HOTELMARKETING.COM

Hotel reviews and objectivity

June 25, 2009 | Online Travel

New hotel review site Oyster.com gets plenty of media since its launch earlier this week. Including BusinessWeek, which sees plenty of reason for skepticism about Oyster's business venture.

From the perspective of turning a profit, Oyster’s business model is enough to induce apoplexy: Send a full-time reporter on a two-week trip to sample seven or eight hotels and foot the bill—which can reach $35,000—in exchange for unbiased coverage of the properties. “We’re going to spend about $40 million on this before we break even,” says co-founder and CEO Elie Seidman. He and a partner have invested some of their own funds, along with Accelerator Ventures, and recently got $6.5 million from Bain Capital Ventures. Additional fundraising is expected later this year or next.

Desperate hotels are shoveling money into marketing and advertising. The sites also sell advertising and can boast impressive claims for how long users spend clicking around reviews and hotel photos. The Expedia unit that holds Trip Advisor is now producing 11% of the entire company’s $636 million revenue. “If you can get users, it hasn’t been that difficult to monetize,” Seidman says.

Get the full story at BusinessWeek

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