TripAdvisor’s Efforts To Revive Its Hotel Business Could Drive Its 2Q’18 Earnings

by Trefis Team
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TripAdvisor (NASDAQ: TRIP) is slated to report its June quarter financial performance on 2nd August 2018. The market anticipates a decent growth in its earnings driven by its efforts to revive its Hotel segment and the strong performance of its Non-Hotel business segment. Going forward, the company’s efforts to increase its ties with travel partners and Online Travel Agencies (OTA) and increased investments to enhance its technology capabilities are likely to drive its value in the long term. However, the company is likely to face stiff competition from market leaders such as Expedia and Booking Holdings, which could impact its market share and top-line growth.

We currently have a price estimate of $43 per share for the company, which is lower than the market price. View our interactive dashboard for TripAdvisor and modify the key drivers to visualize the impact on its valuation.

Key Trends To Watch Out For in 2Q’18 Results

  • TripAdvisor’s Hotel segment has been struggling to perform over the last few quarters. Thus, in order to revive the division, the company has been investing in brand advertising, improving product experience, and optimizing its marketing mix. To this quest, the company has streamlined its hotel pages with a refreshed look and feel, making the platform user-friendly and improving its tracking capability. We expect these efforts to augment the division’s revenue and boost the company’s revenue for the quarter.

  • Similar to the last quarter, the company’s Non-Hotel segment is likely to drive its second quarter results. The growth of the division will be driven by the increase in the Attractions and Restaurants business which deepens traveler engagement with the platform.
  • Further, the company is investing to enhance the product experience to broaden the marketplace and to grow its bookable supply. These steps will help the segment to deliver better results in the coming quarters.
  • Since TripAdvisor is one of the few operators that facilitate researching and booking local activities at travel destinations, we expect it to experience a strong growth in its top-line in the long term.

Do not agree with our forecast? Create your own price forecast for TripAdvisor by changing the base inputs (blue dots) on our interactive dashboard.

 

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