Here’s Why TripAdvisor Is Strengthening Its Tours And Activities Segment

by Trefis Team
+36.23%
Upside
30.59
Market
41.67
Trefis
TRIP
TripAdvisor
Rate   |   votes   |   Share

Towards the beginning of October, Viator, TripAdvisor’s tours and activities market place, launched a booking platform for travel agents. Viator’s new platform enables travel agencies from around the world to book over 70,000 tours and attractions. The transactions can be made in 13 different currencies and agencies can earn an 8% commission. The platform also offers a low price guarantee implying that in the event of an agent or user finding a lower price being offered for the similar activity elsewhere, then Viator will refund the difference. With this initiative, Viator has now become the first major consumer facing tours and activities platform that offers direct booking options for travel agents along with an added commission.

TripAdvisor Is Growing Its Non-Hotel Segment

In order to gain back its market confidence, it is important for TripAdvisor to make progress with its offerings. The company’s hotel booking platform is yet to show a satisfactory amount of traction, hence leading to a persistent weakness in performance by the company. Though its non-hotel segment is growing well (31% y-o-y revenue growth in Q2 2017), yet its contribution being around 20% of the company’s overall revenues make the impact less significant. But that doesn’t mean that TripAdvisor should not attain a competitive advantage in these segments as there are chances that these grow in the future and occupy a greater part of TripAdvisor’s revenues and become crucial to the company’s overall growth. It is also important to gain a competitive edge in the offerings that are already performing well in the market, in order to keep its lead over the competition.

In the restaurant booking segment also, TripAdvisor partnered a few months back with restaurant delivery service provider, Deliveroo. The Deliveroo service will be available across 12 countries on over 20,000 restaurants listed on the TripAdvisor platform. Customers who wish to access the Deliveroo service can click on the “order online” option of TripAdvisor. After acquiring multiple restaurant reservation booking websites, TripAdvisor now has the biggest online restaurant reservation platform in Europe called ‘TheFork.’

TripAdvisor Is Yet To Revive The Company’s Overall Performance

TripAdvisor’s several attempts to revive its growth are not yet working for the company. Its revenues declined by 1% y-o-y in 2016 and its margins had been declining after reaching its peak in 2009. The company had been trying several things like making its hotel shopping more mobile friendly, introducing metasearch, and then launching Instant Booking and making it the focal point of its offerings. However, after heavy investments on the Instant Booking platform still didn’t rev up margins, TripAdvisor has recently started refocusing on its metasearch capability while keeping Instant Booking on the sidelines. The company’s revenue per shopper has been especially dampened since the introduction of Instant Booking in 2014.

With its hotel segment performing below expectations, the company is trying to strengthen both its hotel and non-hotel segments through all possible measures. We hope that these measures reap benefit soon enough for TripAdvisor to finally make a turnaround in its performance.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for TripAdvisor

 

See More at Trefis | View Interactive Institutional Research (Powered by Trefis)

Get Trefis Technology

Rate   |   votes   |   Share

Comments

Name (Required)
Email (Required, but never displayed)
Be the first to comment!