Announcements have come thick and fast from TripAdvisor in the past week, right up to its earnings call last night, which showed positive growth for the quarter.
And yet despite entering 2014 "firing on all cylinders" it missed its Wall Street predictions resulting in a 14% drop in share price.
So where to next for a company that has in the past week alone boosted its vacation rentals, trip planning and restaurant presence with the acquisitions of Vacation Home Rentals, local expert site TripBod and La Fourchette?
The transcript of the earnings call is worth closer inspection for what CEO Steve Kaufer does (or doesn't) say about the acquisitions, meta, mobile and tours and activities, to pick on just a few elements.
Not much specifically on Vacation Home Rentals or TripBod apart from welcoming them to the stable and the ongoing quest for "great ideas, teams and opportunities to accelerate our product roadmap."
Much more space is devoted to offer to acquire restaurant booking service LaFourchette with Kaufer saying restaurant traffic accounts for more than 200 million monthly page views.
Pending the deal's closure, expected by the end of May, the LaFourchette team has already been tasked with expanding beyond its core markets of France and Spain.
The rationale for the deal was twofold with plans to make a much bigger and better play in the space because of its "natural adjacency" to travel and the international opportunities. Kaufer describes online restaurant reservations as an "extremely under-penetrated" area with the US seeing 20% of bookings made online but pretty much every where else in single digits.
It's also interesting in light of Concur's announcement yesterday of an investment in last-minute booking service Table8 as part of its Perfect Trip fund. Both companies are clearly looking to penetrate every element of the trip planning cycle, whether leisure, business or both.
Tours and activities:
If you're going to touch every facet of trip planning, then tours and activities is key and no single company has thus far been able to comprehensively crack this space.
The TripBod acquisition furthers TripAdvisor's local ambitions as well as highlighting its focus away from the core hotels business.
Repeated questions from analysts for clarity on T&A aspirations during the Q1 earnings call elicit from Kaufer comments such as:
"It's fair to assume we will leverage the tremendous amount of global traffic that we have and the demand...and expand beyond hotels, vacation rentals, flights and now restaurants into additional activities."
Currently TripAdvisor has partnerships with Viator, GetYourGuide and Expedia, which Kaufer says:
"...works fine but it is not as fulfilling to the traveller and we know it's not the full potential for what we can do."
And this snippet, which came later following a question on mobile, is more telling:
"We are the company with the best rationale for being with you throughout the trip. Some day we will help you do something even more than what we currently do today in the attractions activities space."
That said, no plans or timeline added for if and when it might make a move or in what direction. Speculating gives rise to many questions:
- Who is out there that might interest TripAdvisor? The space is seen as being the last uncharted territory but startups abound.
- Would it seek to acquire an activities meta type service or an OTA service?
- Would it be better swallowing a company that provides the platform for connecting the multitude of fragmented suppliers?
- All of which leads to mobile because if you're in destination looking for something to do, a mobile device comes in pretty handy.
Some 44% of TripAdvisor's traffic comes via mobile and three-quarters of that is from smartphones - the figure rose to 47% in March.
The company has just launched its Instant Booking service on mobile enabling users to complete their reservation on a smartphone.
It's available to 10% of US-based iOS, Android and mobile web traffic and for 150,000 properties so far, which is about one third of TripAdvisor's commerce-enabled properties.
Choice Hotels is the launch partner and the company expects OTAs to get involved as well but is conscious of making clear to the customer who the booking is with i.e the OTA partner or direct supplier.
The plan is to have it available for 100% of smartphone sessions in most major markets by the end of Q2 and TripAdvisor is already designing a new desktop and tablet experience in line with Instant Booking.
Hotel shoppers, meta and conversion
It's all about conversion. Hotel shoppers increased 14% in Q1 but more importantly hotel shopper conversion is described as getting better and better and the quarter showed the first positive year-on-year growth in revenue per hotel shopper since TripAdvisor started rolling out metasearch.
The company is also seeing increases in average time per session and repeat usage.
A question on how many meta clicks there are per hotel shopper results in some good insight around what's better - revenue from more clicks or getting the customer quickly to a booking:
"The on-site conversion, some of our folks that make a Meta click will make 2 or 3, but we know they're only going to make one actual booking. So our objective is to get that user to the right hotel as soon as possible to make one click because we're showing them the right place to book and be done.
"So in a weird sense, I make more money at the moment by getting someone to click on 6 different hotels as they compare along because I get to charge 6x for the click, but the downstream conversion, at the end of the day, they're only going to buy one property. So if I could -- if my clicks per shopper goes up, it's not clear that, that's a good thing.
"I could argue, the clicks per shopper going down is the desired result of our personalization efforts, where we're helping you find, really, the right hotels so you don't have to shop around as much. But the quality of that lead downstream is going to be much higher.
"Said another way with instant booking, our own purchase path funnel, we're going to convert that intent into a booking at a much higher rate because it's going to be kind of the right hotel for the person. So at the end of the day, it turns out to be the revenue per hotel shopper that's the best metric measured in bookings when all is said and done."
The company has also started rolling out its Just For You personalised hotel results service and says it is already seeing a positive revenue uplift. Currently more than 15% of users looking at hotels getting the improved experience and with a goal of 100% in Q2.
And finally, a few numbers...
NB: Open book image
- Total revenue for the quarter increased 22% ($51 million) year-on-year to $281 million
- Net income rose 10% to $68 million year-on-year
- Revenue from click-based advertising increased 16% to $207 million for the quarter (74% of total revenue) while display-based advertising increased 28% (11% of total revenue) and revenue from subscription, transaction and other increased 62% to $42 million (15% of revenue)
- More than 250 million avearge monthly unique visitors during Q1, up 27% year-on-year with a high of 267 million in March, second only to August 2013 (277 million).