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TripAdvisor appears to be downplaying hotel booking on its own sites, giving more preference to metasearch links to partners in a dramatic reversal of its initial strategy for its so-called Instant Booking feature.
The presentation of booking on TripAdvisor versus links to partners could thus vary depending who is doing the searching.
Skift wrote last month: “On TripAdvisor today, it appears that changes in its hotel search algorithms have moved the site away from an earlier approach when it seemed to be giving preference at times to its own Instant Booking, or Book on TripAdvisor, feature over metasearch and its links to partners,”
But, in a research note May 4, Kevin Kopelman and Emily DiNovo of Cowen and Co. put the changes into context, characterizing them as a “dramatic rollback of Instant Booking” that would boost TripAdvisor’s revenue $50 million to $100 million annually because TripAdvisor metasearch has the conversion advantage over Instant Booking.
The Cowen and Co. analysts also found that the rollback of TripAdvisor Instant Booking on mobile is even more dramatic than on desktop.
“Instead of Instant Booking, TripAdvisor has reverted to its more traditional meta-search price comparison ads that re-direct hotel shoppers to its partners’ sites — usually Priceline and Expedia brands” the Cowen and Co. note said.
“We estimate the changes could drive approximatley $50-100M annualized benefit to TripAdvisor revenue, adding approximately 5% to total revenue growth and approximately 10% to growth in the flagship meta/IB revenue line, most of which would drop to EBITDA.
In a new note to investors Monday morning, Cowen and Co. reports that TripAdvisor is expected to soon debut a website redesign that keeps the same trajectory with metasearch emphasized but cleans up the user interface.
“With Instant Book now heavily rolled back on both desktop and mobile, we no longer view IB as a meaningful headwind,” Cowen writes.
In a search for a new business identity, TripAdvisor management has apparently decided that it doesn’t want the company primarily to become a hotel- booking site, per se. Instead, it will tilt toward metasearch for now.
If consumers prefer booking on TripAdvisor, then based on their past behavior on TripAdvisor they will see this option most prominently. If they prefer to navigate to third-party sites for booking, then those are the options that TripAdvisor will highlight.
TripAdvisor’s strategy is evolving — as it should — and these changes are obviously not the end of the story. TripAdvisor management is likely to have much more to say about some of these issues when the company releases its first quarter earnings statement Tuesday afternoon and officials speak to analysts Wednesday.