Tripadvisor recorded a $369.5 myriad writedown on its bequest hotels and promotion endeavor in the third quarter, and its CFO stated on the earnings call that SEO volition motionless be a headwind to growth in 2027.
The non-cash goodwill impairment hit the Hotels and Other segment, which includes inn metasearch and media advertising, according to the company’s third-quarter earnings release. The publish says it was driven mostly by traffic headwinds that have accelerated complete multiple periods since of “changes in the hunt landscape.” Segment income cut 23% to $151.6 myriad for the quarter.
During the call, expert Ross Sandler at Barclays wanted to cognize how near Tripadvisor’s center brand is to Google Zero, a term used to depict a website receiving zero integrated traffic via Google. In response, CFO Mike Noonan stated Tripadvisor’s SEO visibility is in the “mid to elevated teens,” downward meaningfully versus a twelvemonth ago, but did not provision specifics on what total it is a percent of.
Marketing is additionally taking a larger portion of revenue, which Tripadvisor ties to its move from liberated hunt traffic to paid channels.
What Tripadvisor Said When Asked About Google Zero
Sandler suggested Viator, Tripadvisor’s experiences booking site, has small SEO exposure. Noonan accepted and stated the visibility comes mostly through the bequest Tripadvisor brand.
SEO volition motionless be a headwind in 2027, Noonan said, and he expects it to commencement to comfort according to current trends in the channel. He stated the eventual tailwind to growth would arrive whenever the business can “mechanically get out of that headwind.”
In August, he estimated the SEO drag on the Experiences section at about 5 percent points of bookings growth. He stated in the second-quarter prepared remarks that the drag continues to average “as SEO becomes a smaller portion of general bookings mix.” In the third-quarter remarks, he put it at an approximate 3% growth headwind to section bookings.
Experiences bookings grew 2% in the quarter. Bookings on Viator rosy 4%, during bookings through Tripadvisor’s own location cut by a low-teens percentage.
Marketing Costs And The Move To Paid Channels
Marketing took 48.8% of Tripadvisor’s income from continuing operations in the third quarter, up from 43.3% a twelvemonth earlier. Those figures exclude TheFork, which Tripadvisor has sold. Spending was approximately flat in dollars at $213.0 myriad during income cut 11% to $436.4 million.
Noonan attributed the addition to an ongoing move from liberated to paid channels caused by persistent SEO headwinds, mostly in Hotels and Other and on Tripadvisor’s own site.
He stated the SEM conduit saw a decrease in accessible clicks in August, which coincided alongside a planned move of expend to newer, small scaled paid channels. On the call, he suggested several of that decrease could be tied to macroeconomic conditions.
CEO Matt Goldberg stated SEM has been Tripadvisor’s largest promotion conduit and that “the auctions have certainly rotate into additional competitive,” alongside several SEM expend now small efficient. Noonan described Viator’s paid hunt effectiveness as decent twelvemonth complete year.
In August, the CEO stated the business was finding ways to dispersed spending beyond paid hunt as additional travelers discover experiences on social and another mid-funnel channels.
What Tripadvisor Says About AI Citations
In the prepared remarks, Goldberg stated Viator is operating alongside a figure of AI platforms (including Anthropic, OpenAI, Gemini and Meta Muse) and that quantity is low. He added that MCP partner integrations create conversions to bookings at better-than-average rates as fine as higher booking values, and that Tripadvisor’s brands “lead in portion of citations for experiences prompts,” but did not provision data on the call concerning the way this portion was calculated.
On the call, he stated AI is likely under 1% of Tripadvisor’s general traffic but is ramping. He thinks AI traffic converts at near to five times the average on Viator and concerning twice the average on Tripadvisor.
According to Goldberg, distinctive contributors have held stable or declined lone slightly so far this year, notwithstanding double-digit drops in traffic. In his view, inn and online journey agency partners, alongside alongside LLMs, value the satisfied these contributors create as leads, licensed content, or AEO citations.
Why This Matters
Tripadvisor has stated it is seeing small of an SEO drag on bookings now that SEO represents a smaller part of its general business. Marketing represented about 5.5 percent points additional of income in the third fourth compared to the identical duration final year, which the business attributes to the passage from liberated to paid channels.
In May I posted that Condé Nast’s CEO was instructing his teams to scheme for zero hunt traffic. On Oct. 29, Reddit announced that its hunt referrals declined by complete 1 myriad per week on average in October. Tripadvisor has added its CFO’s prediction that the SEO headwind volition continue into 2027, alongside alongside a promotion metric a preparedness squad can use to difference internally.
Looking Ahead
Goldberg volition continue as CEO until the center of February during the commission plant alongside a hunt resolute to acknowledge his replacement, and CFO Mike Noonan volition depart at the end of the year. Kristen Dalton, caput of scheme and operations for Tripadvisor, volition rotate into interim CFO productive Jan. 1. Tripadvisor stated its portfolio review, which includes deliberation of strategic alternatives, continues.
Tripadvisor estimates Experiences’ adjusted EBITDA in the fourth fourth to be about break-even, during continuing to allocate in newer paid channels. In all of its Q2 and Q3 comments, the business cited an evaluation of the SEO effect to Experiences. A third evaluation in the next study would display whether the drag is motionless shrinking from concerning 3%.
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