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TripAdvisor quarterly update fails to impress

Posted by Lee Hayhurst on
TripAdvisor quarterly update fails to impress

Shares in TripAdvisor took a nosedive after a quarterly earnings update this week that failed to meet investor expectations.

The review site revealed total revenue in the three-month period increased 2% to $433 million, but income from its hotel division was down 4% to $313 million.

The firm said user revenue volumes grew 24% so that of June 30 there were 661 million covering 7.7 million places to stay, eat and do.

Average monthly unique visitors on TripAdvisor websites and apps was 456 million, up 10% year on year.

The firm said hotel shoppers decreased 3% to 149 million “primarily due to our ongoing initiative to operate our paid online marketing channel to improved profitability levels.”

Total adjusted EBITDA was up 8% to $109 million, with hotel EBITDA up 6% to $89 million and non-hotel up 18% to $20 million.

Steve Kaufer, TripAdvisor chief executive, said: “We are pleased with second quarter results and our strong first half of 2018.

“Operational changes have been taking hold, our product and marketing initiatives continue to align with the needs of consumers and partners alike, while our investments in newer initiatives position our platform for future profitable growth.”

TripAdvisor said its bookable experiences product grew by 98% to 121,000. Non-hotel revenue increase of 22% was driven by growth in experiences and restaurants.

Ernst Teunissen, chief financial officer, said: “Our business trends have strengthened since the beginning of the year.

“Optimising our marketing mix has successfully stabilised hotel segment profit and first half results and recent performance make sus incrementally confident in our expectation of adjusted EBITDA growth this year.”

Following the trading update shares in TripAdvisor fell by as much as 16.4% with analysts saying they did not see any improving fundamentals and the firm remains in transition.

The slide was the firm’s worst daily performance in the markets since November 2017, however, the share price remained 45% up for the year to date.

Brent Thill, analyst at Jefferies, said: “Despite incremental improvements, TripAdvisor remains a ‘transition’ story with a turnround that gets constantly pushed further into the future.”

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