If TripAdvisor Were an OTA, How Big Would It Be?

TripAdvisor market size

Lead Analyst: Luke Bujarski

This is an excerpt from our recent SWOT analysis on TripAdvisor, and its rise in the rankings as a travel booking channel:

Online travel agencies, including Priceline and Expedia, often report on 'gross bookings' as a key performing metric and relative market share measuring stick. It represents the total value of travel products sold including taxes and fees. TripAdvisor has yet to report on gross bookings (probably never will) but its new position as a direct booking platform warrants a closer comparison.

Here's the formula we used to estimate Trip's approximate gross bookings in accommodations:

Instant Booking share of total TripAdvisor revenues / (13.5 average commission rate) *100 = TripAdvisor gross bookings 

A side-by-side view with Expedia and Priceline shows that TripAdvisor Instant Booking will have some catching up to do, at least when it comes to the total value of travel booked directly on these platforms (see Figure 4). 

Figure 4: 2016 Gross Bookings Projection USD billions - TRIP, PCLN, EXPE

Note: Estimate assumes Instant Booking will account for 60% of TripAdvisor revenue share by year's end 2016. Estimate also assumes that Instant Booking will cannibalize Trip's metasearch revenues over time. Expedia figure includes flights (roughly half) but excludes bookings from HomeAway. By 2016, a portion of Priceline bookings will have been captured through the TRIP Instant Booking sales channel (see Priceline Partnership section in this report). Best estimate here, given the share of Booking branded properties listed on Instant Booking, is that approximately half of TRIP’s bookings will be factored into the Priceline number.