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Here's How TripAdvisor Is Further Monetizing Its Restaurant Booking Business

While the stakeholders and followers of the online travel world are still waiting to see how Instant Booking brings about that breakthrough in profitability for TripAdvisor, it seems that the company has not forgotten its other segments. By now we know that TripAdvisor's non-hotel segment is growing steadily, unlike its hotel division, and revenues from this segment might provide a major boost to TripAdvisor's g rowth in the future. TripAdvisor recently announced the launch of a subscription service and added features to further monetize its online restaurant booking platform that currently boasts over 4 million listings .

What's New For The Restaurant Segment?

TripAdvisor's restaurant booking platform, TheFork, now spreads across 12 countries and includes websites such as LaFourchette, the leading online restaurant reservation website in France and Spain, mytable and restopolis in Italy, Iens in The Netherlands, Best Tables in Portugal, and Australia's largest restaurant booking website, Dimmi. TripAdvisor is trying to further monetize its online restaurant booking business that includes over 4 million restaurant listings. The company has decided to expand its subscription business to include restaurants. The subscription facility, so far available in the U.S. and Spain, has been globally rolled out, recently. As a part of this service, restaurants will be able to post their selected photos and preferred customer reviews below their own listing on TripAdvisor's website. The restaurants can also avail themselves of data regarding customer trends etc from TripAdvisor. Hotels listed on TripAdvisor have been already enjoying these services.

Why Is TripAdvisor Focusing On The Restaurant Segment?

TripAdvisor's weak performance in the last year was due to the lack of sufficient traction on the Instant Booking platform. Though Instant Booking currently includes nine out of the top ten hotel chains and also global OTA leaders Priceline and Expedia, yet the platform is still to demonstrate impressive growth. This has led to a decline in the company's revenue per hotel shopper and hence its profitability. Focusing on other services for growth, while simultaneously working on removing glitches from Instant Booking, does seem like a good idea for the company right now. According to some experts, TripAdvisor's non-hotel business, including attractions, restaurant reservations, and vacation rentals has the potential to grow by 118% between 2015 to 2018 to amount to a $500 million business.

We currently expect TripAdvisor's Subscription and Other businesses' (which comprises of attraction, restaurant, and vacation rental bookings) revenue and EBITDA to grow for the next six years at a CAGR of ~6% . However, increased efforts at monetization might increase the growth rate even further in the future.

Have more questions about TripAdvisor? See the links below.

  • What Is TripAdvisor's Fundamental Value On The Basis Of Its Forecasted 2015 Results?
  • Advertising Vs Subscription: What's TripAdvisor's Revenue and EBITDA Breakdown?
  • How Has TripAdvisor's Revenue And EBITDA Composition Changed Over 2012-2016E?
  • TripAdvisor Year 2015 In Review
  • Where Can TripAdvisor's Growth Come From In The Next 5 Years?
  • What Drove TripAdvisor's Revenue And EBITDA Growth Over The Last Five Years?
  • TripAdvisor Q1 2016 Earnings Preview
  • How Is TripAdvisor Gearing Up For Competition In The Vacation Rental Space?
  • How Can Instant Booking Stir Up The OTA Space And Be A Game Changer For TripAdvisor?
  • TripAdvisor's Expected Revenue And EBITDA Growth For 2016: Trefis Estimate
  • Why Might TripAdvisor Be An Attractive Acquisition Target For Priceline?
  • What Has Been The Immediate Impact Of The Brexit Decision On The Online Travel Companies?
  • How Is TripAdvisor's Non-Hotel Business Expected To Grow?
  • What Might Be The Long-Term Impacts Of Brexit On The Online Travel Agencies?
  • What Is The Significance Of TripAdvisor's Upgraded Flight Search Platform?
  • TripAdvisor's Q2 2016 Earnings Preview
  • TripAdvisor's Q2 2016 Results Remain Subdued But The Company Is Eyeing Long Term Growth
  • Reasons Behind Our 12% Downward Revision Of TripAdvisor's Stock Price
  • How Is TripAdvisor's Top Line Trending?
  • TripAdvisor's Third Quarter 2016 Earnings Preview
  • TripAdvisor's Third Quarter 2016 Remains Dampened As It Keeps Waiting For Instant Booking's Success
  • TripAdvisor's Instant Booking Is Expected To Receive A Significant Boost With The Inclusion Of Expedia's Websites

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for TripAdvisor

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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