The "Social Rush": How Twitter and Facebook change social travel (Part 1 of 3)

By Russ Hearl, CEO and Co-Founder, Sherpa Travel Exchange, http://www.staysherpa.com/

This is the first post in a three part series on the intersection of travel and social networking.

Is it just me or does it seem like everyone and their brother is claiming to be a social media "expert"?  Just because one uses Facebook or Twitter doesn't make that person an expert.  Individuals and businesses are rapidly trying to figure out how to "leverage" the power of the social networks.  Candidly, this means they are trying to figure out how to market and sell you stuff now that they know a whole lot more about you than they could have ever known prior to you providing such wonderful information about your likes/dislikes and general whereabouts.  

Like the California Gold Rush, there's now what I call a "Social Rush" of enterprising intermediaries attempting to stake their claim in the social travel landscape. It's been said that very few of the gold crazed 49ers became rich from their prospecting efforts.  Rather, the entrepreneurs that provided the implements with which to search for gold (such as pix axes, shovels, hotels and food) were the ones to actually strike it rich and set the stage for a dramatically altered economic landscape.

A similar phenomena is playing out in the social travel space (By my definition, social travel is the intersection of community and travel).  Fortunately for us travelers there are dozens, if not hundreds, of businesses being started at this moment that seek to provide the foundation and value added services needed to increase the availability of supply while driving down prices. In the end, the real winners will be the travelers who benefit from a greater variety of travel accommodations and destination services at a far lower cost.  The burgeoning social travel movement will make travel generally more affordable around the world and will enable greater numbers of people to explore this amazing planet.

Let's first discuss the democratization of markets and how social travel will democratize established institutions:

The efficiency and productivity gains brought by the internet touched almost every corner of our post-industrial society. Unfettered and free access to information has proven to be the great equalizer that has broken down bureaucratic silos and even the most militaristic of institutional hierarchies.  It would be hard to argue against the fact that the internet has squashed outdated business models and reduced barriers to entry; thereby allowing enterprising people to reach huge audiences through the distribution power of the internet. 

YouTube offers the most visible example of the democratization of markets.  YouTube wasn't the first user-generated video site, but it quickly became the most widely used because it gave video content providers an open platform for distribution. Before long, anyone with a camera could broadcast their video and quickly build a massive audience.

"Deal of the day" sites also built massive audiences in unbelievably short periods of time.  Groupon, for example, started in late 2008 and is rumored to have more than 2 million members receiving deals of the day via email.  This $100 million business was built virtually overnight through crowdsourcing.  Zynga is another great example of a business that was built entirely on the backs of the social networks.  Their inescapable and addictive FarmVille and MafiaWars game are a ubiquitous reminder of just how rapidly a business can scale an audience when they leverage an open platform distribution technology like Facebook or Twitter. There's never been a point in history where the "little guy" had so much power to democratize markets and build a significant following.

Social travel has manifested itself in community-oriented sites like Couchsurfing, GlobalFreeloaders and Tripping.com to name a few.  These sites offer hosts and travelers an opportunity to engage in a cultural/hospitality exchange for little to no money.  I've used all three sites and think they're really great, but they risk falling victim to the same problems that beset computing giants such as DEC and Sun: Proprietary standards and walled-garden technologies lead people to search for ways to break down those walls. 

This is where the massive distribution power and reach of sites like Facebook and Twitter have the opportunity to transcend mere content syndication used by most social travel sites in the name of 'viral marketing.' Simply offering apps via the social networks to enable travelers to book a flight or find a couch to crash on is not enough and really only supports a quasi-walled garden approach to serving a massive market for travel services. Ultimately, I believe stand-alone social travel networks will be usurped by more organic, open communities that are accessible from all corners of the internet, rather than via a destination site.

Part two of this three part series on social travel will discuss how innovative entrepreneurs are building organic social networks as a way to dramatically increase the size of the social travel distribution pipe.

