Change the outlet
Google has made frequent changes to its search results pages over the years, and Tripadvisor has often suffered as Google has its own competing companies. Recent changes seem to have particularly affected Tripadvisor.
Dennis Schaal
Tripadvisor offered a muted look at its top companies and attributed the smoothness to changes to Google’s travel search results pages.
Tripadvisor pointed to Google’s organic and free search results as the culprit. Last week, Trivago said Google’s changes to paid advertising formats were also affecting its financial results.
Commenting on the decline in travel demand in April and May, Tripadvisor CFO Michael Noonan said during the company’s first-quarter earnings call on Wednesday: “We also witnessed an upgrade in broad travel SERP (search engine results page) reach (Google) that extended over a longer period of time than typical updates we’ve seen in the past.”
Officials said changes to search engine results pages at Google, which has about 90 percent control of search by various accounts, began late last year and continued through the first quarter .
Given these pressures from Google, during the second quarter, Noonan stated:
Company-wide consolidated revenue is expected to be flat or up “slightly” compared to the year-ago period, and adjusted EBITDA margins would fall around 100 basis points. Tripadvisor’s hotel metasearch, or the Tripadvisor brand, would see revenue fall in the single to high single digits, and the decline in adjusted EBITDA margins would be more than margin improvement at Viator and TheFork. Revenue from Tripadvisor’s tours and activities brand Viator in the second quarter is expected to decline “a couple of points” compared to first-quarter gross booking value growth of 15%. Dining reservation platform TheFork would see “growth shrink” to “low to mid-teens year-over-year growth” due to Google’s changes and the timing of the Easter holiday. Noonan said that because of the expected trends for the second quarter, the company is “taking a more cautious view” on expectations for the full year 2024. “We now expected consolidated revenue to grow in the low to mid-single digits and adjusted EBITDA of flat-to-low single-digit growth.”
The Google friction came as controlling shareholder Liberty Tripadvisor and Tripadvisor separately announced Wednesday that a sale proposal Liberty received in February would not lead to a deal.
In an earnings call, Liberty Tripadvisor’s Greg Maffei, who is Tripadvisor’s president, said there are ongoing discussions between Liberty Tripadvsior and a special committee of Tripadvisor about “strategic alternatives.”
Tripadvisor’s share price fell nearly 30% midday Wednesday.
Google’s problem
Tripadvisor did not detail which of the changes Google made to its travel search results pages affected Tripadvisor’s performance.
In recent months, Google’s algorithmic changes have tended to de-index and penalize websites that Google believes do not provide high-value content. It is not clear if this affected Tripadvisor.
Trivago, which offers hotel comparison price shopping alongside Tripadvisor, has highlighted the difficulty of navigating changes to Google’s ad formats, including the use of more carousels and a reduced emphasis on ads from text
A Google sponsored ad for hotels. Source: Google/Skift
The European Union’s Digital Markets Act has also altered the way travel search results are displayed on Google, although Goldberg said the DMA’s changes do not necessarily “correlate” with the adverse impact it is hearing google
Bright spots for Tripadvisor
Officials said Tripadvisor teams are working to mitigate adverse changes from Google.
“It takes time to readjust when things change like that,” Noonan said.
He said Tripadvisor is pleased with how other channels, such as the Tripadvisor app, and paid marketing efforts are progressing.
Goldberg agreed that the Tripadvisor app is doing well, although its user base is lower than other channels.
He added that Tripadvisor and Viator have an advantage because Tripadvisor is a Google partner and Tripadvisor employees talk to Google frequently.
