TripAdvisor

Tripadvisor's second-quarter revenue decreased 7%, with the experiences segment up 3% and the hotels business down 21%. Adjusted EBITDA dropped 21% driven by marketing deleverage. Shares were down 20% during early Aug. 6 trading.

Why it matters: While the hotel metasearch business continues to face intense competition that is magnified by AI, the company's anemic experiences performance now raises concerns that it, too, faces pressure from peers and having to pay more to acquire users on third-party distribution channels. We think users could be gravitating more to peers for their experiences, as the 3% sales growth was a deceleration from last quarter's 8%, despite marketing deleverage of 510 basis points to 61.3%. This period's 3% booking lift portends little recovery in the near term. Direct AI competition appears to be displacing Tripadvisor's hotel business, where revenue was just 50% of 2019's level, despite the lodging industry having fully recovered a few years ago. We expect these challenges to continue.

The bottom line: We don't plan to change our $15 fair value estimate for no-moat Tripadvisor much, as a dining business sale benefit is offset by lower sales in the hotel and experiences segments. Shares are undervalued, but we expect volatility to remain and reiterate our Very High Uncertainty Rating. In June, Tripadvisor agreed to sell TheFork, its European online restaurant platform, to American Express for $700 million by year-end, which equates to an attractive 3 times our 2026 sales forecast, lifting our intrinsic value. That said, we have decreased confidence that TheFork proceeds can be used toward solidifying the experiences position. We plan to decrease our 2026-35 experiences sales forecast to 6% growth from 9%. Also, we see hotel sales dropping 6% versus 4% prior during the same period.

Big picture: In our view, the recent softening in the US to Europe travel industry is modest and doesn't account for the firm's weaker performance.

We have maintained our fair value estimate of $16 per share, which implies a 2027 enterprise value to adjusted EBITDA multiple of 12 times.

Tripadvisor's second-quarter revenue decreased 7%, with the experiences segment up 3% and the hotels business down 21%. Adjusted EBITDA dropped 21% driven by marketing deleverage. While dealing with transitory headwinds in the Middle East (geopolitics), Mexico (security), and Hawaii (flooding), Tripadvisor continues to battle secular competitive pressures in its core hotel business by prudently shifting investment toward its industry-leading experiences business. As a result, we have reduced our 2026-35 revenue growth to 1% on average, down from 4%-5%.

Strategically, we think sharing the meta platform's rich and trusted data across the experiences business, while shifting resources from the former to the latter, is prudent. In our view, this will strengthen its AI position, where trust and data are key. Also, we see value in Tripadvisor’s review content and agree with the company’s decision to partner with large language models like Perplexity, as we think this business faces more threat of displacement from mass-market artificial intelligence products than online travel agencies that own the supply relationships. Our 2026-35 hotel and other business sales estimate reflects an average annual decrease of 6%, down from 4% previously. Also, we have increased our 2026-35 marketing as a percentage of sales forecast to 45.3% from 43.6%. We continue to model healthy growth for the experiences segment. We estimate that Tripadvisor's Viator brand will average 6% annual revenue growth over the next 10 years versus 8% prior, benefiting from their leading content in these growing verticals. Based on our revenue and expense forecasts, we expect operating margins to decline from 6.5% in 2025 to 2.6% in 2035, as competition in the hotel and other business outweighs revenue growth and midteen EBITDA margins in experiences.

We have a no-moat rating for Tripadvisor based on a prognosis of intensifying competition in the company's core hotel and other metasearch business, which represented 42% of its 2025 revenue.

