TripAdvisor: A Network for Vacation Bliss

How do you plan the perfect getaway? I'm sure you've used TripAdvisor at one point or another in your travel planning process whether you are looking to determine the destination, hotels to book and other places to go and eat, etc. The vast collection of reviews from customers has been a tremendous contribution to the growth of the platform and has become the most popular travel site in the world.

What is it?

TripAdvisor gathers reviews, photos, and opinions from travelers on a range of topics, including activities, accommodations, restaurants, and destinations. This content has become an essential source of advice to other travelers who are seeking to build their own unique travel experience.

Over the years The platform has added the functionality to evaluate real-time prices for flights, hotels etc. You can also make reservations directly. In addition, TripAdvisor has capitalized on the move to mobile by modifying its app to conveniently provide recommendations and booking capabilities even on vacation. TripAdvisor is now a one-stop destination to fulfill all of your vacation needs.

As of 6/30/15 as of 6/30/15, the site had a total of 250mm reviews and opinions and the site had 375mm unique monthly users. The site is available in localized versions on TripAdvisor website available in 45 countries and 28 languages, allowing the company to have a global reach.

User-generated content is now a trusted source for advice to those who are looking for ideas for their travels. TripAdvisor has created a massive global database that allows users to find relevant information about any part of the globe. It is also possible to sort reviews using different types of data such as age and type of travel. To help users quickly locate relevant reviews.

Value Capture

TripAdvisor does not charge users a fee to use its platform. Instead, it earns value from third party companies as well as online travel agencies that want to promote their flights, hotels, and restaurants for the millions of people who frequent the website. Additionally this allows these companies to create more targeted marketing based on the users' profile on the platform. These sources are primarily used by TripAdvisor to generate revenue through display-based, click-based subscription-based, and direct booking commissions. Peek Homepage for more tips about Tripadvisor.

Network Effects

The user experience of TripAdvisor is directly impacted by its network. Similar to other platforms an engaged and loyal user base has significant network impacts. With the increase in worldwide users, other users gain more value from the website, such as the ability to search for relevant content such as reviews, suggestions and images.

There are indirect network effects between the huge user base of TripAdvisor as well as third-party companies. Third-party companies gain the broad reach of TripAdvisor as well as more specific marketing. For instance hotels located in Dublin can show ads to people who are searching for anything related to Dublin on TripAdvisor. Since TripAdvisor is the largest travel site in the world It is more likely that the Dublin hotel will be viewed by those looking for an Dublin trip via TripAdvisor than any other site.

Establishing the Closed Loop to enhance Network Effects

TripAdvisor bought several companies from the leisure and travel space to increase its network. The company has bought these smaller companies in order to increase its market reach into areas where it lacks strength or to improve its technologies and capabilities. TripAdvisor is a one-stop destination for all things vacation planning, booking, and even actual travel. It makes it difficult for new competitors to compete directly with TripAdvisor. A competitor can try to compete on one aspect, such as recommendations for attractions and bookings, however given that their user base won't be as large and robust like TripAdvisor's, I'm wondering if their end goal should simply be to get acquired by TripAdvisor?