we are good not just for hotels and flights and restaurants and attractions and vacation rentals, but eventually surfing lessons and limo services and tour guides and any service that a traveler might be interested in.”
But the company’s venture in 2009 into airline price comparisons is perhaps its biggest, most technically challenging, and riskiest move to date, as it represents a departure from the company’s traditional review-driven lead generation model. Since it’s not clear that customer reviews would make any difference in the market for flights—where customers make purchasing decisions based mainly on prices and schedules—TripAdvisor is forced to attract visitors to its new flight meta-search service, launched last February, based on the volume of its raw data.
Of course, this is exactly what many other flight price comparison sites try to do. To make its service different, according to Bryan Saltzburg, TripAdvisor’s general manager of new initiatives, the company makes a point of connecting to more flight databases than anyone else and offering a few unique bells and whistles, such as a “fees estimator” that attempts to calculate the full cost of flying, including baggage fees, airport taxes, and the like.
“Similar models would be Farecast or Kayak, but we have really just built a better mousetrap,” says Saltzburg. “We have more online travel agencies participating, better content, and the largest result set online, and we return the best price more often than any other well-known travel site out there.” Anecdotal evidence suggests Saltzburg is at least partly right: A search last week for flights from Boston to San Francisco in mid-summer returned 2,429 possible itineraries, with a low price of $348. The same search on Orbitz returned only 241 results, with a low price of $347.
Out of the Park
It’s too early to tell whether TripAdvisors’ flight search service will become a major part of its business—Saltzburg says “millions” of people have shopped for flights using the service, but the company hasn’t released more exact figures. But it may be the company’s record of success exploiting travel data that has persuaded its owner, Expedia (NYSE: [[ticker:EXPE]]), to keep its hands largely off.
It’s unusual for startup CEOs to stick around for two or three years after their companies are acquired, let alone six. But Kaufer says his autonomy at TripAdvisor has been nearly complete; otherwise he would have been out the door years ago.
“I agree it’s totally rare—there are very few similar situations in the industry,” Kaufer says. “When people ask me why I’m still here, they say ‘Do they have you locked up with golden handcuffs?’ and I say ‘No, I have enough money.’ I don’t need to work, period. I love the job and I love the autonomy that Expedia has given TripAdvisor and the whole media group. I’ve told my boss and I’m happy to tell the public that when the rules of engagement change and Expedia wants to start micromanaging what we do here, it’s their right. They own the company. But I won’t be CEO.”
In another 10 years, Kaufer may or may not still be in charge. But by then TripAdvisor is likely to look very different—if only because the travel industry itself is evolving. For example, the company is expanding aggressively into China, where it already owns major travel sites Daodao.com and Kuxun.cn.
“It’s just a matter of time before that represents the largest travel market in the world,” Kaufer says. “I want to be a serious player there. There aren’t many American companies that have succeeded with that objective, but I want you to be hearing two years from now that we were the local company that knocked it out of the park in China.” With TripAdvisor’s long experience making products that scale up exponentially, it may just have a chance.
