Some might consider it ironic that there's been a lot of talk about the possibility of Expedia Group shedding assets, but Tripadvisor is the one actively trying to sell its vacation rental businesses. There has been speculation for some time that Tripadvisor would make such a move — and now it's actually happening.
Tripadvisor is actively trying to sell its collection of five vacation rental brands, Skift has learned. The move comes as it focuses more on its experiences, dining, hotels, and media businesses. Rentals account for a single-digit fraction of Tripadvisor’s total revenue.
Tripadvisor hired bankers, was circulating a prospectus, and conducting calls with potential buyers as of a month or so ago, according to multiple sources.
Potential buyers could include Expedia, Booking, Airbnb, Oyo, and Vacasa, as well as local players perhaps in the UK and Spain, for example. Perhaps, too, a private equity buyer might be able to come in and try to sell pieces, or right the course.
The Tripadvisor brand itself in vacation rentals would not be sold outright, but the demand could be licensed, according to one source. For example, Tripadvisor Rentals could generate the demand, but the vacation rental could be booked on FlipKey under new ownership.
A Tripadvisor spokesperson declined to comment for this story.
It make sense that Tripadvisor would want to retain a vacation rental product in some form while foregoing the operational costs. Tripadvisor still needs to offer users rental options if it is to remain true to its vision of providing end-to-end solutions to facilitate the so-called “perfect trip.”
Tripadvisor’s rental offerings are primarily obtained from individual owners — not property managers —who list their properties for free, and pay a commission. That could be attractive to some buyers because those type of rentals are laborious to sign up.
Tripadvisor has been rolling up vacation rental brands since 2008, when it invested in Flipkey, and a few years later took majority control. Tripadvisor acquired the UK’s Holiday Lettings in 2010, bought Spain’s Niumba in 2013, tacked on VacationHomeRentals in 2014, and added Housetrip in 2016. Tripadvisor also displays listings that it obtains in a deal with Vrbo.
But if Tripadvisor was still in rental acquisition mode in 2016, in recent years it downgraded its efforts in the sector as its offerings failed to take hold and competition from the likes of Airbnb, Booking, Vrbo, and local players heated up.
In fact, unlike its two reportable segments, Hotels, Media & Platform, and Experiences & Dining, Tripadvisor lumps its rentals business into a category called Other, which includes Rentals, Flights/Cruises/Car, SmarterTravel, and Tripadvisor China.
In 2019, the reported “other revenue,” of which rentals was a component, was $165 million, or just 11 percent of Tripadvisor’s overall revenue.
A couple of vacation rental industry sources we contacted expressed skepticism about the value of Tripadvisor’s rental brands, which are viewed as subpar compared with many competitors.
“It would be a very difficult set of assets to sell,” one source said.
Another caveat is that it is unknown how the coronavirus pandemic impacted Tripadvsor’s sales efforts for its rental businesses.
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Photo credit: This vacation rental in Sun Valley, Idaho had been advertised on FlipKey. That is one of the vacation rental brands that Tripadvisor is trying to sell. Flipkey