Tripadvisor (TRIP) was spun off from Expedia over a year ago and from the start I was very excited. I did get burned initially but I’m starting to consider it for my next long-term speculative pick. It would be a bit outside of my ecosystem philosophy but I’m starting to believe that TripAdvisor will end up becoming the top travel website out there, surpassing giant Priceline (PCLN) and others.
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We can also compare revenue and growth. I think it’s fair to say that TRIP has a lot of momentum. Of course, that should not be a big surprise. As a much smaller and newer player, it should be growing a lot faster. If it wasn’t, there would be an issue.
The One Big Factor
More critical to this analysis though is the fact that TripAdvisor is increasingly becoming the starting point for travelers planning a trip. Just look at traffic to its websites and you can see what I mean. As it continues to build around a strong community, the website is becoming more useful in ways that competitors simply cannot challenge. The plan seemed to be to build a great product/community at first that would provide the community with a comprehensive number of reviews no matter what you were looking into. Then it made it easier to see where our friends have been (as well as our extended friends) thanks to its Facebook connect link.
Now comes the best step from a shareholder perspective, TripAdvisor is making it easier for users to book their trip by providing them prices and other means.
Much More To Come
As TripAdvisor continues to create relationships with these millions of hotels, restaurants and other local businesses by helping them interact with users, give relevant information and more, it will also open the door to more possibilities such as helping users book (eventually) and letting businesses advertise more easily, etc. The possibilities are significant and very difficult to compete with for competitors.
Does TripAdvisor look cheap at its current valuation? Not exactly. But I do think the potential for growth is very significant and am strongly considering getting in on the action.
I’d love to hear from you.