TripAdvisor has revenue elsewhere to thank as hotel growth remains flat

TripAdvisor turned in modest 5% growth in total revenue for 2017 but a notable 24% increase in revenue in its non-hotel category.

In fact, the non-hotel segment, which includes attractions, restaurants and vacation rentals, now accounts for 23% of the company’s revenue.

In 2014, non-hotel activity accounted for just 9% of total revenue.

Meanwhile hotel segment revenue was nearly flat. It dropped 3% in the fourth quarter compared to the same period in 2016 and was up just 1% for the full year.

Total adjusted EBITDA was down 25% for TripAdvisor’s hotel segment but up a whopping 261% for non-hotel activity.

The company’s core content of user reviews and opinions grew 29% year-over-year, reaching 600 million opinions registered covering 1.2 million hotels, inns, B&Bs and specialty lodging, 750,000 vacation rentals, 4.6 million restaurants and 915,000 attractions including tours and activities.

That growth represents a downtrend compared to 2016 when TripAdvisor reported a 45% increase in user content.

And from 2016 to 2017 one category saw a marked drop in reviews – vacation rentals lost about 10% of its content - while attractions jumped 20%.

Average monthly unique visitors on TripAdvisor-branded websites and applications grew 17% in the fourth quarter of 2017.

In the earnings statement, TripAdvisor says the two main drivers of the company’s fourth-quarter results were a stabilization in its click-based auction and continued optimization of its paid marketing mix with a significant reduction in expenses for online traffic acquisition.

It also noted recent organizational changes – the restructuring of the company’s organization by business units rather than function and departure of two executives announced in early January – that will help it “execute our long-term growth strategy.”

“During Q4 and 2017 we continued to make progress along our key initiatives,” says CEO Steve Kaufer.

“Continued product enhancements, as well as strong content, community and supply growth, nicely position the TripAdvisor platform in front of long-term growth opportunities.”