How does TripAdvisor makes Money?
If you wish to join a big travel community, then TripAdvisor is the definite name of that. Since 2000, this online platform has changed the way people used to plan their tours and trips and the activities and promotion of travel agencies. It has made all of those traditional works more fun and easy. A traveler can get his/her preferred information about hotels, restaurants, brands, destinations, and even videos, pictures, articles of renowned influencers, and magazines.
Businesses can also promote themselves almost free of cost and get as many reviews as they want by following the community rules. But what’s the benefit here for TripAdvisor? Does it make any monetary value from those activities? Well, here’s the catch. TripAdvisor works as a middleman of both the parties and earns money as well. Wondering how so?
With about 490 million users on TripAdvisor, this platform is an influential media to promote different things. That’s why you’ll find lots of display advertisements for many popular global brands on the website. And this activity is one of the significant sources of TripAdvisor’s revenue. Display advertisements are sold based on CPM or Cost per thousand impressions, which means after every one thousand views on the ad, the company pays a certain amount to TripAdvisor. The difference with CPC (Cost per Click) And CPM is, CPC is only payable when someone clicks the ad. But in CPM, only views matter.
TripAdvisor provides subscription-based member to the customer as well. In this process, a customer enters into an agreement for a specific timeframe, which costs only a few hounded dollars each year.
Non-hotel revenues such as experiences, restaurants, and rentals are another major source of income for TripAdvisor. For experience service, it has contacts with local tours or destination agents and provides customers the fun activities and sight-seeing facilities at the destination. For restaurant service, it has an app called TheFork, where customers can book reservations through the app, and TripAdvisor gets a percentage based on the booking. And lastly, for rental service, customers can have short-time renting facilities for villas, cabins, cottages, condominiums, etc. in case someone doesn’t want to stay at a hotel or motel.
Commission Based Revenue
TripAdvisor allows businesses that are engaged with travel-related services such as transportation, cruises, hotels, cruises, flights, hotels, etc. to get listed on the website. Any business, whether it’s new or small, can also offer their services on the site. And if any of the registered business receives any booking through TripAdvisor, the company has to pay a certain fee to the website.
TripAdvisor has an online marketplace where companies can bid to get themselves referred when a customer searches for any query. As this platform is enormous and there’re tons of service providers for each category, it gets tough to be seen by the customer base. That’s why TripAdvisor provides a facility where the referred company will be shown to a potential customer’s search result as a suggestion. The companies who win the bid for each category, get to be referred. And in exchange, pays a certain bidding amount to TripAdvisor.
If used wisely, TripAdvisor can be a moneymaker for any kind of business. And this online platform works continuously to provide a quality service to both the customers and companies so that the mutual interest seems fair and all the parties get benefitted.