What Might Be Troubling TripAdvisor Currently?
TripAdvisor’s recent third quarter earnings showed that the company still has a long way to go before it starts showing signs of a turnaround in its persistently weak performance. The primary reason for the same has been TripAdvisor’s biggest investment in the hotel booking segment, the Instant Booking platform. TripAdvisor’s hotel segment revenues contributes to around 80% of its overall revenues and hence with Instant Booking’s constant underperformance, the overall performance of the company seems to be significantly dampened.
User Reluctance?
It seems that most users are still comfortable with using TripAdvisor solely as a metasearch engine where they compare hotel prices before going on to a different OTA or hotel website to complete their bookings. TripAdvisor’s ambitions towards transforming itself from a metasearch engine to a full service OTA seem to not have resonated with its users, so far. This is particularly strange if we consider that eight out of the top ten major hotel groups in the world has joined the Instant Booking platform and so has the largest global online accommodation provider, Priceline’s booking.com. Despite the confidence of the hotel suppliers, it seems hotel bookers are still not comfortable in completing their bookings via TripAdvisor.
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What Next?
In the third quarter, though, Instant Booking met with some success in the U.S. with its click-based and transaction revenue and its revenues per hotel shopper; however, outside the U.S. the revenues per hotel shopper remained significantly dampened. Overall, the revenue per hotel shopper, an important parameter to track growth, stood at $0.45 reflecting a 12% y-o-y decline.
In conclusion, TripAdvisor’s fourth quarter doesn’t look too hopeful going by the past trends. If the company is not able to make a turnaround even in the next year, then there might be serious questions whether TripAdvisor can continue on its own or could become an acquisition target for a larger OTA.
Have more questions about TripAdvisor? See the links below.
- What Is TripAdvisor’s Fundamental Value On The Basis Of Its Forecasted 2015 Results?
- Advertising Vs Subscription: What’s TripAdvisor’s Revenue and EBITDA Breakdown?
- How Has TripAdvisor’s Revenue And EBITDA Composition Changed Over 2012-2016E?
- TripAdvisor Year 2015 In Review
- Where Can TripAdvisor’s Growth Come From In The Next 5 Years?
- What Drove TripAdvisor’s Revenue And EBITDA Growth Over The Last Five Years?
- TripAdvisor Q1 2016 Earnings Preview
- How Is TripAdvisor Gearing Up For Competition In The Vacation Rental Space?
- How Can Instant Booking Stir Up The OTA Space And Be A Game Changer For TripAdvisor?
- TripAdvisor’s Expected Revenue And EBITDA Growth For 2016: Trefis Estimate
- Why Might TripAdvisor Be An Attractive Acquisition Target For Priceline?
- What Has Been The Immediate Impact Of The Brexit Decision On The Online Travel Companies?
- How Is TripAdvisor’s Non-Hotel Business Expected To Grow?
- What Might Be The Long-Term Impacts Of Brexit On The Online Travel Agencies?
- What Is The Significance Of TripAdvisor’s Upgraded Flight Search Platform?
- TripAdvisor’s Q2 2016 Earnings Preview
- TripAdvisor’s Q2 2016 Results Remain Subdued But The Company Is Eyeing Long Term Growth
- Reasons Behind Our 12% Downward Revision Of TripAdvisor’s Stock Price
- How Is TripAdvisor’s Top Line Trending?
- TripAdvisor’s Third Quarter 2016 Earnings Preview
- TripAdvisor’s Third Quarter 2016 Remains Dampened As It Keeps Waiting For Instant Booking’s Success
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