TripAdvisor is reportedly pulling back from a major strategic effort to get travellers to book hotels directly on its website.
This came after the initiative cut into revenue growth and sent the shares to their lowest price since 2012.
The travel reviews giant is “increasingly agnostic” about how its customers book their accommodation, whether through the site directly or via links to hotel booking sites, Adam Medros, senior vice president of product, told Bloomberg.
The company has changed its website to make its ‘instant booking’ feature less prominent. The initiative was first introduced in 2014.
However, Medros insisted instant book remained a key part of TripAdvisor’s strategy.
“If instant book wasn’t working, we would just kill it, but we’re not killing it,” he said. “We are trying to change the perception of TripAdvisor to not just be a review site.”
Issuing first quarter results, TripAdvisor said: “Despite some continued revenue dilution from last year’s instant booking launch in certain non-US markets, first quarter 2017 TripAdvisor-branded click-based and transaction revenue growth improved by 12 percentage points sequentially to 12% growth year-over-year.
“Non-US click-based and transaction revenue growth rates significantly lagged given tough comparisons primarily created by our staggered instant booking roll-out last year and currency devaluation versus the dollar.
“Our long-term non-US growth opportunity remains strong, though currency fluctuations, competitive dynamics in the online travel landscape and consumer-related factors like the ongoing mobile shift may continue to prevent international growth from reaching U.S. levels in the near-term.”
TripAdvisor added: “In hotels, we are rapidly aligning product, supply and marketing as we drive towards long-term growth and profitability.
“In a few weeks, we will roll out our streamlined hotel shopping experience and soon thereafter we will launch a brand advertising campaign to build user awareness of TripAdvisor as not only a great place to research, but also a great place to find the lowest prices when a user is ready to book.
“Notably, the reallocation of some less-efficient online marketing dollars and expected profit favorability in our Non-Hotel segment enable us to invest $70-80 million in brand advertising this year while maintaining our profit outlook.”
TripAdvisor reported revenue up 6% year-on-year to $372 million in the first three months of the 2017.
CEO Steve Kaufer said: “Our 500 million reviews and opinions continue to forge TripAdvisor brand affinity around the world, and we are building on this strength as we further streamline the hotel shopping experience.
“Later in Q2, we plan to launch a brand advertising campaign to build user awareness of TripAdvisor as not only a great place to research a hotel, but a great place to find the lowest prices when a user is ready to book.”
Chief financial officer Ernst Teunissen said: “Growth rates improved significantly during the first quarter.
“Consolidated revenue growth improved to 6% and TripAdvisor-branded click-based and transaction revenue grew 12% fuelled by strong growth in our US market.
“Moving forward, we believe matching our improved hotel shopping experience with a brand advertising campaign will help us drive revenue, marketing efficiency and profitability on our platform over the long-term.”