This New Entrant In The Tourist Attraction Domain Might Adversely Impact Some Of The OTAs
Yesterday, Google launched a new smartphone application called Google Trips. Described as a ‘personalized tour guide‘ this application will help travelers to plan their vacation days with reservations, things to do, food and drink, and so on. Once the app is downloaded on the phone, the entire app is available offline. With Google’s storehouse of data as the internet search leader, this comes as good news for travelers. But not so for the existing online travel leaders.
The news of this launch made share prices of Priceline (-1%), Expedia (-1%), and TripAdvisor (-2%) fall. Online travel agencies have been braving a rough 2016, so far. With the terrorist attacks and Brexit decision in Europe, the dollar’s appreciation against other currencies, and political unrest and economic slowdown in key destinations, the situation has so far been gloomy. Having a strong competitor enter the arena at this juncture might provide a further blow, though the extent to which it will impact the leaders is yet to be seen. It is noteworthy to mention that Amazon also tried entering the OTA arena but it quit the travel business in 2015.
One of the most adversely impacted players due to Google’s entry might be TripAdvisor. TripAdvisor had been focusing a lot on its attractions segment with its Marketplace platform. It had been aggressively expanding its attractions, vacation rentals, and restaurant booking websites over the last couple of years. We currently expect TripAdvisor’s Subscription and Other business’s revenue (which comprises of attraction, restaurant, and vacation rental bookings) to grow for the next five years at a CAGR of ~8% and the segment’s EBITDA to grow at a CAGR of almost 10%. However, with the presence of a player like Google Trips, the growth rate might be much slower in the future.
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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?
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