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Oxford Economics study reveals TripAdvisor’s impact on global travel economy

July 21, 2016 Statistics & Trends No Comments Print Print Email Email

A global statistical analysis of international and domestic travel has found that TripAdvisor’s breadth of content, trusted consumer reviews, and booking facilities not only influence travel decisions but also generate incremental travel. The Global Economic Contribution of TripAdvisor* report, conducted in by Oxford Economics on behalf of TripAdvisor, reveals that globally TripAdvisor generated 22 million tourism trips and 352 million tourism nights over the course of a year, and US$64 billion (AU$84.5 billion) in incremental travel expenditures, none of which would have occurred if it were not for TripAdvisor content.

Key findings from the study:

  1. TripAdvisor influences both domestic and international travel planning
  • TripAdvisor content influenced1 13% of all international travel and almost 8% of all domestic travel worldwide in 2014.
  1. Increased number and length of trips globally
  • Globally, TripAdvisor generated2 an additional 22 million trips in 2014 – trips that would not otherwise have taken place.
  • TripAdvisor generated an additional 352 million tourism nights in 2014, demonstrating that TripAdvisor content not only increases the number of trips taken globally, but also leads to travellers taking longer trips and extending their stays in destinations.
  1. More money spent on travel worldwide
  • $64 billion worth of travel spend in 2014 was generated by TripAdvisor. This represents 1.3% of the total global travel spend in 2014.
  • TripAdvisor influenced US$478 billion (AU$631 billion) of global travel spend in 2014, representing nearly 10% of total global travel spend for the year.
  • TripAdvisor contribution to global travel spend is due to increased number of trips and increased length of stays, offset by reductions in average daily spend. This results in a net positive overall revenue impact of US$64 billion for the year.
  1. Injection to travel industry employment
  • Over 1.9 million jobs travel industry jobs were sustained as a result of travel spending generated by TripAdvisor in 2014.
  • This includes 900,000 direct jobs within the travel industry and 1 million jobs supported through the supply chain (indirect) and the spending of income (induced).
  1. Improved standards across the hospitality industry
  • Increased travel leads to increased content shared on TripAdvisor. That content helps other travellers plan and book the perfect trip, and also provides businesses with valuable feedback to improve service and in turn attract more customers.
  • Businesses that provide thoughtful Management Responses to the reviews and feedback they receive also perform better on the site.
  • Oxford Economics has linked this virtuous cycle of TripAdvisor content to improved standards in the hospitality industry.

According to Oxford Economics’ report, TripAdvisor content gives travellers the confidence to choose a property based on reviews, ratings and photos from other travellers, rather than more traditional decision-making factors such as brand recognition or previous experience. This trend particularly benefits non-branded businesses, enabling small and independent businesses to compete on more of an equal footing with larger, more internationally recognisable brands.

Australian small business owners are seeing the significant impact TripAdvisor is having on their businesses, including Graeme Dodd, owner and sole operator of Bike Buffs bike tours. “Word of mouth is how people find out about my business; the influence and reach of TripAdvisor is really crucial to the success of my company. Exposure on TripAdvisor has opened up opportunities to both local and international audiences which would not have otherwise been possible.”

Adam Taloni, General Manager of Ovolo Woolloomooloo, actively encourages guests to review their hotel stay experience on TripAdvisor, noting the significance of both the feedback, and the rating of their hotel on the site.

“We place equal importance on the reviews we receive, and our ranking on TripAdvisor – we need the ranking to draw more reviewers to our page in the first place, and then it becomes about the actual content of the reviews which influences others to book,” said Taloni.

The study also established a link between TripAdvisor content and destination choices by analysing TripAdvisor data, travel trends and economic activity. The findings illustrate that the there is an increase in the number of trips taken to a particular destination as the content – such as photos, reviews, listings and information – for that destination increases on TripAdvisor.

According to Margy Osmond, CEO of the Tourism & Transport Forum of Australia (TTF), embracing digital channels is essential to the continued growth and stability of the Australian tourism industry. “Digital channels make travel and tourism more accessible for everyone – from the seasoned globetrotter to the travel newbie – and that means more international travellers coming to Australia, staying longer and spending more money in our visitor economy.

“Tourism operators are increasingly recognising the importance of investing more into their online presence as well as the need to cultivate positive experiences for travellers to build a coalition of supporters. Sites like TripAdvisor are enabling tourism operators in Australia to tap into a global marketplace,” she added.

“Since its launch in 2000, TripAdvisor has contributed significantly to the growth of the global travel and tourism marketplace,” saidGrant Colquhoun, Senior Director Asia Pacific, TripAdvisor. “User-generated content has transformed the way people travel and this study provides compelling insights into just how TripAdvisor has impacted the global tourism industry.  Traveller reviews, ratings and photos help to put smaller, lesser-known operators and destinations in front of a huge 350 million-strong global audience and give travellers the confidence to visit new places, book hotels they might not otherwise have known about and even extend their trip in order to explore more of their destination.”

For more information and to download the complete report, The Global Economic Contribution of TripAdvisor, please visitwww.tripadvisor.com/tripadvisorinsights

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