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Monday, January 30, 2012

Vetting Online Booking and Review Sites



-- Republished from Solutionz Blog  --

I love online review sites.  I really do.  And I use them to help me do everything from finding the perfect high school for my daughter, to buying a fabulous new refrigerator and yes, to book travel. 

According to a 2011 article by Kevin May of TNooz, 60% of all reviews are positive, 28% are "neutral" and just 12% are out and out negative.  These stats were taken from a study done by Spain-based ReviewPro.

Most legitimate review sites (including TripAdvisor, iGouGO, TravelPost as examples) have a vehicle for hotels, restaurants and attractions.  But you should be aware that other travel related services such as online travel booking services sit out in the hinterlands of these sites, often reported in moderated forum sections of the site.

In the spirit of full disclosure, I happen to manage one of the top 100 travel booking sites (per Hitwise/Experian), that thanks to our user generated destination and property reviews is also in the top 40 in the travel and accommodations category.

What I've been finding out is that if a consumer comments on our site (or any other online site), the designated moderators (who are generally NOT employees of the review site) are allowed to make very general and often inflammatory comments that are not always an "informed position". 

Out of my frustration with these sites, I created this video to help consumers "vet" sites that they are considering using for both travel booking and for reviews. 

This video is intended to give consumers a way to gauge the viability of online travel booking sites from empirical evidence provided by independent analytics firms (such as Compete.com) and trusted advisors, such as the Better Business Bureau.

What consumers should consider when selecting an online booking service:

1.  PROFITABILITY - This is readily available for those sites that are run by public companies.  We recommend checking out the companies on Yahoo Finance and paying special attention to the Key Statistics section and the MARKET CAP, REVENUES and GROSS PROFIT.
2.  VOLUME METRICS - For private companies that do not disclose the profitability information, volume metrics are key.  To check the volume metrics, we recommend that you use COMPETE.com, an independent analytics site.  You can put in ANY URL, including the URL of review sites and booking sites.    This site shows TRAFFIC, GROWTH and SEASONALITY


  • TRAFFIC - It is important to note that to run an online business of any kind, you must have a sustainable amount of traffic.  While that number changes based on your business model, I have a rule of thumb that I look at companies that have over 100,000 average unique visitors per month as "viable".  Now that doesn't mean that they are profitable on a cash flow basis, but it does mean that they have a great chance of surviving and thriving.
  • GROWTH - What you want to look at here is year over year growth, as month over month (particularly during 4th quarter), travel sites will often show a decline due to SEASONALITY.
  • SEASONALITY - If you look at both large companies in a particular category (such as Online Travel Agencies OTA), you will see the "normal seasonality" over the course of a 12 month period.  In travel, it is totally normal for visitors and bookings to decline after Labor Day.  Do not be concerned if you look at the current Compete.com site for your favorite site and see a decline for December.  Next month they will show January stats and you will see a remarkable rebound for nearly all travel sites. 

There is also a great feature that lets you click on SIMILAR SITES.

3.  REPUTATION - This one used to be simple.  You could call the Better Business Bureau (BBB) and see how they rank the firm.  With the advent of online ranking sites, this is no longer quite as clear cut as there are many companies getting into this "game".   

Some sites (include the BBB) charge the business to become "accredited", but the BBB has very strict standards for accreditation and they will not grant the use of their logo to companies that don't adhere to their standards.   If a site allows you to pay to claim your business, but does not have any quality standards, beware.  What this means is that companies may not be able to challenge complaints that are posted without becoming a member. 

Once again, you can use COMPETE.com to see how many people are actually using the review site and stick with those that are used by a broader range of consumers and also take a look at the ratio of negative comments to positive comments and see if it aligns with the ratios that were noted in the TNooz article.  If they are unduly skewed toward the negative, beware, as you may only be getting the views of those people that may never be happy with anything.  Most review sites allow you to click through to see the complaint history of an individual and you can easily see patterns emerging that could render their complaint as fraudulent.

4.  KNOW THE POLICIES - Back before the advent of online travel, you could call a travel agent or a hotel and "reserve" a room without paying.  Not so with most online travel sites.  On most sites, you pay up front and the retailer is responsible for conveying the reservation details and payment to the hotel prior to check in.  This is not always instantaneous, so you may call a hotel right after booking to see if they have your reservations and they may not have the details yet.   This is generally a limitation of the level of sophistication of the property, not the booking site. 

Every booking site and every property have their own unique relationship and contract for how changes and cancellations are handled.  Please make sure you read the website's policies before booking so that there will be no surprises.

Even if there is a "no cancellation" policy for prepaid bookings, if there is a reason out of your control (e.g. an accident or illness), the booking site will generally work with you.  They may require proof, so make sure that you keep documentation from your doctor or hospital that can be faxed to their customer service department.

5.  GET EDUCATED, THEN BOOK AND GO!
If you do your homework, you should be able to confidently book and go on your trip, knowing that your reservation will be secure.  Many of the complaints that we see on the review sites have to do with the hotel's customer service or the hotel not honoring what was confirmed. 

We recommend that you give the company a chance to respond to you directly if you do have a problem (versus posting on one of the hundreds of complaint sites that may or may not be monitored daily by the company).  If the problem was with the hotel and the hotel refuses to resolve it, then by all means, post your negative review of the property on a public site.  Quite often the booking site will remove that hotel from its live booking system if they repeatedly create this type of service problem. 

If you are happy with the elements of the trip, please post a positive response on the various public sites and mention who you used to book the trip. 

If you have additional ideas for vetting sites and companies, I'd love to hear about it.

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