the field of technology & digital transformation. Tripadvisor Reviews is struggling to restructure processes in light of developments in the field of Artificial Intelligence (AI) and machine learning.
- Tripadvisor Reviews business model can be easily replicated even with the number of patents and copyrights the company possess: The intellectual property rights are very difficult to implement in the industry that Tripadvisor Reviews operates in.
- Implementation of Technology in Processes: Even though Tripadvisor Reviews has integrated technology in the backend processes it has still not able to harness the power of technology in the front end processes.
- Low Return on Investment: Even though Tripadvisor Reviews is having a stable balance sheet, one metrics that needs reflection is “Return on Invested Capital”.
Opportunities
- Increasing Standardization: Tripadvisor Reviews can leverage this trend to reduce the number of offerings in the market and focus the marketing efforts on only the most successful products.
- Changing Technology Landscape: Machine learning and Artificial Intelligence boom is transforming the technology landscape that Tripadvisor Reviews operates in.
- Opportunities in Adjacent Markets: Tripadvisor Reviews can explore adjacent industries Customers, Internet to further market growth especially by extending the features of present products and services.
- Developments in Artificial Intelligence: Tripadvisor Reviews can use developments in artificial intelligence to better predict consumer demand, cater to niche segments, and make better recommendation engines.
- Increase in Consumer Disposable Income: Tripadvisor Reviews can use the increasing disposable income to build a new business model where customers start paying progressively for using its products.
Threats
- Government Regulations and Bureaucracy: Tripadvisor Reviews should keep a close eye on the fast changing government regulations under the growing pressure from protest groups and non government organization especially regarding to environmental and labor safety aspects.
- Threats of New Entrants because of Reducing Costs and Increasing Efficiencies: As Tripadvisor Reviews can leverage low cost of reaching customers using social media and e-commerce, so can the competitors – both local and international competitors.
- US China Trade Relations: Tripadvisor Reviews has focused on China for its next phase of growth. But there is growing tension between US China trade relations and it can lead to protectionism, more friction into international trade, rising costs both in terms of labor cost and cost of doing business.
- Credit Binge post 2008 Recession: Easy access to credit can be over any time, so Tripadvisor Reviews should focus on reducing its dependence on debt to expand. The party has lasted for more than a decade and rollback from Fed can result in huge interest costs for Tripadvisor Reviews.
- Increasing costs component for working in developed market because of environmental regulations: Tripadvisor Reviews has to deal with these costs as governments are trying to levy higher environmental taxes to promote cleaner options. For Tripadvisor Reviews it may result into higher logistics costs and higher packaging costs.
- Squeezing Middle Class in Developed and Developing World: The growing inequality is one of the biggest threat to not only globalization but also to capitalism. Tripadvisor Reviews first hand witnessed the impact of it where it has seen lower demand of its products from middle class customers in US and EU market.
Conclusion
The business model of Tripadvisor is based on matching consumer travel demand with travel partners offering accommodations, restaurants, and other travel-related experiences.
