TripAdvisor Displayed Broad-based Growth Across All Segments In Q1 2015

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TripAdvisor (NASDAQ:TRIP) announced its first quarter 2015 financial results on May 6th. The company’s shares rose by 4.2% to reach $80 in the wake of healthy earnings, despite currency translation headwinds due to the strong U.S. currency. Revenues for Q1 2015 grew by 29% year on year to $363 million and adjusted EBITDA grew by 4% to $127 million. The core hotel business displayed strong growth. The attractions, vacation rental, and restaurant business grew at an even faster rate. These businesses were a prime revenue driver for the first quarter of 2015. [1]

TripAdvisor’s business listings grew by 19% to 4.9 million, with 16% growth in hotels, 25% in attraction listings, and 19% in restaurants. TripAdvisor’s monthly unique visitor base grew by 31% year on year to 340 million. Reviews on its websites grew by 45% to 225 million on 4.9 million listings on places to stay, places to eat and things to do. [1]

All the three divisions of TripAdvisor contributed to the strong top-line growth in the first quarter. Click-based advertising revenue increased by 20% year on year to $249 million, Display-based advertising increased by 9% year on year to $35 million, and, Subscription & transaction revenue increased by 88% year on year to $79 million. [1]

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We are in the process of updating our current price estimate of $87 for TripAdvisor’s stock.

See Our Complete Analysis for TripAdvisor Here

TripAdvisor’s Presence on Google And Apple

TripAdvisor is one of Google‘s (NASDAQ:GOOG) initial launch partners for customized voice action through the Google application. Users can find attractions on TripAdvisor through the Google application platform. TripAdvisor  recently announced the launch of the TripAdvisor Apple (NASDAQ:AAPL) Watch application which leverages the Apple Watch’s “Glances” feature to provide quick access to TripAdvisor traveler reviews, ratings and photos of hotels, restaurants and attractions with a quick swipe-up on the watch face. Hence, currently for any popular device, TripAdvisor seems to be the most prominent application to answer travel, restaurant, and entertainment related queries. In Q1 2015, TripAdvisor mobile application witnessed 190 million downloads. [2]

Instant Booking Rolled Out To Wider Geographies

TripAdvisor launched its Instant Booking platform in the U.S. in Q1 2014. The platform allows users to carry on the end-to-end steps of the booking process — from selecting a room to inputting personal and credit details — on TripAdvisor’s platform itself. Customers can do booking while remaining on the TripAdvisor page.  However, the customer information is sent to the hotel so that the credit card is charged by the hotel and other payment related support is offered by the hotel itself. The company aims to spread the new avatar of TripAdvisor through online and offline channels, through their “plan, compare, and book” message.

In Q1 2015, TripAdvisor launched its Instant Booking feature for independent hotels on its TripConnect platform. It is currently working with 70 connectivity partners to provide more hotel booking options on its platform. Instant Booking Platform’s reach was expanded to mobile phone users in the U.K., Australia, Canada, Ireland, and New Zealand. The company is aiming for a seamless booking experience through the TripAdvisor mobile application and trying to expand to all the English-speaking countries.

TripAdvisor Became The Foremost Repository For Attractions With Viator

In September 2014, TripAdvisor acquired Viator in order to extend its reach in the entertainment sector, which is TripAdvisor’s third largest source of demand after hotels and restaurants. Viator is a leading online service provider of over 20,000 tours and attractions. Viator’s competitive advantage over its peers lies in its “curation model”. Since the acquisition, bookings via Viator have more than doubled.  In February 2015, TripAdvisor and Viator announced the launch of a new tours and activities supplier platform called Marketplace. Marketplace will enable more tours and attractions operators to list their products on Viator and TripAdvisor sites and get access to TripAdvisor’s global audience. [3]

Viator started the rollout of its Marketplace in Q1 2015. There are currently 530,000 attractions on TripAdvisor’s listings. TripAdvisor’s management claims that even though the market for attractions is sporadic in nature, the 170 million mobile applications from TripAdvisor gives a rich content source for tourists searching for attractions and hence it is the foremost repository for attractions. [2]

TripAdvisor Gained Lion’s Share Of European Restaurant Booking Space

In 2015, TripAdvisor continued its tryst with European restaurant booking websites with the acquisition of Portugal-based Best Tables in April 2015. Best Tables also operates in Brazil and has a database of 1,200 bookable restaurants. In Q4 2014, TripAdvisor acquired mytable and restopolis in Italy, and Iens in The Netherlands. Prior to this, in May 2014, TripAdvisor acquired LaFourchette, the leading online restaurant reservation systems in France and Spain. TripAdvisor’s restaurant inventory presently spans across France, Spain, Switzerland, Belgium, Turkey, Sweden and Denmark, making it a market leader in the European online restaurant reservation domain.

In Q1 2015, the restaurant content, traffic, and listings experienced healthy organic and inorganic growth. TripAdvisor re-branded its restaurant platform as TheFork. The company is expanding the reach of The Fork and recently entered markets in Sweden and Turkey. TripAdvisor seeks on leveraging its rich content, deep mobile engagement, and 2.7 million restaurant listings to match more travelers and locals with more restaurants. [2]

One of the reasons why the company is acquiring multiple online restaurant reservation platforms is to consolidate the user base from the different restaurant applications into one common platform. This in turn will help the company cross-sell its other services to the expanded number of users.

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Notes:
  1. TripAdvisor Reports First Quarter 2015 Financial Results, TripAdvisor Investor Relations, May 6, 2015 [] [] []
  2. TripAdvisor (TRIP) Stephen Kaufer on Q1 2015 Results – Earnings Call Transcript, Seeking Alpha, May 6, 2015 [] [] []
  3. TripAdvisor (TRIP) Q4 2014 Results – Earnings Call Transcript, Seeking Alpha, February 11, 2015 []