We believe Tripadvisor’s metasearch model has relatively low barriers to entry. Metasearch platforms don’t control the inventory they show on their websites, as hoteliers and OTAs (like Booking and Expedia) provide this content. Obtaining the quantity and quality of hotel information and relationships that these agencies have would require hiring thousands of sales and call center employees for an extended period. In fact, Booking's annual spending on personnel eclipses the total revenue reported by Tripadvisor in a year. In our view, the main barrier to new entrants replicating a metasearch platform is having the customer traffic to attract travel suppliers and OTAs to share their content and garner reviews from travelers. We think this business faces a greater threat of displacement from mass-market artificial intelligence products than online travel agencies that own the supply relationships. Additionally, wide-moat companies such as Alphabet, Amazon.com, Meta, and Alibaba have sizable user bases and budgets and could present an increasing metasearch threat in the future. In fact, Alphabet's Google continues to build out travel supply content on its metasearch network within its search engine. Perhaps even more concerning, the technology giant is adding travel-related features on Google Maps, which could become a powerful travel platform, given its location, user intent data, artificial intelligence, and navigation capabilities. We also envision artificial intelligence helping a company like Meta leverage its global database of personal travel content into a metasearch network, which would add another major competitor to Tripadvisor. Also, Amazon.com has tested and in some cases launched metasearch travel offerings over the last several years and could provide a powerful competitor with its shopping expertise (book a beach vacation and have sunscreen shipped to your hotel or vacation rental).

We see signs that existing competition is already pressuring Tripadvisor’s results. For example, in its hotel and other segment, its hotel business, which is the company's metasearch business that is competing with agentic AI, revenue reached 50% of 2019’s level in the second quarter of 2026 versus 75% and 71% in 2024 and 2025, respectively, and compared with US and European hotel industry revenue per available room reaching all-time highs. Also, Google continues to emphasize its metasearch platform and paid links ahead of organic search links, which presents a challenge for Tripadvisor to compete for future traffic and market share.

The strain on Tripadvisor’s metasearch demand comes despite the company’s consolidated platform presenting one of the industry’s most complete array of travel content (lodging, experiences, dining, transportation, and reviews). Tripadvisor’s network has 1 billion travel reviews and 300 million monthly unique users. The company’s metasearch lodging content is driven by hoteliers and online travel agencies providing their content to the platform to reach the large travel audience offered by Tripadvisor’s network. As a result, Tripadvisor's platform has more than 1 million traditional hotels. That said, Tripadvisor has for years de-emphasized vacation rentals and severely trails the 8 million-9 million tallied on both Airbnb’s and Booking’s platforms. We think this lack of rental supply signals either that online travel agencies like Airbnb and Booking do not view Tripadvisor’s platform as a needed distribution channel for vacation rentals, or that the metasearch company is focused on first improving its monetization of traditional hotel content.

Beyond lodging content, the company’s Viator brand boasts an industry-leading 425,000 bookable experiences. This brand has higher barriers to entry than their metasearch segment, given that they own and manage the supplier relationships. In experiences, key online travel agency peers, like Booking and Expedia, have moved away from efforts to organically build a presence in the vertical, instead choosing to partner with Tripadvisor’s Viator. And the company’s experience business has seen a strong sales recovery to about 300% of 2019’s level in 2025, providing proof that its online travel agency network is resonating.

In our view, the high-single-digit average ROICs including goodwill for Tripadvisor during the next five years are a useful quantitative metric to determine whether a moat exists. Here, ROICs sit below peers and support our quantitative and qualitative analysis that Tripadvisor does not stand to hold a competitive advantage over the next 10 years.

Penetration levels are low and growing in the experience markets. Tripadvisor is well positioned to benefit over the long term, given its critical-mass revenue share.

An IPO or sale of the experiences business could garner an attractive price for the company's shareholders.

Tripadvisor garners 300 million monthly unique visitors and a large amount of travel content, including more than 1 billion reviews in aggregate.

Metasearch has lower barriers than online travel agencies, and is facing competition from artificial intelligence, which could meaningfully affect the firm’s growth outlook.

People could use generative artificial intelligence through search engines and social platforms for travel information instead of Tripadvisor's metasearch platform.

Google continues to de-emphasize free organic search, which can elevate marketing costs for Tripadvisor.