TripAdvisor Strengthens Its Network Effect
Entering the booking commission market greatly expands its long-term revenue opportunity.
Despite intense competition, we expect TripAdvisor’s (TRIP) network advantage to remain in place over the next decade, supported by a solid global position, low penetration of travel advertising spending allocated online, and increased marketing spending.
We expect TripAdvisor’s sales growth to slightly exceed the online travel industry’s high-single-digit annual rate we forecast on average over the next several years. Further, only around 25% of total travel advertising is spent online, versus 40% of total travel bookings done online. We believe this gap will close over time as advertising dollars become more aligned with industry bookings.
Dan Wasiolek does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.