tripadvisor mobile
7 months ago
 

TripAdvisor tipped for takeover (if it has a successful year)

TripAdvisor could find itself as a viable acquisition target if its financial results this week point to an upturn in its fortunes and strategy.

Financial analysts claim the company is “starting to see the light at the end of the tunnel” after a series of low-key earnings reports in the last year or so.

It is most recent, in November last year, TripAdvisor saw revenues increase by a slim 1% year-on-year to $21 million for the third quarter, with EBITDA down 12% to $114 million over the same period.

The central issue has been the ongoing integration and expansion of its Instant Booking model, whereby users can search and select a hotel on metasearch principles but secure the reservation on-site.

This has had a detrimental impact on its until recently mostly solid financial performance since listing on the public markets.

But since then, Expedia has come onboard with the initiative alongside Booking.com, and Hilton – one of the naysayers for a few years – has also joined.

This is giving the beancounters on Wall Street some reason for optimism over the business, with it touted as a decent vehicle for investors.

Furthermore, Jonathon Ansley, John Freeman and Fred McClimans, in a report on SeekingAlpha, claim the TripAdvisor business could be a potential target for deep-pocketed suitors. TRIP has a market cap of around $7.5 billion.

Still, none of the likely buyers is particularly surprising.

One could come in the form of the Priceline Group – a deal that has been talked about for years and gains prominence every time Glenn Fogel (ex-M&A guru and now CEO) is seen talking to Steve Kaufer at a Phocuswright conference.

Others potential buyers could be Google, the SeekingAlpha analyst report says, or Amazon.

The former has possibly the most obvious legs to it of the trio of acquirers, given the synergies around content and hotel metasearch, whilst an Amazon deal could be seen as its attempt to finally figure out how to tackle the travel industry (after a few lacklustre attempts).

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Kevin May

About the Writer :: Kevin May

Kevin May was a co-founder and member of the editorial team from September 2009 to June 2017.

 

Comments

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  1. Carl Rove

    Priceline needs a footprint across EMEA and APAC markets so it could make sense for them in the long run. Google would be ideal. Google car and Virtual Reality could compliment the user experience .

     
  2. liz andrea

    trip advisor increases the money and decreases their reputation. my visitors are talking and I see that some people are not genuine business , they are just a website done by others (like an agency with other name)that “uses” a person as a tour guide . So that allowes unfair competition.
    Also seems to be that trip advisor lost the control of who is joining and let not licensed tour guides become guides, and not tour agencies become agencies. Against the law.
    Is a mess

     
  3. William Beckler

    The Google and Amazon ideas seem pretty farfetched. I also don’t see Priceline going for it. That looks like the kind of deal that could kill a company like Tripadvisor because Tripadvisor is in a delicate situation and needs to grow to justify its price. Its growth will come at the expense of Priceline. So any reasonable valuation of Trip includes future share that Priceline loses. If Priceline buys Tripadvisor to prevent that from happening, then that chunk of Trip’s value is zeroed out, which means Priceline’s valuation of Trip is going to be too low before the conversation starts.

     
  4. Valentin Dombrovky

    Hm. Could become biggest travel tech M&A deal. At least, by its influence to the eco-system.

     
 
 

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