TripAdvisor, the world’s largest travel site, announced the ‘2019 TripAdvisor Economic Impact Study in the Restaurant Market’ in partnership with Strategy&, part of the PwC network, revealing insights about the size, growth and key trends of the global dining industry.
Strategy& also found that TripAdvisor and its subsidiaries influenced nearly $8 billion in 2018, including supporting more than 60,000 jobs in the six countries within the scope of the research.
“TripAdvisor is proud to contribute to the growth of the restaurant industry and create value where we operate globally,” said Bertrand Jelensperger, senior vice president, TripAdvisor Restaurants. “Our ambition continues to be to help drive growth and digitisation within the restaurant and hospitality industry as we connect more diners with exciting culinary experiences that match their interests.”
The study found that the global restaurant market reached $1.6 trillion in 2018, and its annual growth is expected to accelerate from 2.9% (2010-2018) to 4.7% (2018-2022). The UK restaurant market reached $32 billion the same year, with an expected acceleration to 1% per year from 2018 through 2022.
“The size and acceleration of the global dining industry is very encouraging for restaurateurs in the UK and beyond,” said Pierre Péladeau, Partner of Strategy&. “It’s also clear that TripAdvisor has a substantial, positive economic impact on this industry in a number of ways, from driving incremental revenue for dining businesses to supporting local jobs.”
Using market research, site data and a survey of restaurant clients, Strategy& determined that TripAdvisor companies together influenced nearly $8 billion of restaurant revenue in 2018 in the six markets within the scope of the study (US, UK, France, Spain, Italy, and the Netherlands), representing over 320 million additional meals eaten in restaurants. In the UK alone, TripAdvisor impacted $0.8 billion restaurant revenue, corresponding to 35 million additional dining decisions.
Strategy& also found that TripAdvisor generated or sustained over 60,000 direct and indirect jobs in 2018 in the six countries within the scope of this study, with 4,500 direct and indirect jobs in the UK over the same period.
Restaurants that use travel-planning and restaurant reservation sites like TripAdvisor see a boost to their bottom line while also providing a service to their customers. The study reveals five critical actions for dining businesses to thrive online:
- Be where hungry diners are doing their research: Millions of consumers turn to travel planning sites and apps to find the perfect place to eat. Having a presence on TripAdvisor, at no cost to the business, leads to +2% of average annual restaurant revenue.
- Engage diners online: Owners benefit from claiming their listing for free on sites like TripAdvisor and engaging with their diners, such as responding to their online reviews. Claiming a restaurant on TripAdvisor generates approximately $15,000 incremental revenue on average per year for every claimed restaurant.
- Encourage online reviews: Businesses also benefit from asking diners to share their candid reviews and opinions online. Eateries with 51 to 100 total user reviews see an average +2% incremental revenue. Restaurants with a 4.5 bubble rating on TripAdvisor also exhibit 2% incremental revenue, more than restaurants with lower average ratings.
- Be bookable online: Restaurateurs who make it easy for guests to book their property see an average of 16 times the return on their investment, and 10% increase in additional revenue.
- Consider levelling up with paid marketing: Owners should also consider paid marketing opportunities to increase traffic and revenue. Restaurants participating in TripAdvisor Premium capture an average six times more incremental revenue than restaurants that have not subscribed. Those with an active TripAdvisor Ads capture five times more incremental revenue than those without.
“The restaurant industry is going through a monumental period of digitisation, as more and more consumers expect to compare places to eat online and seamlessly book a table from their mobile device,” said Jelensperger. “We believe the biggest online marketing opportunity for restaurants is still ahead of them, as 80% of diners are checking online before dining out, while restaurants are dedicating a limited amount of time and investment in online marketing.”