Tripadvisor recently reported their second quarter results which reflect the historic impact the COVID-19 pandemic is having on the travel industry. Tripadvisor’s horrible year is an indication of just how bad the carnage is for travel providers and travel media companies. In Q2, they posted revenue of $59 million, a $153 million net loss, and a $74 million adjusted EBITDA loss.
Tripadvisor which bills itself as the world’s largest travel platform has shrunk considerably as a result of collapsing traffic and revenue,along with necessary cost cutting. In the pre-Pandemic era, the company served about 463 million travelers each month content which includes more than 867 million reviews and opinions of 8.7 million accommodations, restaurants, experiences, airlines and cruises. Let’s just say EVERYTHING has changed.
In late March and throughout April, they saw the sharpest, deepest drop in business activity in their 20 year history, as customers such as online travel agents, hotels, activity suppliers, destination marketing organizations, and restaurants reduced their advertising budgets to align with impacted travel demand, reduced bookings, and increased cancellation rates. While significant year-over-year business impacts persist and near-term visibility remains low, they say they are somewhat encouraged that consumer travel demand trends and business has picked up from the April nadir. Albeit, very slowly.
Their Online Traffic Collapsed
In April, May, and June, monthly unique users on Tripadvisor sites were approximately 33%, 45%, and 60%, respectively, of last year’s comparable period. But the company estimates that July monthly unique users have improved further, to approximately 67% of last year’s comparable period.
Early observations from the com many indicate that consumers are in search of shorter, local getaways that enable them to be active outdoors; domestic travel has been recovering faster than international travel; and European markets have been recovering faster than the U.S. We also note that intra-Europe searches started to rise as that region’s borders reopened.
“Moreover, we have seen notable improvements in restaurant traffic, with European markets leading the way compared to other regions. For example, in July, restaurant traffic on Tripadvisor sites in France, Belgium, Germany, and Switzerland returned to year-over-year growth, and Italy recovered to parity with 2019. TheFork, our restaurant transaction-based business, has also seen rapid recovery, with relative strength in key European countries such as Italy, France, and Spain.”
But The Bottom Line is More Worries Ahead
Consumers’ uncertainty surrounding the pandemic and its impacts has impacted all aspects of travel, from airlines to hotels and to tour providers and media sites. This won’ change anytime soon, so the industry and related sectors need to plan for the new normal ahead. Tripadvisors’ horrible year will continue, and travel will be rocked for some time to come.