Travel Titans Clash: How Airbnb Dominates as Tripadvisor Struggles!

Starboard Value announced last week that it owns more than 9% of $TripAdvisor(TRIP)$ valued at about $160 million ($160 million).Tripadvisor surged 17% after the news, and its shares are near a new high for the year.

As it stands, Tripadvisor's valuation is still lower than its peers.Its price-to-sales (P/S) ratio is 1.1, compared to Expedia's 1.5, Airbnb's 6.8, and Booking Holdings' 7.0, and its TTM PE is 42.40, which the market remains wary of due to the current level of stable margins in the Pembroke.

However, its Non-GAAP Forward PE of 11.85x also shows its potential after further operational efficiencies.

Starboard's Investment Style

• Driving Strategic Alignment: Starboard is known for driving corporate change and may ask Tripadvisor to optimize operations, cut costs, or divest some of its assets to boost shareholder value.For example, analysts speculate that it could push for the sale of high-growth subsidiaries such as Viator (experience booking business, 10% growth) or TheFork (restaurant booking business, 12% growth).

• Rebranding or Business Focus: Starboard may suggest Tripadvisor reposition its brand or accelerate the realization of user-generated content to address competition in the market.

• Short-term catalyst role: This investment is seen as a potential opportunity for Tripadvisor to turn things around, but success depends on the company's ability to effectively execute change.

Challenges facing Tripadvisor

• Declining core business: Tripadvisor's hotel booking business continues to shrink, subject to stiff competition from online travel agencies (OTAs) such as Expedia and Booking.com.

• Long-term stock underperformance: its share price has fallen sharply since 2015, reflecting market concerns about its ability to grow.

• Pressure to adapt to new trends: as consumers move towards alternative accommodation and experiential travel, Tripadvisor needs to innovate to remain competitive.

Broader implications for the travel industry

The travel industry is undergoing profound change.The rise of alternative accommodations reflects a change in consumer behavior, with millennials in particular placing greater value on flexibility, value for money and unique experiences.This trend may force traditional hotel and travel service platforms to reassess their business models.

For Tripadvisor, its traditional model of relying on hotel booking and review services is being challenged.The pressure on Starboard may accelerate its transition to higher-growth areas, such as experience booking or focusing on niche markets.However, in a competitive environment, innovation and execution will be key.

Changing trends in the hotel and travel industry since 2025, more and more travelers are abandoning traditional hotels in favor of alternative accommodations offered by platforms such as $Airbnb, Inc.(ABNB)$ and $Expedia(EXPE)$ Vrbo.This trend not only reflects consumers' higher expectations of the travel experience, but also reveals the hotel industry's shortcomings in adapting to the demands of the new era.

Advantages of Airbnb and Vrbo

1. Price Advantage

   Airbnb and Vrbo typically offer more competitive rates than traditional hotels.Whether it's an extended stay or a large group trip, consumers can save money by finding affordable options through these platforms.

2. Unique Experiences

   Unlike traditional hotels with standardized rooms, Airbnb and Vrbo offer diverse lodging options such as locals' homes, rustic cabins and even boathouses.This unique, culturally immersive experience is popular with young travelers and consumers looking to personalize their trips.

3. Flexibility

   Emerging accommodation platforms often have more flexible booking and cancellation policies than traditional hotels.This flexibility caters to the modern traveler's need to deal with the uncertainty of their itinerary.

4. Space and convenience

   Airbnb and Vrbo accommodations often offer more space with amenities such as kitchens, living rooms, and more, making them ideal for families or groups traveling together.In addition, these accommodations are often conveniently located near city centers or tourist attractions.

The growth of Airbnb and Vrbo not only threatens traditional hotels, but also poses competition to integrated travel platforms such as Tripadvisor.The latter will need to find differentiators, such as through technological upgrades or integration with emerging trends, to strengthen their market position.