Last week, Skift Research launched the second edition of our analysis of TripAdvisor, this one the Deep Dive Into TripAdvisor’s Competitive Position In Travel 2017. We focus on TripAdvisor because no other marketplace rolls up as many travel products, services and content under one brand. In this time of tech disruption and consolidation, travel is getting pulled into the vortex of platforms like Google, Facebook, Amazon, Apple and others. So what can TripAdvisor’s strategy teach us about the future of online travel?
Below is an excerpt from our report:
Arguably, TripAdvisor is at the center of a bigger debate now playing out in online travel i.e. the full-service platform model versus the specialized service provider. Booking.com has shown how a narrow focus on one segment i.e. hotels can turbo-charge a company’s ﬁnancial performance. Trivago has shown us how extreme ad spend and effective marketing can catapult a brand even in the toughest of markets. At the same time, platforms like Google and Facebook in the west and Ctrip and WeChat in the east have demonstrated the cost synergies associated with a captive audience. TripAdvisor is somewhere in between. The question is whether Trip will be able to compete as a platform.
TripAdvisor has potential to become more than a hotel booking engine, but it needs to get hotels humming and proﬁtable to give management additional runway to fulﬁll that vision. Hotel metasearch is the sensible path of least resistance to sustained revenue growth and proﬁtability — the holy grail for publicly traded companies. Here, Trip will need to hold onto two important partnerships. Expedia and Priceline account for nearly 50 percent of its revenue. While this concentration is risky, TripAdvisor is arguably more diverse than some of its direct competitors including Trivago that derives 80 percent of its revenue from those two players. The investment community will watch intently if, and how, Trip can diversify its revenue. Here, its tours and activities line will be key.