TripAdvisor’s Third Quarter 2016 Remains Dampened As It Keeps Waiting For Instant Booking’s Success

November 10th, 2016 by Trefis Team
+11.07%
Upside
13.86
Market
15.39
Trefis
TRIP: Tripadvisor logo
TRIP
Tripadvisor

Following the cue of the last two quarters of 2016, TripAdvisor’s performance continued being dampened in the third quarter. Though its top line grew by a mere 1% year-on-year, its EBITDA declined by 12% year-on-year. The biggest reason for this weak performance was TripAdvisor’s hotel segment revenues which contributes around 80% of its overall revenues. TripAdvisor’s hotel segment revenues still remained under pressure mostly on account of Instant Booking’s unimpressive performance. Instant Booking is now on phase 3 of its rollout phase which involves enhancing the user’s experience related to hotel shopping and continued partnerships with major hotel chains, OTAs, and standalone hotels. While TripAdvisor’s hotel revenues in the third quarter stood at $320 million depicting 6% year-on-year decline, it did show marginal improvements from its Q2 2016 revenues. Its non-hotel revenues grew by 35% to $101 million.

Currently, the TripAdvisor platform includes over 435 million reviews (50% y-o-y growth) for 1.9 million accommodations, 4.2 million restaurants,  and 730,000 attractions and the platform enjoys 390 million average monthly unique visitors reflecting an 11% y-o-y growth.

trip q32016

Relevant Articles
  1. Why Has Tripadvisor Stock Slumped 35% This Year?
  2. Gaining 20% This Year, Will Tripadvisor Stock Rally Further After Q1 Results?
  3. Up 26% Already This Year, What Is Next For Tripadvisor Stock?
  4. Up 21% Since 2023, How Will Tripadvisor Stock Trend Post Q4 Results?
  5. Down 18% This Year, How Will Tripadvisor Stock Trend Following Q3 Results?
  6. What’s Next For Tripadvisor Stock?

The Instant Booking Platform Showed Slight Improvement

TripAdvisor’s Instant Booking is biggest driver in its hotel segment. Instant Booking completes the next step of TripAdvisor’s metasearch, i.e, booking hotels on the same platform. The platform had so far failed to demonstrate significant growth. Though its management said that the platform might start showing signs of recovery toward the second half of 2016, there was only marginal improvement in Instant Booking’s performance in the third quarter and the platform is yet to show a significant positive impact. One of the reasons for the lack of demand on this platform is that TripAdvisor’s users are accustomed to making searches and reading reviews on its platform before booking elsewhere.

Instant Booking met with some success in the U.S. with its click-based and transaction revenue and its revenues per hotel shopper. However, the revenues per hotel shopper remained significantly dampened outside the U.S. Overall, the revenue per hotel shopper, an important parameter to track growth, stood at $0.45 reflecting a 12% y-o-y decline. Some of the reasons for this decline were due to Instant Booking’s transitions from desktop to mobile and from metasearch to transactions, and the problems with conversions in small screen mobile devices. However, this was a lesser decline than the 19% decline of the revenue per hotel shopper parameter in Q3 2015 when Instant Booking was being rolled out globally. We still have to wait and watch whether Instant Booking turns out to be a bane or a boon for TripAdvisor.

 

Have more questions about TripAdvisor? See the links below.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean 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