TripAdvisor is on a collision course with its two biggest customers
TripAdvisor is on pace to handle $3 billion in hotel gross bookings by 2016, according to a new study, and that transition from hotel comparison site to hotel booker may not sit well with its two largest customers, Expedia Inc. and the Priceline Group.
A new UBS study about TripAdvisor Instant Booking, which has TripAdvisor currently partnering with “43 small online travel agencies and chain hoteliers” so consumers can complete their hotel bookings on TripAdvisor, projects that Instant Booking would account for 30 percent of TripAdvisor’s hotel revenue by 2016. That would be an increase from a projected 6 percent of revenue in 2015.
“We note the biggest risk to TripAdvisor in transitioning to Instant Booking relates to their dependence on Expedia and Priceline,” the UBS report states. “Any change in marketing plans by those two companies could present a near-medium term headwind.”
In 2014, Expedia Inc. and Priceline, including their sub-brands, accounted for 46 percent of TripAdvisor revenue. That’s down a tad from 49 percent in 2011, according to TripAdvisor financial filings.