Morningstar

TripAdvisor Is Just Getting Started

We expect improving sales and profitability to continue.

Securities In This Article
Tripadvisor Inc
(TRIP)

Starting in the third quarter of 2017, ad partners looked to improve their profitability on meta channels, leading to pricing pressure for TripAdvisor. We view this headwind as a reset versus a structural issue, given the traffic and quality of leads TripAdvisor provides. That said, we are pleased that TripAdvisor’s meta platform (50% of sales) continued to see stabilization in pricing despite key peer Trivago witnessing ongoing pressure, which we believe points to the superior demand and supply of TripAdvisor’s network and past initiatives to improve the user experience. As a result, TripAdvisor’s total platform sales and revenue per hotel shopper grew 1% and dropped 9% on a two-year-stack basis, both the strongest performance seen in several quarters. We continue to see slight sales declines this year in the hotel segment, followed by a sustained return to growth in 2019.

TripAdvisor’s nonhotel (21% of sales) sustained a mid-50s two-year-stack sales lift. The company remains the leader in experiences and increased its bookable content in that segment by 80% to 104,000 attractions. We don’t plan much change to our 18% annual sales forecast for nonhotel over the next five years.

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About the Author

Dan Wasiolek

Senior Equity Analyst
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Dan Wasiolek is a senior equity analyst, AM Consumer, for Morningstar*. He covers gaming, lodging, and online travel. Names covered within the gaming industry are Wynn Resorts, Las Vegas Sands, MGM Resorts, Caesars Entertainment, Penn Entertainment, and DraftKings. In the hotel industry Dan covers Marriott, Hilton, InterContinental, Hyatt, Wyndham, Choice, and Accor. Other travel related names under his coverage are Booking Holdings, Expedia, Airbnb, Tripadvisor, Sabre, and Amadeus.

Before joining Morningstar in 2014, Wasiolek spent 16 years as an analyst and portfolio manager covering US mid- and large-cap strategies for Driehaus Capital Management. During the first half of his time at Driehaus, Dan’s responsibilities as an analyst included analyzing and recommending stocks across all sectors and industries for inclusive in the portfolios. Then in the second half of his tenure at Driehaus, Dan was responsible for stock selection and portfolio management of the US mid- and large-cap strategies, as well as co-managing in-house smaller-cap portfolios.

Wasiolek holds a bachelor’s degree in business administration from Illinois Wesleyan University and a master’s degree in business administration, with a concentration in finance, from the DePaul University Kellstadt School of Business.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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