Google Search Claims Another Victim: Tripadvisor Lowers Outlook


Skift Take

Google has made frequent changes to its search results pages over the years, and Tripadvisor has often suffered as Google has its own competing businesses. Recent changes appear to have hit Tripadvisor particularly hard.

Tripadvisor offered a muted outlook across its major businesses, and attributed the softness to changes in Google’s travel search results pages.

Tripadvisor pointed to Google’s free, organic search results as the culprit. Last week, Trivago said Google’s changes to paid advertising formats were hitting its financial results too.

Commenting on diminished travel demand in April and into May, Tripadvisor Chief Financial Officer Michael Noonan said Wednesday during the company’s first-quarter earnings call: “We also witnessed a wide-reaching update to the (Google) travel SERP (Search Engine Results Page) that extended for a more prolonged period of time than typical updates that we have seen in the past.”

Officials said the changes to search engine results pages on Google, which has roughly a 90% grip on search according to various accounts, began late last year and continued into the first quarter.

Given these pressures from Google, for the second quarter, Noonan stated:

  • Consolidated revenue for the whole company is expected to be flat or to increase “slightly” compared to the prior year period, and adjusted EBITDA margins would fall around 100 basis points.
  • Tripadvisor hotel metasearch, or Brand Tripadvisor, would see revenue fall single to high-single digits, and falling 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 with the first quarter’s gross booking value growth of 15%.
  • Dining reservations platform TheFork would see “a step-down in growth” to “low- to mid-teens year over-year-growth” because of the Google changes and the timing of the Easter holiday.
  • Noonan said because of forecasted second-quarter trends, the company is “taking a more cautious view” about full-year 2024 expectations. “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 friction from Google occurred as controlling shareholder Liberty Tripadvisor and Tripadvisor separately announced Wednesday that a sale proposal that Liberty received in February would not lead to a deal.

In an earnings call, Liberty Tripadvisor’s Greg Maffei, who is the chairman of Tripadvisor, said talks are ongoing between Liberty Tripadvsior and a Tripadvisor special committee about “strategic alternatives.”

Tripadvisor’s share price fell nearly 30% midday Wednesday.

The Google Problem

Tripadvisor didn’t detail what about the changes Google made to its travel search results pages dented Tripadvisor’s performance.

In recent months, Google’s algorithmic changes have tended to de-index and penalize websites that Google believes don’t offer high-value content. It isn’t clear if that affected Tripadvisor.

Trivago, which offers hotel comparison price shopping along with Tripadvisor, has emphasized the difficulties in navigating changes to Google’s advertising formats, including the use of more carousels and deemphasizing text ads.

A Google sponsored ad for hotels. Source: Google/Skift

The Digital Markets Act in the European Union has also altered the way travel search results get displayed on Google, although Goldberg said the DMA changes don’t necessarily “correlate” to the adverse impact that Google is feeling.

Bright Spots for Tripadvisor

Officials said teams at Tripadvisor are working to mitigate the adverse changes coming from Google.

“It takes time to readjust when things change like that,” Noonan said.

He said Tripadvisor is pleased how other channels, such as the Tripadvisor app, and paid-marketing efforts are advancing.

Goldberg concurred that the Tripadvisor app is performing well, although its number of users are smaller than in other channels.

He added that Tripadvisor and Viator have an advantage because Tripadvisor is a Google partner and Tripadvisor employees talk to Google frequently.



Source link

About The Author

Scroll to Top