TripAdvisor reviews are now so powerful they impact the tourist industry of entire countries

TripAdvisor is the biggest travel reviews website in the world. It makes nearly $US1 billion in revenue a year and boasts more than 60 million members.

Customers of hotels, restaurants, and other attractions add 115 comments to the site every minute, writes Tom Vanderbilt on Outside Online.

The site is now so big that its reviews can shift the tourist economies of entire countries, Vanderbilt says.

TripAdvisor began in 2000 as a travel website with features, photos, and reviews. Founder and CEO Stephen Kaufer found that his users’ write-ups often spread like wildfire across the web and are the crux of its success. TripAdvisor uses a 1 to 5 “bubble” rating system. (Stars are reserved for high-end establishments.)

Social media and TripAdvisor have together forced hotel owners to do more than rely on nice photos and clever branding to entice customers, Vanderbilt writes. And that is changing the hotel economies of entire countries.

An Ireland University College Dublin study examined hotel reviews in the Las Vegas market between 2007 and 2009, and compared them with reviews of hotels in Ireland during the same period.

In Las Vegas, reviews remained more or less constant during that time. But in Ireland, where TripAdvisor was a more recent entrant into the market, review averages climbed from 3.6 to 3.8 bubbles, Vanderbilt says. The standout discovery is that as Irish hotel managers took action to garner good reviews on TripAdvisor, their hotels actually got better. And as they did, responses also improved — and visitors arrived more frequently.

Travel/markets strategists Tourism Economics conducted a separate study of TripAdvisor and saw that user-generated content was “directly related to £1.7 billion of tourism spending in the UK,”Big Hospitality reports. In 2012, that figure made up around 2.2% of all tourist spending.

Vanderbilt also notes an internal TripAdvisor study that found that hotel owners who reply to commenters are 20% more likely to get bookings. Another piece of analysis, this time from Cornell University’s Center for Hospitality Research, found that reviews even Affect hotels’ “RevPAR,” or revenue per available room. Every positive percentage point a place rises up the tables in TripAdvisor, RevPAR at locations increases by 1.4%. Vanderbilt explains that as a result, hotels can raise prices by 11% to reflect their reputation on the site.

Today, TripAdvisor lists over 890,000 hotels, holds one of the largest collections of travel photos on the internet, and features accommodation in more than 45 countries.

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