Excerpt from Motley Fool
The online travel company hopes that experiences and restaurants will pick up the slack.
The nature of travel has changed dramatically over time, and TripAdvisor (NASDAQ:TRIP) has had to try to adjust to changing consumer preferences. That's created some challenges for the online travel company, and tough competition has remained an impediment to TripAdvisor providing the kind of sales and profit growth that investors would prefer to see.
Coming into Tuesday's fourth-quarter financial report, TripAdvisor investors had expected to see solid gains in revenue and earnings. Results were reasonably good, but a combination of weakness in certain areas and concerns about the company's forecast for early 2019 weighed on investor sentiment.
A closer look at the company's segments showed ongoing challenges in the hotel division. Revenue for the business was down 2%, as a 20% plunge in what the company calls "other hotel revenue" from non-TripAdvisor branded websites offset flat to slightly higher results from sources bearing the TripAdvisor brand. Adjusted pre-tax operating earnings for the hotel segment were strong, though, rising 25% and contributing substantially to overall bottom-line gains.
From a revenue standpoint, the non-hotel segment played a key role in the company's growth. The division's top line expanded 38% from year-earlier levels, and the unit produced $8 million in adjusted pre-tax operating earnings, improving from break-even performance in last year's fourth quarter.
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