TripAdvisor Sees Decline in Hotel Shoppers After Travel Industry Advertising Reset
Skift Take
The hidden tale behind TripAdvisor's anemic revenue growth is that the online travel companies that had heavily advertised on it and similar platforms have decided to trim that spending to improve on their margins rather than chase growth. TripAdvisor executives said they planned to do the same. Quailty growth is the new new thing.
TripAdvisor saw its growth soften in the three months ending June 30. The main cause was that the industry's two largest online advertisers — Expedia Group and Booking Holdings — have in the past year reduced the pace at which they market their deals on TripAdvisor's platform along with some other outlets.
In the second quarter of 2018, TripAdvisor booked revenue of $433 million, a growth of only 2 percent.
The revenue growth rate looked anemic compared to the 8.4 percent growth rate that the company enjoyed in the same period a year ago. It also looks sluggish against the 5.1 percent growth rate for the company in the full year of 2017.
In response, TripAdvisor had to cut its overall marketing spend, the company said Wednesday.
TripAdvisor shares were trading down 14 percent on Thursday.
In the second quarter, it spent about 10 percent less, year-over-year, on marketing. Most of the trimming came in online marketing, while the company grew its brand TV spending for its hotel and non-hotel products.
For the first time in memory, the company saw a decline year-over-year in the number of average monthly unique hotel shoppers. In the second quarter, the reviews and search company attracted 149 million hotel shoppers, a drop of 3 percent, year-over-year.
Investors responded by shaving more than 10 percent off the company's share price, to about $57.
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