TRIP Stock: This Could Be a Big Problem for Tripadvisor Inc
Lackluster Results Putting Pressure on TRIP Stock
Tripadvisor Inc (NASDAQ:TRIP), a company previously known for its online traveler reviews platform, is now allowing users to book hotel accommodations directly after a search. Will this be enough to reverse the course of TripAdvisor stock?
This instant booking system was first tested in the U.S and in Britain, but it’s now becoming more ubiquitous, with hotel bookings accounting for 80% of its business. (Source: “TripAdvisor Misses Expectations as Hotel Revenue Falls,” The Wall Street Journal, August 3, 2016.)
While hotels are the company’s main business, it still has other sources of revenue, such as restaurant, bar, entertainment venue bookings of all kinds. In theory, this should have produced benefits to the group, but it has not. It seems many investors have lost confidence in TRIP stock, which has lost more than 25% year-to-date is almost at half of its $110.00-per-share peak as of 2014.
This begs the question, is TripAdvisor stock a buying opportunity?
The instant booking service certainly has its appeal. It means users can visit TripAdvisor for reviews on their favorite hotels—or other services—and make a direct booking in the same place, thereby bypassing the services of the “Expedias” and “Trivagos” of this world. This delivers the 12%–15% commission fee directly to TripAdvisor.
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Copyright 2016 Investors Buz