December 21, 2011 / 4:01 PM / in 6 years

Global guest book spins out on its own

(Reuters.com) - TripAdvisor, the world’s largest travel site with 20 million members, has completed its spin-off from travel website operator Expedia.

Steve Kaufer, chief executive officer of TripAdvisor, poses for photographs in central London May 14, 2008. REUTERS/Toby Melville

The site, which aggregates reviews and opinions about destinations, hotels, restaurants and activities, stretches over 30 localised country websites.

In an interview with Reuters late last week, TripAdvisor’s founder and CEO, Stephen Kaufer says customers won’t notice any difference to the look and feel. “We’ve been able to run as an independent company within Expedia’s portfolio for many years. For the folks within the company, it’s very exciting to be off on our own.”

He added the company will, however, be able to “have relationships with all of our clients that aren’t potentially tainted by having a special relationship with Expedia.”

TripAdvisor started out when Kaufer, who calls himself an “average traveller”, tried in 1999 to plan his first trip to Mexico. Not trusting the glossy travel-agent brochures, finding somewhere to stay involved spending a couple of days searching online for unbiased reviews.

Those reviews, which soon flourished exponentially on the youthful web portal, began to draw the ire of the properties that were being so candidly depicted. Kaufer admitted to having been surprised that hoteliers could not at first see the value of an honest testimonial.

Many chains seem now to have recognised the potential of authentic reviews over the anonymous testimonials plastered on marketing collateral; over 250 hospitality firms now feature TripAdvisor content on their websites. “They report back to us that it improves the conversion rate,” says Kaufer.

UK reputation management firm KwikChex would take umbrage with the term ‘authentic review’; a non-transactional site, there’s no guarantee that people who review properties on TripAdvisor have actually stepped foot in them. KwikChex represents properties who feel their businesses have been damaged with malicious or unfounded reviews. Its co-founder Chris Emmins told Reuters in September that, “The number of fake reviews is difficult to estimate but there is ample evidence that abuse is on a large and global scale.”

Some of these complainants, says Kaufer, “have clearly engaged in fraudulent activity. We’ve caught them, and they don’t like being caught.” He goes on to argue that when you have scale like his site has - 500, even 5,000 reviews of a property - one phoney review is irrelevant.

“Every single person I’ve ever met without exception, when asked ‘how do you use TripAdvisor’?, says I look through the reviews, mentally throw out the best one, the worst one, and follow my judgement based on what the vast majority of people are saying.”

How should hotels deal with negative reviews? Kaufer maintains that hoteliers must “look carefully about what the review is saying, see if it’s part of a trend... take steps to improve their service, and then take it one step further and use our free Management response to either apologise for the issue, or... tell your side of the story. Customers want to know that a hotel is listening to feedback.”

With over 50 million monthly users, it is clear that users find TripAdvisor’s recommendations to be accurate enough. And until a guidebook, physical or virtual, is produced that includes 500,000 properties around the world, the site is unlikely to meet stiff competition.

TripAdvisor shares started trading at $26.06 on the Nasdaq Stock Market under the symbol TRIP.L, giving the company an approximate market capitalisation of $4bn.

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