Russ Hearl

CEO & Co-Founder

Sherpa Travel Exchange, LLC

601 Van Ness Ave, Suite E-208

San Francisco, CA 94102

russ.hearl@staysherpa.com

http://www.staysherpa.com/

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Travel Review Sites: Moral Hazard Ahead

By Russ Hearl, CEO and Co-Founder, Sherpa Travel Exchange, LLC

"Trust me." "To be honest with you."

Have you ever noticed that these prefacing statements are often precursors to a tall-tale? Well, when it comes to endorsements (or indictments, for that matter) of travel experiences it becomes equally difficult to separate fact from fiction.

User generated and social travel review sites such as TripAdvisor and HotelChatter have become mainstream options for travelers seeking a third-party review of airlines, car rental companies, tour operators, hotels, and vacation rentals, to name a few. Millions of people use these sites to obtain a less biased review than they would get by looking at a travel services supplier website or brochure.

But, how un-biased are these sites in reality?

It's a question that we should all ask ourselves. After all, many of these sites are supported by advertising revenues. This applies a not-so-insignificant amount of pressure on the site operators/businesspeople to make sure the people paying the bills are happy. I know this may sound cynical, but as a former advertising executive myself, I can tell you that there is a significant moral hazard present in advertising supported businesses. Lest we think that the big, colorful real estate section in our local newspaper is there because the editor just couldn't wait to tell you about the new sub-division opening up on the other side of town.  I have friends in the newspaper business that tell me a meaningful portion of the content is written to garner paid advertisements. So ask yourself - Is it real news or bait to lure-in advertisers?

When it comes to review sites, how trustworthy is the 5-star aggregate score for the service provider in question? Case in point, Yelp was hit with a class action lawsuit alledging that they are really running an extortion scheme. The lawsuit was filed on behalf of a collection of local businesses that alledge Yelp promises to remove negative comments about their businesses only if they agree to pay a monthly advertising fee. Whoa. If that's true it really makes you wonder whether you're actually getting reviews of real exerpeinces or just the positive ones. Anyone that has used Yelp knows that there's no shortage of inflammatory reviews of service providers.  Many of the negative reviews are actually really funny, but most are plain outrageous and could be considered libelous in some jurisdictions.

Forrester Research examined the motivations of travelers that read and wrote reviews of travel experiences. The research found that 21% of travelers had read reviews on travel review sites like TripAdvisor in the previous 12 months in order to make travel purchase decsisions. The research also found that:

• 19% of the travelers who responded said that they left a review because they were told they would be entered into a drawing for a prize or would receive some form of compensation for submitting a review.
• 27% said they wanted to warn others about a bad experience.
• 48% said they wanted to share a good experience with others.

Overall, more than 6 in 10 U.S. leisure travelers were found to regularly participate in travel-focused social media activities like rating a hotel. Clearly, travelers like to tell almost anyone about our experiences (witness the 50,000+ travel blogs).

Indeed, many marketers would argue that the revolutionary impact of the social networks and user generated content sites (like travel review sites) is embodied in the ability to inspire, monitor and, (cough, ahem!) control word of mouth marketing.  Of course, the transparency offered by social networks can cut both ways.  As travelers, we ought to question the credibility and integrity of some of the advertising supported review sites. Perhaps a more faithful representation of travel experiences could be gained by polling your own social networks using a Facebook poll or some sort of survey. But even then it would be difficult to gain a large enough sample size or let alone locate anyone within your network that has purchased or consumed services from a provider in your intended destination.

Despite the moral hazard, review sites might still over the best solution in the market for obtaining fast background checks on potential service providers. 

How about you?  Do you trust these review sites?

Russ

Russ Hearl
CEO & Co-Founder
Sherpa Travel Exchange, LLC
601 Van Ness Ave., Suite E208
San Francisco, CA 94012
http://www.staysherpa.com/

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