What Does TripAdvisor’s New “Best Value” Ranking Mean for Hotels?

By Daniel E. Craig, Founder, Reknown

Travelers have spoken, and TripAdvisor has heeded their wishes. According to the 2016 TripBarometer Study, 93 percent of TripAdvisor survey respondents ranked price as the most importance influence on accommodation booking decisions.

To that end, TripAdvisor recently introduced the latest, and possibly the most disruptive, change in its repositioning from a review site to a place to plan, share and book travel experiences—and above all to get the best deals on hotels.

Now, when travelers search a destination on TripAdvisor, hotels are no longer displayed according to the Popularity Ranking; the new default ranking is called “Best Value.” The change was rolled out system-wide on May 30, 2017 along with other updates.

How does Best Value change search results?
The popularity ranking is still around, but it is now called “Traveler Ranked,” and to access it in hotel searches users must switch the sorting option at the top of the page.

The Best Value sort presents a significantly altered portrait of top hotels in a destination. For example, when I searched hotels in New York City on a given date, the Row NYC Hotel, which ranks #346 of 467 hotels on the Popularity Ranking, came up on top as the “#1 Best Value.” That’s quite a jump in visibility for a hotel with lackluster reviews.

Meanwhile, the Hotel 50 Bowery NYC, which ranks #1 in New York City on the popularity ranking, was barely on the radar, coming up as the “#32 Best Value” hotel.

What does this mean for hotels? While it’s too early to assess the full impact, one thing seems certain: if you wish to maximize visibility and booking referrals on TripAdvisor, rave reviews and a high popularity ranking are no longer enough.

What exactly does “Best Value” mean?
Over the past decade, I’ve worked with TripAdvisor and hundreds of hotels and brands around the world to help hotels build and leverage a positive online reputation. The Popularity Ranking has always been a source of mystery for hoteliers—and sometimes frustration. The new Best Value sort stands to be even more perplexing.

TripAdvisor defines Best Value as “Hotels ranked using exclusive TripAdvisor data, including traveler ratings, prices, booking popularity, location and personal user preferences.”

Compare that to the Popularity Ranking, which is based on the quality, recency and quantity of traveler reviews and now seems comparatively simple.

And while TripAdvisor’s commercial relationships with hotels do not factor into the Popularity Ranking algorithm, a hotel’s “booking popularity” is a key ingredient in the Best Value algorithm.

Also noteworthy is that because availability and “personal user preferences” are factored in to Best Value rankings, search results may vary by date and by user. This will make it challenging for hotels to know where they stand in rankings.

To help bring some clarity to these changes, I consulted with Kevin Carter, TripAdvisor’s associate director of corporate communications.

“While our Best Value sort is proprietary, what we can share is that properties that appear in this sort have rates and availability for the traveler’s search dates, offer high quality experiences and are frequently booked by similar groups of user queries,” Carter said.

Why did TripAdvisor change the default sorting filter?
Asked what prompted TripAdvisor to make this change, Carter explained, “TripAdvisor’s new ‘Best Value’ sort is designed to improve the travel planning experience by offering relevant hotel options to users and increasing the quality of leads to hotels. This new sort takes into account rates and availability, as well as TripAdvisor data, including traveler ratings, booking popularity, location and traveler preferences.”

“We’re always testing and making changes to the site based on feedback from our community of travelers. We found over time that the highest ranked properties in a given destination may not always align to a particular traveler’s search parameters.

“So, for example, the top ranked hotel in the city might be out of the traveler’s price range or lack availability for the dates searched. Similarly, that new innovative boutique hotel that’s perfect for a couple’s getaway might not be quite right for a family on a budget who want free breakfast and a pool.

“What became clear from our data is that our users define value differently when looking to book a hotel, and that’s where our new sort comes in to complement our traditional ‘Traveler Ranked’ popularity ranking. Our Best Value sort is designed to help improve their shopping and booking experiences.”

Makes sense from a traveler’s perspective. But if hoteliers want to compete on price, they have OTAs. TripAdvisor’s focus on reviews has always lent the site a degree of integrity and credibility, setting it apart from the more price-driven, mercenary tactics of OTAs, and helping it to grow into the world’s largest travel site.

But it’s not easy to monetize reviews, and TripAdvisor is a public company that must also answer to its shareholders.

How has TripAdvisor’s positioning changed?
TripAdvisor’s shift to a pricing model has been evolving for several years. In 2014, the company launched Instant Booking, a commission-based model that allows travelers to make a reservation without leaving the site or app.

Since then, most major hotel chains have come on board as partners, as have Booking.com and Expedia. But travelers have been slower to embrace Instant Booking. Revenue from commissions has not offset losses in cost-per-click revenue, and TripAdvisor’s stock value has fallen from a high of US $111 three years ago to its current value of about $36.

