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TripAdvisor pulls back on hotel bookings

Profile Photo By: Steve Shellum
May 10, 2017

TripAdvisor pulls back on hotel bookings

Needham, Massachusetts – 10 May 2017 – 
TripAdvisor is pulling back from a major strategic effort to get travellers to book hotels directly on its website after the initiative cut into revenue growth and sent the stock to its lowest price since 2012, Bloomberg reported.

Tripadvisor Instant BookingA massive online repository of hotel and restaurant reviews, TripAdvisor is “increasingly agnostic” about how its customers book their accommodations – whether through the site directly or via links to hotel booking sites – said Adam Medros, senior vice president of product at TripAdvisor. The company has changed its website to make its Instant Book feature less prominent.

Investors cheered the move and TripAdvisor shares jumped more than 8 percent in extended trading, even as the company reported earnings that missed analyst estimates.

For years the company made money by charging a referral fee for sending its users to sites like Expedia. At the end of 2014, though, it started trying to get those customers to book directly on its site, aiming to capture higher-margin booking fees. The effort continued, while revenue fell and some investors abandoned the stock. In the last few weeks, the company did an about-face, changing its website to more prominently show deals from other websites if the prices were better.

Later this quarter, the company plans to launch a brand advertising campaign “to build user awareness of TripAdvisor as not only a great place to research a hotel, but a great place to find the lowest prices when a user is ready to book,” chief executive Steve Kaufer said.

TripAdvisor reported revenue of US$372 million in the first quarter, less than the average analyst estimate fro US$376.2 million.

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