TripAdvisor (TRIP) has grown to become one of the most visited travel website companies that provides reviews of travel-related content. The company helps the two biggest OTA (online travel agency) majors—Priceline Group (PCLN) and Expedia (EXPE)—gain traffic as about 10% of TripAdvisor’s traffic ends up visiting one of the two companies websites. TripAdvisor had launched an instant-booking platform aimed at the US consumer in June 2014, but back then both Expedia and Priceline refused to share their inventories.
Priceline and TripAdvisor team up
In September 2015, Priceline and TripAdvisor announced the formation of a strategic partnership under which Priceline Group’s online travel brands would participate in TripAdvisor’s instant-booking platform. To start off, Booking.com would be the first Priceline brand to implement the partnership, and other brands like Priceline.com and Agoda.com would follow. As a result, travelers visiting TripAdvisor would be able to see Booking.com’s hotel listings and book directly through the website.
Effects on Expedia
In response to this announcement, Expedia said that the effect of the deal would be muted as TripAdvisor is one of its lower-margin channels. However, this new partnership could still put increased competitive pressure on Expedia because the combined entity could snatch away traffic as well as market share in the US.
Expedia answer to the Priceline-TripAdvisor collaboration has been trivago—one of the fastest-growing major global hotel meta-search brands—which the company has been investing aggressively in. Trivago recently launched hotel bookings on its site and app in Germany, initiatives that it plans to expand into English-speaking countries. The company also said that they plan to test the new “Book on Google” feature, which could be a better deal for Expedia than TripAdvisor appears to be for Priceline.
Continue to the next part of this series for an evaluation of Expedia’s increasing debt, as seen from its 3Q15 results.