The latest round of changes to price displays fixes one of the major problems with Instant Booking: it did not always feature the lowest price. Now, the lowest price is always displayed in the first position regardless of the booking source or which source bids the highest. Savings are highlighted in red strike-through pricing.

At a recent investor conference, TripAdvisor CEO Stephen Kaufer explained the company’s new value proposition. “We want to make sure that it’s not just reviews that [travelers are] coming to us for,” he said. ‘It’s not just for those photos, the experiences, but saving you money.”

Do reviews matter anymore?
In a series of new TV advertisements, TripAdvisor’s owl mascot sings the praises of finding the best hotel prices on TripAdvisor but barely utters a peep (or a hoot) about traveler reviews.

But travelers have all sorts of price comparison sites to choose from, and all of them claim to offer the best deals even though most rates are at parity. It’s not easy to deliver on the promise of saving travelers money.

So, for now at least, reviews will continue to set TripAdvisor apart and must play an integral role in a hotel’s reputation strategy. A hotel’s rating, popularity ranking and reviews are still prominently displayed on its property page.

And, as Carter explained to me, “A hotel’s overall rating, and the quality of the experience provided, remain important factors in our Best Value sort.”

How will this impact booking inquiries?
Properties that rank high on the Popularity Ranking may find that the amount of traffic and referrals they receive from TripAdvisor decreases. But, if all goes as TripAdvisor plans, conversion rates should be higher.

“As Best Value continues to develop and learn based on user preferences, it can help drive more qualified travelers to a hotel’s property page,” Carter explained.

“Ultimately, we know hotels want to drive bookings, and the Best Value sort—we believe—will be one of the most efficient ways for hotels to cut through the lookers and get to bookers quicker, more deliberately and more efficiently.”

What can hotels do to adapt to these changes?
Which brings us to the big question: How can hotels increase visibility in Best Value search results?

“Make sure to offer competitive rates, share all availability with TripAdvisor and continue to deliver an amazing experience for guests,” Carter said.

He identified three key areas to focus on:

  1. Supply rates and availability: Hotels can provide rates and availability, directly via TripAdvisor’s Instant Booking or Cost-Per-Click products, or indirectly via an OTA.
  2. Demonstrate quality: Reviews from travelers reflecting the high quality of service provided are very important. This positive feedback, along with improvements hotels make to their business based on guest feedback, can help improve the hotel’s visibility in the Best Value ranking.
  3. Improve booking frequency: Providing competitive rates is a top driver for bookings.

To participate in Instant Booking and Cost-Per-Click campaigns, you will need a connectivity partner, and they can help guide your strategy. To learn more about pricing strategy, check out these posts from Fastbooking and Mirai.

What lies ahead?
TripAdvisor regularly tests and tweaks content on the site, so expect more changes to come. Treat your TripAdvisor page like a secondary website—a dynamic platform that requires regular monitoring, measuring and updating.

And don’t forget the basics: monitoring, responding to and earning reviews, as well as managing photos and descriptions on your page. Now that user preferences factor in to the Best Value sort, your Amenities section should always be complete and up to date.

I asked Adele Gutman, vice president of sales, marketing and reservations at Library Hotel Collection, what she thinks of TripAdvisor’s new direction. Over the years Gutman has been a huge proponent of the power of online reviews, and her properties consistently rank within the top ten on the Popularity Ranking.

Gutman takes a pragmatic perspective. “I would love to go back to yesterday and have it be that way forever,” she told me. “However, every company has to make decisions based on its own long-term profits and sustainability. Whatever TripAdvisor has to do to be financially successful is okay by me, even if it means fewer page views. My company benefits most in the long term if TripAdvisor thrives.”

I think Gutman speaks for many hotels that have reaped the benefits of TripAdvisor in the past and wish to continue to do so in the future.

See also: Important Updates to TripAdvisor’s Popularity Ranking

 

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4 Responses to “What Does TripAdvisor’s New “Best Value” Ranking Mean for Hotels?”

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  1. Neil James says:

    Great article that provides some clarity to hotels on the impact of these changes. Thank you Daniel!

  2. Something wrong with TripAdvisor rankings where a property with a lower grading & higher prices can be “Best Value” above one offering better quality & lower prices

  3. Tim Henthorn says:

    Great read. This is an interesting migration from review based to value-based sorting, driven primarily by price, reviews and booking volumes. The remaining question for hotels will be how much consumer preferences and the needs for each unique trip will influence travel search visibility on TripAdvisor. As for consumers, TripAdvisor has rather enticing prospective traveler data to personalize their experience.

  4. Jeffrey Barabe says:

    As a hotelier we invested several resources to appease the Tripadvisor bots and make the top five. It now appears that Tripadvisor has sold out as a traveler ranking site with the “Best Value” model not being evenly remotely representative of our small market, Palau. Six of the worst hotels (below budget accommodations) in our area are now in the top ten. Unfortunately it is our local tourism that is suffering because in the end the guests are highly disappointed and are likely not to to return.

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