Are TripAdvisor and Priceline signaling peak travel or a vacation recession?
It’s still too early to say that the online travel sector has peaked, and it’s still not set in stone that travel is about to see a major contraction. That being said, the easy growth days for the sector and the endless consolidation efforts might already have been seen.
TripAdvisor and Priceline Group may have one thing in common: they both suffered into or after earnings. It might be easy to signal that both companies have already had their great easy growth days. The flip side is to ask whether these represent a travel recession or if it means that peak travel numbers have been witnessed for this business cycle.
TripAdvisor reported that revenue fell 3% to $352 million, for a decrease of roughly 1% on a constant currency basis. What stands out is that the after-hours reaction was far worse than the formal opening price for TripAdvisor shares. One of the problems seen was that there may be too much mobile penetration. Mobile reached 54% of total unique users and app downloads reached 315 million in the first quarter. As a reminder, mobile is harder for most companies to convert to revenue versus desktop users.
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