Kayak + TravelPost = watch out TripAdvisor? - By Sam Shank | Travel Industry News & Conferences

Kayak + TravelPost = watch out TripAdvisor? - By Sam Shank

Mar 18, 2009

There’s been a lot of news recently about the competition between Kayak and TripAdvisor. TripAdvisor recently launched an air metasearch product, directly threatening Kayak’s core business.

Published: 18 Mar 2009

There’s been a lot of news recently about the competition between Kayak and TripAdvisor. TripAdvisor recently launched an air metasearch product, directly threatening Kayak’s core business.

In classic Steve Hafner style (and borrowing from The Art of War), Kayak is responding with a counterattack by playing up the long-in-progress relaunch of their hotel review site TravelPost, and taking more than a few pot-shots at TripAdvisor in the process.

For context and background, I founded and was CEO of TravelPost.com. We were successful with TravelPost.com, reaching over 700k unique visitors, becoming profitable and building the second-largest hotel reviews site. I like to call TravelPost.com the “RC Cola of hotel reviews sites” - profitable with a loyal fan base, but small compared to the total market which is dominated by TripAdvisor (who, to continue the metaphor, is both Coke and Pepsi.)

Realising TravelPost.com needed greater scale to get to the next level, we sold the business to SideStep in 2006, and then it ended up at Kayak after Kayak swallowed up SideStep in 2008.

Kayak did an overhaul of TravelPost.com a few months ago, and will add a lot more functionality and officially relaunch it within a week. As I went head to head with TripAdvisor for four years, I wanted to share my thoughts on the challenges, opportunities and options Kayak has to dethrone TripAdvisor.

TripAdvisor’s strengths

SEO. They understood the power of SEO early and remain among the best SEOs online, not only in travel but in any category.

Traffic. They have tens of millions of visitors every month (about 30x more than TravelPost).

Brand. Having been around for eight years, their brand is synonymous with hotel reviews

Innovative. For a large company, TripAdvisor continues to improve their product and experiment with new products (ex. Facebook apps - worked, social networks - didn’t work).

Network Effect. Most importantly, the hotel review business is a strong network-effect business, approaching a natural monopoly like the online auctions business. Travellers want to write a review where the most readers are, and travellers want to read reviews where the most reviews have been posted. Thus, a single site dominates the category with significant barriers to entry. This fact is something I underestimated when building TravelPost, and made it very hard to get users to post reviews.

TripAdvisor’s vulnerabilities

Overcommercialised. There are a lot of ads on TripAdvisor (though I wouldn’t go as far as saying they are polluting the Internet.)

Conflict of interest. TripAdvisor is owned by Expedia Inc., the largest online travel agency that also controls Hotels.com and Hotwire. This parent company makes up the vast majority of “advertisers” on TripAdvisor. There are many potential reasons why this ownership structure could influence the supposedly unbiased nature of TripAdvisor’s hotel reviews (ex. removing negative reviews from preferred hotel suppliers or changing the review ranking algorithm to favor higher margin properties.) I don’t believe any of this is happening, but there’s nevertheless the potential for a perception of conflict of interest to develop, especially when the competition is a hotel review site that isn’t owned by a company that directly sells travel products.

Too many reviews. The amount of content is both a strength and a weakness. With over 2000 reviews of many hotels, users aren’t going to take time to read all the reviews (or even the 100 most recently posted ones.) What travellers want to do is view reviews from other travellers with the same tastes and values as themselves, and TripAdvisor provides no way to do this.

Users do the work, Expedia keeps all the revenues. TripAdvisor made over $200m last year due to the millions of contributions by its users, who received….$0. Sure, many users will post for altruistic or emotional reasons (status, awards, feedback, etc.) but it’s risky that TripAdvisor doesn’t share any of the revenues it makes from the time and effort expended by the originator of the content that anchors the foundation of the site.

Kayak’s strengths

World-class product team.

Proven abilities. In 2006, Steve Hafner told me that he started Kayak with the goal of “building a better Sidestep, and we succeeded in 12 months.” Two years later, he bought SideStep outright. Given Kayak’s track record, focus and tenacity, I wouldn’t want to be in their crosshairs.

SEO Foundation. The hotel review business is largely driven by SEO, and the rankings, authority, theming and aging that Kayak acquired in TravelPost.com give it a huge head start versus building a new service from the ground up.

Demographic reviewer data. TravelPost’s hotel reviews are filterable by attributes of person who wrote the review, so users can find reviews from people like themselves.

Competency in aggregating data. The new TravelPost will feature reviews aggregated and standardised from over 200 different sites. Many sites offer a similar feature, but Kayak has specialised skills and systems from their metasearch platform that should offer a more comprehensive and useful experience.

(Contributed by Sam Shank, who was the original founder and CEO of TravelPost from 2004-2007. Now he is associated with hotel deals and packages site DealBase.com).

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Kayak + TravelPost = watch out TripAdvisor? - By Sam Shank

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