How the mighty have fallen. TripAdvisor is now in deep trouble with its transition to a hotel search and booking site going backwards.
Of major concern is that the steps taken by TripAdvisor’s leadership to turn its hotel business around – “a fresh new look”, “streamlined hotel shopping experience” and increased brand advertising – have actually accelerated the decline.
Rubbing more salt into the wound is the fact TripAdvisor has never been more popular as a review site (monthly visits exceed 455 million) and yet booking revenue is down.
It’s now clear Founder Steve Kaufer was kidding himself when he told investors in early August that, “It is still very early, but these efforts are showing signs of success.”
At that time hotel bookings were slowing but still in the black. Not any more. During the third quarter, advertisers cut their spend while “click-based and transaction revenue and revenue per hotel shopper to decline by 5% and 11%, respectively.
“These softer than expected click-based and transaction results led to negative 3% Hotel segment revenue growth in the period.”
On the upside, its restaurant and attractions business grew strongly and Kaufer remained determinedly optimistic.
“Despite the recent headwinds, we are pleased with our progress aligning our product experience with our consumer marketing campaigns, and we are confident this will enable us build more fruitful, long-lasting relationships with the more than 163 million average monthly hotel shoppers on our site during the quarter.
“In our Non-Hotel segment, positive momentum continues to build, particularly in our Attractions and Restaurants businesses.
“Non-Hotel revenue grew 26% in Q3, and we are investing to broaden our marketplace, grow bookable supply, improve the product experience and further deepen traveler engagement with our platform throughout more moments of every trip.”
TripAdvisor shares are down 23% since announcing its third quarter results.