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Tripadvisor Idea Proposal

Tripadvisor Idea Proposal

Will consumer adoption of Tripadvisor’s Instant Booking feature make it more valuable than metasearch?

Report Available: June 9, 2016


Blueshift’s initial research shows TRIP in the midst of transforming the way it does business with travelers, OTAs and hotels, moving away from its metasearch and rolling out a new Instant Booking feature which makes it more of an OTA than an aggregation site. While this promises to keep more of its visitors on its site instead of going elsewhere to book reservations, the economics of the change have not yet delivered results as revenue per hotel customer declined because of lower commission rates from hotels and OTAs with Instant Booking than with metasearch, not to mention the transition of how and when revenue is recognized.



  1. TRIP’s Q1 missed expectations for earnings and revenue. Total revenue declined 3% from a year ago while earnings per share dropped more than 40% year to year. TRIP’s revenue per hotel customer dropped 24% year to year, even worse than the 12% decline in the previous quarter. Much of this is due to TRIP’s efforts to transform its business from a media/advertising model to a booking site with its Instant Booking feature, which is also changing how the company recognizes revenue where now a greater portion occurs at the time of the stay instead of when a shopper clicks on a metasearch link.
  2. Instant Booking, introduced a year ago, is the newest feature for TRIP, allowing travelers to book hotel stays directly through the TRIP website instead of losing them to an OTA or the hotel itself. This provides travelers one more booking option and allows TRIP to now serve as a de facto OTA for all those who visit its site to do their hotel research. It also delivers a better user experience with a greater monetization opportunity on mobile devices than metasearch.
  3. TRIP has signed up nearly all the leading hotel brands and OTAs to be partners in its Instant Booking effort. PCLN’s went live in November 2015 and Starwood signed on in January, joining the likes of Marriott, Hyatt, and Best Western hotels among others. Hilton and InterContinental Hotels Group are the few remaining large chains not partaking in Instant Booking.
  4. A downside to Instant Booking is that it is causing the company’s revenue per hotel shopper to be lower than TRIP’s metasearch where the company makes money on a per-click basis off leads sent to OTAs and hotels. TRIP may have given up too much in the form of lower commissions than OTAs negotiate with hotels in order to get hotels to partner with Instant Booking. The hotel either pays a 15% commission per reservation to claim 50% of the reservations made using the Instant Booking button or a 12% commission rate per reservation to claim 25% of the reservations made using that button. TRIP believes Instant Booking will begin to pay off in the second half of 2016 and beyond.


Is Instant Booking working? What are OTAs and hotels seeing from customers when it comes to Instant Booking?  What are expectations for growth of Instant Booking in the coming year or two? How is Instant Booking doing on mobile compared to metasearch?  To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: OTAs, Chain hotels, Independent hotels, and Industry specialists.


Companies: Tripadvisor (TRIP), Priceline (PCLN), Expedia (EXPE), Orbitz (OWW)


Research Begins: May 23, 2016