TripAdvisor considers loyalty program to counter Google

TripAdvisor has plans for a possible loyalty program and is gearing up to increase user engagement as part of a project to counter the reduced free traffic that the company got from Google in the second quarter.

Company officials called out the lower search engine optimization traffic from Google in the quarter that ended June 30 as one of the factors, along with “optimizing” its paid marketing spend and foreign currency fluctuations, behind a 7 percent revenue decline in TripAdvisor’s hotels, media and platform segment.

Hotels, media and platform segment revenue in the second quarter was $254 million, a 7 percent decrease year-over-year.

TripAdvisor’s selling and marketing costs fell 17 percent to $180 million in the second quarter, as the company emphasized profitability. In this hotels, media and platform segment, the largest portion of TripAdvisor’s business, adjusted earnings leaped 27 percent to $108 million.

In prepared remarks, TripAdvisor stated that it anticipates “increased focus from regulators moving forward” about Google’s practice of prioritizing its own travel business to the detriment of organic traffic, and TripAdvisor CEO Steve Kaufer renewed calls for regulators to take action.

“This past quarter, they (Google) did a few things on the hotel front which hurt a bit more than usual, but we’ve been working on a handful of initiatives, some of which we’ve already covered, to counter that for a while,” Kaufer told analysts Thursday.

BOOKING HOLDINGS CHIMES IN

TripAdvisor is not the only company to cite Google’s incursions into the travel business as a competitive threat. In a quarterly financial filing, Booking Holdings cited the increasingly competitive nature of the online travel market:

“For example, Google has entered various aspects of the online travel market and has grown rapidly in this area, including by offering a flight meta-search product (Google Flights), a hotel meta-search product (Google Hotel Ads), its Book on Google reservation functionality and integrating its hotel meta-search product into its Google Maps app, as well as Google Travel, a planning tool which aggregates its flight, hotel and packages products in one website.”

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