How Tripadvisor is trying to get paid before the traffic disappears

Today, I'm digging into Tripadvisor (TRIP).

The operate their namesake travel review site, and Viator, a marketplace for booking tours/activities. If you're anything like me, any time you've researched a hotel or a destination, you've probably ended up on a Tripadvisor page.

Tripadvisor has a lot in common with Chegg, which I covered a couple of days ago. Both built big audiences on free Google search traffic: Chegg with homework answers, Tripadvisor with hotel and restaurant reviews.

Both companies are now watching Google's AI Overviews and chatbots answer those questions directly dramatically decreasing their traffic. The difference between the two is what each company attached to its audience. Chegg sold subscriptions to answers that became free. Tripadvisor bought Viator in 2014 and started taking a commission on tours and activities, which is less impacted by AI answers/chatbots. That's the main reason Tripadvisor is a turnaround story and Chegg appears to be more of a wind-down story.

Tripadvisor has a market cap of ~$1.0B, and in June they agreed to sell one piece of it (TheFork, a European restaurant reservation app) to American Express for $700M in cash.

A few things that stood out to me:

• It’s most well known asset is the one that's shrinking. The Tripadvisor brand (hotel ads, media, and other) still runs at a ~28% adjusted EBITDA margin, but revenue fell 21% in Q2 2026. Once again, fewer people are clicking through from Google to read hotel reviews, and AI answers are only making that worse.

• The growth engine has worse margins than the business it's replacing. Experiences (Viator plus Tripadvisor-branded tours) did $924M of revenue in FY2025, up 10%, on ~$4.7B of gross bookings. That's a ~20% take rate, but the segment's adjusted EBITDA margin was only ~10%, and its been shrinking as they have shifted from free traffic to paid marketing.

• The TheFork sale is a big number relative to the whole company. $700M is ~67% of the current market cap. Once it closes (expected by the end of 2026), Tripadvisor should go from roughly breakeven net debt to ~$700M of net cash.

• They pay heavily for their customers. Marketing accounted for ~42% of revenue in FY2025 ($791M on $1.89B). And that’s not likely to go down anytime soon as SEO pressure alone cut ~5 points from experiences bookings growth in Q2 2026.

• The company is in the middle of a portfolio review with an activist (Starboard) on the board. When Starboard is on your board, change is likely coming.

This is another case study in the importance of diversification in your distribution/marketing, which they are suffering from. It also shows that their diversification in product offering, specifically their Experiences segment, has insulated them a bit more when compared to other AI casualties like Chegg.

I know that in the ventures I'm working on, I'm trying to take a multifaceted approach to marketing through things like this email newsletter, SMS marketing, and a YouTube channel we're going to stand up soon. More to come on all of that.

With that, I'll see you early next week!

Nick

TL;DR

• Tripadvisor runs the Tripadvisor review site and Viator, a marketplace for tours and activities, and is selling TheFork to American Express for $700M.

• Experiences now make up ~63% of revenue (Q2 2026), with Hotels and Other (mostly hotel metasearch ads) making up the remaining ~37%.

• Experiences grew 10% in FY2025, but Hotels and Other fell 8% in FY2025 and 21% in Q2 2026 as search and AI changes cut into hotel shopping traffic.

• Revenue has been flat around $1.8B to $1.9B for three years, operating margins are thin (4.2% in FY2025), and marketing spend runs ~42% of revenue.

• Entrepreneur takeaway: an audience you don't monetize directly is an audience you're renting, so build a transaction into it while the traffic is still there.

The 30,000-Foot View

Tripadvisor started as a place to read and write travel reviews. For most of its life, it made money through hotel metasearch: you look at a hotel on Tripadvisor, click "View Deal," and land on Booking.com or Expedia, which pays Tripadvisor for the click. It's a high-margin business when traffic is free and abundant, and Google sent a lot of free traffic for a long time.

That model has been eroding for years. Google built its own hotel search right into results, and now AI Overviews and chatbots answer "where should I stay in Lisbon" without sending anyone to a review site. Third-party estimates put monthly visits at 146M to 169M in early 2023 and ~120M by February 2025.

