TRIP ADVISOR Harvard Case Solution & Analysis

Trip advisor Case Study Solution

Overview of Case

Trip advisor established in Feb 2000 and that was the result of frustration, when the founder Stephen Kaufer found the unbiased information about traveling and he got frustrated, in that frustration he got an idea to develop an application that provides true information regarding traveling to the consumers.

The information regarding the traveling was limited to the websites and applications.

Hotels where consumers wanted to stay during the vacation or traveling, they provide the in-depth information regarding rates or services.

That frustration became the reason for developing a website that provides true and insightful information regarding traveling or vacation. Trip advisor website also provides the information regarding the rental charges of the different hotel at different locations. Information regarding the vacation means Trip advisor suggests you which is the best place for vacations by looking the reviews or where most of the people are going for vacations.

At its initial phase, the primary source of income for the Trip advisor was the ads of travel agencies on the website of Trip advisor, actually trip advisor searched the travel agencies on the internet and it offers them the tax link service on its website, Test links basically was the ads of the travel agencies on the site of Trip advisor, that advertisement provide the information regarding the travelling rates and by looking at the travelling rates of different agencies consumer can compare which one is best for the traveling and which travel agency is providing lower rates, However, Trip advisor earns on the pre click basis, the more the people click on the ad, the more the company was generating the profits.

In FY 2004, S. Kaufer sold the Trip advisor website to Interactive Corporations at the price of $210 million, the whole amount was paid in cash.

After the acquisition of Trip advisor website by active incorporation, the company experienced rapid growth, its reviews reached to 1 million and its market share was increasing.

During its rapid growth, Kaufer was the part of the company he was working as the CEO and president of Trip advisor.  In 2005, the company became the largest travel site with its operations in 25 countries and offering services in 17 languages. In the fiscal year 2010, it has reached over 40 million reviews moreover, the company has 460,000 hotels, 565,000 restaurants in around 71 destinations in the world.

In the fiscal year 2010, company reported the revenue of $239 million with the operating income of $139 million.  Company’s customer base increased to 35 million and that was more than its competitors such as, Yahoo travel was on the second number with 21 Million.


The company is facing challenges for entering into three new markets including flight market, Chinese market, and rental market. These market are very competitive as there are large companies in these market such as Google, which has acquired ITA, a leading flight information company. These companies will give tough time to the Trip advisor and company also requires a huge resource to gain competitive advantage and to compete with these giants.

Why is TA appealing to consumers? Why do consumers write reviews?

Trip advisor is appealing to customers because it is providing real information to the customers, that information is real in a way that it is provided by the people who have already traveled that places based by giving reviews for those destinations. Travelers rely on other’s information when they are choosing some places for the vacations. And Trip advisor is providing that information, by looking at the different reviews provided by the travelers, potential travelers can choose the best destinations for their vacations or holidays.

Consumers will get unbiased information regarding hotels, attractions and other traveling related ideas.

TRIP ADVISOR Harvard Case Solution & Analysis



Consumers write reviews because they share their experience with social media or through any blog.Actually, consumers know that these reviews would help other persons while choosing the best place for their holidays, on the basis of the reviews, they suggest global travelers which place is best for them.

Research showed that 89% of global travelers choose places based on the reviews and 96% of the hoteliers told that reviews are very important for generating the bookings.

What do hotel owners and property managers feel about TA? How does TA manage to create the balance between consumers and hotel managers?

Hotel owners and property managers would look Trip advisor as an opportunity while interacting with consumers online. They can provide the information regarding the consumer’s preferences online.

As Trip advisor have 35 million people per month and no doubt hotel owners and property would look this as an opportunity. Through the internet, they can target more people than physical having one shop, as through the Trip advisor, they can target many people belonging to different cities, they can interact with customers through Trip advisors. To create the balance between the managers and customers, TA has changed their marketing focus to encourage the customer to give the reviews regarding their traveling....................

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