How Is TripAdvisor’s Non-Hotel Business Expected To Grow?
A recent report from Piper Jaffray suggests that TripAdvisor’s non-hotel business might not be getting the attention it deserves. The report suggests that the non-hotel business, including attractions, restaurant reservations, and vacation rentals might grow by 118% between 2015 to 2018 to amount to a $500 million business. While TripAdvisor’s Instant Booking platform is the center of investors’ attention right now, with all its promising growth opportunities and future earning potential, it is important to note that TripAdvisor has been pretty aggressive with the building up of 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%.
- Tripadvisor’s restaurant booking platform, TheFork now spreads across 12 countries and boasts of 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. TheFork currently assists in reservations in over 33,000 restaurants.
- TripAdvisor is also strengthening its entertainment booking platform, Marketplace, with the help of its tour and entertainment based website, Viator. The company believes that attractions can be its next billion dollar revenue generating segment. The market is in a fragmented state and it provides for an $80 billion market potential in the U.S. and the U.K. alone. After the launch of Marketplace in 2015, Viator’s bookable properties had almost tripled from 11,000 to 32,000 in Q4 2015.
- In the vacation rental segment, TripAdvisor has acquired companies like HouseTrip, FlipKey, HolidayLettings, Niumbia, and VacationHomeRentals.com. Currently, TripAdvisor’s platform includes 800,000 vacation rental properties which is almost double that of Priceline.
Piper Jaffrey has also asserted that almost 60% of visitors to the TripAdvisor website research for non-hotel related services. Though it has also added that the monetization of this traffic (still at around 2.4% to 3.6%) is still significantly lower than that of the hotel searches. However, along with the increase in the number of attraction searches, the monetization is expected to also improve 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?
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