The bet now is Experiences. Viator is a two-sided marketplace with 425,000+ products from 70,000+ suppliers (walking tours, cooking classes, boat trips, museum passes). Travelers book and pay through Viator, Viator keeps a commission (~20% of gross bookings on average), and the operator gets the rest. In November 2025, management reorganized the company to be "experiences-led," combined Viator and Tripadvisor's own experiences team into one segment, and cut ~20% of staff. The Tripadvisor brand is now being run for profit and to feed demand into experiences.

Revenue mix (Q2 2026, continuing operations):

• Experiences: $278.6M, ~63%

• Hotels: $117.9M, ~27%

• Media and advertising: $31.2M, ~7%

• Other: $14.2M, ~3%

For context, in FY2025 (excluding TheFork), Experiences was ~55% of revenue and Hotels and Other was ~45%.

Key Stats

• Market cap: ~$1.04B

• TTM revenue: ~$1.61B (continuing operations, excludes TheFork)

• TTM gross margin: ~92%

• Experiences gross bookings: ~$4.7B (FY2025)

• Experience bookings: ~22.9M (FY2025), up ~16%

• Employees: ~2,590 (FY2025 10-K)

• Industry: Online travel, consumer cyclical

Company History

• 2000: Stephen Kaufer and co-founders launch TripAdvisor in Needham, Massachusetts. The original plan was to license editorial travel content to other sites. The "visitors can add a review" button turned out to be the real product.

• 2004: IAC acquires TripAdvisor for ~$210M. It moves under Expedia when Expedia is spun out of IAC in 2005.

• 2011: TripAdvisor is spun off from Expedia and starts trading on Nasdaq as its own company.

• 2012: Liberty Interactive buys Barry Diller's controlling stake, beginning more than a decade of Liberty control.

• 2014: Acquires Viator (~$200M) and La Fourchette (~$140M, later renamed TheFork). These two deals end up defining the company 12 years later.

• 2020: COVID wipes out travel demand. The platform passes 1 billion reviews and opinions.

• 2022: Kaufer steps down. Matt Goldberg becomes CEO.

• 2025: Completes its merger with Liberty TripAdvisor in the spring, eliminating the dual-class structure and reincorporating in Nevada. In November, reorganizes around experiences, cuts ~20% of staff, and targets $85M+ of annual savings.

• 2026: Starboard pushes for a sale of the company. Tripadvisor signs a cooperation agreement in March and adds new directors. In June, agrees to sell TheFork to American Express for $700M, with closing expected by year-end.

Show Me the Money

Standout financial features:

• Revenue has been stagnant: $1.79B in FY2023, $1.89B in FY2025, and ~$1.61B TTM on a continuing basis after removing TheFork. Experiences growth is being canceled out by the hotel decline.

• Gross margins are ~92% because Tripadvisor doesn't own any inventory. The true costs of this business fall below the gross profit line. Marketing was $791M in FY2025 (~42% of revenue), and operating margin slid from 7.0% in FY2023 to 4.2% in FY2025.

• Net debt swung from ~$161M of net cash in FY2024 to $216M of net debt in FY2025. The Liberty TripAdvisor merger and buybacks used ~$501M of cash, funded partly with new borrowing. Shares outstanding dropped ~10% (127.4M to 114.5M).

• TheFork's $700M sale price is ~33x its FY2025 adjusted EBITDA of $21M. Amex paid for growth (revenue up 22%) and strategic fit, not current profits.

Financial Data

FY2023 to FY2025 as originally reported (includes TheFork). TTM is continuing operations only (excludes TheFork).

The N.O.O.B. Nine - Competitive Powers

The Nerd Out on Business Nine is made up of Hamliton Helmer's famous "7 Powers" of competitive advantage (Scale Economies, Network Economies, Counter-Positioning, Switching Costs, Branding, Cornered Resource, and Process Power) combined with two of my own (Data Flywheel and Distribution Advantage).

Average Score: 2.8/5 - A brand and content moat that's eroding at the top of the funnel, with Viator as the attempt to rebuild it around transactions instead of traffic.

Memorable Marketing

Tripadvisor's best marketing has always come from its supply side. Hotels and restaurants proudly promote their Tripadvisor ratings, which turns every business on the platform into a billboard for the brand. More recently, the company has spent on TV and brand campaigns for Viator to reduce its dependence on search.

