What: Shares of TripAdvisor soared on Wednesday afternoon after the company announced that Marriott would be adding its hotel portfolio to TripAdvisor's Instant Booking platform. TripAdvisor closed with a 14.65% gain following the news.
So what: TripAdvisor launched the Instant Booking platform in June 2014, allowing users of its mobile app to book hotel rooms directly, instead of through third-party platforms. Marriott's 4,200 hotels, spread across its 19 brands, will be available to be booked through Instant Booking starting this summer.
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TripAdvisor is far smaller than the major online travel companies,and the deal with Marriott provides a major boost to its Instant Booking platform. For Marriott, the deal allows the company to remain in control of where its rates and inventory are displayed. Instant Booking puts the hotel in control of the guest relationship, with the platform simply taking a cut of the booking price.
Marriott SVP Shafiq Khan had this to say: "TripAdvisor has created a new distribution model that changes the game in the travel industry by addressing key concerns of hotel suppliers. The result is mutually beneficial to both partners from a strategic and economic standpoint."
Now what: It's hard to put a dollar value on this partnership, but it's clear from the market's reaction that investors view the deal as a major positive for TripAdvisor's Instant Booking platform. Most of TripAdvisor's revenue comes from click-based and display-based advertising, so Instant Booking represents an opportunity for TripAdvisor to diversify its revenue. The Marriott deal certainly validates the Instant Booking platform, and investors are clearly betting that Instant Booking will become a major source of growth going forward.
The article TripAdvisor Inc. Soars on Deal With Marriott International originally appeared on Fool.com.
Timothy Green has no position in any stocks mentioned. The Motley Fool recommends Apple and TripAdvisor. The Motley Fool owns shares of Apple and TripAdvisor. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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