TripAdvisor Leads Travel’s Possible Subscription Future


TripAdvisor first announced its travel subscription plan on its third quarter earnings call with analysts, describing a coming offering that would bring to subscribers discounts on hotels and attractions worldwide as a starting point, with what CEO Steve Kaufer called “plenty more if you think about the things that we can add to the bundle.”

The intent of the offering, he noted, was to leverage the relationships TripAdvisor has built with hospitality players worldwide to build a better travel experience for its own consumers.

“We’re looking to present an offering to our travelers that not only saves them money but gives them … a special experience,” Kaufer said. “Everyone loves to feel like they are treated special, that they are delighted when they go traveling, not only by where they’re going, but how they are treated as a guest at a hotel or on the experience.”

That subscription program has now officially launched, and as of the firm’s latest earnings call on Friday (Feb. 26), Kaufer was outing the emerging program as a “win, win” for TripAdvisor and its customers. He also said it is start of what the company believes will be a powerful recurring revenue stream going forward, as well as the start of a change to the aggregation business model.

Instead of basing its revenue on the commission of the booking, he noted, the company is able to go to hotels directly and persuade them to take that commission and “offer that discount directly to the consumer.”

“The win for the hoteliers, they get access to this club on TripAdvisor,” Kaufer said. “They get preferred placement on the TripAdvisor side, so more visibility for their property. They get a guest that’s perhaps higher end, perhaps likely to stay longer.”

The move has gotten TripAdvisor a lot of attention, and at least one avid fan in the form of Citi analysts who upgraded the brand’s stock rated from neutral to buy to start off the week, calling the $99-a-year subscription program a “thesis changer,” according to TheStreet. Citi has since more than doubled its price target on TripAdvisor to $62 a share from $29. At last check, TripAdvisor shares raised 9 percent and are trading a 52-week high, almost quadrupling their 52-week low set not quite a year ago.

The move, so far, is unique to the travel vertical which has remained rather immune to the wave of subscription services that have been sweeping through all corners of the retail market over the last year. Although given the attention TripAdvisor is getting, it likely won’t be the last if subscriptions for travel actually manage to gain traction among consumers.

But moves in the industry to woo back consumers as the pandemic period begins to wind down are certainly not unprecedented. Last week, Airbnb rolled out a new flexible search feature within the app to allow consumers the ability to tailor their searches around specific locations as opposed to specific dates. The move is meant to better serve consumers who have seen their travel patterns altered by their work-from-home lifestyles and are looking for longer stays during off-peak times.

The new flexible dates feature also offers hosts increased transparency into interested travelers. Users will be able to see a flexible dates feature that will give them multiple options and offer additional ideas for getaways.

Travel has long been on pause, and the debate about when exactly consumers will feel fully comfortable getting back out there remains heated. A lot of new products and programs are to be expected over the next six months as brands and platforms struggle to discover the secret sauce to reigniting the travel bug in the average consumer.

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