Here’s How TripAdvisor Is Further Monetizing Its Restaurant Booking Business

While the stakeholders and followers of the online travel world are still waiting to see how Instant Booking brings about that breakthrough in profitability for TripAdvisor, it seems that the company has not forgotten its other segments. By now we know that TripAdvisor’s non-hotel segment is growing steadily, unlike its hotel division, and revenues from this segment might provide a major boost to TripAdvisor’s growth in the future. TripAdvisor recently announced the launch of a subscription service and added features to further monetize its online restaurant booking platform that currently boasts over 4 million listings .

What’s New For The Restaurant Segment?

TripAdvisor’s restaurant booking platform, TheFork, now spreads across 12 countries and includes websites such as LaFourchette, the leading online restaurant reservation website in France and Spain, mytable and restopolis in Italy, Iens in The Netherlands, Best Tables in Portugal, and Australia’s largest restaurant booking website, Dimmi. TripAdvisor is trying to further monetize its online restaurant booking business that includes over 4 million restaurant listings. The company has decided to expand its subscription business to include restaurants. The subscription facility, so far available in the U.S. and Spain, has been globally rolled out, recently. As a part of this service, restaurants will be able to post their selected photos and preferred customer reviews below their own listing on TripAdvisor’s website. The restaurants can also avail themselves of data regarding customer trends etc from TripAdvisor. Hotels listed on TripAdvisor have been already enjoying these services.

Why Is TripAdvisor Focusing On The Restaurant Segment?

TripAdvisor’s weak performance in the last year was due to the lack of sufficient traction on the Instant Booking platform. Though Instant Booking currently includes nine out of the top ten hotel chains and also global OTA leaders Priceline and Expedia, yet the platform is still to demonstrate impressive growth. This has led to a decline in the company’s revenue per hotel shopper and hence its profitability. Focusing on other services for growth, while simultaneously working on removing glitches from Instant Booking, does seem like a good idea for the company right now. According to some experts, TripAdvisor’s non-hotel business, including attractions, restaurant reservations, and vacation rentals has the potential to grow by 118% between 2015 to 2018 to amount to a $500 million business.

We currently expect TripAdvisor’s Subscription and Other businesses’ (which comprises of attraction, restaurant, and vacation rental bookings) revenue and EBITDA to grow for the next six years at a CAGR of ~6% . However, increased efforts at monetization might increase the growth rate even further in the future.

[trefis_forecast ticker=”TRIP” driver=”0328″]