November was a good month for the stock market, but TripAdvisor (NASDAQ: TRIP) shareholders didn’t participate in that rally. The stock fell 30% while the S&P 500 was tacking 3.4% onto its value, according to S&P Global Market Intelligence. So far this year, TripAdvisor is down nearly 50% — a sharp reversal from 2018, when it ended the year as one of the market’s best-performing stocks.
Last month’s share price slide came as TripAdvisor executives revealed worsening revenue trends in both its core hotel booking business and its promising new line of bookable experiences. Hotel revenue declines worsened to 7% in Q3 as TripAdvisor gave up more ground to competing offerings from Alphabet‘s Google. Executives called the results “frustrating … particularly considering we entered 2019 with such great momentum.”
The latest numbers essentially ensure that TripAdvisor will see declines in its core hotel segment yet again in 2019. Profitability trends won’t have much room to improve, either, given that the company faces a difficult Q4 comparison to a year-ago period that produced gains. As a result, investors don’t have many good reasons to feel bullish about this tech stock today. It still maintains one of the industry’s biggest travel platforms. But TripAdvisor’s third strategic shift in as many years highlights the major challenges inherent in building a sustainable business around that valuable asset.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Demitrios Kalogeropoulos owns shares of TripAdvisor. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and TripAdvisor. The Motley Fool has a disclosure policy.