Online Travel Companies Navigate a Detour in Search Traffic
Bookings Holdings, Expedia, and TripAdvisor face a competitive threat now that Google gets top billing on its own site.
Dan Wasiolek: If you search for travel using Google's search bar, you might have noticed a platform displaying content, and a mapping feature is illustrated atop the results page. This is Google's metasearch platform, which creates a competitive threat for network-advantaged online travel companies like Booking Holdings, Expedia, and TripAdvisor. During the past several years, Google has been expanding travel content on this platform and placing it ahead of organic search links from online travel companies. As a result, it has become harder for Booking Holdings, Expedia, and TripAdvisor to get traffic from these organic links, which drive free customer traffic to their websites.
That said, we think online travel companies can manage this competitive threat. First, Booking and Expedia have noticed an increasing percentage of their total traffic is coming direct to their websites versus arriving from indirect marketing channels, such as Google's platform, where Booking and Expedia place their accommodations content in order to generate customer leads from the search giant. In our view, this is a signal that Booking Holdings and Expedia's networks are resonating with travelers, despite Google's expansion into travel. Also, in the face of regulatory pressure, Google has begun tests that place organic search links of online travel companies back above its travel platform, as these links are the most relevant to a given search query. In our view, should these tests become more prominent, it would stand to boost the direct traffic for Booking, Expedia, and TripAdvisor and help alleviate the competitive threat emanating from Google, providing a potential catalyst for discounted shares to trade toward our fair value estimates.
Dan Wasiolek has a position in the following securities mentioned above: GOOG. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.