Can The Recent Addition Of InterContinental Hotels Group Improve Things For TripAdvisor’s Instant Booking?
TripAdvisor’s Instant Booking platform included yet another big name on its banner with the recent addition of InterContinental Hotels (IHG). All the properties from this top hotel brand, including a chain of 5,200 hotels and 770,000 guest rooms spanning across 100 countries, will be available for booking on the Instant Booking platform in the coming days. With this recent addition, can we expect Instant Booking to make a turnaround yet?
Amidst rumors of looking towards takeover options, it seems TripAdvisor is still going strong. At least its Instant booking platform seems to be a huge attraction among hotel owners and OTAs. Currently, TripAdvisor’s Instant Booking platform includes all the top 10 global hotel brands along with the top two global OTAs, Priceline and Expedia.
The paradox, however, lies in the fact that the Instant Booking platform is somehow not able to generate user traction in the same way as it is pulling suppliers towards it. Earlier there were inconsistencies and some technical glitches on the platform which might have kept users at bay. But with TripAdvisor’s constant investments toward Instant Booking’s improvements, with more aggressive marketing, and last but not the least, with the addition of these heavyweight names on its platform, it does seem that TripAdvisor’s Instant Booking should start bouncing back.
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It is noteworthy to mention that the TripAdvisor platform reached half a billion reviews recently. TripAdvisor is the world’s largest travel review website and most travelers rely on the reviews on its platform before making a hotel booking. Hence, it was expected that giving these travelers the option to book directly from its platform via Instant Booking might have worked in TripAdvisor’s favor but till now, travel bookers seem to prefer booking through the other well-known OTAs. As a result, TripAdvisor’s revenue per hotel shopper fell significantly lower than those of its peers. Most of its OTA peers are earning almost 4-5 times more revenue per shopper than TripAdvisor. Instant Booking is the primary contributor of TripAdvisor’s Hotel Revenues that accounts for around 80% of the company’s total revenues. For the year 2016, its revenues declined by 1% y-o-y to reach $1.48 billion, while its EBITDA declined significantly by 24% y-o-y to reach $352 million. Its stock price has fallen by around 45% over the last two years and it is currently trading at around $45.
With the recent addition of IHG and the preexisting names, we can only hope that things start improving for Instant Booking soon. In case that doesn’t materialize, then eventually TripAdvisor might be taken over by a bigger OTA. It cannot be denied that Instant Booking does have a huge potential for growth and given the right marketing and branding (which a bigger name might have the resources to execute) it has a great possibility of becoming a huge success one day.
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