TripAdvisor Rises Most Since March After Expedia Hotels Dealby
Deal follows similar agreement with Priceline Group last year
TripAdvisor has struggled during transition to booking website
TripAdvisor Inc. rose the most in nine months after it signed an agreement to let customers book some hotels from Expedia Inc.’s websites directly on TripAdvisor, a key development in the company’s transition from a review site to full-fledged hotel booker.
The deal follows a similar one Needham, Massachusetts-based TripAdvisor signed with Priceline Group Inc. last year which sent the stock soaring 26 percent. TripAdvisor gained 5 percent to $48.79 at the close in New York Tuesday, the most since March.
TripAdvisor is struggling to shift its revenue model from one where it gets paid a fee for referring its customers to other hotel-booking websites, to one where users can reserve directly on TripAdvisor. The move should eventually net the company higher profit margins but so far has eaten into revenue because consumers haven’t yet gotten used to booking with TripAdvisor, Chief Executive Officer Stephen Kaufer said last month.
A spokesman for TripAdvisor declined to comment on how many of Expedia’s hotels the deal would initially include. TripAdvisor was spun off from Expedia in 2011.
Billionaire John Malone owns a controlling stake in Expedia through his Liberty Expedia Holdings Inc., and holds a small stake in TripAdvisor, according to data compiled by Bloomberg. Greg Maffei, a longtime executive in Malone’s business empire, has voting control of TripAdvisor.