Ever since Trip Advisor rolled out their Instant Booking platform to become a one-stop shop for travel, their stocks have been suffering. Do we think it is all going downhill from here? Or do we think this is just a teething phase and its a good time to buy on the dip before it rebound?

1- Fundamental Points

Who the heck are they?

Needham, Massachusetts-based TripAdvisor (TRIP) is one of the first websites I visit whenever I think of a travel destination. They use their in-depth travel related reviews to rate and rank popular travel destinations, hotels, and restaurants. Many travelers hold TripAdvisor’s rankings in high regard, and base their travel decisions on what they read. There is also a nifty online forum discussion page where you can ask questions about a travel destination such as “Which is the best restaurant to visit in the North Pole?”, or “Are there mosquitoes in Iceland?”. There is a strong community spirit on Trip Advisor where seasoned travelers help out other fellow travelers.

They recently seemed like they have moved away from their ad-based model, and rolled out an instant booking service platform for booking hotels and flights directly on their website, making them a one-stop shop for travel research, reviews, and bookings. Because of this move, they are putting themselves in direct competition with the online travel agencies (OTA) sector.

Who are their competitors?

The leaders of the OTA sectors are Washington-based Expedia (EXPE) and Connecticut-based Priceline Group Inc (PCLN). They are participating in TripAdvisor’s Instant Booking platform (after much reluctance and hesitation), only because of TripAdvisor’s wide customer reach.  This participation allows for a win-win relationship to develop. Talk about “Keep your friends close and your enemies closer.”!

Fun Fact: Expedia Inc owns Hotels.com, Orbitz, Trivago, HomeAway, Egencia, Travelocity, Hotwire, Wotif Group, CarRentals.com, and Traveldoo. Priceline Group owns bookings.com, agoda.com, KAYAK, RentalCars, and OpenTable.