Notable tactics:

• Certificate of Excellence and Travelers' Choice awards (2010 to today): The Certificate of Excellence launched in 2010 and was folded into Travelers' Choice in 2020. Highly rated businesses get a certificate, a website badge, and an owl sticker for the front window. Millions of travelers see the brand on restaurant and hotel doors around the world at almost zero cost to Tripadvisor.

• Review Express: A free tool that lets hotels, restaurants, and attractions email past guests asking for a Tripadvisor review. The supply side does the work of generating Tripadvisor's content.

• Travelers' Choice "Best of the Best" awards (annual): Ranked lists of hotels, beaches, and restaurants that generate press coverage every year and give winners another reason to promote Tripadvisor.

• Viator national TV campaign (2023): Humorous spots like "Viator Makes Museum Tours Juicy Again." Goldberg said it reached hundreds of millions of travelers and lifted brand search and direct traffic.

• "Regret Less. Do More." (2024): Viator ads showing trips going badly (a family stuck on an empty tour bus, two people hanging off a cliff) to sell the value of booking a vetted experience.

• AI distribution deals (2025 to 2026): A Perplexity partnership for hotel content in January 2025 (Goldberg called it an "AI first funnel" with high-intent users), plus apps inside ChatGPT for Viator, Tripadvisor, and TheFork.

Tactical takeaways:

1. Give your customers a badge they want to display. A window sticker for a top-rated restaurant is free distribution that compounds every year.

2. Make it easy for your supply side to generate your content. Tripadvisor never wrote the reviews, its businesses asked their guests to.

3. Brand spend is how you reduce dependence on a traffic source you don't control. Viator's TV campaigns were explicitly about lifting direct and brand search traffic.

4. When a new channel shows up (Perplexity, ChatGPT), get in early while the traffic is small and high intent.

AI Uses & Opportunities

Current exposure:

• AI is mostly a headwind today. Management has said hotel traffic is under pressure from search changes, including AI Overviews, and SEO pressure cut ~5 points from experiences bookings growth at the Tripadvisor point of sale in Q2 2026.

• LLM referral traffic is growing quickly and brings higher revenue per visitor, but management says it's still small relative to other sources.

• Tripadvisor launched an "AI-native" MVP in Q4 2025 that management says beat earlier on-site AI efforts on engagement and conversion.

• The company has apps in ChatGPT for Viator, Tripadvisor, and TheFork, and a hotel partnership with Perplexity.

Future opportunities:

• License the review corpus to model builders as verified, first-party travel data, and get paid for the content that AI is already using.

• Become the booking layer for AI agents. If ChatGPT plans the trip, Viator wants to be the inventory and checkout behind "book the food tour."

• Supplier co-pilots for 70,000+ tour operators: listing creation, translation, photo selection, and pricing suggestions. Better listings mean better conversion.

• AI review fraud detection to protect the trust that makes the reviews valuable in the first place.

• Personalized itinerary building that bundles multiple Viator experiences into one trip, which raises booking value per customer.

Bumps in the Road

• Hotels and Other is still the profit engine (~$207M of the $298M adjusted EBITDA excluding TheFork in FY2025), and it's guided to fall 20% to 23% again in Q3 2026. If it shrinks faster than Experiences grows, profits go down even as the company "transforms."

• Experiences is moving from free traffic to paid traffic, which is why segment margins fell 290 basis points in Q2 2026. Growth that requires more paid marketing is less valuable growth.

• Competition in experiences is real: GetYourGuide, Klook, Airbnb Experiences, and the big OTAs all want the same tour operators and travelers.

• Travel demand is sensitive to macro, weather, and geopolitics. Q2 2026 was hit by cancellations, extreme heat, and softer U.S. to Europe travel.

• Strategic uncertainty: a portfolio review, an activist on the board, and a pending $700M cash pile. How management allocates that money will matter a lot.

Your Swipe File

• It's incredibly hard to predict the future. That's why diversification across marketing and product is something that should be focused on. this is nothing earth-shattering, but it's important enough to keep repeating it

• Ad-based businesses are much more durable if you can provably drive transactions: ones you own or ones from partners.

• I tend to believe that everything is for sale, even your strongest assets. TheFork grew 22% in FY2025 and sold for ~33x adjusted EBITDA because a strategic buyer paid for momentum and fit.

• Turn your supply side into your marketing team. Window decals and review requests got millions of businesses to promote Tripadvisor for free.